Você está na página 1de 20

University of Jordan

Faculty of Business
Strategic Management

Arab Center for Pharmaceutical and Chemical“


”.Industries Co

Case Study

Prepared By

Fathi Salem Mohammed

2009
Table of Contents
Topics Page
Introduction 3
History 3
Vision and Mission 3
PESTEL Framework 4
Porter’s Five Forces Framework 6
External Audit 7
CPM-Competitive Profile Matrix 7
External Factor Evaluation (EFE) Matrix 8
Financial Ratio Analysis 9
Internal Audit 10
Internal Factor Evaluation (IFE) Matrix 11
SWOT Matrix 12
SPACE Matrix 13
Grand Strategy Matrix 14
The Boston Consulting Group (BCG) Matrix 15
The Internal-External (IE) Matrix 15
The Quantitative Strategic Planning Matrix (QSPM) 16
Recommendations 18
EPS/EBIT Analysis 18
References 19

2
Introduction
The Arab Center for Pharmaceutical and Chemical Industries Co. (ACPC) is a leading
manufacturer of empty hard gelatin capsules, made from the best quality
pharmaceutical grade gelatin (100% Halal Beef and free from BSE). The dyes used in
the manufacturing process are FDA certified and approved for use, as dye for food,
drug and cosmetics (F.D and C.)
ACPC is led and operated by well experienced teams of technical and professional
people, committed to provide and guarantee the highest quality of empty hard gelatin
capsules manufactured in its plant.
ACPC have a certificate of Quality Management System (ISO 9001, 2000).

Major ACPC Historical Milestones


• In 1983, The Arab Center for Pharmaceutical and Chemical
Industries was founded as a public company with capital JD1.6
million.
• In 1986, ACPC entered Iraqi market.
• In 1990, ACPC entered Egyptian market
• In 1991, Shareholders of ACPC raised its capital to JD5 million.
• In 1992, ACPC raised its production capacity by 50%.
• Between 1992 and 1995, ACPC entered Yemeni, Syrian, and
Palestinian markets.
• In 29 May 2007, ACPC come by ISO 9001:2000.
• In 2007, ACPC entered Saudi market.
• IN 15 July 2008, ACPC come by certificate of suitability from
European Directorate for the Quality of Medicines and HealthCare.

Vision
We aim at achieving leadership and integrity in the pharmaceutical
industry through the provision of best quality capsules.

Mission
The Arab Center for Pharmaceutical and Chemical Industries is a leading
manufacturer of empty hard gelatin capsules committed to providing the
pharmaceutical industries sector in Jordan and the region with the best
quality products while adhering to the accredited international standards
and specifications. this is achieved by employing best-in-class practices at
every aspect of our business, bench marketing performance, developing
our most precious assets; human resources, building strategic partnership
and focusing on our quality of services and the way we deal with our
valued customer

3
PESTEL analysis
Political forces
• The pharmaceutical industry is unusual; as in many geographic markets
there is effectively only one powerful purchaser, the government.
• In the 1980s and 1990s, governments around the world began to focus
upon pharmaceuticals as a politically easy target in their efforts to
control rising health care expenditure and demand greater ‘value for
money’.
• As the industry globalizes and ownership and employment become
concentrated in fewer countries, this may result in less benign
intervention.
• Regulators have been challenged not to overburden new growth areas in
biotechnology research.
• There are growing pressures arising from inter-country pricing
disparities and parallel trade.
Economic forces’ demand
• Patients (i.e. ultimate users) have traditionally had little influence on the
choice and price of pharmaceuticals;
• First, it was doctors who made the prescription and the medical
practitioners tended to favor branded products instead of memorizing
complex chemical names.
• Secondly, incentives to shop were diminished as costs were assumed or
reimbursed by insurers, employers (in the US) or health care authorities
(in Europe).
• During the 1990s, funded systems found it hard to cope with rampant
health care costs.
• It was recognized that health care had none of the normal checks of a
free market that would balance supply and demand, and so free-market
incentives were introduced to control demand.
• The high margin branded prescription market has globalized, reflecting
worldwide convergence in medical practice and regulatory
harmonization.
• Big pharmaceuticals have proven expertise to mass-market products on a
global scale. However, the market appears set to become more US
centric, leaving the industry heavily exposed to fluctuations there.
Supply
• The global pharmaceutical market remains relatively fragmented, with
no company holding more than an 8% market share in 2005 (i.e. Pfizer).
• At the same time, the industry still features relatively strong non-
internationalized players based in Japan, Europe and the developing
world (notably India).
• Spending on R&D has grown while the number of new products

4
reaching the market has fallen.
Social forces
• As the ‘baby boom’ generation approaches retirement, there have been
new efforts to develop drugs for the treatment of the elderly.
• Final consumers are now better informed, have higher expectations and
want greater say in their treatment, this could open new marketing
opportunities but, at the same time, educated consumers have become
more demanding of advances in therapy.
• There are significant differences for R&D and marketing amongst
international trading blocs.
• R&D is primarily driven by European and North American needs while
‘satellite economies’ are major markets for generic products and
antibiotics.
Technological and environmental forces
• Potential new ways to discover drugs, to better target their use and to
conduct medical trials suggest there could be a major reorganization of
the industry.
• The introduction of ‘cradle to grave’ policies in the EU should result in
greater need for ‘green’ (i.e. environmentally friendly) management.
• Genetic research has yet to have an impact on drug discovery or clinical
trials.
Legal forces
• The intervention of health authorities is a key to determine the length of
patent protection as well as approving new products to be marketed.
• The move towards international harmonization of regulatory controls
could bring significant benefits in terms of reduced costs and accelerated
time to market for pharmaceutical companies.
• Clinical trials demand the greatest share of resources to develop a drug.
• Big pharmaceuticals will point the finger at cumbersome regulation as
responsible for lengthy trial periods.
• This is partially true but taking a drug through the trial-and-approval
process still requires from 10 to 12 years because (a) the trials
themselves are more and more difficult to conduct, and (b) because of
the trend to target diseases that take a long time to manifest themselves
(such as osteoporosis).
• Pharmaceutical companies often find problems in enforcing patent
protection in developing countries (particularly Asia).

5
Five forces analysis
Factors
Threat of Firms specializing in moving specific molecules along the value
potential chain could be tomorrow's main competitors.
entrants Emphasis on high-priced niche drugs for high unmet need
diseases likely to support market entry by biotechs.
(LOW)
Power of Controls on pricing, reimbursement and market access continue
buyers to tighten (‘value for money’ is a top concern on both sides of
the Atlantic).
Growth of managed care continues deteriorating the profitability
of big pharmaceuticals regardless of the outcome of regulation.
(HIGH)
Power of Biological generics appear.
substitutes Diversification into generics protects volume share (but not the
profit) of big pharmaceutical companies.
Functional foods preferred as safer alternative to drugs.
(MODERATE)
Power of Emergence of China and India as key outsourcing locations.
suppliers Cost of licensing deals drives companies towards more
acquisitions.
(MODERATE)
Competitive Continued industry consolidation in static market results in
rivalry fewer larger global companies, focused on specific franchises,
with intense rivalry within therapeutic franchises.
(HIGH)

6
External Audit

Opportunities Threats
1. Demand in Europe market for 1. Children preferred liquid
Vegetarian Capsules is medicines rather than capsules.
expected to increase by 29% 2. Threats of global business in
between 2010 and 2012. dealing with varied regulatory
2. Europe market demand for environments and currency
capsules that are made from fluctuations.
pure bovine gelatin increased 3. Increased consumption of
by 5% in 2008 natural supplements.
3. Saudi market demand for
empty hard gelatin capsules
expected to increase by 8%
annually.
4. Advancements in technology
can minimize production cost
by 30%.
5. Swine flu affecting empty
gelatin capsules sales for
manufacturer that use pig skin
in producing the capsules.
6. Barriers to entry are high.

CPM – Competitive Profile Matrix


ACPC Capsuline Erawat Pharma
Limited
Critical Success Factors Weight Rating Weighted Rating Weighted Rating Weighted
Score Score Score
Organizational Structure 0.05 2 0.10 4 0.20 1 0.05
Price Competitiveness 0.10 3 0.30 3 0.30 3 0.30
Advertising 0.04 1 0.04 2 0.08 4 0.16
Product Quality 0.10 3 0.30 4 0.40 3 0.30
Sales Distribution 0.10 3 0.30 3 0.30 2 0.20
Customer Loyalty 0.03 2 0.06 3 0.09 3 0.09
Market Share 0.11 1 0.11 3 0.33 2 0.22
Global Expansion 0.11 3 0.33 4 0.44 3 0.33
Demographics 0.03 2 0.06 3 0.09 3 0.09
Financial Position 0.15 2 0.30 3 0.45 2 0.30
Research and Development 0.13 2 0.26 4 0.52 3 0.39
Innovation 0.10 1 0.10 3 0.30 2 0.20
Total 1.00 2.26 3.50 2.58

7
External Factor Evaluation (EFE) Matrix

Critical Success Factors Weight Rating Weighted


Score
Opportunities
1. Demand in Europe for capsules made from
vegetarian materials is expected to increase by
10% between 2010 and 2012. 0.12 3 0.36
2. Europe market demand for capsules that are
made from pure bovine gelatin increased by 5%
in 2008 0.12 3 0.36
3. Saudi market demand for empty hard gelatin
capsules expected to increase by 8% annually 0.10 3 0.30
4. Advancements in technology can minimize
production cost by 30% 0.10 2 0.20
5. Swine flu affecting empty gelatin capsules sales
for manufacturer that use pig skin in producing
the capsules. 0.10 4 0.40
6. Barriers to entry are high 0.06 3 0.18
Threats
1. Children preferred liquid medicines rather than
capsules 0.10 2 0.20
2. Threats of global business in dealing with varied
regulatory environments and currency
fluctuations 0.08 2 0.18
3. Increased consumption of natural supplements 0.12 2 0.24
4. Hindu and Buddhist consumers may require
gelatin from non-bovine sources. 0.10 1 0.20
Total 1.00 2.62

8
Financial Analysis 12/2008
Financial Ratios ACPC Industry
Turnover Ratio % 7.70 15.51
Earning Per Share (JD) 0.02 0.05
Dividend Per Share (JD) 0.05 0.06
Book Value Per Share (JD) 1.54 1.33
Price Earnings Ratio (Times) 115.63 64.29
Dividend Yield % 2.62 1.98
Dividends Per Share to Earning Per Share % 302.69 127.41
Price to Book Value (Times) 1.24 2.18

Gross Margin % 11.92 48.21


Margin Before Interest and Tax % 6.67 9.68
Profit Margin % 6.02 6.02
Return on Assets % 1.00 3.55
Return on Equity % 1.07 3.39

Debit Ratio % 6.90 27.56


Equity Ratio % 93.10 72.44
Interest Coverage Ratio (Times) - 3.55

Total Assets Turnover (Times ) 0.17 0.41


Fixed Assets Turnover (Times) 0.56 1.33
Working Capital Turnover (Times) 0.46 1.23

Current Ratio (Times) 6.27 2.54


Working Capital (JD) 3,007,377 57,317,450

Net Worth Analysis 12/2008


1. Stockholders’ Equity + Goodwill = 7135883 + 0 JD 7135883
2. Net income x 5 = JD82593 x 5= JD 412965
3. Share price = JD1.5/EPS 0.017 =JD 88.24x Net Income JD82593= JD 7288006
4. Number of Shares Outstanding x Share Price = 5000129x JD 1.5= JD 7500194
Method Average JD 5,584,262

9
Internal Audit
Strength Weakness
1. ACPS is the only 1. Assets deceased by 14%
manufacture that in 2008, and Selling,
produces empty hard general, and
gelatin capsules in Jordan administrative expenses
are gradually increasing
2. Holds 75 % of market
from 2006 to 2008
share in Jordan.
2. Produce only 4 from 8
3. ACPC have a certificate of
types of empty hard
Quality Management
gelatin capsules
System (ISO 9001, 2000).
3. There is no increasing in
4. Almost 60 percent of sales
ACPC's production
are generated
capacity since 1997
internationally
4. Enters new market on
5. ACPC provide their
account of current
customers with
market due to shortage
customized shades as per
of capacity
their requirements.

6. All of ACPC capsules are


made from pure Bovine
Gelatin, Halal, and free
from Dioxin.

10
Internal Factor Evaluation (IFE) Matrix

Critical Success Factors Weight Rating Weighted Score


Strengths
1. ACPS is the only manufacture
that produces empty hard
gelatin capsules in Jordan 0.15 4 0.60
2. Holds 75 % of market share in
Jordan. 0.15 4 0.60
3. ACPC have a certificate of
Quality Management System
(ISO 9001, 2000). 0.08 3 0.24
4. Almost 60 percent of sales are
generated internationally 0.10 4 0.40
5. ACPC provide their customers
with customized shades as per
their requirements. 0.08 3 0.24
6. All of ACPC capsules are made
from pure Bovine Gelatin,
Halal, and free from Dioxin. 0.15 4 0.60
Weaknesses
1. Assets deceased by 14% in
2008, and Selling, general, and
administrative expenses are
gradually decreasing from 2006
to 2008 0.05 2 0.10

11
2. Produce only 4 from 8 types of
empty hard gelatin capsules 0.05 1 0.05
3. There is no increasing in
ACPC's production capacity
since 1997 0.11 2 0.22
4. Enters new market on account
of current market due to
shortage of capacity 0.08 1 0.08
TOTAL 1.00 3.13

SWOT Matrix

12
Strengths Weaknesses
1. ACPS is the only 1. Assets
manufacture that deceased by
produces empty 14% in 2008,
hard gelatin and Selling,
capsules in Jordan general, and
administrative
2. Holds 75 % of expenses are
market share in gradually
Jordan. decreasing
3. ACPC have a from 2006 to
certificate of 2008.
Quality 2. Produce only 4
Management from 8 types of
System (ISO 9001, empty hard
2000). gelatin
4. Almost 60 percent capsules
of sales are 3. There is no
generated increasing in
internationally ACPC's
5. ACPC provide their production
customers with capacity since
customized color 1997
as per their
4. Enters new
requirements.
market on account
6. All of ACPC of current market
capsules are due to shortage of
made from pure capacity
Bovine Gelatin,
Halal, and free
from Dioxin.
Opportunities S-O Strategies W-O Strategies
1. Demand in Europe market 1. Produce vegetarian 1. Produce all types of
for Vegetarian Capsules is capsules (S4, O1) empty hard gelatin
expected to increase by 2. Enter European market capsules (W2, O3)
29% between 2010 and
(S1, S2, O1, O2)
2012. 2. Increase capacity
2. Europe market demand for by 50% (S1, S2,
capsules that are made O2, O3)
from pure bovine gelatin
increased by 5% in 2008
3. Saudi market demand for
empty hard gelatin
capsules expected to
increase by 8% annually.
4. Advancements in
technology can minimize
production cost by 30%.
5. Swine flu affecting empty
gelatin capsules sales for
manufacturer that use pig
skin in producing the
capsules. 13
6. Barriers to entry are high.
SPACE Matrix
Financial Strength Rating Environmental Stability Rating
Return on assets 6 Rate of inflation -3
Leverage 5 Technological changes -4
Net Income 3 Price Elasticity of demand -4
ROE 5 Competitive pressure -4
Working capital 6 Barriers to entry new markets -2
Average 5.0 Average -3.40
Y-axis +1.60
Competitive Advantage Rating Industry Strength Rating
Market share -6 Growth potential 6
Product Quality -2 Financial stability 4
Customer Loyalty -1 Ease of entry new markets 6
Control over other parties -1 Resources utilization 4
Technological know-how -2 Profit potential 5
Average -2.40 Average 5.0
X-axis 2.60

Directional vector point is :( 1.60, 2.60)

14
FS
Conservative Aggressive

C IS
A

Defensive Competitive

ES
Grand Strategy Matrix

Rapid Market Growth


Quadrant II
Quadrant I

Weak
Strong
Competitive
Competitive
Position
Position

Quadrant IV
Quadrant III
Slow Market Growth

The Boston Consulting Group (BCG) Matrix

15
Market share position

Stars Question mark


Industry
Sales ACPC
Growth Rate

Cash Cow
Dogs

The Internal-External (IE) Matrix


The IFE Total Weighted Score

Strong 3.0 to 3.99 Medium 2.0 to 2.99 Low 1.0 to 1.99


High
3.0Ito 3.99 II III

IV V VI
The EFE
Total Weighted Medium
ACPC
Score 2.0 to
2.99

VII VIII IX

Low
1.0 to 1.99

16
The Quantitative Strategic Planning Matrix (QSPM)

Strategy 1 Strategy 2
Increase ACPC's Enter European
production market
capacity by 50%

Key Internal Factors Weight AS TAS AS TAS


Strengths
ACPS is the only 0.15 4 0.60 2 0.30
manufacture that produces
empty hard gelatin
capsules in Jordan

Holds 75 % of market share in Jordan 0.15 3 0.45 1 0.15

ACPC have a certificate of 0.08 1 0.08 3 0.24


Quality Management
System (ISO 9001, 2000)

Almost 60 percent of sales 0.10 1 0.10 4 0.40


are generated
internationally

ACPC provide their customers with 0.08 - - - -


customized shades as per their
requirements
All of ACPC capsules are made from 0.15 2 0.30 4 0.60
pure Bovine Gelatin, Halal, and free
from Dioxin

Weaknesses
Assets deceased by 14% 0.05 4 0.20 1 0.05
in 2008, and Selling,
general, and
administrative expenses
are gradually decreasing
from 2006 to 2008

Produce only 4 from 8 0.05 - - - -


types of empty hard
gelatin capsules

There is no increasing in 0.11 4 0.44 2 0.22


ACPC's production

17
capacity since 1997

Enters new market on account of 0.08 4 0.32 4 0.32


current market due to shortage of
capacity
SUBTOTAL 1.00 2.49 2.28

Strategy 1 Strategy 2
Increase ACPC's Enter European
production market
capacity by 50%

Key Internal Factors Weight AS TAS AS TAS

Opportunities
Demand in Europe market for 0.12 - - - -
Vegetarian Capsules is expected to
increase by 29% between 2010 and
2012
Europe market demand for capsules 0.12 3 0.36 4 0.48
that are made from pure bovine gelatin
increased by 5% in 2008
Saudi market demand for empty hard 0.10 4 0.40 1 0.10
gelatin capsules expected to increase by
8% annually
Advancements in technology can 0.10 - - - -
minimize production cost by 30%
Swine flu affecting empty gelatin 0.10 3 0.30 3 0.30
capsules sales for manufacturer that use
pig skin in producing the capsules
Barriers to entry are high 0.06 - - - -

Threats
Children preferred liquid medicines 0.10 - - - -
rather than capsules
Threats of global business in dealing 0.08 - - - -
with varied regulatory environments
and currency fluctuations
Increased consumption of natural 0.12 2 0.24 2 0.24
supplements
Hindu and Buddhist consumers may 0.10 - - - -
require gelatin from non-bovine sources
SUBTOTAL 1.00 1.30 1.12
SUM TOTAL ATTRACTIVENESS 3.79 3.40
SCORE

18
Recommendation
ACPC must increase its capacity by 50% at least to sustain its domestic and
international market share and to enter in Europe market; to implement the two
strategies that will cost JD 1 million.

EPS/EBIT Analysis
$ Amount Needed: JD 1,000,000
Stock Price: JD 1.50
Tax Rate: 15%
Interest Rate: 9%
# of Shares Outstanding: 5,000,129
Common Stock Financing Debt Financing
Recession Normal Boom Recession Normal Boom
EBIT 400,000 600,000 800,000 400,000 600,000 800,000
INTERSET 0 0 0 90,000 90,000 90,000
EBT 400,000 600,000 800,000 310,000 510,000 710,000
Taxes 60,000 90,000 120,000 46,500 76,500 106,500
EAT 340,000 510,000 680,000 263,500 433,500 603,500
# of 5,666,796 5,666,796 5,666,796 5,000,129 5,000,129 5,000,129
Shares
EPS 0.060 0.090 0.120 0.053 0.086 0.120

70 Percent Stock - 30 Percent Debt 70 Percent Debt - 30 Percent Stock


Recession Normal Boom Recession Normal Boom
EBIT 400,000 600,000 800,000 400,000 600,000 800,000
INTERSET 27,000 27,000 27,000 63,000 63,000 63,000
EBT 373,000 573,000 773,000 337,000 537,000 737,000
Taxes 55,950 85,950 115,950 50,550 80,550 110,550
EAT 317,050 487,050 657,050 286,450 456,450 626,450
# of Shares 5,466,796 5,466,796 5,466,796 5,200,129 5,200,129 5,200,129
EPS 0.058 0.089 0.120 0.055 0.088 0.120

19
References

1. www.acpc.com.jo
2. Annual reports for years from 2004 to 2008
3. www.jsc.gov.jo
4. Exploring Corporate Strategy 8th Edition
5. Euromonitor International, site www.euromonitor.com

20

Você também pode gostar