agp_the vision 2008
TRANSCRIPT
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The Vision
2008
(Private)Limited
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Business Scope
AGP Defines its business within thePharmaceutical Industry.
The Vision is to become the MarketLeader in the Antibiotics and Pain KillerSegments by providing the highestquality Brands to customers.
AGP has acquired Eli Lillys AntibioticProduct Line to market in Pakistan.
AGP is progressing towards ExportBusiness in Nairobi, Phillipines, Canada.
(Private)Limited
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Competition
GSK Multinational PharmaceuticalMarket Leader
BMS Multinational with competing
products in same market segments.
Hilton National PharmaceticalCompany with same product portfolioin Pain Killer Market
Getz Largest GrowingPharmaceutical National Company inPakistan
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Company
LOGO
(Private)Limited
Company Size = 1.46 Bil PKR
Company Ranking in Pharmaceutical Industry = 11th
Company Market Share : 2.14 %
Business Units = 5
Target Segments = GPs, Gynae, Derma, Surgeons, Paeds/ENT
National Distribution Netwo
rk = AGnC
Branches in Pakistan :Khi, Hyd, Skr, Qta, Mux, Fsd, Gjw, Lhr, Rwp, Psw, DIK
Company Introduction
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64.3 billion PKRGrowing at 11 %
Pharma Market
Others
J01D12.44 bil
15 %
J01D22.31 bil
15 %
M01A13.36 bil12 %
PharmaMarket
PharmaMarket
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e armaMarket
32815344 3458808236179607
4016026742414699
45271007
51212247
57722665
64350755
71370000
79220000
87934200
97606900
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008(+000)
No. of Companie
s
482 489 507 522 542 571 550 583 586 590 602 614 622
IMS QIV,1996- 2004IMS QIV,1996- 2004
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Pakistan Total Pharma Market Value in Billion 64.3Growth 11%
Code Major Therapeutic Class Units Value Share
(+ 00) (+ 000) %
J Systemic Anti-Infectives 1585155 12515684 25.6
A Alimentary Tract & Metabolism 1931218 10041243 20.5
N CNS 846421 5532062 11.3
R Respiratory System 1348845 3877881 7.9
C Cardiovascular System 315153 3354425 6.9
Source : Archives 2002
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Code Category Unit Value Share Goly
(+ 00) (+ 000) % %
J Systemic anti-infectives 1585155 12515684 25.6 13
J01 Antibiotic systemic 1466165 11155194 22.8 13
J01A Tetracycline & Combs 20095 372946 0.8 6
J01B Chloramphenicols & Combs 51043 11196 0.2 15
J01C Broad Spectrum Penicillin (Oral) 421682 2539757 5.2 16
J01D Cephalosporins & Combs 341295 3585083 7.3 18
J01D1 Oral 157910 1799319 3.7 18
J01D2 Injectables 183385 1785763 3.7 17
J01G Fluoroquinolones 121104 1791244 3.7 11
Source : Archives 2002
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Cephalosporins
2344370
1224208
2386699
1316648
2376939
1378886
2719102
1481184
2972966
1502432
3220076
1621802
3710841
1860177
4128542
2119909
4756733
2444720
5320000
2732000
5958400
3060700
6674000
3428020
7474216
3839387
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Cephalosporins & Comb (J01D) Oral (J01D1)
(+000)
IMS QIV,1996- 2004IMS QIV,1996- 2004
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290671
171870
65949
336960
189048
66458
310554
171835
59764
360937
167513
79894
365229
156238
85089
377389
152680
88557
417166
191264
71267
447691
204671
83519
523985
203359
99715
575000
213000
116000
619346
220000
141700
663319
225000
170000
709751
235000200000
0
100000
200000
300000
400000
500000
600000
700000
800000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Velosef Ceporex Keflex
(+000)
Major Players in J01D1
IMS Q-III,1996- 2004IMS Q-III,1996- 2004
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Year Mrkt J01D1 BMS GSK AGPSize in Billion
% % % % % % %
1997 1.31 11.1 25.2 15.8 14.1 9.9 4.9 0.7
1998 1.37 -2.4 23.8 -7.8 13.1 -9.1 4.5 -10.1
1999 1.48 14.6 24.1 16.2 11.2 -2.5 5.3 33.8
2000 1.50 -0.4 24.5 1.1 10.4 -6.7 5.7 6.52001 1.62 7.5 23.5 3.32 9.5 -2.2 5.5 4.07
2002 1.86 11.9 23.2 10.5 10.6 25.2 3.9 -19.5
2003 2.11 13.2 22.0 7.3 10.0 7 4.1 17.1
2004 2.44 17.4 21.9 17 8.5 -0.6 4.1 19.392005 2.73 11.1 21.0 9.9 7.8 4.9 4.2 16.7
2006 3.06 11.1 20.2 7.9 7.1 3.2 4.5 22.1
2007 3.42 11.1 19.3 7.1 6.5 2.27 4.8 19.9
2008 3.83 11.1 18.5 7.0 6.8 4.4 5.2 17.6
Growth
IMS Q-III,1997- 2004IMS Q-III,1997- 2004
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Which Indications
To Target ?
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AGP Prescription AuditOthers
9%SSTI
6%
RTI
85%
Rx Index, IMS, 2002Rx Index, IMS, 2002
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Prescription Share of
BMS
RTI50%
UTI9%
SSTI16%
Others25%
Rx Index, IMS, 2002Rx Index, IMS, 2002
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Prescription Share of
GSK RTI77%
UTI7%SSTI
7%
Others9%
Rx Index, IMS, 2002Rx Index, IMS, 2002
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Which Specialities
To Target ?
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AGP Customer Audit
P h y2%
Surg0%
P a e d s2%
RM O9%
G P s87%
Rx Index, IMS, 2002Rx Index, IMS, 2002
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BMS Share in Specialities
Surg6%
RMO20%
Gyn2%
Phy2%
Paeds3%
EENT3%
GPs64%
Rx Index, IMS, 2002Rx Index, IMS, 2002
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GSK Share in Specialtites
P h y1 %
P ae d4 %
S u r 1 %
G y1 %
D e rm1 %
E E N2 %
R M2 0 %
G P7 0 %
Rx Index, IMS, 2002Rx Index, IMS, 2002
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Age Bracket
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Prescription share in Age Groups
0
5
10
15
20
25
30
35
40
under 1 1 - 4 yrs 5-11 yrs 12-19yrs
20-29yrs
30-39yrs
40-54yrs
55-64yrs
65+ yrs
BMS GSK AGP(+000)
Rx Index, IMS, 2002Rx Index, IMS, 2002
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Competitor Analysis
Where We Are ??
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ParametersParameters BMSBMS AGPAGP GSK GSK Product Life Cycle Mature Growth Mature
Product Size 1.98 bil 1.46 bil 8.4 bil
Distribution P.D.s AGnC MnPProduct Portfolio Antibiotics/Pain
Killers/Vitamins/Oncology / CNS /
Respratory
Antibiotics/ Vitamins/Pain Killers
Oncology/Antibiotics/ Pain
Killers/ CNS/Cardio / Resp.
Customer Base GPs + Gynae +Surg + RMO + ENT+ Paeds + Phy
GPs + Gynae + RMO GPs + Paeds +RMO + Gyne +
ENT + Dent
Marketing Operations Lucrative Lucrative Lucrative
Production Capacity CompletelyUtilized
Under Utilized CompletelyUtilized + 3 rd Party
Mnftg
Human Resource Deployment 260 SPOs 190 SPOs 430 SPOs
Financial Capabilities High High High
Brand Ownership High Mediocre HighMana ers Ca abilites Experienced Fresh Experienced
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s r u on na ys s (*Assuming total 300 W.S. & 1000 RetailOutlets/100 Institutions)
ChannelChannel ProductProductMixMix
OutletOutletCoverageCoverage
Market ReachMarket Reach
No. of Outlets sellingProduct Mix
Total no. of Outlets
Sale of Product MixSale of all brands
AGnC Distributor to W. Sale AGP 83 % 3 %
Distributor to Retailer 50 % 1.2 %
Distributor to Institutions 2 % 0.1 %
Distributor to Consumer 0 % 0 %
MnP Distributor to W. Sale GSK 85 % 32 %
Distributor to Retailer 75 % 24 %
Distributor to Institutions 56 % 18 %
Distributor to Consumer 2 % 1 %
P.D.s Distributor to W. Sale BMS 76 % 24 %Distributor to Retailer 86 % 31 %
Distributor to Institutions 67 % 19 %
Distributor to Consumer 4 % 2 %
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Cost Analysis
RawMaterials
OperationalCost
FixedCosts
Inventory Cost LogisticCost
Distr.Cost
SellingCost
Total
AGP 18 % 21 % 16 % 11 % 9 % 4 % 21 % 100 %
BMS 16 % 21 % 21 % 9 % 11 % 8 % 14 % 100 %
GSK 12 % 18 % 25 % 11 % 13 % 4 % 17 % 100 %
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To Predict Future
P olitical Affairs : Army Dominance in Institutions L egal Issues : WTO Factor E conomic Climate : Local Pharma Industry Revolution
S ocial Changes : Doctors getting personalized T echnological Advancement : Research & Development
Consider the above parameters
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Key Performance Indicators (KPIs)
KPIs Standard Where weare
Improvement Plans
I II III
SPO Yield 10 lac 5 lac Increase Dr on List
ReduceTerritory Size
Expandportfolio
Double DigitGrowth
25 % 7 % Launch newProducts
ExpandCoverage
Open newSpecialties
StandardMinute Value
(Productivity Time)
Rs. 1000 per minute
Rs. 633.5per minute
Increaseworking time
in Field
ExpandCoverage
Open newSpecialties
Employeeturnover
0 % 15 % Training Hierchy Incentives
SkillDevelopment
No Limit Mediocre TrainingWorkshops
On JobTraining
Out HouseTraining
Strong
Distribution
MnP AGnC Increase Field
Force
Increase Vans Increase
Branches
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Confrontation Matrix
WeaknessesWeak DistributionInexperienced ManagersLack of Branding Power
No RnD
Strengths6 sigma OrganizationPositive Work ClimateAggressive Attitude towardsGrowthProduction CapacityGrowing Phase
Opportunities New Product Segments New Customer BaseInstitutional BusinessExpansion of Field Force
Managers Training
Threats
Loss of Sales because of SubstitutionMajorly Driven by GPsCustomer BaseLikely entry of Competition
PROMISING
After Improvement
HIGH
RISK
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The Customer : Basis of our Business
What do
Customerswant ?
MOST IMPORTANTASPECTS
How dowe
Score ?
Whats theCompetition
upto ??
Key Strengths&
Weaknesses
l f
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Relative Importance of Factors
Factors Importance Range
AbsolutelyCritical
VeryImportant
QuiteImportant
Not soImportant
NotImportant
Dont want it Total
Quality 90 % 5 % 5 % 100 %
Efficacy 90 % 10 % 100 %
Safety 100 % 100 %
Convenience 50 % 35 % 10 % 5 % 100 %
Regular Reminder 75 % 20 % 5 % 100 %
Presentable SPO 50 % 20 % 20 % 10 % 100 %
Marketinggimmickry
35 % 20 % 20 % 20 % 5 % 100 %
You scratch myback & I willscratch yours
35 % 25 % 5 % 15 % 20 % 100 %
Availability 90 % 5 % 5 % 100 %
Discount 25 % 10 % 25 % 25 % 15 % 100 %
Price 95 % 5 % 100 %
i C i i
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Buying CriteriaS.No
Product Related Weightage Velosef Ceporex Keflex
1 Quality 10 % 10 % 10 % 10 %
2 Efficacy 10 % 10 % 10 % 10 %
3 Safety 15 % 15 % 15 % 15 %
4 Convenience 10 % 10 % 5 % 5 %
5 Discount 3 % 2 % 1 % 2 %
6 Price 10 % 7 % 8 % 8 %
S.No
Service Related
1 Regular Reminder 10 % 5 % 5 % 8 %
2 Presentable SPO 5 % 5 % 5 % 2 %
3 Marketing gimmickry 10 % 5 % 5 % 7 %
4 You scratch my back & Iwill scratch yours
2 % - - % 1 %
5 Distribution 15 % 15 % 15 % 5 %
TOTAL 100 % 85 % 79 % 73 %
Philli R l ti P f
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Phillips Relative PerformanceRating Matrix
Good
Same
Bad
Efficacy Convenience
Quality Safety Discounts
Price
Regular
Reminder Presentable SPO
MrktgGimmicks
Deals
Distrib.
Keflex Vs. Velosef & Ceporex
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Sir,
That completes the first part of thispresentation Market Dynamics Internal Analysis Confrontation Matrix
Customer Demand Our Position in Customers Eyes
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NowNow
THE PATH TOWARDS 2008THE PATH TOWARDS 2008
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The Mission
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Strategic Intent
Nothing but the Best !!
Core
Values
Core
Purpose
BusinessVision
Big, Hairy,Audacious
Goals
Core Values:Quality Pharma
Products
Core Purpose:We Value Life
Business Vision:Market Leader inJ01D1
BHAG:200 mil in 2008
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How will we grab Velosef share ??
Hit its 500mg Strength
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Velosef Line Contribution
125 Sus14%
250 Sus16%
500mg Cap57%
250mg Cap13%
IMS, Q IV 2004IMS, Q IV 2004
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500mg Capsu l15%250mg
Capsule5%
125mg Sus33%
250mg Sus16%
Drops31%
IMS, Q IV 2004IMS, Q IV 2004
Keflex Line Contribution (In 2004)
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500mg Capsul25%
250mg Capsul8%
125mg Sus26%
250mg Sus15%
Drops26%
Keflex Line Contribution (In 2008)
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Where do we see ourselves ??
Product Line Development
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Keflex 125mg Susp
(+000)
IMS Q III, 1996 to Q III, 2004
768510090
11976
2051722608
2638222721
27666
3237835154
40000
45000
52000
0
10000
20000
30000
40000
50000
60000
1996 1998 2000 2002 2004 2006 2008Keflex 125 Susp
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9119 8584 8119
1006511160
12472
10550
12549
15785
19100
22200
25000
29000
0
5000
10000
15000
20000
25000
30000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Keflex 250 Susp
Keflex 250mg Susp
(+000)
IMS Q III, 1996 to Q III, 2004
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Keflex 250mg Caps
3524 3537
52595793 5728
5279
3855 4053
52836140
9000
12000
15000
0
2000
4000
6000
8000
10000
12000
14000
16000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Keflex 250 Cap(+000)
IMS Q III, 1996 to Q III, 2004
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Keflex 500mg Caps
(+000)
IMS Q III, 1996 to Q III, 2004
8314
14131
18684 18336
14763
9147 10506
15406
20000
30000
41000
52000
0
10000
20000
30000
40000
50000
60000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Keflex 500 Cap
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Keflex Drops
1901621331
19397
2401827257
29662
24994
2874530862
34693
40500
47000
52000
0
10000
20000
30000
40000
50000
60000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Keflex Drops(+000)
IMS Q III, 1996 to Q III, 2004
T ti l Pl
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Tactical Plan2006
Increase Doctor Coverage in Local Cities Base SPOs in Hospitals Tap Local Potential & Gynae Segment Include in Hospital Formularies
2007 Deploy SPOs in Potential Towns Increase Coverage in Peripheral Areas Expand into Surgery Segment Grab Tender Business
2008 Government Institutions Street Business
Hospital Business Tender Business
Segments of GPs, Gynae, Surgery should be our domain.We should enter into Hospitals, Government Institutions & dominate Streets
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Competitive Innovation
Increase Field Force Size SPOs = 85 RSMs = 17
SMs = 3 Expand Specialities
GPs
Gynae Surgery RMOs
Paeds
Till 2008
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In 2006
Increase Field Force
Karachi SPOs = 16 / RSM = 2 Hyderabad SPOs = 6 / RSM = 1 Sukkur SPOs = 5 / RSM = 1
Quetta SPOs = 2 / RSM = 1 Multan SPOs = 5 / RSM = 1 Bahawalpur SPOs = 4 / RSm = 1 Gujranwala SPOs = 3 / RSM = 1 Lahore SPOs = 10 / RSM = 2
Faisalabad SPOs = 5 / RSM = 1 Rawalpindi SPOs = 8 / RSM = 1 DIK SPOs = 3 / RSM = 1 Peshawar SPOs = 6 / RSM = 1
Total SPOs = 72 / RSMs = 14
S i D if
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Strategic Drift
Surgery = 10 A4 = 5 A3 = 5 A2 = 0
Paeds = 2 A4 = 2 A3 = 0 A2 = 0
Others = 8 A3 = 3 A2 = 5
Daily Calls = 18
Doctors on List = 140
GPs = 70 A4 = 45 A3 = 15 A2 = 10
Gynae = 35 A4 = 20 A3 = 10 A2 = 5
RMOs = 15 A3 = 5 A2 = 10
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Working Behavior
Morning = 12 CallsMorning startsOT Reminder
Ward WorkingHospital OPDsGPs WorkingDischarge Slips
Evening = 6 CallsGPs WorkingConsultant Calls
Daily Chemist Calls = 6
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Meeting ScheduleWeekly Meeting Every Monday - 3:00 PM to 5:00 PM
Quarterly Meeting Regional Meeting - 9:00 AM to 5:00 PM
6 Monthly Meeting Zonal Meeting - 2 days
Annual Meeting Pakistan Level - 3 Days
For Expansion Strategy consider the following parameters
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1. The Costs of Gaining Share & ROI2. Knock On Effect3. Changing Loyalty of Customers from
Competition involves higher investments
4. Organization Intent to Grow5. PLC6. Increase in Share is attractive from
less appealing and less profitablesegments
7. Monopoly Legislation8. Competitive Fight9. Short Term Gain10. Competitive Retaliation11. Brand Equity12. Dont Fall in No Mans Land
For Expansion Strategy, consider the following parameters
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Take Risks
BUT
Take Calculated Risks !!
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Wish us GoodLuck !!