Ian Appraisal of Glaxosm,Ithki:Ine Bang,Ladesh Limited' ~ .~~
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r e"/- , ,Q ( 0" J IAn Appraisal of GlaxoSm,ithKI:ine Bang,ladesh Limited' ~ .~~ Il Internship Report in Ful:fUlment of Bus-499· Prepared for Dr. Tanbir Ahmed Chowdhury Associate Professor ,.0. • Departm.ent of Business Administration Eas,t West University Prepared by Sifal Pervin to: 1997 ..... 2 -12 - 004 Department of Business Administration East West Uni'Versi,ty EWU Dhaka -1212' December 29" 2001 Letter of Transmittal December 29, 2001 Dr. Tanbir Ahmed Chowdhury Associate Professor Department of Business Administration East West University 45-46 Mohakhali, Dhaka - 1212 Dear sir: It gives me immense pleasure in presenting my internship report on GlaxoSmithKline Bangladesh Limited, which has been assigned as a partial requirement to complete BUS - 499 course. I have the pleasure in forwarding my report in which I have presented an overview of GlaxoSmitKline and revealed about the various areas of functions of the Company. I have also conducted evaluation of financial performance of the Company, identified the prospects and problems of the Company and suggested some remedial methods for the development of GlaxoSmithKline Bangladesh Limited. I have tried to cover all these areas with immense sincerity and best effort. I consider my evaluation, interpretation, opinions and remedial propositions of their problems would lead GSK Bangladesh Ltd. to sustain their growth, be competitive and continue to increase their market share. I would like to take the opportunity to thank you and extend my appreciation towards you for your valuable guidance and constant attention as and when required in accomplishing this report and providing me the opportunity to familiarize the practical aspect of business. I shall be pleased to answer any query you think necessary when needed. Sincerely, Sifo.t .:r~y\y\ Sifat Pervin 10: 1997 -2- 12 - 004 Department of Business Administration East West University Acknowledgement I would like to show my sincerest gratitude and appreciation to my academic advisor Dr. Tanbir Ahmed Chowdhury, Associate professor, Department of Business Administration, East West University. His heartiest guidance and assistance helped me a great deal not only to complete this report but also to gain experience from practical field. I would furthur like to show my gratitude to all the respondents [ corporate officials1 of GlaxoSmithKline Bangladesh Limited for taking their valuable time and providing me with necessary information regarding the report. I express my greatfulness to the foJ/owing officials of GlaxoSmithKline Bangladesh limited: • Md. Moynullslam Group Product Manager • Md. Nizam Uddin Manager - HR Services • Naimul Islam Chowdhury IT System Officer • Md . Masudur Rahman Manager Accounts • Md. Mustafizur Rahman National Distribution Manager • Md. Rokonuzzaman Internal Audit Manager. II Tabl'e of' CQ:ntents Topics Page Number Letter of Transmittal Acknowledgement II Executive Summery III Chapter 1 1. 1 Introduction 1 1.2 Origin of the Report 2 1.3 Objectives of the Study 2 1 .4 Data Collection Method 3 1.5 Scope and Methodology of the Study 3 1.6 Limitations 4 1.7 Background of GlaxoSmithKline 5 (A Global Perspective) 1.7.1. Glaxo Group Limited 5 1.7.2. Burroughs Wellcome 6 1.7.3. Glaxo Wellcome Pic. 7 1.7.4. SmithKline Beecham 7 1.7.5. GlaxoSmithKline 8 1.8 Some Specific Features of GlaxoSmithKline 12 1.8.1. Research and Development 13 1.8.2. Global Manufacturing and Supply 14 1.8.3. GSK in Time 14 Topics Page Number 1 .9 Support and Guidance from the Center 15 1.9.1 . Commercial Development 15 1.9.2. Human Resources 16 1.9.3. Finance 17 1.9.4. Legal Operations 17 1.9.5. Communications 18 1.9.6. Information Technology 19 1.9.7. Procurement 19 1.9.8. International Regulatory Affairs 20 1.9.9. International Government Affairs 21 1.10 GlaxoSmithKline Bangladesh Limited 22 (Company Profile) Chapter 2 2.1 Industry Analysis (Bangladesh Perspective) 25 2.2 Human Resource 27 2.2.1. Average Number of Employees 29 2.2.2. Organogram of GSK Bangladesh Limited 31 2.3 Information Technology 32 2.4 Product 33 a) GlaxoSmithKline Group 33 b) Local Suppliers 33 2.5 Packaging 34 2.6 Labeling 35 2.7 Promotional Strategies 36 2.7.1 . Processes of Promotion 37 a. Marketing Representatives 37 b. Mail 37 Topics Page Number c. Medical Journal 37 d. Promotional Symposiums 37 e. Gifts 38 f. Discounts 38 2.8 Pricing Policies 39 2.9 Terms of Trade 40 i) Cash Basis or Cheque 40 ii) Credit Sales 40 2.10 Distribution 41 (A) Imported 41 (B) Locally Produced 41 2.10.1. Distribution Channel 42 2.11 Environmental Impact 43 2.12 Basis of Accounting 44 Chapter - 3 3.1 Evaluation of Financial Performance 45 3.1.1 . Capacity Utilization 47 3.1 .2. Net Sales 49 3.1.3. Profit After Taxation 53 3.1.4. Earning Per Share 56 3.1 .5. Dividend 57 3.1.6. Dividend Per Share 58 3.1.7. Dividend Payout 59 3.1.8. Net Assets Value Per Share 62 3.1.9. Return on Shareholder's Fund 63 3.1.10. Price/Earning Ratio 64 3.1.11 . Total Funds Employed or Shareholder's Fund 65 3.1.12. Sales Position of the Company 66 Topics Page Number 3.2 Trend Analysis by Following the 68 Ordinary Least Square Method 3.2 .1. Trend Analysis of Net Sales 70 3.2.2. Trend Analysis of Earning Per Share 73 3.2.3. Trend Analysis of Dividend 75 3.2.4. Trend Analysis of Profit After Taxation 78 3.2.5. Trend Analysis of Shareholder's Fund 80 3.2.6. Trend Analysis of Return on Shareholder's Fund 83 3.3 Share Capital Position 87 3.4 Position of Shares Holding 88 Chapter 4 4. 1 Prospects 89 4.2 Problems 95 Chapter 5 5.1 Recommendations 98 5.2 Conclusion 101 Appendix-A Locally Manufactured Products Price List 102 Imported Products Price List 104 Appendix- B Questionnaire 106 Appendix-C Bibliography 110 List o.f Tables. and Grap,hs, Tables and Graphs Page Number Chapter 2 2.2.1. Average Number of Employees Table and Graph 2.2.1. 29 2.2.2. Distribution of Executives Table and Graph 2.2.2. 30 2.10.1 . Distribution Channel of GSK Bangladesh Limited Figure 2.10.1 42 Chapter 3 3.1.1. Capacity Utilization Table 3. 1. 1. 47 3.1.2. Net Sales Table and Graph 3.1.2. 49 3.1.3. Profit After Taxation Table and Graph 3.1.3, 53 3.1.4. Earning Per Share Table and Graph 3.1.4. 56 3.1.5. Dividend Table and Graph 3.1 .5. 57 3.1.6. Dividend Per Share Table and Graph 3.1.6. 58 3.1.7. Dividend Payout Table and Graph 3.1.7. 59 Tables and Graphs Page Number 3.1 .8. Net Assets Value Per Share Table and Graph 3.1 .8. 62 3.1 .9. Return on Shareholder's Fund Table and Graph 3.1.9. 63 3.1.10. Price! Earning Ratio Table and Graph 3.1 .10. 64 3.1.11 . Total Funds Employed or Shareholder's Fund Table and Graph 3.1.11 . 65 3.1.12. Sales Position of the Company Table 3.1.12. 66 3.2.1 . Trend Analysis of Net Sales Table 3.2.1 . 70 3.2.2. Trend Analysis of Earning Per Share Table 3.2.2. 73 3.2.3. Trend Analysis of Dividend Table 3.2.3. 75 3.2.4. Trend Analysis of Profit after Taxation Table 3.2.4. 78 3.2.5.Trend Analysis of Total Shareholder's Fund Table 3.2.5. 80 3.2.6. Trend Analysis of Return on Shareholder's Fund Table 3.2.6. 83 Calculated results of Trend Equations and Square of Correlation Coefficient, Table 3.2( I ) 85 Year Wise Comparison, Table 3.2( II ) 85 Executive Summery GlaxoSmithKline is a world leading research based pharmaceutical Company, committed to improve the quality of human life by enabling people to do more, feel better and live longer. Pharmaceutical industry is one of the most complex and highly regulated industries in Bangladesh as elsewhere in the world. Although there is a price ceiling on the controlled priced products set by the government, still GlaxoSmithKline contributes around 100 crore Taka to the national exchequer and the amount is programming in an upward trend. The company has one of the most diversified marketing networks and efficient financing policies by which it ensures the availability of its products to the ultimate consumer and at the same time ensures good fund management. The Company always sets a selling target each year and tries to attain the goal. The Company also enjoys competitive advantage on its brand name. The Company has established 11 DMOs(District Marketing offices) in 11 districts, medicines are allocated to different demand oriented areas from these DMOs. The Company views Information System as a corporate resource and includes it as part of the strategic planning process. The maintenance of quality is a long-term fundamental aspect of the Company and they achieve it through their commitment to high international standards in every aspect of their business. GlaxoSmithKline is among the few companies in Bangladesh, which conducts their own research on millions of molecules to produce new medicines, for which they have some patent products. As far as the pharmaceutical industry is concerned, it is a highly competitive market and up to some extent, infact a great extent there is also the presence of a complex monopolistic market. Under these conditions the company has to set different sort of marketing and financing strategies.