SMP

Respiratory Business Plan

Abbott
 BUSINESS SCOPE
 Regions = Pan Pakistan

 Functions / applications = Cold, Flu and Cough Market – Tablets, Syrup,

Effervescent Tablets, Chest Rubs, Inhalants

 Customers & users = Patients with cold, Flu & Fever (Ages 1 year & above)

 Products, technologies & services

 Need to explore new technologies such as Rapid dispersing medicines, newer combinations
 Need to shift trend of people from self medication to proper consultation

 Direct competitors fall under similar market scope where as indirect competitors
are exploring niche segments. Eg: Vicks

 Customers can be created by providing utility to the patients and doctors, and
enhancing the value curve
 MARKET STRUCTURE

Cold Fever Nasal

End user/applications Sinus Pain Sore
& & Congestion
Throat
Flu Flu

Arinac
Brufen Arinac
Cofcol
Products Panadol CF
Arinac Cofcol Vicks Rub Strepsils
Panadol Xynosine Vicks Tab
Triminic CF
Paracetamol Vicks Rub
Actified P
 Distribution Channels

Industry

Institutional
Distributors Whole Sellers
Distributors

Institutions / Dispensing Chemist /

Retailers
Hospitals Doctors Chain Pharmacies
 MARKET SIZE Volume (MLN RS)
2007 2008 2009 2010 2011 CGR 5 YEARS
TOTAL MARKET 22 24 28 34 40 9.14
COLD & FLU 6 8 10 13 15 12.08
FEVER & FLU 9 10 11 13 16 10.87
NASAL CONGESTION 5 5 6 6 7 4.93
SINUS PAIN 2.0 1.3 1.3 1.3 1.8 -2.42
SORE THROAT 0.002 0.039 0.124 0.249 0.259 233.27
Value (RS +000)
2007 2008 2009 2010 2011 CGR 5 YEARS
TOTAL MARKET 987,277 1,015,915 1,235,195 1,439,269 1,724,544 9.14
COLD & FLU 471,302 456,417 552,887 664,103 789,389 12.08
FEVER & FLU 379,832 456,417 552,887 664,103 789,389 10.87
NASAL CONGESTION 127,794 146,231 171,498 200,969 230,186 4.93
SINUS PAIN 41,619 27,514.0 27,049.0 29,774.0 40,418.0 -2.42
SORE THROAT 25 1,305 4,344 8,861 9,224 233.27
Fever/Cold and flu is the largest segment of market and still growing so investment in
this segment would be a good option
Although segment of sore throat is small but it is attractive for future growth and LCM
point of view
Nasal congestion segment is growing slowly a blue ocean strategy would be helpful in
this segment
 PRODUCT LIFE CYCLE STAGES

Product Segments INTRODUCTION GROWTH MATURITY DECLINE

Cold & Flu 

Fever & Flu 
Nasal Congestion 
Sinus Pain 
Sore Throat 

Innovative remedies for sinus pain is required

Need to find out reasons of maturity of nasal congestion segment
More precise focus is required in Cold /Fever and flu segment to face
segment rivalry
 COMPETITION / SEGMENT MATRIX
One page analysis – The competitor / segment matrix for evaluating
market attractiveness and competitive position
Competition Segments Overall
1 2 3 4 5

1. GSK 35% 65% 100%

2. P&G 61% 22% 17% 100%
3. R&B 100% 100%
4. ZAFA 100% 100%
5. ABBOTT 59% 41% 100%

Historical Growth 12% 10% 5% -2% 233% 100%

Projected Growth 13% 12% 7% -1% 150%

Company
Profitability N/A
 COMPETITION / SEGMENT MATRIX

Intense competition with GSK in cold/fever and flu segment

Need to enter in nasal congestion segment with innovation

Monopoly of R&B in sore throat segment should be

challenged by Abbott

Nasal spray with more efficacy and compliance will be helpful

to drive growth of this segment

Entry in nasal congestion segment would be a largest threat

to ZAFA
 DISTRIBUTION STRUCTURE: SHIFT FROM 2007 TO 2011

% OF RS MIL COLD & FLU FEVER & NASAL SINUS PAIN SORE
FLU CONGESTION THROAT
2007 2011 2007 2011 2007 2011 2007 2011 2007 2011
DISTRIBUTORS 85% 81% 85% 81% 83% 80% 100% 100% 97% 95%
WHOLESALES
RETAILERS
CHEMISTS / PHARMACY CHAINS
INSTITUTIONS / HOSPITALS 10% 12% 10% 12% 15% 16%
DISPENSING DOCTORS 5% 7% 5% 7% 2% 4% 3% 5%

Distributor are more important in all segment so selection of extremely

good distributors would be a key to success

Institutional distributor can be helpful to drive growth of all segment

 DISTRIBUTION SHARES AND COMPANY’S POSITIONS (2007)

% OF RS MLN ALL PAKISTAN ABBOTT GSK

DISTRIBUTION

DISTRIBUTORS 83% 81% 80%

WHOLESALES
RETAILERS
CHEMISTS / PHARMACY CHAINS
INSTITUTIONS / HOSPITALS 11% 12% 15%
DISPENSING DOCTORS 6% 7% 5%

Need to focus on institutional business through institutional distributor to

compete with GSK
One level distribution to pharmacy chains for bulk business to compete
with GSK by increasing Abbott’s shelf Share
 TOP – 10 External Trends
Taking Advantage

Trend Potential Impact We GSK P&G R&B

Urbanization Reduced Purchasing Power    
Enhanced Competition
Strictly Price Regulated Market Erosion of Margins  

Multiple Dosage and Application Customization   

Forms Innovation to suit the needs
Seasonality Opportunity    

Self Medication Reductions in Rx & Control   

Level of Promotion Opportunity (Trade Education)   

Bulk Buying at Hospitals Threat, Price War 

Increase in Annual Health Budget Opportunity, Increased  

Institutional Buying
Doctors Endorsement Opportunity, Support from  
KOLs
Chemist Endorsement Opportunity, OTX   
SWOT Analysis
Strength Opportunity
1. Experience Curve in Cough & Cold 1. Trade Level Endorsement
2. Best Cost Provider Strategy 2. Acceptance of New Dosage Form
3. Market Leadership 3. Seasonal Variations
4. Increase in Health Budget
4. High Standard Margins
5. Health Awareness
5. Pull Strategy 6. Expected Price Increase
6. Health Professional Coverage 7. Focus on Health Care Professionals
7. Urban Coverage 8. Increase in Primary Care Setup
9. Population Growth
10. Broad Range of Buyers

Weakness Threats
1. Capacity Constraint 1. Self Medication
2. Distribution Network 2. Low Priced Competitors
3. Raw Material Import Restrictions 3. Institutional Bulk Buying of Low Priced Products
4. Weak NPI 4. Strictly Price Controlled Market
5. Reach & Frequency in Peripheral Areas 5. COBC on Promotional Campaigns
6. OTX approach 6. Highly Saturated Market
7. Restricted Dosage Form 7. Raw Material Constraint
8. Premium Price 8. Restriction from OTX to OTC
9. Medium of Promotion 9. Urbanization
10. LCM 10. Innovation and R&D
CONFRONTATION MATRICES

Strength Opportunity
1. Experience Curve in Cough & Cold 1. Seasonal Variations
2. Best Cost Provider Strategy 2. Increase in Health Budget
3. High Standard Margins 3. Health Awareness
4. Expected Price Increase
4. Pull Strategy
5. Focus on Health Care Professionals
5. Health Professional Coverage
6. Urban Coverage
CONFRONTATION MATRICES

Weakness Opportunity
1. Capacity Constraint 1. Trade Level Endorsement
2. Distribution Network 2. Acceptance of New Dosage Form
3. Weak NPI 3. Increase in Primary Care Setup
4. Reach & Frequency in Peripheral Areas 4. Population Growth
5. OTX approach 5. Broad Range of Buyers
6. Restricted Dosage Form
CONFRONTATION MATRICES

Strength Threats
1. Best Cost Provider Strategy 1. Low Priced Competitors
2. High Standard Margins 2. Institutional Bulk Buying of Low Priced Products
3. Strictly Price Controlled Market
CONFRONTATION MATRICES

Weakness Threats
1. Raw Material Import Restrictions 1. Self Medication
2. Weak NPI 2. COBC on Promotional Campaigns
3. OTX approach 3. Highly Saturated Market
4. Restricted Dosage Form 4. Raw Material Constraint
5. Premium Price 5. Restriction from OTX to OTC
6. Medium of Promotion 6. Urbanization
7. LCM 7. Innovation and R&D
 Relative Importance of Factors
Factor Number Absolutely Very Important Quite Nice to Not significant Don’t
Critical 4 Important Have 1 Want it
5 3 2 0
Brand Equity

Efficacy

Ease of Usage

Availability

Suggested Definitions:

Absolutely Crucial: Overrides most other considerations, wouldn’t consider supplier who doesn’t
perform on this factor.
Very Important: One of the first things we ask for, but we may be prepared to negotiate on it.
Quite Important: A negotiable item, but one when we attach considerable weight to.
Nice to Have: It could make the difference in a division, but is normally taken into account last.
Not Significant: Not normally taken into account at all.
Don’t Want it: Would prefer a product without this feature
RATING AGAINST CUSTOMERS BUYING CRITERIA
Abbott GSK P&G R&B ZAFA
Quality & Price

Non-Price attributes %
Affecting Customer Weight
Choice

Product - Related %
1. Brand Equity 24% +++ +++ +++ ++ +
2. Efficacy 38% +++ +++ ++ ++ +

3. Ease of Usage 11% ++ +++ +++ +++ ++

4.
Availability 27% + ++ +++ +++ ++
Total 100%
Has quality gone up/down (+/-)
In past 4 years + +/- + - +

Relative Price today 100 60 75 130 90

Relative Price 4 years ago 100 50 55 90 75
Market choice of suppler specified by
Price ………… % and Quality ………………. % (Total 100%)
CUSTOMERS BUYING CRITERIA: PRICE ..%, QUALITY ATTRIBUTES ..%

Question
its Cost Keep it UP

Abbott
Better
GSK GSK
GSK GSK
Relative
Performance Same Abbott
Rating Abbott
Abbott
Worse

Do Not Availability Ease of Usage Brand Equity Efficacy Improve

Least 10% 20% Most fast
Sweat

Attributes Important to customers

Key Issues
1. Saturated Respiratory market

2. Stiff challenge from OTC and well established brands

3. Major chunk of Pakistan population living in rural areas

4. Manufacturing Constraint

5. NPI and R&D (limited dosage forms)

6. Maintaining favorable top line and bottom line in the face of strict
pricing and regulatory controls

7. Generating Rx growth in a mature brand

 Impact of Issues on Strategic Profile
Issue Number Issue 1 Issue 2 Issue 3 Issue 4 Issue 5

Issue Name Saturated OTC Sales Rural Manufacturing NPI

Market Population Constraint

Customers +++ +++ ++ ++

Regions + ++ ++

Market segments ++ ++ ++ +++

Needs / wants / applications +++ + +++

Products (prices) +++ +

Strategic Management + + ++ +

Product Creation Process + ++ +++

Sales Acquisition Process + ++ + ++

Operations (Production/Logistics) +++ ++ ++ ++

Customer base Management ++ ++ ++ ++

Technology + ++ +++

Plant & Equipment ++ ++ +++ +++

Distribution Channels ++ +++ +++ ++

 Impact of Issues on Strategic Profile
Issue Number Issue 1 Issue 2 Issue 3 Issue 4 Issue 5

Issue Name Saturated OTC Sales Rural Manufacturing NPI

Market Population Constraint

Money ++ ++ ++ ++ +++

People + ++ ++ +

Information + + + ++

Raw Materials, Energy ++ ++ +++ ++

Organization Structure

Procedures + + +

Culture