SAMPLE ANSWER 01

ABP

ABP Level 7
MA / MBA Advanced entry
Level 7 Business and Strategy
Level 7 Business and Strategy Marketing
Management of Financial Resources & Performance

April 2013

Kindly note that these sample answers have been

developed in lieu of the assessment term mentioned in
the cover page and may not necessarily reflect the
structure that you are required to present in your final
answer. You are advised to use this only for reference
and not as a guideline for structure, content and
presentation.

Analysis of stakeholders
Management, Current
Business position and
financial Analysis of Beximco
Pharmaceutocals Bangladesh.
and A Financial Case on 123
Limited

Table of Contents

SL
**
Component -1
Component -1.2
Component -1.3
Component -1.4
Component -2.1
Component -2.2
Component -2.3
Component -2
Component -2

Component -3

Topics
Title Page
Executive Summary ,Overview of Beximco
Pharmaceuticals
Classification Of stakeholder
Stakeholders of Beximco pharmaceuticals
Stakeholder Management
Current Business position Of Beximco
pharmaceuticals
Business Strategy Of Beximco Pharmaceuticals
Financial Analysis of Beximco Pharmaceuticals
Asset Turn over ,Return on asset ,Return on
Common stakeholder equity ,Earning per share
Pay out Ratio, Current ratio,Acid Test Ratio
Inventory turnover Ratio ,Fixed asste turnover
ratio ,Average collection Period
Investment Appraisal

Page Number
1
3-4
5
6-7
7
8
9
10
10-11
11-14

15

Executuve Summary:
Stakeholders are considered as a vital part of an organization .They are increasing
organizational challenge approaching with different interest .So it is very important for the
organization to understand the need or interest of different stakeholder and communicate
them skillfully with the most appropriate medium of communication
In Component 1 I analyzed the stakeholder of Beximco Pharmaceuticals Bangladesh and
effetctive Management of them
In component 2 I Identified the Current Business Position of Beximco Pharmaceuticals and
Made financial Analysis of Beximco Pharmaceuticals

Component- 1

1. Overview Of Beximco Pharmaceuticals Limited Bangladesh

Pharmaceuticals business is an emerging business sector in Bangladesh .A lot of
organizations are involved with this business in Bangladesh. Beximco Pharmaceuticals is the
market leader in this field. Beximco Pharmaceuticals is a pharmaceutical company
and ITS a member of BEXIMCO Group, the largest private sector industrial
conglomerate in Bangladesh. Beximco pharmaceuticals are the largest medicine exporter in
Bangladesh. It has expanded its geographic footprint to 40 countries. Beximco
Pharmaceuticals produces and markets its own `branded generics' for almost all
diseases from AIDS to cancer.
As a public Limited Company it shares are actively listed in two stock exchanges in
Bangladesh. Beximco Pharmaceuticals has achieved the unique position of being
the only company in the country listed on London Stock Exchange.
Beximco Pharmaceuticals is a leading edge pharmaceutical company. The firm started
operation in 1980, manufacturing products under the licenses of Bayer AG of Germany and
Upjohn Inc.

Production Information:
Beximco Pharmaceuticals manufactures a range of dosage forms including tablets,
capsules, dry syrup, powder, cream, ointment, suppositories, and large volume intravenous
fluids, metered dose inhalers in several world-class manufacturing plants, ensuring high
quality standards complying with the World Health Organization (WHO) approved current
Good Manufacturing Practices (cGMP). They also produce for major international
brands of leading multinational companies.

Organizational Structure:
Beximco pharmaceuticals is completely owned and operated by its corporate body. The
chief

of

the

organization

is

the Chief

Executive

Officer.

Then,

Sales, Commercial, Manufacturing, Finance and Accounting, Product Planning, Business

Research and Development, and MIS departments each supervised by a director. Directors
of the departments report directly to the CEO. Considering the demands of dynamic
environment Beximco Pharmaceuticals designed its organizational structure as highly
adaptive and flexible. It is a Learning Organization that has developed the capacity to
continuous learns, adapt and change. In Beximco Pharmaceuticals employees are highly
trained

and

empowered

to

handle job activities and problems. They have minimal formalization with narrow span ofcon
trol.The organizational members share information openly on work and activities. For
internal communication, BPL follows a strictly formalized Intranet based electronic
communication

system

For external communication

as well
Beximco

as informal
Pharmaceuticals

verbal communication.
uses both

Internet based

electronic communication and an array of printed communication material.

1.2 Classification of stakeholder by Their General Interst

Types of
Stakeholders
Government
Employees
Customers
Materials
Supplier
Creditors
Community
Trade union
Investors

Interest of Stakeholders
Taxation, Proper VAT, legislation of Organization, Less unemployment,
transparency.
Good pay rate , Health& safety , Appraisal, quality of work life,
Trustworthy communication.
Product value,Quality,Price,Aftersales Service ,New product introduction
,Innovation
Supplier focus for New business opportunity .They tend to penetrate in
every production layer .They look for fair financial transaction as well .
Credit score, new contracts, liquidity.
More jobs, Involvement ,Recognition ,Environment friendly approach
,Social contribution
Workers safety ,Value
Annual rate of return ,Market share

1.3 Stakeholders of Beximco Pharmaceuticals with Specific Interest

1. Government: As Beximco pharmaceuticals is the leader in public limited sector in

Bangladesh thats why governs expectation is more form them .Governments always
expects proper exposition of information, transparency, less unemployment and proper
taxation.

2.Financial Instution : The financial institutions are very importand stakeholder for beximco
pharmaceuticals .They are perfing the overall monetary activities of Beximco
Pharmaceuticsls as a result their interst is to achieve a good deal and making more money

3.Research Institue : All the research institutes are big stakeholders for pharmaceutical
companies .Research institutes tend to exchange their latest invention and innovation with
beximco pharmaceuticals

4.Suppliers : Beximco Pharma is the market leader in Pharmaceuticals company in

Bangladesh thats why all the supplier expect to establish a equitable business opportunities
with proper dignity and honest financial transaction .

5.Investors : Investors are the most crucial stakeholder for any public .So investors expects a
manipulation free share price and annual rate of return from beximco pharmaceuticals .

6.Community : The community expects more from this giant company .They concern in
proper number jobs environment friendly production atmosphere and significant social
responsibilities .

7. Dealers : Beximco Pharmaceuticals is the biggest Medicine manufacturer in Bangladesh

and they exporting their medicine in overseas as well , As a result they have lots of dealers
who selling their product in every corners .Dealers expect proper supply of medicine in a
god sell commission .

8.Endusers /Customers : Being a poor and developing country the customers interest is to
get a good medicine in a cheaper price .

9.Doctors : Usually doctors represents a Medicine company very directly to its potential
customers .So doctors interest is to know the lates product update from Beximco
Pharmaceuticals .

10.Medical Institutions Student : All the Medical Institutions students are the major
stakeholder of Beximco Pharmaceuticals .Beximco Pharmaceuticals possesses the biggest
research lab in Bangladesh , Most of the medical institute student have the interest to get
an employment there.

1.4 Recommendation for Effective Stakeholder Management

Customers play the most effective role as stakeholder they enhance the brand and ruin the
image as well .So its very important for Beximco Pharmaceuticals to Maintain a good
relationship with their customer by proving superior product value ,Competitive price and
decent after sales service .Government is a vital stakeholder for Beximco Pharmaceuticals
So its very important for Beximco Pharmaceutical to maintain a transparent relationship
with government by proving truthful information ,proper tax ,proper VAT .Suppliers provide
all the raw materials thats the key determinant of production cost so its very important to
analyze the supplier and ensuring them all the organizational business facilities .Investors
provide the substantial amount of money to establish a venture .So Beximco
Pharmaceuticals should provide proper dividend, proper annual return and useful
information to retain their existing investor and attract new investor as well .They should
encourage their local Medical graduate to join them Because hiring overseas employees
might not be cost effective .
I believe that what I have mentioned to make the stakeholder management Of Beximco
Pharmaceuticals to make worthy is logical and realistic that requires no more discussion .

Component-2
2.1. The current Business position of Beximco Pharmaceuticals :
Beximco Pharmaceuticals is the largest medicine manufacturer and exporter in Bangladesh
.They are award winning exporter in Bangladesh .Its manufacturing facilities are respectfully
certified by Australia,Gulf Nations ,Europe and Brazil .In the domestic market Beximco
pharmaceuticals ranking is One among Two Hundred Pharmaceutical Companies .The
company achived annual sales turn over of Tk4.9 billion with a massive growth rate of 21
%.Beximco Pharma s product are being supplied in to reckoned hospitals in the world ,Like
Raffles Hospital Healthway Medical Group and, K K
Women & Children Hospital in Singapore, MEDS and Kenyatta National Hospital (KNH) in
Kenya.The Company has taken aggressive expansion program to capture the whole
domestic market and spread global footprint. Generic drug capabilities, competitive cost
advantages, and the manufacturing plants, global standards, have enabled the company
ideally positioned to eye into the highly promising contract manufacturing markets for
affordable generics. Currently, the company has contract manufacturing agreement with
GlaxoSmithKline for producing Metered Dose Inhaler products.

2.2. Business planning and strategies of Beximco Pharmaceuticals

Brand Values of Beximco Pharmaceuticals
The core value of Beximco Pharmaceuticals is thinking about the Quality first and creation
and execution of the innovation to achieve a distinct position in customers mind. Because of
its long history of working with MNCs at different times, the concept of 'quality' became
ingrained in everything Beximco Pharma does. Now a days Beximco Pharmaceuticals is
synonymous with Quality and Superior brand value in customers mind. Beximco
Pharmaceuticals is always concerned about the ethical facts .They are always ethically
sound in terms of their business operations .

Marketing and promotional activities of Beximco Pharmaceuticals

Beximco pharma is always focusing on innovation .Beximco pharma has always taken some
interactive and effective marketing promotional campaign. The company undertake some
aggressive marketing strategy through the Physician nationwide. It has its own distribution
network and its current sales force of more than 1,500 dynamic individuals is driven by
company's commitment towards providing quality medicines ensuring 'a healthier
tomorrow' for all. The company provides high quality academic services to the physicians in

the form of product information, journal publications, reprints, books and through
organizing scientific seminars and symposia on a regular basis. Beximco Pharma also
sponsors major health program to increase awareness. Beximco Pharma has been donating
a lot free medicine to rural areas .They made a significant donation to Tsunami Victims in
Indonesia and srilanka .They are helping the NGO s with current innovation and invention
along continuing a sound business .They are promoting their business along with raising
awareness against as well .Beximco Pharmaceuticals is arranging very useful communication
and awarness campaign for the prevention of HIV AIDS .
Beximco Pharmaceuticals has started spomsorship in Soprts as well .They are trying to
promote their brand with the help of young generation in Bangladesh.

Operational Strategies of Beximco Pharmaceuticals:

They always focus on quality rather than rivalry .They are always focusing on total quality
management. They have established dynamic working environment that enables every one
to perform at their best .Nationwide and international distribution channel alleviates all of
their barriers to reach their product to end user. Inviting the cutting edge technology and
providing the best service is also a part pf their operational strategy.They following a strong,
world class and dynamic channel of distribution thats helping them to gain higher
competitive advantage.

Human Resource Strategies of Beximco Pharmaceuticals :

The Human Resource strategies of beximco Pharmaceuticals are also dynamic .They always
appreciate and provide opportunities to qualified personnel .As a result they have been able
to establish a dynamic and brilliant workforce for their organization .Beximco
Pharmaceuticals provides all the necesseray benefits to their employees to make them
dedicated towards the organization .The compensation Package of beximco pharmaceutical
very attractive and competitive among the Pharmaceuticals companies in Bangladesh .The
performance appraisal system of Beximco Pharaceutical is world class .Innovation is partly
synonymous with Beximco Pharmaceuticals because the always tend to update their
workforce with the most innovative technologies .

10

2.3 Financial Analysis of Beximco Pharmaceuticals

The ratio Analysis represents the relationship among the financial data of the organization
.It helps to find out the difficulties atdifferent level of organization.
Profit Margin
All the figures are considered as TAKA BDT .
Profit Margin comes out when net income is divided by net sales
Profit Margin of Beximco Pharmaceuticals:
Profit Margin =Net Income / Net sales
=TK 1,034,682/Tk 6,774,426
=15.2%
1. Asset Turnover
We can divide the Net sales By Average assets to calculate the asset turnover. This ratio
represents firms ability to use assets.

Asset Turnover of Beximco Pharmaceuticals:

Asset Turnover = Net Sales / Average assets
=Average asstets =TK.24,281,092+TK.23,033,341/2=TK.23657216.5
= Tk. 6,774,426/TK.23657216.5
= 0.28 Times

2. Return on Assets
The return on asstes shows that hoe the organization handles its entire assets .
Return on Assets of Beximco Pharmaceuticals :
Return on Assets= Netincome/Average Assets
= TK. 1,034,682/ TK.23657216.5
= 4.04%

11

3. Return on Common Stockholders Equity

This ratio fascilitate to find out the organizational profitability.That enables to make crucial
financial decisions
Beximco Pharmaceuticals Return on the equity of common stockholder

Formula of Return on Common Stockholders Equity = Netincome /Average common

stockholders Equity

= Average common Stock holder Equity (24,281,092+23,033,341/2)=

23657216.5
=Net income / Average common stockholders Equity

= TK. 1,034,682/23657216.5

= 4.04%

4. Earnings per Share

Earning per share EPS is the most crucial profitability index on an organization. Net Income
has to be divided by weighted average common share outstanding

Earnings per Share of Beximco Pharmaceuticals:

Earnings per Share = Net Income /Weighted Average common Share Outstanding

= TK. 1,034,682/304639050
= TK.3.40
5. Payout Ratio

12

Pay out Ratio is used to evaluate the company performance to its earnings .We can find it by
dividing the cash dividend by Net income
Payout Ratio of Beximco Pharmaceuticals :
Payout Ratio = Cash Dividend/Net Income
= TK1,229,000/ TK. 1,034,682
= 1.18%

6.Current Ratio
Current Ratio determines companys performance in a short period that shows companies
pay back capabilities of short period liabilities.

Current Ratio of Beximco Pharmaceuticals :

Current Ratio = Current Asset /Current Liabilities
= TK7,945,056/TK2,879,625
= 2.75%

1. Acid-Test Ratio
The Acid Test ratio shows the most possible chance about the companys capability to make
up its current liabilities through existing short term assets apart form selling inventories

Acid-Test Ratio of Beximco Pharmaceuticals :

Acid-Test Ratio = Current Assets Inventories /Current liabilities
= TK7,945,056-Tk 2,324,252/ TK2,879,625
= 1.95%

2. Inventory Turnover Ratio

Inventory Turnover Ratio of Beximco Pharmaceuticals:

13

Inventory Turnover Ratio = Sales / Inventory Of Finished Goods

= TK 6,774,426/ Tk 2,324,252
= 2.91 times

1. Fixed Asset Turnover Ratio

Fixed asset turnover ratio represent companies capacity to sell the fixed asset .
Fixed Asset Turnover Ratio of Beximco Pharmaceuticals
Fixed Asset Turnover Ratio = Sales/Non current Asset
= TK 6,774,426/ TK16, 336,036
= 0.41 times

2. Total Asset Turnover Ratio

To calculate total asset turnover ratio we can devide the total sales by total assets
Total Asset Turnover Ratio of Beximco Pharmaceuticals :
Total Asset Turnover Ratio = Sales/Total Assets
= TK 6,774,426/Tk 24,281,092
= 0.27 times

3. Average Collection Period :

It refers to the approximate amount time that takes for a business to receive the
payments those are owed .
Average Collection Period of Beximco Pharmaceuticals :
Average Collection Period = Accounts Receiveable /Total Assets /365

= 1,244,678/ Tk 24,281,092 /365

= 33.38 days(Apx)

14

Component - 3
Under this task you should briefly explain the investment appraisal techniques that could be
used by an organisation, and should apply those techniques to conduct a investment
appraisal for the give scenario.
Note: Sample answers for this section could not be provided since this is a calculation based
task. However, candidates can use several investment appraisal techniques such as payback
period, NPV, IRR, ARR to evaluate the given scenario.

References:
1. The Official Website of beximco Pharmaceuticals - http://www.beximcopharma.com
2. Annual report Of Beximco Pharmaceuticals
3. Important Information regarding Current business position of Beximco
Pharmaceuticals were found at www.superbrands .com
4. A lot of term were found at www.businessdictionary.com
5. The theoretical parts have been covered from IMSS online resources from London
School Marketing
6. Prasanna C. 2010 Project management, TATA-McGrw Hill New Delhi
7. www.investopedia.com
8. www.financeformulas.net
9. Text Gitman Finalcial Management 11th edition
10. Text Fundamental of Finance 3rd Edition Prof. Shahjahan Mina

15