1.

Introduction
Objective of this assignment is to critically examine the effective
utilization/implementation of planning function within the organization. PC Pharma PLC
has been selected for this assignment.

Key strengths and shortcomings have been identified with respect to the planning of the
organization, linking to internal and external factors affecting their business. Finally,
recommendations are made on key improvements for identified shortcomings in the
organization planning function with specific outputs and outcomes.

It is concluded that the theoretical background of management function can be used as an

effective framework for organizational behavior in order to analyze its effectiveness and
efficiency.

2. Overview
This chapter provides a brief overview of the selected organization.

2.1 Company Overview

PC Pharma PLC (PCP) is a pharmaceutical company which was incorporated on 5th May
2006. The main line of business of PCP consist of importing, distributing and marketing a
spectrum of pharmaceuticals, medical devices, nutraceuticals and medical consumables in
Sri Lanka. The company represents international reputed established brands in the
respective arena such as Square Pharmaceuticals Ltd – Bangladesh, Bbraun Dialysis
Products – Germany, Celia infant and maternal nutrition – Lactalis International France,
EZ Smart Blood Glucose Monitoring System – Tyson Bioresearch Inc. Taiwan,
Aurochem Pharmaceuticals Pvt Ltd – India. Pharmaceutical items of superior quality and
repute are sourced from across the globe for promoting better health and improving the
quality of life of the Sri Lankan people.

PCP keen participation in the pharmaceutical market has carved the company a niche in
the industry, establishing a firm platform from which to develop further in the direction of
the company’s vision to emerge as the prime pharmaceutical importer in the country.

1
3. Planning
“Planning is determining the organization’s goals and defining the means for achieving
them” (Daft, 2012). This involves the creation and maintenance of a plan which involves
the following three stages;
1. Goal setting
2. Strategy formulation
3. Strategy Implementation

3.1 PCP Planning Process

Table 1 provides the Vision, Mission and Values of the company

Table 1: Vision, mission and values of the company

Vision
Be an ethical leader in shaping healthy lives in the country

Mission
 To assume responsibility for the marketing of efficient health products and value
added services preserving corporate integrity, long term independence and concern
for people.
 To provide quality, innovative solutions that support better health and improved
quality of life.
 To be consistently oriented towards the needs of our customers and business
partners, providing superior benefits and creating value that exceeds all our
stakeholder expectations.
 To maintain a corporate culture that encourages professionalism and ethical
business practice
 To take part in the achievements and dedication of our employees, who are the
pillars of the Company and its continued success.
Values
 Customer oriented
 Quality focus
 Value employees
 Accountable

2
Table 2 provides a brief of planning process of the company

Table 2: Planning process of the company

Aspect PCP
Planning and  In order to start with planning, all the Strategic Business Units (SBU) send
Goal Setting their research data to the Corporate Planning Department together with a
market analysis done by them.
 Corporate planning team consists of CEO and mangers representing Sales,
Marketing, Finance, International business, Regulatory and Tender.
 They compile research work done by individual SBUs and external
institutions.
 5 year strategic plan is developed and submitted for the approval of Board
of Directors.
 Approved Plan will cascade down to annual goals to achieve the formulated
strategy and then will be communicated to each SBU.

Strategic  Increase the overall market share by 10% by 2016.

Goals
 Increase year – on- year growth by 25%.

 Improve the import ranking to stand within the first 10 Pharmaceutical

companies by 2016.

 Setting up a pharmaceutical manufacturing plant by 2016.

 Provide cost effective products and services of superior quality.

 Acquisitions and Strategic Alliance with health care manufacturers/

providers.

 Build corporate brand equity by enhancing the value proposition

 Launch of New Products including Nutraceutical range, Energy drinks and

Infant formulas by 2013/2014

 Retain and develop Human Resources productivity and commitment.

 Develop CSR & CRM practices.

Strategic When developing budget for the year a detailed PESTEL analysis, Industry
Analysis analysis and SWOT analysis is carried out.(Annexure – Figure: 1,2 and 3)

3
Aspect PCP
Strategy  Penetration Strategies
Formulation - Increasing the field strength
- Strengthen distribution network and product exposure

 New product development (NPD)

- Brand extensions
- Line extensions

 New market development

- New product launches – Infant formulas, Nutraceuticals, Energy drinks,
Over the Counter (OTC) drugs, Veterinary, Dental

 Diversification
- Concentric diversification – Mother & Baby care market, Laboratory
equipment

 Improve the market Positioning of PCP through effective differentiation

 Rationalize product portfolio for competitive advantage

- Segmentation, Targeting of customer segments and Positioning of
product portfolio to profitable customer segments
- Focus attention on profitable product categories

 Pricing strategy

- Penetration pricing strategy is adopted for new launches in order to

stimulate interest
- Competitor based pricing strategy is used for me-toos particularly when
the price elasticity is low for the product.
- Market Skimming pricing strategy

Strategy The company has developed a series of Critical Success Factors on market share,
Implementati volume growth, execution excellence and working capital to sales to ensure
on effective implementation of the strategic plan.
Management  Based on the goals set for the individual SBUs, Head of the SBU decides
by Objectives goals for each manager to achieve SBU’s goals
(MBO)  Achievement of those will be linked with a rewarding scheme such as
Process commissions, incentives, bonuses etc.
 Series of actions to achieve the set goals are clubbed together in a
development plan
 These are bi-annually tracked by the individuals in order to achieve the set

4
Aspect PCP
targets
 Performance analysis is done at the end of each year, which is linked
directly to the rewards of the individuals and in turn results in achieving the
SBUs goals.

Tactical/Oper Finance
ational Goals
 Optimize overheads
and Plans
o SBU architecture for best cost control and management.

 Profitability based targets and incentives

 Distributor management

 Debt management

 Efficient inventory management

o Departmental cost control and efficiency improvement

 Centralization and streamlined operations flow management

 ERP

 Achieve revenue growth of 25% per year

Human Resource

 Retain and develop Human Resource Productivity

o Widen doors to career development and career growth

 Identify and mentor departmental senior staff.

o Improve Loyalty strategies and activities

 Recreational, training, leadership and brainstorming

workshops for improved employee engagement and
employee satisfaction

o Improve work life quality

 Develop work standards, safety and hygiene. Quality of

workstations/ desks departments, resource allocations &
sharing.

5
Aspect PCP
o Improve performance based pay escalation structure for improved
enthusiasm.

 Work-harder-earn-higher schemes,

 Self-service portal for all employees

 Inter dept/ SBU recreational activities.

 Cost sharing & profit sharing schemes on projects

 Improve employee commitment

o ‘Employee of the Year’ program

 Evaluate on attendance, co-operation, dedication & KPI

achievement

o Quarterly employee appraisals

 Appraisals & guidance for target achievement

Distribution

 Company appointed Distributor network

 The company’s direct” National Sales team” under the supervision of the
National Sales Manager

CSR Strategies

All CSR strategies are aimed at “humanizing” the company and develop “heart
bonds” with customers.

 Cause related marketing strategy to collect funds for the mentally /

physically challenged with the participation of customers who are willing to
contribute towards the cause through their purchases.

 Use of recycled paper for prescription pads / paper dispenser bags /

envelopes in collaboration with Suppliers

 Market Products containing plant based ingredients for supporting

vegetarianism

 Marketing of quality medical / wellness products certified by renowned

quality assurance organizations such as FDA, ISO, CE

6
Aspect PCP

CRM Strategies

CRM strategies are designed to create high customer equity and attention.

 Use of Database Marketing strategies to “keep in touch” with customers and

discover their needs.

 TCS strategies are designed at providing “total customer satisfaction”

 Complaints register, Bi-annual Customer satisfaction survey to enable

customers to voice their “complaints”.

Forecast mega tenders and projects

 Dedicated tender department

 Focus on Global tenders floated by the Dept oh Health Services

 Focus on injectable of tender demand

Technological Objectives and Strategies

 Equipped with the advanced Enterprise Resource Planning (ERP) solution -

SAP. The introduction of SAP to the organization has ensured efficient
workflow practices resulting in timely services to our principals and
customers enhancing our competitive advantage.

 Implementation of MIS / MKIS

Operational goals and plans are also developed

Source: Author

3.2 Strengths and Shortcomings of the Planning Processes

Considering the dynamic nature of the environment the effectiveness of the planning
process is assessed for the organization. Table 3 below provides strengths and
shortcomings identified for PCP.

7
Table 3: Strengths and shortcomings identified for PCP

Strengths Shortcomings
The fundamental purpose of the Vague vision statement. It is non-
organization is successfully defined in quantifiable and lacks inspiration.
the Mission statement.
MBO approach in planning with Values are generic not specific to the
emphasis on regular review progress company.
and annual performance appraisal.
SBU/Division wise strategies and Executing too many strategies at once could
actions that link to individual backfire, as they may not be compatible with
performance and objectives will each other.
provide clear direction and motivation
to achieve set objectives of the SBUs
and divisions.
Performance focused approach to Non availability of contingency planning to
planning enables SBU leaders to response emergencies, set-backs or
formulate creative strategies and unexpected conditions.
become more committed to the plan.
Performance driven power culture Lack of internal resources to assist senior
enables achievement of organisational management in planning to meet turbulent
goals. market conditions.
Changes done by the top management at the
time of approving the corporate plans and
revising it without giving attention to detail
of the operation.
Non availability of environmental scanning
to anticipate and interpret changes the
environment.
Absence of reassessing the mission and
goals after the analysis of internal and
external environment.

8
Strengths Shortcomings

Highly sensitive with uncontrollable

variables such as Govt. regulatory policies,
exchange rates, tax policies.
Source: Author

3.4 Recommendation
By analyzing the above following recommendations are made for the key shortcomings
identified regarding the planning process of PCP.

Table 4 : Recommendations for the shortcomings identified for PCP

Issues Recommendation Time Output Outcome

Frame
Vague vision To make a clear Medium Employees Improve the
statement. It is vision statement, Term clearly chances of the
non-quantifiable which is understand the company in
and lacks quantifiable and exact vision achieving their
inspiration. easy to know and the vision.
when it is deadline for
achieved. that, thus they
are
encouraged.
Values are generic Define values Medium Creates an Achievement of
not specific to the which are unique Term unwavering the
company. to the company. and organizational
unchanging goals.
guideline to
the business.

Executing too Implementation of Short Availability of Attainment of

many strategies at the most suitable Term clear strategies organizational
once could and viable to guide the mission and
backfire, as they strategies at a organizational goals.
may not be time. decision
compatible with making.
each other.

9
Issues Recommendation Time Output Outcome
Frame

Non availability of Development of a Medium Availability of Brace the

contingency contingency plans. Term contingency organization for
plans to respond unexpected
planning to response
the events.
emergencies, set-
emergencies,
backs or unexpected set-backs or
conditions. unexpected
conditions.

Lack of internal Development of a Short Availability of Brace the

team of expertise Term team of organization for
resources to assist
to assist and expertise to turbulent market
senior conditions.
advice during the respond the
management in
turbulent market turbulent
planning to meet conditions. market
turbulent market conditions.
conditions.

Changes done by At the time of Short Ensures that Achieve expected

finalising the plans and business growth,
the top Term
annual plan, strategies of profitability levels
management at the and strengthen the
Corporate every
time of approving market position of
Planning department are
the organization.
the corporate plans Department needs realistic.
and revising it to discuss with Thereby all the
without giving individual employees will
attention to detail business units and be focusing on
department heads achievement
of the operation.
for them to give of the results
their inputs on the
suggestions

10
Issues Recommendation Time Output Outcome
Frame

Non availability of Proper mechanism Short Availability of Achievement of

to be developed to Term information to higher profits and
environmental
carry out the detect revenue growth.
scanning to
environmental emerging
anticipate and
scanning. trends.
interpret changes
the environment.

Absence of Reassess the Short Availability of Attainment of

organizational Term realistic organizational
reassessing the
mission and goals mission and mission and
mission and goals goals.
after the analysis goals.
after the analysis
of internal and
of internal and external
external environment.
environment.

Highly sensitive To enhance their Medium Increase the Reducing the

range of products Term number of unsystematic risk,
with
in different market products in the which intern
uncontrollable reduce the total
segments to pharmaceutical
variables such as risk
reduce the total sector in non-
Govt. regulatory risk. correlated
policies, exchange market
rates, tax policies. segments.

Source: Author

11
4. Conclusion
The purpose of this report was to critically analyze the management practices of PCP with
the objective of identifying how the planning aspects of management affect the success of
the organizations.

Since the company is engaged in pharmaceutical industry inter rivalry among the
competitors is intense and it confronts challenges of dynamic environment. Therefore
planning for rapid changes in the environment is crucial for the organisation. Also key
management challenges in modern times such as motivating employees and encouraging
innovation are unavoidable to the organisation.

From an overall perspective, it is evident that PCP which operates in a highly dynamic
environment should respond rapidly to the changing environment. Further the company
should develop core values to suit the organisation and not to focus too many strategies at
a time to attain the organizational goals.

12
5. List of references

Draft, R.L. (2012), New Era of Management, New Delhi: Cengage Learning.

PC Pharma Introductory Document December 2011

Robbins, S.P. & Judge, T.A. (2009). Organizational behavior, 13th ed, New Delhi:
Prentice-Hall of India

13
6. Annexes

Figure 1: PESTEL Analysis

Political

1. Stable socioeconomic environment in relation to other South Asian countries

2. Poor public administration related to health issues and go slow at the Cosmetic
Devices and Drug Authority (CDDA)
3. Ad hoc changes in government policies related to import and registration

Economic

1. Moderate inflation
2. High production costs
3. Good purchasing power relative to other developing countries
4. Demand for low priced pharmaceuticals
5. High borrowing rates
6. Demand for discounted goods, purchase on consignment basis
7. Demand for extended credit terms (at least 60 days)
8. Slowdown in the retail sector

Social

1. Ageing population rising

2. Falling birth rate
3. Significantly high Physically Challenged population
4. Greater focus on a healthier lifestyle
5. Increase in direct customer promotions
6. Demand for healthcare appliances for use at home

Technology

1. Access to easy communication and business technologies

2. Growing interest in e-business and e-tailing
3. Knowledge management systems
4. User friendly medical appliances

Education

1. High literate population

2. Demand for information (product information)
3. Free availability of information (Internet and other print and electronic media)
4. Greater awareness of health issues and products
14
Ethical

1. Growing numbers of ethical consumers

2. Ethical trading practices
3. Focus on CSR (Corporate Social Responsibility)
4. Increase in health/safety inspections of pharmaceutical items, trading locations
and practices.

Legal/Regulations

1. Absence of a National drug policy

2. All medicinal products which are consumed or applied (in contact with the
body/skin) need to be registered. Eg. Razor
3. Increased numbers of dossier submissions by growing Importer population
(400dossiers/week) results in processing delays
4. Stricter Implementation of regulations related to product registrations.
5. Increasing import costs and Pharmacists code of conduct
6. Attention on post surveillance and pharmaceutical product testing by NDQAL
(National Drug Quality Assurance Laboratory)
7. Ad hoc tax increases (OTC products – total tax payable on import apprx. 80%
Medical Devices – apprx. 60%)

Ecology

1. Increase in the numbers of Green consumers

2. Increase in Vegetarian population
3. Population growth and higher incidences of pollution related health issues
4. Demand for green / organic / animal ingredients free products
5. Pharmaceutical raw material (API) shortages in the world market
6. Bad weather and related delivery / transport issues

Source: Author

15
 Figure 2: Application of Porters 5 Forces Model for PCP

Threat of New Entrants

- Few barriers
- Saturation in certain market segments
- Doctor/ Opinion Leader loyalty for some importers
- Free trade arrangements encourage more Indian /
Pakistan and SAARC exporters

Bargaining Power of Suppliers Bargaining Power of Buyer

- Low for most major - High for most major
therapeutic classes and medical therapeutic classes and medical
devices. devices.

Industry Rivalry
- Intense with over 200
registered companies
- Price wars are common
- Crimping of agencies and
field personnel
Threat of Substitutes - Industry marred by unethical
- Availability of low cost practices to gain competitive
advantage
pharmaceuticals
- Development of medical
techniques and procedures to
reduce the need for long term
use of drugs

Source: Author

16
Figure 3: SWOT Analysis of PCP based on Overall View

Strengths Weaknesses
 Visionary leadership of the Chairman  Improvements in marketing
 Good brand image of products infrastructure
marketed  Relatively low market penetration
 An experienced and dynamic  Improvements on product line
Management team with vast exposure extension
in the industry
 Strong networking relations with key
persons and authorities in related
industries/markets
 Strong customer base
 Customer / Employee satisfaction
 Alliance with reputed suppliers
 Large product portfolio containing
superior quality products
 Strong presence in the tender market
 Automated organizational processes eg
ERP, MIS & MKIS systems
 Flat organizational structure &
decentralized decision making for
faster responses.
 Unique selling propositions and Market
leader brands.

Opportunities Threats
 A growing pharmaceutical market
 Govt spending on healthcare & strong
working relations on public health  Intense competition
projects  Easy substitution of products
 An active Tender market  Ad hoc changes in Govt. policies
 Booming private healthcare market  Absence of an established National
 Growth through acquisition drug policy
 New product/market development  Poor implementation of the “Bibile
opportunities policy” creates distrust and negative
 Diversification perceptions among customers
 e-marketing, m-marketing  Delays in registration at the Cosmetic
 Strategic alliances Devices and Drug Authority(CDDA)
 Forward and horizontal integrations  Moderate Inflation
 Outsourcing  Increased numbers of new entrants
 Emerging markets for healthcare
products and services
 Ethical consumers

Source: Author

17