Term Report On Abbott

Term Report for Introduction to Business

Business Activities of Abbott Laboratories (Pak) Ltd Submitted to

Sanat Ullah Submitted by Adil Aziz (2938) Khawer Atique (2934) Syed Zaheer uddin Ashraf (2818) Tabish Jawaid (2946)

TABLE OF CONTENT CONTENT

PAGE NO.

ABOUT ABBOTT LIMITED HISTORY ABBOTT PAKISTAN ABBOTT OPERATION IN PAKISTAN ABBOTT MARKETING ARMS VISION: MISSION ACHIEVEMENT COMPANY PROFILE PRODUCTS ABBOT PHARMACEUTICAL PRODUCTS ABBOT NUTRITIONAL PRODUCTS ABBOTT INFRASTRUCTURE DEPARTMENTALIZATION DEPARTMENTALIZATION CHART OF ABBOTT PAKISTAN ABBOTT PAKISTAN DISTRIBUTION DEPARTMENT HIERARCHY OF ABBOTT SALES & MARKETING ABBOTT STRUCTURE & AUTHORITY FIRST LINE MANAGERS MIDDLE MANAGERS TOP MANAGERS HUMAN RESOURCE MANAGEMENT RECRUITMENT & SELECTION WAGES & SALARIES TRAINING PROGRAMS BENEFITS TO EMPLOYEES HEALTH & SAFETY SWOT ANALYSIS COMPETITION PRICING PLACEMENT PROMOTION CLASSIFICATION OF BUSINESS ACTIVITY OF ABBOTT PAKISTAN PRODUCT LINE STAGES IN THE PRODUCT LIFE CYCLE REFERENCES

3 3 3 3 4 4 4 4 5 6 6 6 7 7 8 8 9 10 10 10 10 10 10 10 10 10 11 11 12 12 12 12 13 13 13-14 14

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ABBOTT LABORATORIES (PAKISTAN) LIMITED

(A Promise for Life) ABOUT ABBOTT LIMITED: Abbott is a global, broad-based health care company devoted to discovering new medicines, new technologies and new ways to manage health. Abbott products span the continuum of care, from nutritional products and laboratory diagnostics through medical devices and pharmaceutical therapies. Abbott comprehensive line of products encircles life itself – addressing important health needs from infancy to the golden years. With over 70,000 employees worldwide and a global presence in more than 130 countries, Abbott is committed to improving people's lives by providing cost effective health care products and services that consistently meet the needs of our customers. HISTORY: Founded in 1888 by Dr. Wallace Abbott, a Chicago physician, Abbott is a broad-based health care company that discovers, develops, manufactures and markets products and services that span the continuum of care – from prevention and diagnosis to treatment and cure. Abbott's principal businesses are global pharmaceuticals, nutritional and medical products, including diagnostics and cardiovascular devices. Headquartered in north suburban Chicago, Abbott serves customers in more than 130 countries, with an employee base of more than 68,000 at more than 100 manufacturing, distribution, research and development, and other locations around the world. ABBOTT PAKISTAN: Abbott Pakistan is part of the global healthcare corporation of Abbott Laboratories, Chicago, USA. Abbott started operations in Pakistan as a marketing affiliate in 1948; the company has steadily expanded to comprise a work force of over 1500 employees. Currently two manufacturing facilities located at Landhi and Korangi in Karachi continue to use innovative technology to produce top quality pharmaceutical products. ABBOTT OPERATIONS IN PAKISTAN: Abbott Laboratories (Pakistan) Limited. is a public limited company. The Company is incorporated in Pakistan and its shares are quoted on the Karachi, Lahore and Islamabad stock exchanges. The Company is principally engaged in the manufacture, import and marketing of research based pharmaceutical, nutritional, diagnostic, hospital and consumer products. 3

ABBOTT MARKETING ARMS: Abbott Pakistan has leadership in the field of Pain Management, Anesthesia, Medical Nutrition and Anti-Infective. Company’s wide range of products is managed and marketed through three marketing arms, which are as under: Horizontal Integration: Acquired Knoll Pharma in 2001. Abbott Laboratories has to compete in a growing industry with Knoll pharma so the company gains monopoly by acquiring Knoll Pharmain 2001. This strategy was pursued to gain access to new suppliers, distributors, customers, products and creditors. Product Development: Abbott Laboratories has strong research and development capabilities so the company seeks increased sales by improving present products such as Klaricid ,Brufen and Ensure. Horizontal Diversification: Abbott Laboratories can use present channels of distribution to market the new products to current customers such as Tarka & strepsils with vitamin c. VISION: To be premier health care company in Pakistan MISSION: To deliver consistently superior products and services with contribute significantly to improve the quality of life of the consumers. This will be achieved while ensuring that the interests of all stakeholders including healthcare providers, employees, shareholders & the communities are secured. Abbot Pakistan will comply at all times with applicable local laws & regulations conform to highest standards of local CGMP/EHS and adhere to the Corporate Code of Business Conduct & Ethics. ACHIEVEMENT: On June 29, 2005 Abbott Pakistan Achieved Class 'A' accreditation against the Oliver Wight ABCD Check list. This was an outstanding achievement, which puts Abbott Pakistan amongst some of the best global companies in terms of operational excellence. A continuous process of innovation, research and development at Abbott's worldwide facilities enables Abbott Pakistan to offer effective solutions for various healthcare challenges, with products and services that are well focused, within the customer's reach and contribute to improved health care of the people of Pakistan. Abbott believes that Corporate Social Responsibility is fundamental to earning and deepening the trust of the people it serves, an integral part of its commitment to improve lives has contributed to a number of humanitarian causes and supported various institutions in various fields including health and education. The promise of Abbott is in the promise that our work holds for health and for life

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COMPANY INFORMATION: BOARD OF DIRECTORS KAMRAN Y. MIRZA EX Chairman & Managing Director ASIF JOOMA Active Chairman & Managing Director GREG W. LINDER (Alternate Farhat Qadeer Dar) IMRAN A. HALAI MALLICK HASEEB UR REHMAN

LORI O CARLSON (Alternate Mohammad A. Khan) GARY P. COUGHLAN (Alternate Ishaque H. Hashmi) ALI SHABBIR

SECRETARY MOHAMMAD AMIN AUDITORS SIDAT HYDER QAMAR & CO. Chartered Accountants LEGAL ADVISERS AZFAR & AZFAR SURRIDGE & BEECHENO BANKERS ABN - AMRO BANK AMERICAN EXPRESS BANK LTD. BANK OF AMERICA N.T. & S.A. STANDARD CHARTERED GRINDLAYS BANK

DEUTSCHE BANK HABIB BANK LIMITED MUSLIM COMMERCIAL BANK NATIONAL BANK OF PAKISTAN CITIBANK N.A.

NO. OF EMPLOYEES

1,350

REGISTERED OFFICE AND FACTORY Opp: RADIO PAKISTAN TRANSMISSION CENTRE HYDERABAD ROAD, LANDHI, KARACHI - PAKISTAN DEPOTS ISLAMABAD PLOT NO. 136, STREET NO.9, 1.10/3 INDUSTRIAL AREA ISLAMABAD - PAKISTAN LAHORE SHAHPUR KANJRA 16 K.M., MULTAN ROAD LAHORE - PAKISTAN MULTAN HASSANABAD, GATE NO.2, NEAR: PAK ARAB FERTILIZERS KHANWEWAL ROAD, MULTAN - PAKISTAN

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PRODUCTS: Abbott Products are been categorized in four divisions, which are as under: Abbot Pharmaceutical Products Abbot Nutritional Products Abbot Diagnostics Services Abbot Diabetes Care ABBOT PHARMACEUTICAL PRODUCTS:                    

Abbutol,Abocain, Abocal, Abozole, Abrifam, Acyclovir, Arinac, Artifen, Atrelax Becefol, Bejectal, Bevidox, Brufen, Burnol Calcijex, Cecon, Cofco, Citro Soda, Cremaffin Dayalets, Daycor, Dijex, Dobutamine, Dopamine Enoxabid, Entamizole, Epival, Erybron, Erythrocin, Eryderm Flexin, Forane, Froben Ganaton, Gopten Hytrin Iberet, Isoptin Klaricid Lucrin, Lincomycin, Loftyl Mammo, Moculator, Mospel Neophage, Nicor Optilets-M Pentothal, Pramet - FA, Prothaiden, Protium Rambuzid, Rashni, Reducti, Rondec Savourane, Selsun, Silliver, Somogel, Sparaxin, Survanta, Surbex Tarka, Trividox, Tronolane Urixin Vancomycin, Vi-Daylin

ABBOT NUTRITIONAL PRODUCTS: Abbott Nutritional segment is engaged in the manufacture import and marketing of pediatric nutritional products and medical nutritional products. ABBOTT NUTRITIONAL PLAN FOR HEALTH CARE: Good nutrition leads to healthy growth. To grow properly, kids need to eat the right amounts of protein, carbohydrates, fat, vitamins and minerals. For times when you're not sure your child is getting adequate amounts of proper nutrition from regular food, look to PediaSure. No matter which delicious flavor you choose, every can of PediaSure contains 25 essential vitamins and minerals and a balanced combination of protein, carbohydrates and fat. With PediaSure, you can be confident your child is getting complete, balanced nutrition.

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Vitamins & Minerals From bone growth to healthy skin to muscle development, vitamins and minerals are essential for healthy growth. A diet that provides a wide variety of all the food groups can provide the vitamins and minerals your child needs.

Protein Mainly found in meat, poultry, fish, beans and eggs, protein helps build and repair cells in the body. Carbohydrates Found in fruits, vegetables and grains, carbohydrates add fiber to your child's diet and provide energy. Fat In small amounts, fat is essential for the development of a healthy nervous system. The healthiest fats are mono- or polyunsaturated fats and come mainly from plant sources. ABBOTT INFRASTRUCTURE: LAND:Abbott has five satellite warehouse in which two are manufacturing units both manufacturing units is Abbott own property and three satellite warehouse are on rent. Manufacturing plants are in Karachi one in Landhi and second in Korangi Industrial Area. Both plants have also satellite warehouse. Rests of warehouse are in Multan, Lahore and in Islamabad. LABOUR: Abbott has trained work force in which Manual workers, skilled workers and management are all members of the workforce. They are paid wages or salaries for their services. CAPITAL: Abbott is working as an incorporated company in Pakistan if company get loan then they shows guarantee of head office at Chicago. DEPARTMENTALIZATION: Abbott Pakistan operation is been divided into five basic departments, which are as under: • • • • • •

Director Human Resource Director Production & Engineering Director Marketing Director Sale & Distribution Director Material Management Director Finance

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DEPARTMENTALIZATION CHART OF ABBOTT PAKISTAN

General Manager

Director Marketing

Director Sales & Distribution

Director Human Resource

Director Finance

Director Material Management

ABBOTT PAKISTAN DISTRIBUTION DEPARTMENT

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Director Production & Engineering

Distribution Hierarchy General Manager

Director Distribution Trade Sale

Director Institution Saletion

Institution Manager

Institution Sale Cocoordinator

Manager Trade Sale & Logistics

Distribution Services Officer

Distribution Services Manager Islamabad

Distribution Officer

Distribution Services Manager Lahore Distribution Services Manager Multan Central Depot Manager

Warehouse Officer Korangi Plant

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HIERARCHY OF ABBOTT SALES & MARKETING

General Manager

Director Sales Primary Care A,D,E Specialty Care A Hospital Division

Head of Sale Primary Care A Specialty Care A

Head of Sale Primary Care D,E

Director Sales Primary Care B,C Specialty Care B,C

Head of Sale Hospital Division

Head of Sale Primary Care B Specialty Car B

Sales Manager South PCA, SCA

Head of Sale Primary Care C Specialty Care C

Director Marketing

Franchise Manger General Healthcare or Consumer

Marketing Manager

Group Product Manager

DSM PCA Karachi

Product Manager

Product Manager

DSM SCA Karachi

DSM PCA Hyderabad

Product Manager

DSM SCA Hyderabad

Group Product Manager

DSM PCA Sukkur

Product Manager

DSM SCA Sukkur

Product Manager

Product Manager

Sales Manger North PCA, SCA

Sales Manager Central PCA, SCA

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ABBOTT STRUCTURE & AUTHORITY: Abbott Sales & marketing structure is tall & in line authority FIRST LINE MANAGERS: District Sales Managers are the first line managers in Abbott Sales & Marketing hierarchy. Their technical skills are high as this would required at this level MIDDLE MANAGERS: Sales Managers & Head of Sales are the middles Managers in Abbott Sales & Marketing hierarchy. Middle Managers have good human skills. TOP MANAGERS: Directors & General Manager are the top managers in Abbott Sales & Marketing hierarchy. Their conceptual skills are high. HUMAN RESOURCE MANAGEMENT: Abbott Human Resource Management (HRM) is a set of organizational activities which directing, attracting, developing and maintaining an effective work force. This department takes place within a complex and ever-changing environmental context and is increasingly being recognized for its strategic importance. HR live with touch with all departments and follow up for job analysis and forecasting the demand for and supply of labours, all department has a systematic analysis of jobs in organization. In Abbott the job analysis is made up of two parts job description and job specification. RECRUITMENT & SELECTION: Abbott has hired best suite employees with attracting and selecting the best candidates for vacancies that arise. The effective recruitment will be taken by giving ad in newspaper, then first line manager test the candidates and refer the selected candidates to middle manager. After evaluation of middle manager the selected candidate are referred to Panel interview which consist of Top Manager, Training Manager & HR Manager. WAGES & SALARIES: Abbott pays attractive salaries and retained the right people and be sufficiently high to motivate employees. TRAINING PROGRAMS: Abbott gives basic training to newly induct employee. Further Abbott makes plans and gives training as per requirement needs of employees and as per requirement of employee’s designation. This should be linked to the future plans of the business. BENEFITS TO EMPLOYEES: Abbott Pakistan has the following scheme to provide benefits to their permanent employees: Staff retirement benefits - A recognized provident fund for all permanent employees who have completed six months’ service; and

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- An approved funded pension scheme for all its permanent employees who have completed one year's service. Provident fund A recognized provident fund (defined contribution) scheme is in operation, which covers all permanent employees who have completed six months' service. Equal contributions are made by the Company and the employees. Pension Abbott operates a recognized, funded defined benefit pension scheme for all its regular permanent employees drawing basic salary exceeding Rs. 1,000/- per month. Contributions are made monthly to the fund on the basis of actuarial recommendations. The scheme is administered by the trustees nominated under the trust deed. An actuarial valuation is performed each year. The actuarial valuation was carried out using the Projected Unit Credit Method. Under this method, the cost of providing pension is charged to the income statement so as to spread the regular cost over the service lives of the employees in accordance with the advice of qualified actuaries.

HEALTH & SAFETY: Abbott has law regarding his employees’ health and safety and provides them company medical facilities. SWOT ANALYSIS: STRENGTHS:  Good company reputation.  Strong distribution network.  Strong brand positioning.  Have deep roots in the Pharma business.  Excellent professional management team. WEAKNESSES:  Comparatively high price.  Lacking of deep rural penetration.  Employee rededication - High Field Force turnover. OPPORTUNITIES:  Increase per capita income.  High rate of population increase in Pakistan.  Promotion intensive market.  Increasing healthcare awareness. THREATS:  High inflation rate. 12

   

Foreign Exchange Rates Political conditions of Pakistan. Govt. restriction on price Low price local pharma product.

COMPETITION: Abbott main competitors are GSK, Novartis, Merck & Getz. Below is competitors profile table. ABBOTT Critical Success Factor

GSK

NOVARTIS

Weight Rating Score Rating Score Rating

Score

Market Share

0.2

3

0.6

4

0.8

2

0.4

Price competitiveness

0.1

3

0.3

3

0.3

2

0.2

Financial Position

0.3

3

0.9

4

1.2

3

0.9

Product quality

0.2

3

0.6

3

0.6

2

0.4

Customer Loyalty

0.2 1

2

0.4 2.8

3

0.6 3.5

2

0.4 2.3

Accordingly to the above table, which reflect the Abbott competitive approach in the market as compare to their two main active competitors. PRICING: Abbott commonly known as house of multivitamins & pricing of multivitamins is most economical as compared to competitors, whereas prices of rest of the products are competitive. PLACEMENT: Abbott has three levels channel which includes fifty seven distributors all over the Pakistan who are providing Abbott products to consumers via wholesalers and retailers. Main Distributor: Pharmanet – Karachi Premier Agency – Karachi Qarni Cooperation – Hyderabad Baber Medicine Co. – Lahore DS Pharma – Islamabad Nadeem Traders: - Peshawar PROMOTION: Abbott medicine products are promoted through personal selling i.e. one to one selling to Doctors through medical representatives. 13

Abbott consumer products like Selsun blue, Mospel, Rashnil, Burnol are promoted through advertising (print & electronic media). Low & Rauf is the service provider of print media & FM Radio, PTV, GEO is the main resource of electronic media.

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CLASSIFICATION OF BUSINESS ACTIVITY OF ABBOTT PAKISTAN: SECONDARY PRODUCTION: Abbott involves manufacturing, transform raw material into goods, and raw material has been import from India, China, Germany and Denmark and this all raw material are imported by third party. TERTIARY PRODUCTION: Abbott also provides direct service for relaxation of public vial direct selling at low price in Exp centre Karachi. BUSINESS ACTIVITY: Abbott has a good name in Non-durable Goods as medicine and Nutrition milk, confectionery (Shampo, Mospel, Burnol) MIXED ECONOMIES: Pakistan has mixed economy so Abbott is working also between mixed economies, the part of price of medicine is dependent on approval of ministry of health, but in nutrition Abbott has authority of holding price. Production decisions are made by firms in response to demands of consumers and also on seasonal basis. PRODUCT LINE: Abbott has products line in which most popular product are Surbex, Rondec, Kalaracid, Erythrocin etc., Abbott has also multiple product line who allow for company to grow more rapidly and can help to minimize theconsequences of slow sales in anyone product line. STAGES IN THE PRODUCT LIFE CYCLE: GROWTH : The new products of Abbott are Reductil, Ganaton, Gopten, Nicor & Daycor. These products are in Growth level and satisfy enough consumers, sales begin to climb rapidly. MATURITY: Abbott’s some products are in Maturity level like Pedialyte, this product is a ors product. Some products are also in maturity level and these product are come in counter sale and with out company promotion are being sale (Brufen, Burnol). DECLINE: Abbott some products are come in decline due to condition of economic is that raw material is so expencesive but the price of product not increase from ministry of health, company is selling only for company name. BRANDING PRODUCTS: Abbott has also so brand product like Burnol, Cofcol, Rondec these branding is using symbols to communicate the qualities of a particular product made by a Abbott. PACKAGING PRODUCTS: 15

Abbott package serves in-store advertisement that makes the product attractive, displays the brand name, and identifies features and benefits. Abbott also reduces the risk of damage, breakage, or spoilage and increases the difficulty of stealing small products. Provide convenience in transportation. LABELING PRODUCTS: Abbott’s all products have a label on its package. Like outer carton label, product package label which contain the product name, raw material use in manufacturing & expiry dates, also caution label on products addresses issues of consumer safety & usage of product. REFERENCES: 1. 2. 3. 4. 5. 6. 7. 8.

ABBOTT LIMITED (www.abbott.com) ABBOTT LABORTARIES (PAKISTAN) LIMITED (www.abbott.com.pk) http://www.paksearch.com/Annual/Annual00/ABBOT00.htm SHAKEEL AHMED METHAWA (Manager Costing Finance Dep. Abbott) ARSHAD ALI (Ass. Manager employ relation Abbott) ALMAS ILYAZ (Distribution Services Officer Abbott) ATIF AUSAF (Territory Manager Abbott) SALEEMUDIN (Warehouse Manager Korangi Plant Abbott)

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