Orion pharma
Company Overview
About Orion Pharma:
Orion Pharma Limited (Orion Pharma/Company), earlier called Orion Laboratories Limited, a company of ORION GROUP, was incorporated in 1965; and owns and operates a modern pharmaceuticals factory and produces and sells pharmaceuticals drugs and medicines. It also owns approximately 21.76% shares of Orion Infusion Limited, a public company listed with Dhaka Stock Exchange and Chittagong Stock Exchange since 1996, manufacturing and marketing intravenous fluids.
At present, the Company has tablet, capsule, PFS, ampoule, cephalosporin, cream and ointment
Products. Its sales during the last nine months ended 30 September 2010 amounted to Tk. 110 crore, a growth of approximately 14% over the same period of the previous year. The Company has a market share of around 2% of the pharmaceuticals market of the country at approximately Tk 5,500 crore.
Orion Pharma is one of the premier pharmaceutical companies of Bangladesh for manufacturing and marketing branded?generic primary and chronic care medicines, maintaining strict compliance of WHO CGMP standards. Given vast experiences of over four decades imbibed with advanced technical and professional expertise, Orion Pharma now levers a wide array of therapeutic areas including life saving anticancer drugs and injectables having more than 80 generics in almost 250 presentations.
Vision
To be regarded as a world-class pharmaceutical company in the field of generic finished products.
Mission
To improve people’s health and achieve stakeholders’ satisfaction by manufacturing and marketing pharmaceutical finished products.
Values
Quality in everything we do
Alive up to our commitments
Transparent and fair in all our dealings
Take initiative to exceed standards
Trust and respect for each other
Work as a team
Share social responsibility
Overseas Marketing
Orion Pharma Ltd. steps forward in overseas business with peak precedence. With a view to providing healthcare facilities globally, as of now, Orion is having its overseas marketing network in Nepal and Myanmar. Orion is also in the process of receiving regulatory approvals and exploring business opportunities in many countries including Afganistan, Vietnam, Cambodia, Srilanka, Pakistan, Yemen, Singapore and some African Countries.
Competitive Condition
Bangladesh is basically a branded generic market. The industry’s major competence lies in formulation.
In total more than 230 companies have operations in Bangladesh at present. Out of this, about 200 have their own manufacturing facilities of which 5 are multinationals. The scenario in the local pharmaceutical sector underwent a drastic change with the introduction of National Drug Policy in 1982.
Within a short span of 10 years, i.e., in 1992, national companies control over more than 60% of the total sales and top 5 local companies had 45% share in local sales. The import of drugs also substantially declined and the total import was less than 15% of the total sales. After 15 years, the scenario further changed. Then the local drug companies met 97% of the country’s requirement and only high tech drugs comprising of 3% are imported. 30 companies already exported to 67 countries. With an annual turnover of about Tk 5,500 crore, Bangladesh’s pharmaceutical industry is a unique success story. The following table shows the year?wise growth of the pharmaceutical market during the last 6 years:?
Table: Bangladesh Pharmaceutical Market Growth during the last 6 Years
| Year | Size (Crore TK) | Growth (%) |
| 2010 | 5500 | 56.29 |
| 2009 | 3519 | 34.08 |
| 2008 | 3381 | 17.64 |
| 2007 | 2874 | 8.75 |
| 2006 | 2638 | 6.67 |
Orion Pharma has a market share of around 2% of Bangladesh Pharmaceutical Market. It’s main
Competitor’s are?
(a) Square Pharmaceuticals Ltd;
(b) Beximco Pharmaceuticals Ltd;
(c) Incepta Pharmaceuticals Ltd;
(d) Acme Laboratories Ltd;
(e) Opsonin Pharma Ltd;
(f) Drug International Ltd;
(g) Essential Drugs Ltd;
(h) Eskayef Bangladesh Limited;
(i) GSK Bagladesh Limited; and
(j) Renata Bangladesh Limited.
Company’s Financial Performance
· Sales Growth:
| Year | Sales growth |
| 2010 | 29.73% |
| 2009 | 21.86% |
| 2008 | 7.93% |
| 2007 | 48.77% |
| 2006 | 33.93% |
· Return on Assets Ratio
| Year | ROA |
| 2010 | 14.77% |
| 2009 | 9.93% |
| 2008 | 12.45% |
| 2007 | 11.91% |
| 2006 | 6.42% |
· Gross profit
| Year | Gross profit |
| 2010 | 613,807,942 |
| 2009 | 508,930,802 |
| 2008 | 406,103,405 |
| 2007 | 310,759,825 |
| 2006 | 195,004,572 |
Company’s Compensation Strategy
· Pay strategy: Here the company analysis the competitors salary structure and compare it with their company, then decides its own salary. So we can say that they follow comparable pay strategy.
· Consider Length Of Service: To give promotion they consider length of service. So there are no discrimination occurring.
· Performance Evaluation: There have maintained performance evaluation sheet. Also follow quantitative and qualitative base system. So there are no biasness comes out.
· Follow CPI Rate: They follow the country CPI rate and adjust it when it is change. So there is no gap in salary structure.
· Performance appraisal: The Company has performance appraisal system and it occurs once in a year. The company used this as a employee motivational tool.
Part- 2
Actual Compensation system
Benefits for White Collar Employee
· Merit pay: Merit pay is a long term incentive program designed for employee. Company provides it based on aggregate performance evaluation. Orion Pharmaceuticals Company provides merit pay to their employee.
· Job security: It is a security of employee life. Orion pharmaceuticals provide job confirmation, provident fund, gratuity, job status as a job security which is very important.
· Training opportunity: Orion pharmaceutical provides training for sales team in marketing department, for new employees, head office training for professional department and in house training for sharing information.
· Short term incentives: Company provides this incentive in monthly basis and for this they consider the company capabilities and return on capital. It is a variable payment. They provide it only for sales employee if they can minimize the company cost.
· Decision Making: Orion Pharmaceutical involves their employee on a important decision making. They give priority to the employees in decision making. So they have maintained a good relationship among them.
· Sick Leave Facility: Orion Pharmaceutical provide sick leave for casual 10 days and for earn leave 8 days.
· Motivate the Employee: To motivate the employee they involve their employee in decision making so they feel highly satisfy, giving laptop, provide free ticket to enjoy live BPL matches and etc.
· Other company benefits:
1. Job sharing facility: It means share the job as a team and divide the task among every member. Orion pharmaceutical has job sharing facility.
2. Maternity leave: As every company should have this type of leave, Orion has also provides this facility and it is for six months.
3. Emergency medical facility: As it is a pharmaceutical company so risk is there and for this they arrange emergency medical program for every employee.
4. Providing medicine: The Company provides medicine for the employees according to company rate and it is very beneficial for them.
5. Professional counseling: Orion Company has professional counseling system but it is only for marketing department and they do it in every month.
6. Disability income protection: If any employee of that organization becomes disabling because of work then the company gives compensation to that employee as income protection.
Benefits for Blue Collar Employee
· Training: Orion Group provides training to their workers. Like how to operate machine, how to packaging the product etc.
· Safety Benefits: Workers get safety benefits from the company. Like- Eye protecting Glass, hand gloves, apron etc.
· Performance Appraisal: Workers get appraisal once in a year, which improve their performance.
· Short-term incentives: If workers give better performance then they got shot-term incentives.
· Gender Discrimination: Here, workers do not face any gender discrimination. Also workers do not face any discrimination pay policy.
· Maternity Leave: They provide maternity leave facility.
· Emergency Medical facility: If any workers become injured on working time then company has an Emergency Medical Facility.
· Disability Income Protection: if any workers become disable than company give them particular portion of money.
Part- 3
Analysis Part
SWOT Analysis
Strengths
Cost effective technology: The Orion Pharma uses the cost effective technology, which is considered as a great strength for them.
Strong and well-developed manufacturing base: The manufacturing plant of Orion Pharma is well developed. That is also strength of Orion Pharma.
Low- cost manpower: In our country labor supply is more than other country. As a result the cost of labor is very low. So, this is also a good strength for the firm.
High-quality formulations and drugs: The Company produces very high quality products or drugs for various dieses. It is also strength for them.
Weaknesses
Lack of strategic planning: They do not have any proper strategic planning, which is a big threat for the organization.
Low R&D investments: This Company is a growing company. That is why they cannot invest more in research and development as a matured company invests.
Production of duplicate drugs: Their most of the formula of drug manufacturing is hired from different foreign company. That is a weak point for the firm.
Opportunities
Incredible export potential: Day by day the pharmaceuticals market of Bangladesh is growing very faster. The demand of our medicine is also increasing in foreign countries. So, there is a great opportunity to export drugs outside of country.
Increasing health consciousness: Nowadays people are getting more conscious about their health. This is also a nice opportunity for the pharmaceuticals company.
New innovative therapeutic products: The Orion Pharma is introducing different new product day by day. That may be considered as an opportunity for this organization.
Drug delivery system management: Their delivery system of drug and its management is very good. That is why it brings some opportunities to the firm.
Threats
Competition from MNCs: At present there are about five multinational pharmaceuticals companies are operating their business in our county. This tuff competition is a great threat for Orion Pharma.
Poor marketing methods: Their marketing methods are not very good. They don’t spend much on advertising. This is also a big threat for them.
Tariff barriers: This Company has to face tariff barriers, while they export or import any goods. So, the Tariff Barriers can be considered as remarkable threat for this company.
Employee Need Analysis
We have conducted a survey among their employees to analyze their need and satisfaction. Our sample size was 20. We had asked them to answer only five close ended basic questions.
As we know they always keep busy in their personal work, so they didn’t have enough time to answer all of our almost thirty questions. That is why; we had selected five basic questions, which can help us to analyze their need and satisfaction in this organization.
The results, we have got from the survey are given below with graph.
Question- 1:
Do you think the company gives you the enough and satisfactory amount of salary?
Result:
| Very Good | Good | Neutral | Poor | Very Poor | |
| No. of Employee | 02 | 11 | 07 | 00 | 00 |
| Percentage | 10% | 55% | 35% | 0% | 0% |
Question- 2:
How is the work environment of this organization?
Result:
| Very Good | Good | Neutral | Poor | Very Poor | |
| No. of Employee | 04 | 07 | 06 | 03 | 00 |
| Percentage | 20% | 35% | 30% | 15% | 0% |
Question- 3:
How is the relation between employer and employee in this organization?
Result:
| Very Good | Good | Neutral | Poor | Very Poor | |
| No. of Employee | 01 | 08 | 07 | 04 | 00 |
| Percentage | 5% | 40% | 35% | 20% | 0% |
Question- 4:
Do you satisfied with the compensation policy of the company?
Result:
| Very Good | Good | Neutral | Poor | Very Poor | |
| No. of Employee | 01 | 05 | 07 | 05 | 02 |
| Percentage | 5% | 25% | 35% | 25% | 10% |
Question- 5:
Are you satisfied with your job in this organization?
Result:
| Very Good | Good | Neutral | Poor | Very Poor | |
| No. of Employee | 01 | 09 | 08 | 02 | 00 |
| Percentage | 5% | 45% | 40% | 10% | 0% |
Part- 4
Proposed Compensation system
Proposed Compensation Plan for White Collar Employee
o Cash Compensation for White Collar
o Benefits for White Collar
· Short term incentives: we will suggest giving short term incentives for all white collar employees as a motivational tool.
· Day care facility: According to government rule every industry should have day care centre but Orion pharmaceuticals doesn’t have. So we will propose a day care centre for them.
· ESOP: It means employee stock ownership plan. In our proposed plan we listed ESOP for all white collar employees. It is also called commitment pay.
· Meditation Program: Company could arrange meditation program for white collar employees; because it will help them to concentrate on work.
· Work at home program: Only for the key employees in every department we proposed work at home program (1day in a week).It can be a golden opportunity and motivational tool for the key performer.
· Training allowances: In Orion Pharmaceuticals Company they provide training but it is non-paid. Here we will suggest training allowances for the white collar employees.
· Perk Benefit: Here we will propose them to provide some perk benefits, Such as; mobile bill
· House Rent Allowances: Company can provide 10% house rent allowance to their employee based on specific area.
o Relational Return for White Collar
· Performance appraisal: we suggest Orion pharmaceuticals for evaluating performance twice in a year because it could be beneficial in terms of better performance.
· Award system: in our plan we suggest award system where in every 3 years company will present award to those employees who have profitable contribution in the company.
· Employee Retention Plan: To retain employee in the organization for long run they evaluate employee performance year to year.
· Performance based Evaluation: They give more emphasizes on employees length of service. But they may consider the employees performances when evaluate them.
Proposed Compensation Plan for Blue Collar Employee
· Provide Bi-Cycle: They can provide bi-cycle for their every blue collar employee, which will help them to reach in the factory easily and quickly.
· Vaccination Program: The organization can arrange different vaccination program for the children of blue collar employee. Because there are some Vaccines which are very costly, such as; Hepatitis- B.
· Free or Cost Cosmetics: As we know, Orion is a pharmaceuticals company; they produce different type cosmetics as their product line. So they can provide them cosmetics with low cost or free.
· Annual Sports: They can arrange annual sports for the blue collar employee. As a result they will be motivated.
· Life Insurance: The organization can provide them life insurance facility, because they always risky job in the factory.
· Day Care Centre: The Company can also give day care facility for the female blue collar employee.
· Training for Technicians: They can provide training for the technicians to improve their skills and efficiency.
Test of Proposed Compensation System
Is it aligned?
· It is a pharmaceuticals company
· Product (Medicine and Cosmetics) producer
· Here we mostly focus on White Collar employees. To some extent we focus on Blue Collar employees.
To gain a competitive advantage as Orion pharma fulfill these three conditions of alignment, so we can say that our proposed plan can be different from our competitors and our cost is so much aligned with the total compensation budget. So it is a great source of competitive advantage.
Does it differentiate?
Here we will focus on how much unique our proposed plan is. As we know that our main competitors are Beximco, Achme, Opsonin etc. and for Orion Pharma we suggests some such benefit that are not included in our competitors compensation strategy. Here we focus on work at home program, meditation program, house rent allowance for white collar employee and Bi-cycle, vaccination program, free or cost cosmetics for blue collar employees that make differentiate from their competitors.
Does it add value?
Is this test company focus on positive or negative impact that can fall or affect in the proposed plan about the compensation. Our proposed plan has passed this test because the listed benefits in our proposed plan motivate greatly our employees. For the company it has proven best compensation plan. So it affects the company in very positive way and there is no negative affect for this proposed plan. So we can say that by using this proposed plan we can or will get competitive advantage now and near future.
Part- 5
Ending Part
Conclusion
Orion Pharma Ltd. is one of the premier pharmaceutical companies of Bangladesh which has been contributing to improving the human health care of the country by providing quality branded-generic pharmaceuticals. It is a growing company. We have found some lacking in their compensation system, which are the cause of employee dissatisfaction. We have designed a compensation system for Orion Pharma, which will help them to go to the maturity stage from the growth stage.
Reference
· http://www.orionpharmabd.com
· Annual Report of Orion Pharma- 2011
· Md. Tawhidul Islam (Manager of Cmmercial Department)