SWOT Analysis on the Company Kalbe
By: Ratna Budi Phebriana, Aditya Fitriasari, Sarmoko
Background
PT. Kalbe established in mid 1960 by Dr. Benjamin Setiawan, Ph.D. and Francis Bing Aryanto which aims to help raise awareness of health and welfare of the community. Then they decided to establish Kalbe which focuses on the pharmaceutical business.
Dr. Boen is a medical and pharmacology experts who really understand about the world of pharmacy, while that is a brother of Dr. Bing. Boen very keen in seeing the opportunity to develop business Kalbe. Bing also has a business network and extensive relationships.
Kalbe started from a small garage in Tanjung Priok in North Jakarta. Today, Kalbe is known as one of the largest pharmaceutical company, which was ranked third of the 20 largest pharmaceutical company in Southeast Asia.
Kalbe Farma Company Profile
PT. Kalbe Farma Tbk. is one of the largest pharmaceutical company in Indonesia which had stood since 1966. Kalbe’s vision is to become dominant in the health business in Indonesia and become a player in the global market with strong brands, increased through good management and advanced technology. Kalbe’s mission is to improve health for a better life. The main value of Kalbe is integrity, a strong collaboration, innovation, agility and give their best to consumers.
There are many factors that support, stimulate and accelerate the progress of Kalbe. Basically there are 4 keys to success that makes Kalbe capable of achievement, namely (1) innovator product variety, (2) a solid marketing strategy, (3) strong commitment to Research and Development and (4) human resources are reliable.
Examples of Kalbe Farma products SWOT:
SWOT ANALYSIS OF KALBE FARMA COMPANY
Kalbe Farma Strength.
Kalbe is the market leader for public health products and the market leader for ethical products. Its products is a leading brand with a variety of specific market segments. In addition, its product is an innovator, developing drugs and chemical entities either by itself or through strategic alliances with international partners. As well as producing many new products based on high technology.
On December 16, 2005, Kalbe Management has successfully completed a merger with Dankos and PT Enseval (“Enseval”) into one company in order to create a publicly listed pharmaceutical company and the largest in Southeast Asia. This merger will provide opportunities for the future of Kalbe in improving the efficiency and effectiveness. Mergers involving PT Enseval as super holding and three subsidiaries listed on the JSE – Kalbe Farma Laboratories (DNKS), Farma (EPMS) – as well as forming a company truly integrated. Horizontally, Kalbe “new” offer a range of products is much broader, ranging from various forms of drug and health food to supplements and energy drinks. Vertically, they do activities from procurement of raw materials, finished product manufacturing, marketing, to sales and distribution.
Kalbe have long experience and in terms of financial, Kalbe revenues increased approximately 18% per year.
Kalbe Management has experienced personnel, including former director general BPOM in developing, producing, marketing and selling healthcare products and pharmaceuticals. Equipped with a solid team and good cooperation between departments internally and close relationships with partners, PT. Kalbe Farma Tbk increasingly established itself in the ranks of big companies in Indonesia.
In the production, Kalbe has 7 GMP (Good Manufacturing Practice) that have an international standard with 2 additional GMP still under construction. Kalbe’s commitment in this regard have been recognized through a series of test results certification department. All production facilities owned subsidiary of Kalbe and has obtained ISO 9001 certification, while Kalbe, PT Laboratories Tbk. (“Dankos”) and PT Kalbe also gained certification of ISO14001 and OHSAS 18001/SMK3 (Health Management Systems and Safety). Kalbe and Dankos have consistently maintained a very satisfactory achievement in the application of the principles of Good Corporate Governance, namely the number five and number two among all the companies listed on the Bursa Efek Jakarta in 2005.
In the distribution, Kalbe have 6000 sales force personnel to 1 million outlets across Indonesia. Sustained a fairly complete business structure, namely a distribution company and a hospital network that carries the brand Families and Partners International Partners, including school nurses.
Kalbe Farma Weakness
Expansion into noncore-business, such as the business property (PT Kalbe Land) and education (STIE Kalbe). This expansion may result in less focus on business development pharmaceutical company.
Export sales to September 2005 grew by 127.7 percent compared with same period last year. While domestic sales grew by 28.6 percent. Although exports grew very large, but weakening of the rupiah against the U.S. dollar can not bring big profits as well. The reason is, about 90 percent of raw materials are imported so the price is also soaring. As a result, gross profit percentage (gross margin) only reached 54.3 percent. This is because the import component of the drug is still very high, amounting to 90% of the raw materials used (the active ingredient and auxiliary materials) and around 50% of used packaging materials.
The active ingredients that can be produced in the country there were not significant and can not be obtained with a competitive price compared to sources from abroad. Efforts to increase self-sufficiency in the field of procurement of raw materials often stumble on the problem :
- Many kinds of raw materials used by the pharmaceutical industry (up to 6000 items) so much usage per item that does not meet the scale of economic production.
- The main problem is the procurement of basic raw material for local production of raw materials associated with :
i. Underdeveloped upstream chemical industry that can sustain the provision of intermediates for the manufacture of drugs. Dependence on intermediates from abroad to a certain extent can reduce the benefits derived from local synthesis.
ii. Lack of coordination among related industries such as petrochemical and pharmaceutical industries. It often happens that the pharmaceutical industry have difficulty because of its intermediate can not be made locally.
Weakness, basically the pharmaceutical industry is indeed a knowledge-intensive industries and highly-regulated, but regulatory aspects of pharmaceutical industry in Indonesia is considered sufficient weight that comes from :
- Policy is made with passion and not a development control;
- Implementation was slow due to the imbalance Among the number of inspectors from the government with private parties to be served. Another chain that is part of the marketing aspect and distribution of pharmaceutical industrial production is still not balanced both qualitatively and quantitatively:
- For example ratio of doctors per population in Indonesia, about 140 doctors for 1 million inhabitants.
- The number of pharmacy (drug store) currently numbers about 6,000 pieces which concentrated in the cities to serve the people of Indonesia are more than 200 million inhabitants. Pharmaceutical care programs have not worked well so that the subtraction of an optimal drug utilization in the community.
- Distributors which is quite a lot but do not have a wide reach and an efficient network that distribution costs are relatively expensive.
Kalbe Farma Opportunity
- The size of the Indonesian population and the still low per capita drug consumption cause a potential market that could be developed. Opportunity to enter into six key markets in Southeast Asia with a population reaching 500 million or approximately 8% of the world population. The total market is more than $ 890 billion in GDP and is likely to grow 5% per year over the next 5 years. Consumption of pharmaceutical products including prescription and OTC estimated 7 billion and growing to 13% from 2005 to 2010. And export opportunities as a result of the decline of the rupiah and the implementation of Good Manufacturing Practice good governance in Indonesia. In 2000, Kalbe began giving greater attention to international markets. Initially, the company tossed products into ASEAN markets, like Malaysia and Singapore. Then, the wing also widened its export business to South Africa. This is evidenced Kalbe by implementing strategies. The first strategy, trading based, namely the Kalbe appoint local distributors in export destination countries. This cooperation is very simple because it merely buying and selling activities only. However, through this network of traders Kalbe products exist in many countries, like Pakistan and Iran, while Kalbe not yet have distribution partners in these countries. The second strategy, marketing-based. Kalbe establish representative offices in each country of destination of an internal survey has the potential for the development of export products. We have 8 offices Kalbe in some countries, like Malaysia (for the markets of Singapore and Malaysia), Myanmar, Cambodia, Vietnam, Philippines, Sri Lanka and Thailand. They were assigned to conduct marketing activities, monitor the market and conducting surveys. PT Kalbe Farma plans to build a factory in Orange Kalbe Nigeria Limited. Construction of this plant to strengthen its market share in West Africa. “Nigeria will serve as the basis of marketing products Kalbe Farma,” said president director of PT Kalbe Farma Johannes Setijono. The plan that the factory will be used to manufacture OTC drugs (drugs without a prescription) and energy drinks.
- Health Care System grow fast so as to channel the power doctors including specialists as required.
Kalbe Farma Company Threats
- The existence of internal competition is quite hard. Something termed “civil war” is especially true in marketing channels. More specifically, in pharmaceutical products in the same category. In the cold medicine, for example, Kalbe have Procold while a mainstay Laboratories powerful enough, Mixagrip. Because of Kalbe and Dankos can see each individual data, they can bring down each other.
- The existence of the economic crisis has made the purchasing power of Indonesian folk medicine to decrease and threatening the survival of the national pharmaceutical industry mainly for the local market.
- The implementation of the Patent Act, 1997 and revised in 2001, Kalbe Farma pharmaceutical industry, which used to rely on the development of its products on a copy cat strategies of new products still under patent, it becomes harder to develop its products.
- Legal system can not effectively tackle counterfeit drugs so that drug prices be more difficult to control.
- The more the extent of the market who want to achieve, namely penetrate the international market will also increase the pharmaceutical business competitors. Kalbe admitted if the product is still not able to compete with products from the United States.
Translated from Source: moko31.wordpress.com/2009/01/22/analisis-swot-kalbe-farma/