SWOT Analysis of Alembic Pharmaceuticals: Multinational

Products & Services by Alembic Pharmaceuticals

Alembic Pharmaceuticals Ltd primarily deals in pharmaceutical products. These are the goods it manufactures:

• Generic Formulation
• Pharmaceutical Products
• Active Pharmaceutical Ingredients (APIs)
• Anti-Infective Drugs

Competitors of Alembic Pharmaceuticals

There has been a stark increase in competition recently in the bio-pharmacy industry. These are current competitors for Alembic Pharmaceuticals Ltd:

• Ajanta Pharma
• Nacto Pharma
• Suven Pharma
• Abbott India
• Sun Pharma

As we are clear about the foundations of Alembic Pharmaceuticals, let’s move on to the SWOT analysis of Alembic Pharmaceuticals.

SWOT Analysis of Alembic Pharmaceuticals

SWOT stands for strength, weaknesses, opportunities and threats which is an analytical technique used for assessing your business in the four aspects. SWOT analysis is simple to analyse and determine what is best for the company at present as well as to formulate a successful strategy for the future. Accordingly, the SWOT analysis of Alembic Pharmaceuticals is carried out.

To better understand the SWOT analysis of Alembic Pharmaceuticals, refer to the infographics image below.

Let’s first start by analysing the strength of Alembic Pharmaceuticals from the SWOT analysis of Alembic Pharmaceuticals.

Strengths of Alembic Pharmaceuticals

Strengths are defined as what each business does or has best in itself. Following are the strengths of Alembic Pharmaceuticals Ltd

• Innovation Driven Organization: Alembic Pharma emphasises technology and innovation to advance the generic pharma industry. It is one of the most innovative firms in the Drugs and Biotechnology sector.
• Research and Development (R&D): The company spends much of its capital on R&D for its markets in the US. Two R&D centres supported by Alembic have helped it in staying ahead in the biotechnology and drugs industry. The company invested ₹346 crores in R&D alone with 470 ongoing projects.
• Strong Brand Value: Alembic Pharmaceuticals Ltd products boast strong brand awareness in the biotechnology and pharmaceutical industries. This allowed the company to charge a higher price compared to its competitors, increasing the profit margin.
• Faster Growth: Alembic Pharmaceuticals has seen faster growth within 115 years. It started as a small home-grown API manufacturer and today it is a developed pharmaceutical company with business in almost every country of the world. 
• Generic Drug Products: Alembic Pharmaceuticals Ltd comes up with comprehensive generic drug products including several cough syrups, vitamins, tonics and sulphur drugs & medicines. This helps companies serve different customer segments in the biotechnology and pharmaceutical industries.
• Highly Skilled Collaborators: Over the years Alembic Pharma has acquired some domestic companies and indulged in licensing agreements with many offshore companies. Bringing down the cost and providing operational flexibility.
• A 500 Index Company:  Alembic Pharma is included in both BSE 500 Index and NSE 500 Index at the respective exchanges getting listed after its demerger from Alembic Ltd in 2011.
• Talent Acquisition: Alembic Pharmaceuticals Ltd’s human resources management and employee skill development programs are an integral part of Alembic Pharmaceuticals Ltd’s success in the biotechnology and pharmaceutical industries.
• Focus on Strategy: Alembic Pharmaceuticals was established with the ambition to provide first-class healthcare services and make pharmaceutical products available to people at reasonable prices and still the company continues to work on its vision.

Weaknesses of Alembic Pharmaceuticals

Alembic Pharmaceuticals should focus on improving its flaws to retain its brand name in the market. Following listed are the weaknesses of Alembic Pharmaceuticals

• Disruptions in the Existing Supply Chain: Alembic Pharma is vulnerable to global disruptions in South East Asia. Recent examples are the Suez Canal incident and Covid-19 disruptions.
• Automation Concerns of Workers: To avoid disruptions and uncertainty in the organization due to workers’ concerns about the rise in automation in the biotechnology and drugs Industry. Alembic Pharma has to come up with a strategy to reduce workers’ concerns.
• High Cash Cycle than Competitors: To be more profitable, competitive in the marketplace and reduce inventory costs Alembic Pharma has to shorten the cash cycle by 12% as it has a higher cash cycle than other players in the biotechnology and drug industry. 
• Low Market Penetration in New Markets: To penetrate international markets outside of the home country – India. Alembic Pharmaceuticals need to spend more on promotional, marketing and advertising efforts.
• Incentives & Compensation: Alembic Pharma should hire more specialists on a project basis. To increase the revenue per employee it needs to redesign the compensation structure and incentives. The revenue per employee is just above the biotechnology and drugs industry average for Alembic Pharmaceuticals.
• Less Awareness: The general public uses medicines of Alembic Pharmaceuticals as prescribed by the doctor, but they are not aware of which brand’s medicine they are consuming. For Instance, Cipla spends heavily on advertising, so the brand’s name has reached the ears of all the Indian households.
• Compliance to Principles: The firm functions in such a sector in which it has to function beneath specific regulations and limitations which can be a difficult and expensive matter for Alembic Pharmaceuticals.

Opportunities for Alembic Pharmaceuticals

Alembic Pharmaceuticals should have an eye on exploiting the external opportunities to gain an advantage from them. A few of these are listed below:

• Expanding Customer Base: Customers need to move from disordered operators in the healthcare industry to licensed suppliers. This allows Alembic Pharmaceuticals Ltd to enter the beginner level market with plain products.
• Acquisitions & Stakes: With increasing net profit, the company should enter into several acquisitions and stake purchases to increase its market share and brand value. Recently, for presence across cream, gel, ointment, shampoo, lotion, solutions, sprays, foams, microsponge and nanoparticulate platform-based product segments, The company acquired a 100% stake in Aleor Dermaceuticals.
• Opportunities in the Online Space: As customers use online services more frequently, Alembic Pharmaceuticals Ltd will be able to offer new services to customers in the Biotechnology and Drugs industries.

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• Changing Consumer Preferences: With increasing disposable income, and rapid acceptance of technical products, today’s consumers are open to new pharmaceutical products on the market. This gives Alembic Pharmaceuticals a chance to broaden its consumer base.
• Enter New Market: The government has created barriers for new entrants in the field of BioTechnology and Drugs Industry, Alembic Pharmaceuticals should seize the opportunity and try to increase its pharmacy business footprint.
• Policy Reform:  According to some experts and reviews, The Patient Protection and Affordable Care Act (ACA Act) passed by the US government will open a new set of reforms that will favour the pharma companies dealing with generic drugs. If this news is true, it will benefit Alembic Pharmaceuticals to a big extent.
• New Technologies: Alembic Pharmaceuticals may use the new technologies to implement a differentiated pricing approach in the new market. It will allow the company to keep its current consumers by providing excellent service while also attracting new customers through various value-oriented offers.
• Favourable Govt. Resolutions: Tighter government regulations make it difficult for disordered stakeholders to work in the biotechnology and pharmaceutical industries. This allows Alembic Pharmaceuticals Ltd to expand its customer base. 

Threats to Alembic Pharmaceuticals

Alembic Pharmaceuticals should try to remove the external threats as they have a vital role in creating hindrance to the growth of a firm. The threats to Alembic Pharmaceuticals are

• Regulatory Challenges: There can be significant changes in biotechnology and drugs industry regulations as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business.
• Increased Institutional Distrust: WTO rules and laws are difficult to enforce across markets. The legal process has become a money-consuming and lengthy activity. This could reduce Alembic Pharmaceuticals Ltd’s investment in emerging markets and slow growth. 
• Tough Competition: With fewer barriers to entering the pharmaceutical business, competition has grown to much extent. The company faces tough competition from companies like Ranbaxy and Cipla.
• Changes According to Government Policy: With constantly changing government rules and regulations, companies have to readjust the rules and norms as well as drug compositions. This creates financial challenges for the company. 
• High Prices: Pharmaceutical companies require various chemical compositions which can result in high priced drugs. This can limit the expansion in various Asian and African countries with low per capita income.
• Counterfeit Drugs: Alembic Pharmaceuticals products are also vulnerable to counterfeit and low-quality product imitation, particularly in emerging and low-income regions.

This ends our detailed SWOT analysis of Alembic Pharmaceuticals. Let us conclude our learning below.