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Management Skills and Entrepreneurship

Student ID

L0144NDND0210

Tutor

Rajendra Kumar Tatiana Pavlovsky

Class Business Proposal Title

MBA1 Assignment: Yuri pharmacy company and website Pharmavn.net in business.

TABLE OF CONTENTS CHAPER TITLE A) Introduction PAGE 4

B) Business plan:

1) Executive summary

a) Strategy and Implementation Summary b) Objectives c) Mission d) Keys of success

5 6 6 6

2) Business description

a) Background and history b) The goal product or services c) Supplier information, agreements, ownership structure and legal considerations

6 7 7

3) Business opportunities

a) The potential customer b) Geographical area c) Business competitors

9 10 10

4) Marketing strategy

11

a) Selecting marketing strategies

11

b) Sale projection c) Marketing plan 5) Business operations

13 13 16

a) The operational function b) Services offered c) Personnel d) Goal e) Business effective

16 17 17 18 18

6) Technology

18

a) Developing in company information system technology b) Using technology for developing website online c) Gears technology in the future plan

18

18 18

7) Finances

19

a) Break even point b) The income statement and business ratio c) Capital investment with NPV and IRR 8) Risk and new opportunites in business

19 21 21 22

a) Risk b) New opportunities 9) Conclusion

22 23 24

10) References and Appendices

25,26

A) INTRODUCTION :

In business today, pharmacy market has become a big profit to many company in the world. Therefore, the author opened YURI pharmacy company in 2008 for selling medicine and beauty pharmacy. Futhermore, the author also created a website news about clinical, healthy and it support for developing YURI company pharmacy on the internet.

By studying management entrepreunership, the author creative innovation, humanities on the internet with website and exploits opportunities for making money successfully to YURI pharmacy company.

B) BUSINESS PLAN: 1) EXUCUTIVE SUMMARY: a) Strategy and Implementation Summary:

Yuri company is a destination in Ho Chi Minh city, VietNam selling about pharmacy such as: Beauty, Pharmacy and Health, opticians. They turned over 116.000 in 2008, having grown by 23% since 2010, and 37% per year in 2012. Moreover, investment of $5000 for improving website extension and trading online is forecast to double sales by 2015 and boost operating margin to 34%.

website PHARMAVN.NET also created at he same time with company. It has 3 main business segments: advertising, selling online

and forum. Advertising revenues have been growing fastest , from 10% to 36% in 2009, with selling online 36%.

The market of country pharmacy was worth 300 million in 2010(source: vneconomy.vn) and has increased strongly at 4-5% per year. Key long-term drivers are the growth in Vietnam population with over 80 millions people.

b) Objectives: The objectives company during 5 years include:

1. Exceed customer satisfaction with the best pricing 2. Every year, increasing the number of customers by more than 30% 3. Create developing website with many viewers 4. Attractive famous pharmacy company to sponsor website by advertising.

c) Mission: Explaining to customers with the lowest best prices for their prescription medications convenience services will be greater than the satisfaction of customers. website provide business to business(B2B) on the internet as try to get more and more sponsor from famous pharmacy company in the world such as: GSK, Astra Zeneca.

d) Keys to Success:

Yuri company and website :

1. Provide to need from customers so they will return again and again 2. Keeping the lowest price and operating costs 3. Provide better prices than all competitors in the environment 4. Create news and forum for attracting viewers

2) BUSINESS DESCRIPTION :

a) Background and history:

The yuri Pharmacy is a limited company for selling about pharmacy,beauty, and perfume in Ho Chi Minh city, VietNam. It has 2 stores and also trading online on the internet. Both of Yuri pharmacy company and website have spent for 4 years developing its unique news flatform, to be simply, quickly, and cheaply.

In the next time, opening new platforms in social media such as: Facebook, Twitters to create satisfaction to customers as selling magazines healthy in the today.

b) The goal product or services:

Yuri company provides premium quality pickup and delivery product to customer, special offer and discount to bring new customers and improve profit to the company. discount 10% for student to buy beauty and perfume to create higher sales special offer such as: buy 1 get1 and double point in membership.

website with free six month advertising in attraction advertising to sponsor to famous company.

Customer service: Free uses a call center to provide its phone support. Transfer banners together to attract many people more and more linked.

c) Supplier information, agreements, ownership structure and legal considerations:

Company ownership: Yuri Pharmacy is a limited liability corperate. The majority stock holder is the author. The author graduated pharmacist and have a lot experience for working in pharmacy company.

personnel in company and website:

payroll in company Payroll Quantity Manager Cashier and seller Accountant Marketing Delivery Customer care Total people Total payroll 3 4 3 2 3 2 17 3134,3 Month 1 1500 480 360,3 240 270 142

CEO: Chief executive officer Tow pharmacist in store Two managers in product and stores Four managers in operation, control, financial and marketing in website 10 staffs in 2 stores and website.

chief executive officer

YURI PHARMACY COMPANY

WEBSITE PHARMAVN.NET

PRODUCT MANAGER

STORE MANAGERS

OPERATIONS MANAGER

QUALITY CONTROL MANAGER

FINANCIAL MANAGER

MARKETING MANAGER

Product in YURI company and website :

Medicine for patients from famous medicine companies such as: Astra Zeneca, Gsk, sanofy Aventis..etc Beauty pharmacy product Mother care product Perfume and cosmetic

Website Provide information about in healthy and clinical . Create a forum to all members to discuss about desease and news in communication Many Logo for advertising from sponsor on the screen of website

Legal considerations :

The Yuri company have 2 pharmacists who to read and take a good advice to patients. Futhermore, Store need to have license about Good Pharmacy Practice (GPP) from the government.

3) BUSINESS OPPORTUNITIES

a) The potential customer :

Customers from Yuri company are 17 to 65 years olds, and website company sponsor from famous pharmaceutical, typically from high income in the world, willing to pay a premium service such as : GSK, Astrazeneca, ,etc.

Yuri customers often buy online some medicine simply and beauty which is necessary for life such as: paracetamol and perfume. Most of customers go to stores for buying some special medicine with advisers from doctor such as : antibiotic. As a result, the author historically needed to survey about potential customer for sales growth until a location reaches a certain critical mass.

Providing to custumers in Yuri company and sponsor for website with confidence is a business endorsement.

b) Geographycial area:

According to the Vietnamese Ministry of Health, most of people in this city often seek treatment in the private sector. Customers go to stores to buy medicine with advice from doctor. Futhermore, customers are likely shopping in store for buying with cash than shopping online with debit card.

c)Business competitors: Competition has many ways in the pharmacy market.

Chain pharmacies. This is a state pharmacies with many stoes around hospital and big population area.

Local pharmacies. This is pharmacies where doctor give medicine. Personal service is higher than chain pharmacies

Online Pharmacy. The advantage of this market is to create a lowest price on the internet.

d)Solutions to business compeittiors: Position of the company where the forces are weakest: For these customers, manager developed such features as good news, and special product and sales off 70%. Buyers can choose from thousands options to order product. Exploit in the social media: the author open many way to customer to choose product such as : Facebook, twiteer, youtube.

Use tactics specifically to reduce of profit leaking to other players. For example: neutralize supplier power to create unique pharmacy company.

4) MARKETING STRATEGY:

a) Selecting marketing strategies:

1. The author choose the seven elements of the marketing mix and it can be seen bellow: Product Price

Make a good quality product and avoid any unethical product in market Offering at a lowest price to encourage people to come this company Free 6 months advertising from sponsor.

Place

Store of company always open at central city with high population and hospital. Alternatively, customers can go store very easy.

Company also create shop on the interner with supporting website Pharmavn.net

Promotion People

Advertising on popular magazines Taking in many types of sponsorship, such as : gameshow on television.

the reputation of the marketing mix that product s are involved in the people's hands

Process Physical

Explaining a with informations on whether the services are useful to the customers.

experience about a product or service when it went out to the customer.

2. manager also provides a useful means of applying SWOT analysis principles to form marketing strategies :

STRENGTHS Well established brand In business since 2008 Good recommendations about quality Low prices A little bit debts OPPORTUNITIES Local transport company has offered organize deliveries to a wider area Produce a wider range of products Capitalize on strong brand position

WEAKNESSES Small market with selling one country Only a limited range of medicine pharmacy

THREATS There are many pharmacy company into the region Large market with developing on the internet

b) Pricing and costs strategy: Pricing will be at the premium level, but we need to be creative and aggressive in acquairing customer to their satisfaction.

Offering group special aimed at getting fraternities and sororities to try us out, and offering giveaways as part of promotional advertising are effective techniques. try to fixed cost of sales and purchase in company at the lowest prices

c) Sales Strategy:

The sales strategy depends on long-term relationships with customers. Offer quick shipment and store front pick up, and provide superior customer service.

All staffs will be trained to provide friendly, knowledgeable customer service.

d) Sales Forecast

Sales activity will begin in month two. In month six we expect to see a jump in sales from website . Sales will grow steadily from month six on.

YURI Pharmacy's target market have two different groups. That is local customers walk-ins, and customers buying online.

2012

2013

2014

The graph show sales forecast for 3 years in the future.

e) Marketing Plan:

The strategic marketing planning process follow below: 1. Mission statement : manager focus upon what customers are buying rather than upon what the company is selling. 2. The marketing audit: it is a systematic internal and external environmental of the company . This provides the basis for subsequent SWOT analysis.

3. The external will describe PEST factors. a. political in Vietnam government about Tax and requirement for pharmacy company b. economic in developing country with high growth and have a lot inflation in this country c. Social cultural and technology in the general business environment. 4. Strengths, weaknesses, Opportunities, threats(SWOT) in marketing strategies. 5. Market objective: objectives are statements of what is to achive to successfully comapany and developing website. Marketing mix objective with 7ps marketing mix has emerged as a successful proposition in the market. 6. Forecast market potential: it provides sale forecast and market segment. 7. Assumptions and contingency plans : manager have to have perfect knowledge and progress can be made to the planning stage. 8. Prepare detailed marketing mix programmes: this part of the plan is concerned with who should do what, where, when, how and why for developing of comapy and website. 9. Budget resources including any changes required to meet the objectives of the plan staffing 10. Agree time_scales: A rolling planning principle ensure plans are at least one year and updated quarterly. 11. Implenment the plan : Marketing and marketers operate in a dynamic environmens. 12. Measure and control: Controls are needed to assess tactics and trategy in the progess towards the achievement of quantitative and qualitative objectives.

5) BUSNIESS OPERATION

a) Operational function: Operation efficiency depends on of YURI company s greatest strengths and developing of website. The author try to sell more and more products on the internet with developing of website. Plan of Yuri pharmacy create a reduced price on the segment market. One of the main objective is targeting advertising from website on the internet.

b) Product and market segmentation:

YURI Pharmacy : Company have a lot of prescription drugs to patients. Both generics and name brands are offered.

Website : focus on news about clinical and healthy informations in the world with 2 miliions viewers everyday.

c) Service offer Customer service : customers service complaint and issue e-mails come directly to the local franchise. Service offered: support several additional services for students, pay point to membership, buy 1 get 1. Call center: Customer service personel coordinate with personel at a location to address problems, such as lost or damaged product, and track such issues until they are resolved.

d) Webstise plan and goals:

Website has improved host and also open many way in social media such as: Facebook, Youtube, Twitter. Improve forum to attract many viewers Goals : provide additional services as well. To reach sufficient revenue levels. To grow the company to point where its net income can easily support the three principle executive into the foreseeable future

e) Operational effectiveness:

it makes these activitives become better and faster. the problem of operational effectiveness is the best practices as it is easily emulated. The maximum value a company can deliver g the good technology, and management techniques, lower cost and improving value

6) TECHNOLOGY : a) Using information technology to marketing research with databases: Databases in website maintains a customized web based database of all customers, account histories, personel hours, and product processes. This automates much of the data collection and generates the forms, e-mail are, and reports needed. Data mining: managers can use statistical analysis and modeling technique to look for important patterns of cause and the database through data mining.

b) Using technology for developing website online: Changing host and create innovation in website to attract more and more viewers to website. c) Gears in the future plan:

The technology strategies can be seen with gears in the future plan. Gear1: a long_term information techonology plan with improving host and service in website Gear2: unifying platform with developing marketing strategies in many social media such: Facebook, youtube and twiiter. Gear 3: a high performance technology culture

. 7) FINANCE a) Break even point of Yuri pharmacy company and website Pharmavn.net

The graph show the break-even point of the company in monthly

Fixed cost: Monthly rent for 2 stores 9850x2= 19800

Insureance for 2 stores

100

Total monthly fixed cost Variable cost: Materials Labour

19800

3 4

Total variable

Selling price

22

Break even point =

= 1320 Units

However, most business do not offer just one product or service. Therefore, the author try to calculate some ratio in financial accounting for this company.

b)The income statement and bus iness ratio The table of out cashflow and in cashflow explain in appendix1. Income statement for the year ended 31 december 2011 2008 Sales Cost of sales Gross profit Net.profit before tax Cash Debtors 20000 2500 28500 3500 29900 4200 34700 4800 207400 91940 115460 53162 2009 289000 169940 119060 56712 2010 302700 179550 123150 60702 2011 350000 222500 80150 17652

Closing stock Creditors

7500

15000

15700

11500

18000

26000

27600

29400

some ratios in Yuri pharmacy company and website:

2008 ROCE Gross profit margin Current asset ratio Quick ratio Trade debtor collection period Trade creditor collection period 25,8% 55,67% 1:6:1 1:25:1 5 days 71 days

2009 19,6% 41,2% 1:8:1 1:23:1 4 days 56 Days

2010 20,05% 40,7% 1:79:1 1:24:1 5 days 33 days

2011 6.04% 23% 1:9:1 1:34:1 5 days 31 days

The gross profit margin in 2011(down from 123.150 to 80.150). Consequently, the return on capital employed was also decreased from 25% to 21,6%.. However, it decribes some limitations to investment. Therefore, the author provide in capital investment appraisal.

C) Capital Investment appraisal: Yuri limited invests 116000 with inital cost 27800 Net cash flows Discount factor at 15% Discounted net cash flow Cumulative Net cash flow

2008 2009 2010 2011

39871 42534 45526 60539

0,87 0,756 0,658 0,572

34672 31765 29933 34616

76129 33595 (11932) (72470)

130986

Paypack period = 2years +

= 2 years, 7 months.

NPV= (130986- 88200)= 42786 >0 the project has been accepted , because NPV is positive.

Calculate IRR: choose one negative and positive rate of return. This is 25% and 30%. Net cash flows Discount Factor 25% Discount Factor 45% 2008 2009 2010 2011 39871 42534 45526 60539 0.8 0.64 0.512 0.4096 31897 27222 23309 24797 0.6897 0.4755 0.3280 0.2262 27499 20224 14933 13694

Total NPV

107407 19207

76350 (11850)

IRR = 25% + (

) x 15% = 25% +9,27% = 34,27%

With IRR 34,27% it is adequate enough for decision making purpose. As a result, the marketing manager is sure that additional sales becomes possible.

8) Risks, new opportunites management: a) Risks management: crisis financial create a high risk to the company. This is because customer will focus on their necessary in their life Government : tax VAT rise up from 10% to 15% in this year. This make manager might change price in product in store.

b) Opportunities to Yuri pharmacy company and website:

The author provide to a new marketing strategies in business. This is Pharmacy franchise in this country. However, before going a decision in this strategy, the author also try to find how much of an opportunities and threat in this company.

Website pharmavn.net create a attractive with 2 millions viewers everyday. It is not only to bring revenues but also create a humanities and good communication in healthy.

9) Conclusion :

Finally, the author open a different business way with innovation in business. Yuri pharmacy and website goal main are to provide perspective medication to customer at reduced prices on the markets as website bring a lot of income from sponsor by advertising.

By focusing on risk management and opportunities help the author to avoid discruption in cash flow and selecting good marketing strategies.

10) References and appendix: a)references: Jonathan Yates, 100 Things to Know and Do to Make Your Idea Happen, Capstone, 2009

Sara Williams, The Financial Times Guide to Business Start Up 2012, 7 edition, Financial Times/ Prentice Hall, 2011 b)Appendicies:

Table 1: Sales projection Year Number of customer per day Unit Peopl e Average customer Total sales per year - 207,400 289,00 0 Variable cost per product Number of purchase Cost of sales per year Units 7 1,000 91940 7 3000 169940 7 3500 170550 302700 350,00 0 7 3700 222550 spending per 20 22 22 22 0 2008 30 2009 36 2010 38 2011 44

Table 2: Payroll Quantity Manager Cashier and seller Accountant Marketing Delivery Customer care Total people Total payroll 3 4 3 2 3 2 17 3134,3 Month 1 1500 480 360,3 240 270 142

Table 3: Profit and lost forecast Year Revenue Cost of sales Gross profit Expense: Rent Wage Furniture General expense Other premise expense Interest 10% Marketing cost Total expense PBT Corporation tax (25%) PAT (20,900) 2000 19700 3500 2000 600 928 2000 62298 53162 13291 39871 928 2000 62348 56712 14178 42534 928 2000 62448 60702 15176 45526 928 2000 62498 17652 4413 60539 928 2000 62598 83902 20975 62927 2000 2000 2000 2000 2000 19700 37670 19700 37670 19700 37670 19700 37670 19700 37670 0 2008 207400 91940 115460 2009 189000 169940 119060 2010 302700 62448 123150 2011 350000 62498 80150 2012 388,000 62598 146500

Table 4: Cash inflows Year Cash from sales Loans Ownership capital Total cash in flows 0 9280 106720 116000 207400 289000 302000 350000 2008 207400 2009 289000 2010 302000 2011 350000

Loans = Total capital * 5% = 116000 * 8% = 9280 Ownership capital = 116000 - 9280 = 106720 Investment=116000

Table 5: Cash outflows Year Cost of sales Rent Wage Furniture General expense Interest (10%) Other premise expense Marketing cost Corporation tax (25%) Total cash outflows 0 19700 3500 2000 2000 2000 19350 1500 13921 167529 1500 14178 246466 1500 15176 257174 1500 4413 289461 2000 928 2050 928 2150 928 2200 928 2008 91940 19700 37670 2009 169940 19700 37670 2010 179550 19700 37670 2011 222550 19700 37670