Strategic management project:

Presented to: Dr. Marwan El Messiry

Presented by:

 Ahmed Mahmoud Elsemongy

 Hany Galal Elsamman
 Tamer ELTahan
Content Index:

 Qualified Pharmacy Business Overview ……………………………….. 3

 Major Products and Services ……………………………... ……………8

 Markets and Sales activities ...……………….………………………….9

 Idea Brief ……………………………………………………………… 11

 External Environment Scanning …………………………………….… 12

 Porter’s Five Forces Model ………………………………… …………18

 SWOT analysis for Qualified Pharmacy...…………………… ……….20

 TWOS for Qualified Pharmacy ………………………..……………... 20

 Corporate Strategy ……………………………………………….. ……21

 Function Strategies ……………………………………………………. 23

 The Stages of International Development ………………….. ………...25

 Forces for Customization ……………………………………................26

 Matrix of change …………………………………………………… …27

 Conclusion ……………………………………………………….. ……29

 Introduction:

From the end of 2015, there is a great dynamic change in the market of community
pharmacies due to large expansion in already present chain pharmacies and also appear
many new chains with big investment.
Which represent threats to single community pharmacy because chain pharmacies have
competitive advantages on:
 Purchasing
 Marketing
 Human resourcing
 Contracting with health insurance companies.
Due to this reasons and other minor reasons the market share of chain pharmacies in
2017 is 24% of total Egyptian community pharmacies market, and estimated to exceed
32% by the end of 2018. Which represent big threat to single community pharmacies
which loose its ability in competition in advanced the chain pharmacies.
Also the government policies of currency deviated affected the market of community
pharmacies due to increase the prices of drugs which lead to difficulty to single
pharmacies to has appropriate product mix to can competing with chain

 Idea Brief

Who we are?

Qualified pharmacy (Q.P.):

It's an innovation services in the Egyptian market.
Applying competitive advantages to single community pharmacies by joining union
under our company management which will give each single community pharmacy the
leverage of chain in purchasing, marketing, human resources…. etc. while keeping under
its owner controlling ( be chain operating with yourself ).
Our target segment is the pharmacies owner who cannot compete in the market due to
competitive advantages of chain pharmacies.
 Qualified pharmacy (Q.P.) will help each single community pharmacy reach its
maximum potential by providing them unique services in the Egyptian market

Qualified pharmacy (Q.P.) unique services:

 union purchasing :
Established Qualified pharmacy (Q.P.) drug store and distributor through contribution
in Shareholding Company which give our pharmacies high leverages (increasing
discount rate, high bonus, no expired problems)
 Human resource module:
Customize special to the community pharmacies which include hiring skillful
pharmacists and employees, training the team of the pharmacies, set special competences
to each job and system to evaluation each one in the team.
 Financing management module :
Achieving maximum efficiency with minimum cost.
 Marketing services and Branding:
Each pharmacy will have sign of Qualified pharmacy (Q.P.) in its front. So can make
advertisings to Qualified pharmacy (Q.P.) also launched web site and mobile
application each pharmacy can access it. And a very important thing in this field will be
hotline which will make easy-order from our pharmacies.
 External Environment Scanning

Societal evniroment:
Political-legal:
 Pharmacy Practice Law (79 ‫ و‬78 ‫ و‬30 ‫ و‬17 ‫ و‬1 ‫ مواد‬55 ‫ لسنة‬127 ‫) قانون‬: This law prevent
chain pharmacy as the government heavily regulates the retail pharmacy industry with
restrictions placed on location and ownership. At the same time , so many of
pharmacies owner refused to rent their pharmacies or merged with any chain , It's
great opportunity to our company to deal with this pharmacies and acquired this kind
of pharmacies, also its give our company sustainability than competitors.
 Governmental policies to reduce importing cosmetics products by increase taxes so
price become very expensive: while it is highly profitable products but single
community pharmacy can’t have good product mix from it. so increase it’s need to
entering union purchasing module
 Rules of pharmacists syndicate : Pharmacy syndicate encourage the union of
independent community pharmacies to can compete with chains pharmacies which is
prohibited by the law and from syndicate views it's policies violations
Economics:
 Currency deviation
This lead to increase the prices of drugs in the Egyptian market by at least 50% since
January 2017 and 100% of healthcare and beauty products which represented a
burden in economics of single community pharmacies due to need to extra capital to
maintain the inventory at the same level .
Its have negative effect to our company because will need different sources of finance
to qualified pharmacies to overcome it
 High inflation rate
This lead to decrease in purchasing power of customers
In 2017 for first time in Egyptian market consumption of the customer reduced by 5 to 10
% from drugs and 25 % from healthcare and beauty products which affected harmful in
the pharmacies market at all and difficult threat to our beginning company
  Facilitated financing from central bank to commercial products ( as 5% initiative of
ECB)
Give our company leverage to can development all qualified pharmacies in our company
and fascinated the module of union purchasing

 Increase operating cost (Salaries, electricity, water…): Decrease profitability and has
negative effect to our company
Technological:
 Biogenetic market is the new frontier in medicine marketing: In 3 years to come, a
significant value can be expected to come from biogenetic product range. It is a new
biogenetic vocabulary that is gaining ascendancy in pharmacies ,Single independent
pharmacy will not have the power to work in this field and maintain availability of
this drugs so it in bad need to be in a merge to take advantage of new innovation
which will be seismic shifts in market trends

Social:
 Global customer and appear of E-pharmacy and increase its sells also pharmacies
mobile applications (as belshefa., saydality , rosheta,…..)
Due to change of consumer behaviors and appear of global customers. By the time these
new technologies tools will be a tough competitor to our qualified pharmacies

repeatabilit
Effect effect on my business impact timing solution
y
Political-legal
forces
Pharmacy
Practice Law Its great opportunity to
our company, also it’s
(‫ لسنة‬127 ‫قانون‬ Highly
give our company immediately continuous Our main POD
‫ و‬17 ‫ و‬1 ‫ مواد‬55 positive
sustainability than
79 ‫ و‬78 ‫ و‬30 ) competitors.

Governmental Opportunity to our positive immediately repeated Established

policies to company .because single Qualified
reduce community pharmacies pharmacy (Q.P.)
importing need to union drug store and
products as
cosmetics by distributor
increase taxes
Opportunity to our Cooperation with
Rules of company, syndicate syndicate and take
immediatel
pharmacists encourage the union of positive repeated and take it’s
y
syndicate independent community approved and
pharmacies support
Economics
forces
Find different
sources to finance
May
Currency qualified
Threats to our company negative immediately repeated
deviation pharmacies and
once a year
depend on credits
with suppliers
Union purchasing
which give the
leverage to
qualified
Threats to our company pharmacies to make
High inflation Continues at
due to decrease the attractive offers
rate negative immediately least for 2
purchasing power of especially in
years
customers healthcare and
beauty products
which present high
percentage in chain
pharmacies sales
Threats to our company Need to maximize
Increase After
due to decrease negative continues efficacy with
operating cost operation
profitability minimize the cost
Technological
Union purchasing
Biogenetic and Find different
market is the sources to finance
Opportunity to our After 3
new frontier in positive continues qualified
company years
medicine pharmacies and
marketing depend on credits
with suppliers
social
Opportunity to our Our hotline,
Global company because global websites and
positive immediately continues
customer customer need taste and reactive mobile
experience international application

Porter’s modules of five forces affecting task environment:

 Threats of new
Score Comment
entries
Economies of No need to large firms to enter the market because all
4
Scale pharmacies owner will be as shareholders
Product We're unique concepts , but by the time may other
2
Differentiation firms do what we do
Capital
4 No need to large capital
Requirements
Any pharmacy will be in our brand very difficult to
cost to switch 1
go to new competitors with very high cost
Any company must to enter this market should have
Cost disadvantages
2 large number of pharmacies in it's brand or it cannot
due to size
generate profit
Threats of new
13
entries total score
Competitiveness
among existing
Number of We're unique and innovation concept in the Egyptian
0
Competitors market. we haven't any competitors till now
The industry of community pharmacy growth rapidly
Rate of industry
2 in two main dimension number of pharmacies and it's
growth
total revenue
Service unique
2 Unique concept difficult to imitate
uniqueness
Amount of Fixed
2 Low fixed cost just admistrative offices
Costs
Exit Barrier 4 Not Easy to exit the market
Because we have indirect competitors represented in
Revelry diversity 4
chain pharmacies
Competitiveness
among existing 14
total score
bargaining power
of buyers
There's about 6000 pharmacies in Alexandrea only
No. of customers 1 just 300 joined chain pharmacies so our segment is
large enough
We don't have direct competitors but chain pharmacy
Alternative 3
are alternative to our company
Low cost to change 1 High cost to change
Buyer earns low Community pharmacies owner suffering now from
4
profits hard economics conditions
Demand Elasticity 4 High demand elasticity
bargaining power
of buyers total 13
score
Threat of
substitute
Number of
There're many chain pharmacies which considered
Available 4
main substitute to our services
substitutes
Chain pharmacies rapidly growth in the two main
Likely to have
5 dimension new chains and increase investments of
substitutes soon
currently existing chains
Threat of
substitute total 9
score
 Our slandered scale to measure the competition of task environment (industry):
Below 60 it's low competition industry.
From 60 to 80 it's medium competition industry
Above 80 it's tuff competition industry
From the above table we could figure that the total weight for all factors are 49 Which
indicates almost good competitive advantage for Qualified pharmacy (Q.P.)to start business in
this market.
 Environmental forecasting model : ‫ايه وليه‬
 Competitive analysis (triad+competitive advantage)

Chapter 5

Vrio

Business Model