Executive Summary
La Brea Pharmacy is a new business establishment expected to be launched soon. The proposed site for the location of the pharmacy is 3rd street, Gardener Avenue. The areas’ traffic flow that leads to the pharmacy’s parking unimpeded and adequate. With the completion of Grove Shopping Mall, Fairfax, and Strip Mall there will be a considerable number of temporary consumers and foot traffic that do not come from the area. There is an option of leasing the facility for five years or acquiring it once it is put for sale. There is well positioning of the facility, and it matches the community's ideal picture. The business will begin a single outlet but later expand to other locations by opening new outlets.
The facility will engage in retailing over the counter drugs and prescription drugs. It will also be involved in selling cosmetics, beauty products, convenience foods and postcards. The pharmacy will offer a wide range of pharmaceutical products to the consumers in the area at lower prices. It will be open 24/7 with mail orders and in customers. The employees will be highly trained and will operate within company’s corporate culture and meet the needs of all customers (Hopkins, 2004).
The pharmacy will ensure that all clients receive first class treatment every time they visit the shop. The Customer Relationship Manager (CRM Software) will be used to manage customer relationship so growth in customer base will not be a problem. The mission of the organization is to ensure long-term customer relationship through superior consultative services and effective disease state (Hopkins, 2004). The goals will be achieved through the provision of the best services to internal as well external customers, provision of innovative pharmaceutical services by knowledgeable pharmacists and continuous growth in the dynamic environment.
History
The business is a new retail community pharmacy an idea that was conceived late last year. The establishment was informed by the need to meet the growing demand for pharmaceutical products along the Grover Avenue. Ideally, the pharmaceutical industry is expected to develop, produce and market medicine. The retail business will not only retail brand and generic medication but will also engage in selling medical devices. The industry is highly regulated given the devastating impacts that drug abuse or drug abuse may cause to humans. There are many universal laws as well as regulations governing efficacy, safety, testing, patenting and drugs marketing. In the United States the industry is controlled by Food and Drug Administration (FDA) and so the business has to adhere to laws that were passed in 2008 especially the Regulation of Retail Pharmacy Businesses (Hopkins, 2004).
In 2011, only 23,100 independent pharmacies were operating domestically and in 2012, an approximately 62,000 specialty and mail retail pharmacies operating throughout the country filled about 4 billion prescriptions. In the same year, the industry earned revenue of about $275 and $290 billion. The United States alone accounts for about a third of the pharmaceutical market generating about $340 sales per year. The industry has maintained a consistent growth rate of 1.6 percent annually (Vickers, 2007). The top beneficiary has been the retail pharmacists with services growing on foot care, smoking deterrent, sun care, eye care and first aid. Over the years, there has been government support and the business environment is favorable for establishment of the business.
Business Description
The pharmaceutical industry has been ignored to a larger extent. However, the business experiences fewer risks compared to other businesses given that it is not affected by changes in the wider economy because people will require medicine at any given time. The sector has an overall positive outlook. The increase in aging population and demand for expensive medicine has raised the dispensing income. However, removal of entry requirements has the risk of the diluting the market. For example, the Supermarkets have made use of this exemption to expend their market share.
The business enjoys access to financial support from the banking institutions in the form of loans and overdraft. Most of these loans are refurbishments, expansion and fund acquisition. The pharmacy can access up to 70% of the stock from the wholesaler through financial support of the banks (Vickers, 2007). Thus, there is a shift of risk from a small store to a large organization. Also, the terms and conditions attached to the loan are favorable. There is a unique cash flow in the pharmacy with National Health Service that is charged with the responsibility of reimbursements of prescriptions doing so in two lots. The initial 80 percent is given three months after prescriptions are forwarded for pricing while the remaining 20 percent is given in the fourth month. The mechanics by which the pharmacy business functions is what pays the wages and ensure that there is a national access to medicines.
The pharmacy retail store will be built on a solid foundation. Highly qualified employees will be hired to man different positions in the organization. The applicants who are interested should not only be experienced or qualified but should also be customer centric and honest to help the organization become prosperous. The key positions include Chief Executive Officer, Pharmacist Manager, Information Technologist, Merchandize Manager, Cashier, Sales agents, and cleaners. The retail store seeks to be the best in the area and number one choice of the customers. Even though the hired staff will be highly qualified, the organization will still seek the services of specialized consultants. Some of the strengths include location, ability to operate 24/7 and the variety of excellent services offered. Possible weakness is that the business is a new establishment, and it may not have enough financial capability to carryout intensified publicity campaigns. The available opportunities for growth and expansion are unlimited, and the business will position itself in a way to tap from this opportunities. The possible threats are unfavorable government policies especially healthcare reforms and economic downtown. The purchasing power of the customers will reduce with economic downtown (Vickers, 2007).
Description of the Market
Market Trends
Country’s healthcare reforms directly influence the pharmacy industry. The business has to abide by the regulations that are reviewed periodically given that the industry is one of the highly regulated. There are also other factors in the larger market that may influence the business and usually big retail stores overcome such storms. The best way to overcome these challenges is to open many chain outlets. The industry has been growing and will continue to grow as the demand for prescription drugs increases. Currently, many pharmacies are relying on technology in management to deal with the challenges of financial leakages, one of the major problems facing the industry players. For example use of CRM is one of the most effective ways of managing the clients (Vickers, 2007).
Potential Market
The trade area where the pharmacy will be located has a total population of about 18,000. There are three major construction projects that are expected to increase the population by more than 2000. The annual expenditure on prescription drugs is expected to rise by at least $800,000. Two of the three projects are residential and will carry a total of 1600 adding to the number of residents. Closeness to the location gives the business greater visibility and access to more residents.
Target Market
The target market is the customers living in the Park La Brea community who require high-quality pharmaceutical services at a fair price. The community has a median income that is enough to expect price sensitivity. Because the business focuses on high-quality services and care the customer base will also be expanded to include those from disenfranchised stores, generic stores and long waiting lines. There is also a potential target market of people living with HIV that is relatively high in the trading area. Given that these customers require a great deal of drug therapy this can be a profitable market. Due to the service-oriented nature of La Brea Pharmacy, it clearly fits the HIV patients because most of them take a lot of interest in the pharmaceutical care they receive (Owen2004).
Young professionals aged 25-34 years living in the community is another target market because majority of them earns an average income of $62,500. This group of clientele majorly interested in alternative and preventive care will enjoy the homeopathic medication, vitamins, herbal medication and nutritional supplements that will be housed by the pharmacy. The seniors of the community that constitute 25% of the overall population is the last target market (Owen2004). The business will use the Safe Senior Home Consultation program will be used to reach out to acquaint this group of customers with the superior services that the pharmacy offers better than the competitors.
Competition
The business will face competition from one independent pharmacy, two supermarkets, and four chain stores; Walgreens, Rite-Aid and 2 Sav-On. Given these seven pharmacies are already established they will pose a stiff competition. Annually the 7 make total sales of $9,736,800. Most of these pharmacies are chain stores that attract customers through low prescription prices. However, they are not targeting the same market. The service oriented approach of La Brea Pharmacy will give it a competitive advantage. Other competitive advantages include location, positioning, highly qualified personnel and the variety of products and services. The customers will eventually flock the store when they realize availability of high-quality medications and services at a lower price.
Advertising and Promotion
The main groups to be targeted by promotion and advertising is the target market. Some of the advertising strategies will include distribution of quarterly circulars clearly specifying the services offered banners as well as listings in the organization’s official website and weekly advertisement in the local newspaper. Fliers and Posters will also be produced and distributed within the trading area making residents aware of the kind of services that the pharmacy offers. There will be several promotion strategies including contact and meet between the HIV patients and the specialty physicians from which the patients will refer other clients to come therapy in the organization. Another strategy is to visit the local health facilities such as the Monaco Care Facility at least once in a month to maintain a good relationship with the residents. The organization will also make a contract with local as well as regional HIV clinics. Finally, La Brea will use Blister Pack Program whereby the packs will have the printed name of the pharmacy, and then they will also be used to advertise to the senior members of the community (Owen2004).
Products and services
La Brea Pharmacy will offer a variety of products with competitive prices. This will include prescription dugs as the generic equivalents. Over the counter products such as kosher minerals and vitamins, nutritional food supplements, a wide variety of diabetic testing kits, herbal medication, spacers and flow meters to help in asthma management will also be offered. The pharmacy will also offer a variety of services including diabetes education; the organization will position itself as the best regarding diabetes testing devices (Owen2004). Asthma education and HIV consultation services including working with the local physicians to ensure that patients receive the best therapeutic services and that adverse effects of medication are minimized. Consultation services targeting the community members will also be offered. This will include a question and answer session aimed at promoting generic awareness and customer relations. The pharmacy will also provide a wide range of immunization services of the vulnerable groups to prevent an occurrence of infectious diseases.
Services targeting the seniors especially the Safe Home Consultation Program to help the people above the age of 60 make their homes safe (Owen2004). The services will aim at preventing injuries and falls by the senior citizens. It will involve raised toilet seats, rails installation and consultancy services on wide variety of health issues. The seniors will also enjoy the blister pack services to ensure ease and timeliness in administration of medication. It will enable them access the medication without necessarily unscrewing the prescription vial.
References
Hopkins Jim, “Fewer Small Business Plan to Hire,”USA Today, March 8, 2004
Vickers Mark, “Hire or Train: The Growing Conundrum,” American Management Association, www.amanet.org, accessed July 15, 2007
Owen Thomas, “At Shell, Everyone's the Answer Man The oil giant saves hundreds of millions by fielding technical questions on a global Web bulletin board”, CNN, January 2004.
