diversification – taking on mobility · 2019. 10. 20. · 1 diversification – taking on...
TRANSCRIPT
1
DIVERSIFICATION –TAKING ON MOBILITY
Diversification – Taking on Mobility
The successful inclusion of a mobility business to access an alternative income stream
M1 – The History up to now M2 – The Future from the now
Mark Woltmann (M1) Mark Boyd (M2)
1
2
2
The Journey to Now
Journey began in 2012 with the advent of PBS Generic Reform
• Net result of PBS Reform - Nearly 10 fold decline in Profit
• Industry Mantra
• Dispensary Hurting – Best response - Must “ramp up the front of shop”• BUT the Big Box discounters own this space (along with Retail Chains)
Like Banging your head against a brick wall
Lots of Pain for No Real Gain
So what to Do??
A Strategic Plan
CQ Friendly Society Ltd
VISION: A healthy business building a healthy community
MISSION: Owned by the members for the wellbeing of the community
PURPOSE: Providing value and relevance for members
3
4
3
Strategy No: 3 (of 6)
Diversify into other Business Areas & Towns
• To Diversify or to Not Diversify
……That was the question
• If yes then
How
Who
What
The Diversification Opportunities
Established a Board Sub-Committee
to investigate possible opportunities
5
6
4
Medical Centres
Optometry Child Care Mobility
• Ballarat Friendlies
• Previous Experience
• Herding cats
• National Pharmacies
• Industry under siege-SpecSavers
• Also looking to diversify
• Like pharmacyHeavily regulated/Gov Subsidised
• Built in growth
• Inhouse experience
• Toowoomba & Maryborough Experience
• Low Barriers to entry
• Common customer base
…..and the Winner was
Mobility
Low start-up cost
Had spare floor space
Leverage of current customer base
Growth market
Aging population
7
8
5
The Timeline
2013
• AFS Independent Living
Superstore
• 200sqm small Store
• $0.25M Annual Turnover
2016
• Central Queensland Mobility
• 800sqm Store
• $1.9M Annual Turnover
2017
• Daniels Surgical & Health
Equipment
• 400sqm Store
• $1.4M Annual Turnover
The Sweetener National Disability Insurance Scheme (NDIS)
Assistive Technologies
• Only 4.5% of NDIS budget
• Equates to $6M Sales/yr in
Central Qld alone
$23B (Wow)
9
10
6
The Timeline & The Effect
2018-19• Mobility
40% Turnover
• 70% of EBIT
Our World View
The future for both industries -
pharmacy and mobility
11
12
7
Smaller Piece of
Pie
The Digital
Chemist
The
Consulting
Pharmacist
• Increase in competition
• Reduction in our scripting numbers
• Falling profitability
• Electronic scripting
• Automation of the dispensary
• Consumer medicine support applications
• Expansion of professional service delivery model
• Broadening of scope of 7CPA
NDIS Aging Population
NDIS Restraint
Other Players
• Will continue as growth market
• Still new and not really well understood
• Baby boomers are starting to mature
• Increase in aged are packages
• Will not fund new ‘red one’ every year
• Will only fund partial replacement or second hand
• Competition will come to town at some stage
• Being corralled by Think Mobility
13
14
8
We must continue to adapt
Pharmacy profession - Chimney sweeps of the future
The mobility party will not last forever
Our next step for mobility……The party will not last forever
15
16
9
Adoption of the Car Industry Model –Full product life cycle
Sell New Car
Service every
10,000km
Trade in Offer
Trade in offer
Sell Used Car
Service every
10,000km
Mobility Full Life Cycle Model
Retail Sales Outlet
Service Department
Second-hand Market
17
18
10
Applying the Mutuality Principle
• Seeking to have mobility income recognised as member income
• Including NDIS and My Aged Care income
• Seeking a private tax ruling on this point
• Engaged Cooper Grace and Ward to assist
The reason behind the challenge
• Based on the principles of the National Disability Insurance Scheme (NDIS)• Choice and control for participants
• If successful • Significant effect on profitability
• Advantage point when competition comes to town
19
20
11
Service / Product Supplier
Service agreement Common law Contract of sale
Participant
Choice Control
NDIA
Assess Disability Determine quantum of support
Our next step for pharmacy……
No chimney sweeps here……..
21
22
12
Mobility will buy us time
…… to do
• Continue to do the basics right
• Purchase smart
• Range Smart
• Staff smart
• Swing of our strong points
• Most trusted and respected professional in society
• Most accessible
• Most cost effective
• Enter headlong into the world of professional service delivery
• Owners of chronic disease management and more importantly, prevention
• Diabetes
• Obesity
• Osteoporosis
• Dementia
23
24
13
And when all that fails………
Drink
25
26