qualanex - final report vfinal

Company Proprietary and Confidential. All Rights Reserved.

Final Report

Senapathy RajagopalanSpencer O’NealW. Steven ManDrew Wagner

Jordan Meredith

May 5, 2015


Table of Contents

2

Recommendations

Results and Findings - Pricing

Results and Findings - Customer Satisfaction

Results and Findings - Web Presence


Recommendations

3

Category Recommendations and suggested next steps:

Pricing:Price to value is a key driver for

new customers

• Recommendation: Our survey results indicate that customers believe Qualanex pricing is currently optimal

• Next Step: Compare current services/pricing to competitors • Next Step: Conduct discount analysis on existing Qualanex sales

Customer Satisfaction:Customers are very satisfied with

Qualanex

• Recommendation: Continue to maintain measures that show high significance and correlation

• Recommendation: Improve sales process measurements for greater customer satisfaction

Web PrescenceSignificant opportunity for

improvement

• Recommendation: Implement website communication channels (i.e. chat box) to facilitate customer and Qualanex interaction

• Recommendation: Provide online tracking/updates and analytical tools as well as tutorials for customers

• Recommendation: Post customer reviews and testimonials similar to Qualanex competitors

• Recommendation: Leverage social media as a channel for marketing outreach


Table of Contents

4

Recommendations





Pricing to value is a key driver to why customers choose Qualanex

5

• Networking and referrals are the main new customer sourcing channels

• Our survey results indicate that new customers are sensitive to price when considering Qualanex

Forward distribution

IT services

Uncertain

Recall management

Waste pass-through

Trade returns

0 2 4 6 8 10 12 14 16

1

1

1

8

10

16

Services Used

Internet or search engine

Qualanex website

Sales team

Other (please specify)

Referral from Qualanex customer/word of mouth

Networking/Industry event

0 1 2 3 4 5 6 7

2

2

2

2

4

6

Referral Source

Location

VAWD Certification

Turnaround time guarantee

Others

Compliance

Accuracy (and credit reductions) through 100% double verification

Pricing/value for money

0 1 2 3 4 5 6 7 8 9

2

4

4

7

8

8

Reasons for Hiring Qualanex


Table of Contents

6

Recommendations





Stellar communication measures

7

Quick and efficient solutions to issues

Response time

Providing updates on situations or orders

Overall ease of communication

Availability of staff (hours of operation)

91% 92% 93% 94% 95% 96% 97% 98%

93.75%

95.54%

95.54%

96.43%

97.32%

Communication

• Overall, customers are pleased with all communication attributes of Qualanex

• Customers consistently ranked “Providing updates on situations or orders” as being the most important attribute

• It is important for Qualanex to keep up the good job of keeping customers informed in all their engagements


Solid trust measure results between Qualanex and customers

8

• Customers fully trust Qualanex in all their dealings

• Qualanex should keep up this trust level as it is very important for customer’s satisfaction with Qualanex

Quality of training provided

Ease of accessing records and past files

Speed of response

Level of trust with the company

Email/phone notifications about open work orders or queries

86% 88% 90% 92% 94% 96%

89.29%

91.07%

91.96%

92.86%

94.64%

Trust Level


Current sales process measurement levels are adequate

9

• Qualanex is performing high in all their function related to the sales process

• Customers ranked “Accuracy of sales information” and “Frequency of sales follow-up” consistently as being important parameters in sales process

• Improving sales process can lead to better satisfaction among customers and can be beneficial from a revenue prospective

Frequency of sales follow-up

Accuracy of sales information

Relevance of sales information

Ease of use of agreements and documents

Ease of negotiating agreement

Expectations met after sales process

Understanding customer needs

74% 75% 76% 77% 78% 79% 80% 81%

76.19%

76.79%

77.68%

78.10%

78.10%

79.05%

80.36%

Sales Process


Training & On-boarding measures are satisfactory

10

• While “Effectiveness of training” is very good, customers are less satisfied with “Ease of setting up return policy”

• Qualanex should improve on the less satisfied Training & On-boarding measures as all of the attributes consistently show high correlation with customer satisfaction

Ease of notifying pharmacies about new return vendors

Ease of setting up pricing logic

Ease of setting up return policy

Availability of follow-up training opportunities

Time and efforts required to learn system

Responsiveness of training personnel

Convenience

Effectiveness of training

75% 80% 85% 90% 95%

81.25%

83.04%

83.93%

86.61%

90.18%

90.48%

91.07%

91.07%

Training & On-boarding


Our survey indicated mixed results regarding expectation measures

11

• Our statistical analysis revealed that expectations of customers can impact their satisfaction

• We encourage educating Qualanex’s value proposition to its customers so that customers have realistic expectations from the company

Decrease in disputes with pharmacies for returned product

Decrease in overall credits issued for returned product

Turn around time of your product processing

Turnaround time of issuing Return Authorization

60% 65% 70% 75% 80%

67.86%

71.43%

74.29%

77.14%

Meeting Expectations


Strong product accuracy and opportunity for improvement on timeliness

12

Availability of back-up information (photos, line item detail) about returned product

Frequency of mistakes in line item detail

Ability to accurately capture line item detail

Speed of resolution of issues

Accuracy of implementation of manufacturer's return policy

80% 85% 90% 95%

84.82%

86.61%

90.18%

91.96%

91.96%

Product Processing Accuracy

Seriousness of delays

Frequency of delays

Product processed within required timeframes

Communication by Qualanex as to sources of delays

Qualanex resolution of delays

Responsiveness of Qualanex to queries about delays

70% 75% 80% 85% 90% 95%

79.46%

81.25%

85.71%

85.71%

86.61%

89.29%

Product Processing Timeliness

• Product processing timeliness can be improved as they have a high correlation with customer satisfaction

• Qualanex should also look into reducing line item details and adding a back-up information feature for returned products


Table of Contents

13

Recommendations





There are opportunities for improvement on the website interface

14

• Customers are highly satisfied with Email and Phone communications but the website is lagging behind

• Qualanex should improve the website as it can have a high impact on customer satisfaction

Website

Phone communication

Email communication

80% 82% 84% 86% 88% 90% 92% 94% 96% 98%

86.61%

92.86%

96.43%

User Friendliness


The website can be a primary touch point between Qualanex and the customer

15

• Accounting and Operations departments (not senior executives) are likely to use the improved website. These users can influence overall purchase decisions so Qualanex should selectively incorporate features requested by them

• Qualanex should focus on “Realtime updates”, “online return authorization”, and “printable authorization forms” as they are most important for customers and likely to be used web features

Monthly newsletters/updates

Online Billing

24/7 online chat assistance

Printable authorization forms

Online return authorization forms

Drug recall announcements

Available realtime updates on returns

60% 65% 70% 75% 80% 85% 90% 95% 100%

73.33%

78.46%

81.82%

85.71%

87.69%

90.77%

95.71%

Web Use Features and Importance

Importance Web Use

C-suite managementMarketing

Service managersDivision managers

Sales representativesClient services member

Transportation departmentOther (please specify)

Account managerOperations team

Customer relationsAccounting

0 2 4 6 8 10 12 14111

222

33

67

1012

Website User


Our research indicates that current competitors heavily leverage their respective websites for product marketing and customer service

16

• Welcome page identifies competitive advantage, services offered, value proposition, and awards & recognitions

• About us section outlines history of company, leadership team, and mission statement in detail

• Services section shows description of services offered and their unique competitive advantage, video where applicable, and testimonials

• Customer tools section:• Inmar: web apps that allow its customers

to manage returns, coupons, rebates, and invoices.

• Also provides financial management and analytics tools

• Other select observations:• Utilization of real photos (warehouses,

equipment, etc)• All competitors have membership

associations published• Published case studies

Competitor Website Observations:

• Website communications channel (i.e. chat box) • Customer reviews and testimonials section

• Develop customer tools and online tutorial

• Monthly/Quarterly updates for customers

• Search engine optimization

• Social media:• Linkedin:

• Stericycle has over 10,000 followers while Inmar has 4,000

• Has the ability to communicate with followers through recent updates

• Blogs (GENCO and Stericycle currently both have blogs)

Suggestions for Qualanex:


Appendices


List of the Appendices

Statistical Analysis

Mid-Point Report 3.24.2015

18


Statistical Analysis

19

Definitions:• Results

• Reveal actual survey results as reported by client• Displayed in blue bar-graphs• Scale of 1-7, normalized to 100%

• Correlation• Reveal the level of importance, measure of impact• Scale of -1 to +1• Measures the positive or negative impact of one factor (survey measures) upon another

(satisfaction)• Significance

• Measures accuracy or ‘truth’ in findings• Proves actual relationships between variable tested for (Y) and variables used to measure

Y (X)• Justifies findings in a statistically meaningful way

• <0.01 = 99% significance, <0.05 = 95% significance


ALP Program: Mid-Point Report

Senapathy RajagopalanSpencer O’NealW. Steven ManDrew Wagner

Jordan Meredith

March 24, 2015

Company Proprietary and Confidential. All Rights Reserved.21

Executive Summary

There are revenue opportunities within Qualanex’s existing customer base– Top 10 customers make up close to ~90% of Qualanex’s total sales while 22 customers make up

~10% of sales.

Customer survey is designed to capture Qualanex key value drivers– We recommend utilizing a kick off letter to assess participation rate– Survey results are expected before April 2015

Research summary for Quanalex’s major competitors– Genco, PharmaLink, Stericycle, and Inmar

Website ideas / suggestions– We believe Qualanex will benefit from a website revamp leveraging a multi-level layout


Table of Contents

22

Financial analysis and key findings

Customer survey

Competitor research

Website ideas / suggestions


There are revenue opportunities within Qualanex’s existing customer base

23

22.0%

19.5%

12.1%

46.4%

Sales By Customer

Abbott Laboratories

West-Ward Pharmaceuticals

UCB Inc.

Top 10 Customers TOTAL % of Total

Abbott Laboratories 2,575 22.0%

West-Ward Phamaceuticals 2,283 19.5%

UCB Inc. 1,410 12.1%

Breckenridge Pharmaceutical, Inc. 1,102 9.4%

WM HealthCare Solutions 768 6.6%

Glenmark Generics Inc., USA 637 5.4%

Hospira, Inc. 513 4.4%

Boca Pharmacal, Inc. 450 3.8%

Acella Pharmaceutical, LLC 366 3.1%

Upstate Pharma, LLC 312 2.7%

Observations:• Abbott Laboratories, West-Ward Pharmaceuticals, and UCB Inc. make up more than 50% of Qualanex’s

total sales• Top 10 customers make up close to ~90% of Qualanex’s total sales

Follow-up items:• Conduct sales penetration analysis to analyze cross-sell opportunities• Derive revenue opportunities associated with the other 22 customers who make up ~10% of sales

*In thousands (000)


2015 forecast indicates strong growth in trade returns and decline in recalls

24

2013 (A) 2014 (A) 2015 (F)0%

20%

40%

60%

80%

100%

30% 31% 31%

7% 5% 9%

25%18% 6%

29%32% 42%

9% 14% 12%

Revenue By Product / Service

Distribution and Warehousing

PharmEcology / IT

Recalls

Trade Returns

Waste Past Thru

Observations:• Strong growth in trade returns and material decline in recalls

Follow-up items:• Follow up with Qualanex to understand key drivers behind current trends especially for the forecasted

period (YR 2015)


Table of Contents

25


Customer survey

Competitor research



Our customer survey will identify key value drivers of Qualanex

26

Key Objectives:– Determine competitive advantage/value proposition– Identify areas of differentiation (# of services) vs. competitors– Understand customer preference in greater depth to enhance service offering– Discover areas of strength/weakness, devise strategy to improve areas

Tactics:– 3 Types of question format – single answer, ranking order, Yes/No/Fill in blank– Address service offerings vs. transaction process vs. competitor comparison


We recommend utilizing a kick-off letter to assess participation rate

27

We recommend utilizing the following kick-off letter to determine customer willingness to participate:

Understand types of questions that

result in most value add.

Understand different

customers.

Draft survey content and

address customizable aspects for

specific customer needs

Analyze results and make

recommendations to address areas for improvement

Anticipated Process Flowchart


Our survey process should conclude prior to the month of April

28

Timeline

• Plan to complete survey with feedback from Qualanex by end of month• Survey should be sent out early march with an estimated 2-week turn-around time frame• Once returned, results to be analyzed and recommendations made in final project deliverable

Obstacles

• With a relatively small customer base (~30), success will heavily depend on a strong response rate from most customers

• If customers are highly diversified in services they use, will need to customize survey adding time necessary to complete

• Will need active participation and feedback from Qualanex to truly understand customer demands and expectations

Jan Feb Mar Apr May

ALP

Task 2


Table of Contents

29


Customer survey

Competitor research



GENCO – Competitor findings

30

Advantages:• Search Engine Priority• Economies of Scale: 600 Million returned items processed annually• 300 customers with annual sales of $1.5 Billion• Extensive warehouse and distribution assets• Two decades of experience in PRL.• Data analysis and recommendations and solutions provided to customers.

• Ie) which products are slow movers or continuous problems• Real time reporting• Excellent Customer reviews (BBB accredited, 0 complaints in 3 years)

Potential threats:• Large amount of services may hinder management focus on PRL service• Compete in Retail, Pharmaceutical, and Technology reverse logistics industry

Where can Qualanex possibly leverage capabilities?• Better software?• More focused customer service• More services for a better price• Specialization in Pharmaceutical Reverse Logistics

• Marketing strategy?• Value Prop?


PharmaLink Inc. – Competitor findings

31

Advantages:• Search Engine Optimization• Primary business is PRL• Advertises free shipping and online processing for wholesalers• Automation

• Speed and accuracy• Cost savings

• “Largest Information Database”• Pride themselves on innovation• Manufacture prescription vials

Disadvantages: • Rely on technology as their competitive advantage• Lack of customer services from high level of automation• Lack of information regarding warehousing or distribution

How can Qualanex leverage resources and capabilities:• Get ahead of them on the technological curve• Leverage customer service• Look into PharmaLink’s distribution network


Stericycle – Competitor findings

32

Advantages:• Well known brand name for healthcare/medical wastes• Does pharmaceutical disposal and returns• Seamless and “Fastest payment of returned product in the industry”• 75% of entire return payment is issued within 12 business days• Advertises free shipping and no hidden costs• Online portal for tracking and getting reimbursed• Good website with option for getting a free quote

Disadvantages: • Doesn’t tell how long it takes to get back the other 25%• Bad customer reviews (Not BBB accredited, 267 complaints closed in last 3 years)

How can Qualanex leverage resources and capabilities:• Q-osk• Leverage customer service• Determine actual cost by talking to a client


Inmar – Competitor findings

33

Advantages:• Real-time commerce platform for connecting retailers, manufacturers, pharmacies and service providers• Multiple awards won (displayed via website)• Good website with blogs, articles and client login• Operates in Mexico and Canada besides US• Acceptable customer reviews (Not BBB accredited, 14 complaints closed in last 3 years)

Disadvantages: • Price?• Not focused to only pharmaceutical reverse logistics

How can Qualanex leverage resources and capabilities:• Q-osk• Leverage customer service


Competitor Research Questions & Takeaways

34

• Compare survey results to competitor analysis:• Where are competitors meeting/exceeding customer expectations? Missing customer

expectations?• How can Qualanex learn from their competitors?• Where can Qualanex leverage their capabilities against competitors?

o Why is Qualanex technology and customer service better?

• Study competitors’ online presence and design Qualanex’s plan around those best practices.

• Use analysis to refine sales and marketing goals. For example: why is Qualanex able to provide better customer service compared to Genco?

• Targeted customer acquisition from weakest competitors. • Can Qualanex win over customers who prefer the Qualanex offerings?


Table of Contents

35


Customer survey

Competitor research



Website Component

Customer Benefit

Qualanex Benefit

DESIGNColors, look and feel, visual

attractiveness

• Visually pleasing • Experience improved• Desire to dig deeper into

Qualanex services and company offerings

• Increases frequency of use• Attract new customer• Create competitive advantage

through perception of professionalism

LAYOUTOrganization of contents,

how pages link to one another in logical manner

• Less confusion• Logical connection to the

material and content

• Allow Qualanex customers navigate easily

• Lessen need for investment in Qualanex resources

CONTENTInformation actually

communicated to customer, beneficial information that customers use in decision-

making processes

• Increased trust in Qualanex Brand

• Confidence in reliability of information

• Higher dependence on website to deliver all relevant information about Qualanex

• More efficient process to deliver relevant information about Qualanex service offerings

• Streamline processes of communication

• Increased control over flow of relevant company information

We believe a revamp of the Qualanex website will add value to the company’s marketing efforts


• Login• About company• Differentiators & Competitive AdvantageHo

me Pag

e• Current Customers• New Customers• Service Offerings• News/Information

Links & Drop Downs

• Login Portal• Online Form AccessSecond Level Links

Third + Level Links

Type

of i

nfor

mat

ion

need

edBROAD

SPECIFIC

Most Important & Most Frequently Used

= Fewer clicks to

Access

We suggest a multi-level website layout for the future website

qualanex - final report vfinal

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