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The Pharmacist By KASK Consul7ng SOURYA DATA, KEITH HOERBURGER, KAUSHIK SAMPATH, ANKITA SINGH
Agenda Problem Statement
Background and Company Analysis
Industry Analysis and Compe::on
Alterna:ves and Decision Making Criteria
Recommenda:ons and Implementa:on plan
Risks, Mi:ga:on and Financials
Conclusion
Problem Statement How can the BRUNET Pharmacies evolve successfully while registering growth?
BRUNET STRENGTHS • Oldest chain of pharmacies in Quebec • Parent company – METRO INC. • Personalized health advice, services • Effec:ve use of technology – MaSante program • Health conscious brand
WEAKNESSES • No sales online • Low penetra:on; only recent expansion
OPPORTUNITY • Brand image • Easy accessibility to customers
THREATS • Increased compe::on • Low margins
BRUNET
Pharmacy Industry
• Independent pharmacies – Jean Coutu, Uniprix, Pharmaprix
• Retail giants – Walmart, Target Compe::on
• Ownership by pharmacist • Non-‐compe::on clause
Legal constraints
• Only 33% of customers return to the same pharmacy Loyalty
Issues
Customer Analysis
7.2
7.4
7.6
7.8
8
8.2
8.4
8.6
8.8
9
9.2
9.4
2010 2011 2012
Quebec popula:on (in Millions)
Aging popula9on: 13% to 16% within 10 years !!
Proximity
Knowledge of pa9ent records
Quality of advice
Quick service
BoQleneck reduc9on
Personalized service
PHARMACY CHOOSING CRITERIA
Alterna7ves
Rewards program in organiza:on
Gas sta:on rewards program
Pharmacy benefit management
Open new pharmacy inside every METRO store
Decision Making Criteria Alterna9ves Customer loyalty Profits Legal Constraints Differen9a9ng
services
Rewards program in organiza:on
HIGH HIGH LOW HIGH
Gas sta:on rewards program
HIGH LOW HIGH LOW
Pharmacy benefit management
HIGH HIGH LOW HIGH
Open new pharmacy inside every METRO store
LOW HIGH LOW HIGH
Decision Making Criteria Alterna9ves Customer loyalty Profits Legal Constraints Differen9a9ng
services
Rewards program in organiza9on
HIGH HIGH LOW HIGH
Gas sta:on rewards program
HIGH LOW HIGH LOW
Pharmacy benefit management
HIGH HIGH LOW HIGH
Open new pharmacy inside every METRO store
LOW HIGH LOW HIGH
Recommenda7on: Rewards Program
• Organiza:on enroll employees in exis:ng MaSante app How
• Reduce health insurance, beeer lifestyle, bring in revenues Why
Recommenda7on: Pharmacy Benefits
• Marke:ng the program where people have a recurring need for medicines
How
• Accessible, sustainable, large market Why
Marke7ng Strategy
Adver:sement through METRO, tradi:onal channels
Execu:ve events organized by BRUNET to promote new programs
Implementa7on – Rewards Program Steps 0-‐6 months 6-‐12 months 12-‐24 months 24-‐36 months
Approach organiza:ons with new rewards program
Customer uses our app to create his health record
Rewards provided to employees every 6 months
Discounts and offers provided to customers every period
Implementa7on – PBM Program Steps 0-‐6 months 6-‐12 months 12-‐24 months 24-‐36 months
Marke:ng the Pharmacy benefit management program
Sefng up the infrastructure and delivery services
Customer subscrip:on and enrolling for the program
Start the delivery services
Risks and Mi7ga7on RISKS PROBABILITY IMPACT TOTAL RISK LEVEL MITIGATION
High IT infrastructure cost
LOW LOW LOW U:lize exis:ng technology; huge return on investment
US compe:tors with PBM facility entering before BRUNET
LOW HIGH HIGH First entry into Canada market
Non-‐acceptance from employees
LOW MEDIUM MEDIUM Long-‐term health benefits
Organiza:on unsure of rewards program from BRUNET
MEDIUM HIGH HIGH Reduc:on in health insurance costs
Financial Assump7ons Numbers provided were based off Metros numbers
10% of Metros Sales is Brunets: 1.2 Mil
0.2% of Quebec popula:on à 16,024 popula:on
Revenue per customer: $74.95
3 organiza:ons a year: enrolling 500 per company (Star:ng year 3)
Organiza:onal size
Pharmacies
21%
20%
17%
13%
10%
10% 9% Jean Coutu
Uniprix
Familiprix
Proxim
Pharmaprix
Brunet
Others
Brunet: 176 stores
Revenue Sales $12,010
Brunet Sales $1,201
Popula:on 8,012,000
Brunet Popula:on 16,024
Revenue per customer $ 74.95
Growth Poten7al
17,029
18,053
19,098 19,664
20,251
15,000
16,000
17,000
18,000
19,000
20,000
21,000 Customer Growth Organiza:on Factoring in 3% organic growth from the industry
Addi:onal growth from pharmacy benefit management: 5%à 10% over 5 years
Organiza:onal Growth: 3 organiza:ons per year and 500 enroll from that organiza:on
Revenue
1,276,332
1,353,111
1,431,400 1,473,787
1,517,814
Total Revenue
Conclusion
• How to boost in the face of increasing compe::on Problem Statement
• Compe::ve environment • Low customer loyalty • Changing consumer behavior • Reducing profit margins • Legal restric:ons
Considera:ons
• Start extensive rewards program • Pharmacy benefits management program Recommenda:on
Thank you! Ques:on??
Appendix 2010 2011 2012
Sales 11342 11396 12010 Brunet Sales 1134.2 1139.6 1201 People in Quebec 8,012,000
16,024
16,519
17,030
17,556
18,098
18,658
Revenue Per Customer 74.95 Illness Customers 5% 801 991 1192 1404 1629 1866
6% 7% 8% 9% 10% 1% 2% 3% 4% 5%
9.91 23.84 42.13 65.15 93.29
Illness Revenue per customer 2 149.90 120,100
148,574
178,692
210,531
244,166
279,679
Cost per customer 5 4006.00 4955.75 5960.38 7022.37 8144.29 9328.86 Marke:ng and Technology Cost 100,000 Addi:onal Customers from Organiza:ons 500 1000 1500 1500 1500
Total New Customers 17,029
18,053
19,098
19,664
20,251
Total Revenue 1,201,000 1,276,332 1,353,111 1,431,400 1,473,787
1,517,814