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Business Strategy Consult

Thrifty White Pharmacy

Bus 490

6/5/2019

Qian Sun

Background and Purpose

• Thrifty White Pharmacy is a local store in Springfield affiliated to the larger parent company Thrifty White Pharmacy.

• Employees at the local store are also the owners enhancing the quality of service.

• This analysis aims to explore Thrifty White’s strategy and performance in Springfield.

• The analysis concludes with recommendations for the company that are in line with the findings.

Scope and Method

• An exploration of Thrifty White Pharmacy’s business strategy in the Springfield locality.

• A SWOT analysis of the store’s operations.

• A PESTLE analysis of the store.

• The use of Porter’s five forces to analyze the market.

Goals

• To offer quality and reliable services for all its clients.

• Offer the employees the chance to participate in ownership for better compensation and job fulfillment.

• Remain innovative and use technology to maintain a competitive edge.

Findings

• Thrifty White Pharmacy has a growing customer base.

• The Industry structure makes them profitable.

• The store faces threats from competitors and government regulations.

• Employee ownership is the heart of their strategy.

Conclusion

• A representation of ideal recommendations for growth.

• An overview of the limitations that could affect the quality of the analysis.

Thrifty White Pharmacy is a local store at Marshal Avenue in Springfield, Minnesota. The store is part of the larger Thrift White Pharmacy that operates in four other states. Thrifty White Pharmacy uses a business model that has its local stores owned by the employees. Their ownership model is meant to improve the quality of service as the employees will protect their financial interests when conducting the store’s daily operations.

The local Thrifty White Pharmacy offer’s medical prescription and advises the customers on the effects of combining certain medications. The specifics of the medication imply that the pharmacy has well-trained personnel that can provide accurate advice to the customers. The store fulfills the Medicare prescription as well as prescriptions out of Medicare services. Their goal is to have all prescriptions filled within 24 hours with available ready refills for recurrent clients. Employees at the pharmacy ensure that multiple prescriptions are well labeled to prevent confusion when issuing prescription medication. The store has to do that since it offers medication for long term care patients. The store also tries to be efficient and affordable to the customers in light of the recent criticisms on the pharmaceutical industry. They fear the possibility of adverse pricing laws after the government started scrutinizing some pharmaceutical companies that were overpricing their products.

Thrifty White Store aims to offer quality and innovative services to Springfield residents. They offer their services through a mobile phone application to reduce the waiting time. Customers can make requests for refills and even get refill reminders on their mobile phones. The store’s management claim that the business has improved its sales since it started using the mobile phone application. They aim to improve the use of technology to improve the customer experience and minimize the time taken on visiting the store.

Thrifty White continue to strive to offer quality services to retain its long-term customers. As the company evolves, it has to explore ways of improving their services. One approach is to start home deliveries to their long-term care customers. Home deliveries are ideal for this era since if the company fails to make such deliveries, a competitor is likely to embrace the strategy. The company has to continue being innovative if it is to compete in the current innovative environment. The employees exhibit a commitment to their work and will continue to deliver quality services. That is, however, not sufficient to guarantee success. A business analysis will help identify the issues and possible solutions for the store.

Political:

There is a rise in the political concern for the high prices in the pharmaceutical industry. Local and national politicians are pushing for the price regulation of the industry. The company also fears a possible tax increase as the local government aims to increase the licensing fees to increase their revenues. The store owners believe that the increase in taxes and forced price reductions will significantly reduce their profit margins.

Economic:

Owners are speculating a possible increase in revenues as the unemployment rate is reducing. As more people are employed the number of people with access to medical insurance increases hence increasing revenues for the store. There is, however, some concerns that the current trade wars will increase the costs of imported medication. Increasing the tariffs on imported goods will increase the prices charged to customers.

Social:

Most of the population in Springfield is aging, increasing the number of people requiring home care services and long-term medication. The old population also increases the number of people unable to come to the store for their medication.

Technological:

The store acknowledges the increasing influence of social media on marketing the company. Any negative comments on social media hurt the store’s demand. The company also joins others in the retail industry in integrating information technology to improve the services offered to the customers.

Legal:

Owners of Thrifty White Pharmacy complain of high regulatory requirements that threaten their bottom line. They claim that using the internet will increase the compliance requirements due to the need for patient privacy.

Environmental:

The community has an increasing concern for the environment. The store has the aim of increasing its corporate social responsibility involved in environmental protection activities.

The threat of New Entrants:

The pharmaceutical industry has no limitation to new entrants as long as investors have the required capital. Existing companies have to be continually innovative to prevent being ousted by new entrants.

Power of Suppliers:

Big pharmaceutical companies are responsible for supplying the store its inventory. Owners complain that they have to accept the prices charged on the products which restrict their ability to sell at low prices.

Power of Buyers:

The patients have limited control over the prices being charged. Most of the payments are from the insurers limiting the ability of the patient to be involved in pricing. Drugs are also a necessity limiting the ability of the patients to negotiate prices.

Availability of Substitutes:

Substitutes to Thrifty White Pharmacy products can come from other drug manufacturers of the same products. Other local pharmacies also offer the same services as Thrifty White.

Competitive Rivalry:

Competition for the company comes from online pharmaceutical suppliers that ease the delivery to the patients. Other rivals include the mail order drug suppliers that also focus on long-term care patients.

The store has an increase in the number of long-term care patients and should introduce discount prices for such clients. Thrifty White Pharmacy currently lacks discounts for bulk purchases. The store should introduce subscription services for customers to encourage those will long-term prescriptions to sign with the pharmacy. Bulk purchase discounts through subscriptions will ensure that the company attracts the aging population with long-term medication needs.

Thrifty White should offer its temporary employees with financial incentives like bonuses to encourage them. The temporary employees often feel like outsiders since the permanent employees enjoy a share of the profits as part owners. Allowing the temporary employees some bonuses will encourage their participation in the company.

The owners should also introduce home deliveries to their customers. Some of their customers are old and have no families to send for their refills. The store also has an online presence, which makes it easy for the company to introduce home deliveries. It is prudent to introduce home deliveries to compete with mail order companies and emerging online pharmaceuticals.

Time is the most pronounced limitation in the analysis. Little time was available to gather data through actual observation of the store’s activities. The analysis mostly depended on the quantitative data collected from the store, which is not complete in providing a complete picture of the store’s activities. The study also relies on the interviews from the employees that hold a bias opinion for their company. It was also challenging to find the input of their customers within the limed period. Most customers come for their prescription at the end of the month while the analysis was undertaken in the middle of the month. There was also a general lack of experience on the researchers, which could affect the quality of the analysis.