A comparative study of the pharmacy business models with specific reference to Nuclicks and Pick 'n Pay

Heunis, C. (2003-03)

Thesis (MBA)--Stellenbosch University, 2003.

Thesis

ENGLISH ABSTRACT: The purpose of this report is to create a better understanding of the new pharmacy initiatives in the South African market, with specific reference to the Nuclicks and Pick 'n Pay groups. In order to understand the respective business concepts better the following abstracts from each chapter of the study is given. Chapter one is basically the introduction to the study and describes the events that lead to the above mentioned corporate retailers to enter the pharmacy market place. An introduction to Hamel's business model theory is also discussed and identified as a possible means of evaluating the corporate retailers' business concepts. In Chapter two the strategic analysis of the South African retail pharmacy industry is performed. This analysis is performed to create an understanding of the different forces at work in the industry. Some of the key findings in this chapter are that changes to the pharmacy act and the way dispensing licences are going to be awarded creates uncertainty. The profit outlook of retail pharmacy, though on the decline, still compares favourably to other retailers. In chapter three the core concepts of Hamel's business model are presented in more detail and applied to the retail pharmacy environment. In his view, a strategy needs to change the industry rules. This chapter ends with the concept of wealth potential based on Hamel's teachings. The wealth potential concept is about creating cash flow and profits. A business model that is able to create customer benefits well below the cost of the competitors is regarded as efficient. By utilising the Hamel way the Nuclicks (chapter four) and Pick 'n Pay (chapter five) business concepts is unpacked. Both Nuclicks and Pick 'n Pay pharmacy business models are presented within the corporate framework of the groups. Nuclicks bought an established pharmacy franchise while Pick 'n Pay launched Healthpharm. Nuclicks creates a possible choke point by buying UPD. The Nuclicks pharmacy strategy is a more comprehensive health strategy, while Pick 'n Pay follows a more cautious approach. As franchising will playa major role in both pharmacy concepts, the theory of franchising is presented in chapter six. Telephonic interviews with Link franchisees are conducted and the possible reasons for the ambiguity that crept into the Link business model are discussed. As the Healthpharm franchise is a new concept, it is evaluated based on information gathered from press releases and the Healthpharm web-site. In chapter seven universal conclusions and recommendations, based upon the literature study and this investigation, are presented. One of the key findings are, success in the face of changes requires more than the current way of doing business. It requires an innovative thinking process. New business models have to be formulated that allows retail pharmacists to establish a focused and well-differentiated value proposition. This value proposition needs to be meaningful for consumers and must strengthen a pharmacy outlet's competitive position.

AFRIKAANSE OPSOMMING: Die doel van hierdie verslag is om 'n beter begrip vir die nuwe apteek inisiatiewe in die Suid-Afrikaanse mark te ontwikkel, met spesifieke verwysing na die Nuclicks en Pick 'n Pay groepe. Om die onderskeie besiqheidskonsepte beter te verstaan, word die volgende opsomming van elke hoofstuk van die studie uiteengesit. Hoofstuk een is 'n inleiding tot die studie en beskryf die gebeure wat aanleiding gegee het tot die bogenoemde korporatiewe kleinhandelaars se toetrede tot die apteek mark. 'n Inleiding van Hamel se besigheidsmodel teorie is ook bespreek en is geïdentifiseer as evaluering van die korporatiewe kleinhandelaars se besigheidskonsepte. Hoofstuk twee bied 'n strategiese analise van die Suid-Afrikaanse kleinhandelaars apteek industrie. Hierdie analise is geskep om beter begrip te ontwikkel vir die verskillende kragte wat inwerk in die industrie. Van die bevindinge in die hoofstuk is die veranderinge in die apteek wetgewing en die wyse waarop resepteer lisensies toegeken gaan word, en hoeveel onsekerhede dit tot gevolg het. Die wins vooruitsigte van kleinhandelaars apteke, alhoewel aan die afneem, vergelyk steeds gunstig met ander kleinhandelaars. In Hoofstuk drie is die kern konsepte van Hamel se besigheidsmodel in meer detail uiteengesit en toegepas op die kleinhandelaar apteek omgewing. Uit sy oogpunt, is 'n strategie nodig om veranderinge te weeg te bring in die industrie reëls. Hierdie hoofstuk eindig met die konsep van waarde potensiaal wat gebaseer is op Hamel se teorie. Hierdie waarde potensiaal konsep is gebaseer op die skep van kontantvloei en 'n Besigheidsmodel wat in staat is om die kliënt te begunstig heelwat laer as die koste van die teenstander, word beskou as effektief. Hamel se teorie is gebruik om Nuclicks (hoofstuk vier) en Pick 'n Pay (hoofstuk vyf) se besigheidskonsepte te analiseer. Beide Nuclicks en Pick 'n Pay se besigheidsmodelle word aangebied binne die korporatiewe raakwerke van die groepe. Nuclicks het 'n gevestigde apteek konsessie gekoop terwyl Pick 'n Pay vir Healthpharm begin het. Nuclicks het 'n moontlike 'wurgpunt" geskep deur die aankoop van UPD. Die Nuclicks apteek strategie is 'n meer omvattende gesondheidstrategie, terwyl Pick 'n Pay 'n meer versigtige benadering volg. Aangesien besigheid konsessie 'n belangrike rol speel in beide apteek konsepte, word die teorie van konsessie in hoofstuk ses behandel. Telefoniese onderhoude is gevoer met Link konsessiehouers en die moontlike redes vir die twyfelagtigheid van die Link besigheidsmodel word bespreek. Aangesien die Healthpharm konsessie 'n nuwe konsep is, word dit geëvalueer op grond van inligting wat versamel is uit die media en die Healthpharm webtuiste. In Hoofstuk sewe word universele afleidings en aanbevelings, gebaseer op die literatuurstudie en die ondersoek, uiteengesit. Een van die hoof bevindings was dat sukses benodig meer as die huidige manier van besigheid doen. Nuwe besigheidsmodelle moet geformuleer word, wat dit vir kleinhandelaar apteke moontlik sal maak om 'n gefokusde en goed gedifferensieerde waarde voorstel tot stand te bring. Hierdie voorstel moet betekenisvol wees vir die verbruiker en moet die apteek kompeterende posisie versterk.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/53233
This item appears in the following collections: