Strategic Management Paper The Generics Pharmacy 1

Philippine Christian University
1648 Taft Ave. Cor. Pedro Gil St. NCR Malate, Manila, Philippines
A STRATEGIC MANAGEMENT OF
THE GENERICS PHARMACY
Abalos, Rhonaver A.
Cabayao, Tyron C.
Carreon, Amante B.
Estrada, Jeanne Mae C.
Mariano, Maria Fevielyn R.
Varon, Remedios
MBA- MB8
April 2023
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STRATEGIC MANAGEMENT: THE GENERICS PHARMACY
EXECUTIVE SUMMARY
TGP is the first and most successful for-profit pharmacy distribution system formed as
a franchise network that serves the underprivileged. TGP is truly revolutionary since it
combines a financial incentive with a concern for the needs of the underprivileged. It suggests
that a sustainable market may be structured around the poor's health care requirements, and
that the poor are not always the recipients of dole-outs as conventional wisdom often portrays
them to be.
It has long been considered (wrongly, for the most part) that only government-
subsidized pharmaceutical supplies can alleviate the equality problem in poor nations. TGP
disproves this ideology. TGP is a for-profit organization that provides low-cost
pharmaceuticals to low-income households in both urban and rural locations. It does this far
and away better than any government program or funded program. Building a brand name
(TGP) for generics is difficult since huge pharmaceutical companies have stigmatized generics
as inferior, of low quality, and intended for the poor. Overcoming these unfavorable image
issues has been a mammoth task that has necessitated extensive marketing and advertising
expenditures.
TGP's main problem is the market entry of other generics-drugs retailers, many of
which use the same business model of medication franchising. Since TGP's initial success,
additional franchise generics pharmacies have entered the market, eroding TGP's market share.
MABISA na, MATIPID pa! The Generics Pharmacy's success can be attributed to the
low prices of the non-branded pharmaceuticals it sells, as well as its unique relationships with
its franchisees. TGP's products are exclusively generic, as opposed to other pharmaceutical
retailers, where the product mix is often 90 percent branded and 10 percent generics. As a
result, the corporation can sell at extremely low pricing.
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TABLE OF CONTENTS
EXECUTIVE SUMMARY ................................................................................................................ 2

TABLE OF CONTENTS .................................................................................................................... 3
ACKNOWLEDGEMENTS ................................................................................................................ 5
I. INTRODUCTION ............................................................................................................................ 6
II. EXTERNAL ENVIRONMENT ANALYSIS ............................................................................. 7
A. MACRO ............................................................................................................................ 7
1. General Economic Conditions and Forecast .................................................................. 7
2. Legislation and Political Aspects ................................................................................... 7
3. Population and Demographics ........................................................................................ 8
4. Societal Values and Lifestyle ......................................................................................... 9
5. Technology ..................................................................................................................... 9
6. Global Segment ............................................................................................................ 10
B. Immediate Industry and Competitive Environment (Porter’s Analysis) ......................... 10
1. Suppliers ....................................................................................................................... 11
2. Rival Firms ................................................................................................................... 12
3. Buyers ........................................................................................................................... 12
4. Substitute Products ....................................................................................................... 13
5. New Entrants ................................................................................................................ 14
C. Threats and Opportunities ............................................................................................... 15
D. EFE Matrix ...................................................................................................................... 21
E. Strategic Issues Based on External Factors ..................................................................... 22
III. INTERNAL ENVIRONMENT ANALYSIS ........................................................................... 23
A. Company Resources and Capabilities ............................................................................. 23
B. Competitive Position ....................................................................................................... 24
C. Value Chain Analysis ...................................................................................................... 26
D. Financial Analysis ........................................................................................................... 29
E. IFE Matrix........................................................................................................................ 31
F. Strategic Issues Based on Internal Factors ....................................................................... 33
IV. STRATEGY FORMULATION ................................................................................................ 34
A. SWOT Matrix .................................................................................................................. 34
B. SPACE Matrix ................................................................................................................. 41
C. Internal-External Matrix .................................................................................................. 41
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D. Grand Strategy Matrix ..................................................................................................... 42
E. Summary of Strategies ..................................................................................................... 43
F. Quantitative Strategic Planning Matrix............................................................................ 44
V. STRATEGY PLAN ...................................................................................................................... 48
A. Vision and Mission.......................................................................................................... 48
B. Objectives (short term and long term) ............................................................................. 48
1. Short -Term Objectives (Strategic)............................................................................... 49
2. Long Term Objectives (Financial) ............................................................................... 49
C. Recommended Business Strategy .................................................................................... 49
D. Corporate Social Responsibility ...................................................................................... 50
E. Financial Projections........................................................................................................ 51
F. Supporting Functional Strategies ..................................................................................... 53
1. Production/Operations .................................................................................................. 53
2. Marketing/Sales ............................................................................................................ 54
3. Finance.......................................................................................................................... 54
4. Personnel ...................................................................................................................... 55
5. MS/IT............................................................................................................................ 55
VI. IMPLEMENTATION AND CONTROL ................................................................................. 56
A. The Balanced Scorecard .................................................................................................. 56
B. Contingency Planning...................................................................................................... 56
References ........................................................................................................................................... 58
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ACKNOWLEDGEMENTS
This paper would not have been possible without the unwavering support of our
graduate school professors from the Philippine Christian University – Dra. Bautista Metro
Bulacan Site.
Dra. Bautista, thank you for believing in us. Our success won’t be possible without your
motherly love and extending hand towards us student who wanted to have this achievement.
We are forever grateful for your efforts. To our site professors, we cannot mention you one by
one but know that we are grateful for every support that you have extended to us. We look
forward to being like you in our future endeavors.
To the PCU-MBA8 classmates and PCU-MBA batchmates, Thank you for everyone’s
support in every activity, reports and papers. We are grateful for your help too.
To the Almighty God, all glory and honor belongs to you.
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I. INTRODUCTION
Despite the Philippines being a developing country with nearly half of its people living
on less than $2 per day, the price of pharmaceuticals in the Philippines is second only to Japan
in Asia and one of the highest in the world. The study demonstrates how The Generics
Pharmacy, a local pharmaceutical company, defied the conventional industry business model
and became the country's largest pharmaceutical store in just three years. The Generics
Pharmacy succeeded in establishing a superior value proposition under the strategic guidance
of CEO Benjamin Liuson by focusing on the supply and demand side components at the bottom
of the pyramid and delivering affordable high-quality medicines within reach of low-income
individual. Superior leadership, management, and strategic initiative were successful in
integrating and balancing the pillars of corporate social responsibility, entrepreneurial
foresight, and resource-based strategy to propel the organization to the forefront.
As was the case with other companies, The Generics Pharmacy began as a modest
operation with a primary concentration on the importation and distribution of pharmaceutical
products. At the time, it was a subsidiary of Pacific Insular Co. They envisioned making less
expensive alternatives to more expensive medicines available to all Filipinos in an effort to
satisfy the requirements of their clientele.
Even though generic drugs are still foreign to many people, even though it is an option
that is more affordable, many still kept to branded medicine - simply because they are better
aware of it and have experience with it. This is the case even when generic medicines are more
affordable. Because of this, the corporation encountered difficulty in gaining acceptance for
the product as having the same quality as branded medicines. But with the opening of their first
pharmacy store, which happened to be the very first generic medicine store anywhere in the
country, things looked better than expected for TGP. This launch was an innovation in and of
itself for the pharmaceutical sectors. TGP carried only generic versions of products, while other
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pharmacies in the Philippines carried branded versions of only 90% of their inventory. There
was still a significant amount of ground to cover before generic drugs could be considered the
norm. When another business decided to franchise the new company, they took on a significant
threat to both the reputation of the company and the product. It is possible that the goods will
be handled poorly, that the store management will be below average, and that the customer
service will be of zero quality. All of these factors are essential to ensuring that the consumer
will be satisfied.
II. EXTERNAL ENVIRONMENT ANALYSIS
A. MACRO
1. General Economic Conditions and Forecast
It is anticipated that the expansion of the Philippines Pharmacy Retail Market will
receive a boost in terms of its development in income thanks to the rise in the demand for
generic pharmaceuticals. The category of branded generics is expected to experience the
greatest expansion, while the market for generic medications as a whole is projected to expand
at a compound annual growth rate of 4.7% between the years 2019 and 2025.
It is projected that the national pharmacy chains would enhance their market share in
the semi-urban and rural areas of the country through the acquisition of both independent
pharmacies and regional chain pharmacies. Because of this, the number of their stores will
expand at a far faster rate.
As of the year 2018, the Philippines was ranked as the eleventh most attractive market
for pharmaceutical companies and the third most attractive market among ASEAN countries.
This is primarily the result of a number of variables, including, but not limited to, a rising
population, a high rate of medical tourism, and other factors of a similar nature.
2. Legislation and Political Aspects
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The Generics Act of 1988 was enacted by the Philippine government with the purpose
of ensuring that all Filipinos have access to medications that are both affordable and effective.
By mandating that doctors write prescriptions that include both the generic and brand names
of the medications they are recommending, the law works toward its goal of facilitating the
distribution of reasonably priced, high-quality medicines that can serve as replacements for
popular but more expensive name brands. The findings of a survey that evaluated the degree
to which pharmacies and medical professionals complied with the requirements of the
legislation are presented in this Policy Note. According to the report, physician compliance
was significantly higher than that of drugstores and individual customers. Poor levels of
awareness of the law were discovered among customers, while compliance with the portion of
the law that required drugstores to display generic menu cards and provide generic alternatives
was found to be low among drugstores. One of the suggestions is to alter the way that customers
think by means of ongoing education campaigns that are directed toward the most relevant
subset of the population.
3. Population and Demographics
Community pharmacies supply drugs on prescription, over-the-counter medicines, and
a variety of other health-related items and services to the markets in their immediate vicinity.
Due to the fact that they are a neighborhood company that conducts business exclusively in
person, the demographics of their target customers are constrained and precisely outlined.
Local pharmacies have a restricted geographic reach, so their business objectives and strategies
need to be devised in a way that will allow them to maintain a profitable position within their
target market. It is essential for the successful operation of a community pharmacy over the
long run to obtain an understanding of how the effect of their target markets affects their
business goals.
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4. Societal Values and Lifestyle
The socio-cultural environment of a society consists of a society's fundamental
principles as well as its lifestyle, culture, and preferences. These elements, either directly or
indirectly, have an effect on the environment in which businesses operate. The norms of society
and the ways people live their lives are not static; rather, they are subject to change over time.
There are a number of factors that come into play, including population, way of life,
culture, tastes, and traditions. These characteristics are frequently inherited from one
generation to the next and are developed by the community as a whole. Encounters with other
cultures have the potential to shape the perspectives and routines of individuals.
5. Technology
The patient and the pharmacy staff both benefit from technological improvements in
pharmacy, which contribute to the creation of a more positive holistic experience and an
improvement in the synergy between the various stages of the prescription process.
Utilizing systems to their full potential
When assessing the information technology requirements for emerging working
practices, pharmacists should explore what functions could be offered by systems that they
already use. This is because pharmacists are already utilizing information technology systems
to support their day-to-day work.
Discharge and prescriptions sent electronically.
In hospitals, electronic prescribing (EP) systems are used to automate the process of
prescribing, supplying, and administering medications. These systems have been found to
significantly improve patient safety and significantly cut down on the number of drug errors.
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However, the effect on error reduction is reliant on the architecture of the system, and an
inadequately executed system can potentially lead to an increase in error rates.
Barcode medicine identification
In EP systems, the use of barcode identification of medications has been demonstrated
to reduce the number of errors that occur during the administration of medications and to
improve the overall comprehensiveness of a patient's medication history. However, barcode
identification of medicines at the site of administration is an interruptive process. As a result,
medical personnel frequently invent "work arounds" to avoid barcode scanning.
6. Global Segment
According to the findings of an investigation that was carried out by Vantage Market
Research, the global market for generic drugs is anticipated to generate revenue of $531.8
billion by the year 2028, which represents a compound annual growth rate of 5.2% from the
$392.4 billion in revenue that was generated in 2021. According to the report that was
published by the research company on the Global Generic Drug Market, the increasing usage
of robotic process automation (RPA) to ensure regulatory and standards compliance as well as
the low prices of generic medications will accelerate the expansion of the market.
B. Immediate Industry and Competitive Environment (Porter’s Analysis)
Figure 1: Michael Porters Diagram of The Generics Pharmacy
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1. Suppliers
Suppliers of pharmaceutical distribution companies would be reliant on pharmaceutical
manufacturing companies, suppliers of material handling equipment, and even software
programs that enable their online services. This would be the case because pharmaceutical
manufacturing companies supply the raw materials for pharmaceutical distribution companies.
The bargaining power of these many suppliers appears to be low as a result of the intense
competition that exists between these various enterprises. In the year 2021, there were around
403 pharmaceutical companies operating in the Philippines. Multinational corporations such
as Pfizer, GlaxoSmithKline, BOE. Ingelheim, and AstraZeneca control the majority of the drug
production industry in the Philippines. On the other hand, prominent local firms like Unilab
and Pascual Laboratories may be found in this region. It would appear that rivalry among
suppliers is quite fierce given the prevalence of global firms as opposed to regional
manufacturers and the former's numerical advantage.
In addition, warehouse equipment, material handling equipment, and transportation
vehicles are all essential components of a successful distribution operation. When it comes to
the storage equipment used in warehouses, various aspects, such as temperature, light and
humidity, ventilation, segregation, and sanitation, play an extremely important role. In the
context of the supply chain, the term "material handling equipment" refers to any machine that
is employed to move, store, regulate, and protect materials or goods during the processes of
manufacturing, distributing, and other operations. The use of robots in the machinery used in
this sector of the economy has created a more level playing field for competition between
businesses. Because of the high initial costs of investments in such items, strategic pricing of
equipment also contributes to the competitiveness.
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This, in turn, results in limitations placed on the expansion of the market. Therefore, in
order for businesses to acquire a larger portion of the market, they need to provide the best
possible pricing for their clientele.
2. Rival Firms
The competition between competing companies looks to be fierce as a result of the
pressures they face to extend their product and service portfolios, enter the digital era, increase
their distribution reach, and develop price strategies. According to the Philippine Commission
on Competition, it would appear that local manufacturing enterprises market their wares via
local distribution organizations. On the other hand, international pharmaceutical manufacturing
businesses almost exclusively depend on other multinational companies, such as Zuelig
Pharma (99%), to operate as their distributor. In addition to that, these large corporations are
also more active participants in the bidding processes for the government projects (PCC, 2020).
It would appear that multinational distribution companies had the upper hand, given the
prevalence of multinational corporations in the Philippines and the substantial reliance on the
imports that these corporations provide. As a result of this, local distribution companies are in
competition not just with other local corporations but also with worldwide corporations.
In addition, there are significant hurdles to overcome in order to leave the industry. The
part of a company's overall costs that are comprised of fixed costs is typically quite significant.
These costs include investments in equipment, warehousing facilities, facility overhead, and
transportation vehicles. Additionally, the incorporation of digitalization into the business
results in the incurrence of fixed expenses due to the company's investment in technological
apparatus. As a result, it would appear that there are many obstacles to leaving the industry.
3. Buyers
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The consumers have a moderate amount of bargaining power because of the high
switching costs and the high need for geographical reach. In order to form partnerships with
wholesalers and distribution organizations, a legally binding agreement must be reached
concerning the quantity of warehousing resources that each of these companies will demand
for their products. In addition, there is a current movement within the sector that sees
distribution corporations offering subscriptions to training sessions about the marketing of their
products. This is a trend that is becoming increasingly common. Customers may consider these
expenditures on things like training subscriptions and equipment for their storage facilities to
be part of their ongoing fixed costs. As a direct consequence of this, switching costs seem to
be quite significant.
On the other side, the majority of clients are likewise demanding widespread
distribution. These retail shop owners operate multiple locations throughout the country, each
of which houses a distinct department store. Additionally, the possibility of increasing the reach
of the principles is another component that contributes to the rise in the need for a wider
geographical reach. When these principals consider entering into long-term partnerships with
distribution firms, one factor that is important to them is the potential for future investments
on additional branches. Companies that have a broad reach provide the impression that they
are capable of accommodating the growth of their consumers even in the event that this growth
occurs in the future.
4. Substitute Products
Products and services that are considered to be substitutes include generic
pharmaceuticals, herbal products, and businesses that operate their very own distribution units.
Depending on the firms that the distribution companies serve as their customers, generic
medications might be able to serve in the same capacity as the distribution companies. Because
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of the potential opportunity cost of losing services from catering to generic drug producers as
well as branded drug manufacturers, providing exclusive service to branded drug
manufacturers may constitute a danger. As a result of the increasing prices of branded
medicine, the market for generic drugs has become increasingly competitive. A further factor
that has contributed to this tendency is the priority that the federal government has placed on
generic drugs through the implementation of the Cheap Medicines Act, which mandates the
selling and distribution of generic medicines among pharmaceutical companies. But according
to a survey that looked at how Filipinos feel about generic pharmaceuticals, only 15% of people
have a preference for generic drugs, while 70% of people have a preference for branded drugs,
and 15% of people don't have a choice either way. Even with the efforts of the government and
other institutions on selling generic drugs, the emergence of preference for these products may
still pose a problem for distributors who cater exclusively to branded pharmaceutical
companies. This is because generic drugs are less expensive than brand-name drugs.
In addition, another alternative to the primary service of drug distribution comprises
businesses that operate their own distribution units within the company. Distributors include
companies such as Pfizer, GlaxoSmithKline, Wyeth, and Novartis, amongst others. These
enormous corporations control a significant portion of the market within the nation. It's possible
that there will be less of a need for third-party distributors now that these corporations have
their own distribution systems.
5. New Entrants
The Department of Health, acting through its health regulatory body known as the Food
and Drug Administration, is in charge of regulating and monitoring the activities of
pharmaceutical businesses. The potential new players in this market need to fulfill a number of
standards before they can begin conducting business. According to FDA Circular No. 2014-
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026 with the subject of: Guidelines on the Implementation of New Rules and Regulations on
the Licensing of Drug Distributors following AO No. 2014-0034, a number of preparations are
required for the application of a license to operate among drug distributors who are either
wholesalers, importers, or exporters. This is stated in the guidelines. This contains
documentations such as the application form, proof of company name registration, credentials
of the pharmacist and other trained staff, risk management plan, location plan, proof of
payment, and a self-assessment toolkit, among other things. After these types of
documentations have been turned in, an assessment of the agency is then required. This
includes conducting audits of the buildings and operations of the respective businesses. Due to
the high fees and extensive amount of time required to complete the application process, these
multiple requirements present a significant obstacle for anyone who might be interested in
participating.
In addition, certifications obtained from other organizations, such as ISO, result in
further financial outlay. To begin operations, you will also need a significant amount of funds
to invest in the necessary machinery and infrastructure.
C. Threats and Opportunities
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OPPORTUNITIES
O1. With a total of 69.40 million people and a contribution rate of 63.9%, the working
age population of 15-64 years old has the highest contribution rate of the entire
population.
Weight: 10%
Rating: 3
Reason for weight: The current demographic may present an opportunity to combat economic
factors that are currently proving to be negative.
Potential Impact: Because the majority of the population is of working age, there will be a
greater number of potential customers who have the means to purchase goods and services.
Reason for rating: A greater emphasis on the senior population has been placed on the
wholesale goods acquisition. It's possible that including people in their thirties would be more
advantageous because it would provide the main partners more product possibilities to choose
from.
O2. The current health expenditures of the Philippines reached Php 1.09 trillion in 2021,
representing an increase of 18.5% in comparison to the Php 917.15 billion recorded in
2020.
Weight: 10
Rating: 3
Reason for weight: An increase in health care costs may suggest a growth in demand; hence,
this may translate into the potential for pricing strategy.
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Potential Impact: The rising priority that Filipinos are placing on spending money on their
health will lead to an increase in the number of sales possibilities available in the
pharmaceutical business.
Reason for rating: The pricing tactics utilized by The Generics Pharmacy are derived from the
company's own extensive consumer market research. An examination of customer behavior is
included in these investigations. With this, the company offers a wide array of products
spanning a variety of price points in order to cater to the various levels of income that its
customers have. On the other hand, such market analyses absolutely require being brought up
to date in light of the current situation in the country.
O3. The consequences of COVID-19 have resulted in a heightened awareness of health
concerns among Filipinos.
Weight: 15%
Rating: 4
Reason for weight: There is a possibility that the market for health items will grow.
Potential Impact: Filipinos becoming more health conscious will make them invest more in
health products.
Reason for rating: The company provides a wide range of health items, including prescription
pharmaceuticals, dietary supplements, and healthy food products, which may provide their
clients more options to choose from. These products will be retailed to Filipinos who are
beginning to take a greater interest in their health.
O4. There has been a recent uptick in the number of telemedicine services that now offer
delivery of medication to patients.
Weight: 20%
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Rating: 4
Reason for weight: This can open up a fresh channel for the distribution of various medical
supplies.
Potential Impact: The growing use of telemedicine could result in fundamental shifts in the
structures underlying the provision of medical services.
Reason for rating: The corporation makes investments in online platforms in order to sell their
products and attract new cooperation opportunities. Because of the company's expertise in
technology, it may be simpler for it to form collaborations with businesses that specialize in
telemedicine.
O5. The Philippine supply chain plan is going to be implemented through the publication
of the Philippine Medicines Policy for 2022 – 2030 (PMPP) in the next years.
Weight: 10%
Rating: 4
Reason for weight: Because the government is putting so much emphasis on the healthcare
supply chain, several pharmaceutical businesses now have the opportunity to form partnerships
with the government.
Potential Impact: The goal of the government to improve the quality of healthcare provided to
the general people may result in an increase in the number of commercial opportunities
available to the various enterprises that make up the pharmaceutical sector.
Reason for rating: The adherence to a stringent delivery schedule is one component of The
Generics Pharmacy comprehensive competitive strategy, which also includes efficient
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delivery. This concentration is in keeping with the efforts that the government is making at the
moment to establish an effective supply chain in the country.
THREATS
T1. The conflict between Russia and Ukraine is still going strong even after all this time.
Weight: 10
Rating: 2
Reason for weight: The political and economic climates of nations all over the world have been
altered as a result of the conflict.
Potential Impact: The rivalry between the countries has resulted in changes to trade regulations,
inflation, and an imbalance in supply all across the world.
Reason for rating: The impacts of the battle on inflation and the price of oil have had a
substantial influence on The Generics Pharmacy business operations. As a result of the sudden
acceleration in the pace of growth in oil prices, the company has incurred additional costs as a
result of their heavy reliance on fuel for the transportation of their products.
T2. There has been a consistent movement toward a weakening in the value of the
Philippine peso, and the current exchange rate between the peso and the dollar is 58.95
php to 1 USD.
Weight: 15%
Rating: 2
Reason for weight: It's possible that it will lower demand for consumer goods in the country.
Potential Impact: Customers might have less purchasing power if the peso value is low.
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Reason for rating: Because Filipinos have less money to spend overall, there is a greater
likelihood that they may opt for generic brands of consumer goods. This indicates that needs
at retail stores will fall, which will result in a decrease in the requirement for wholesale and
distribution as well.
T3. There is currently no secretary who has been appointed to the Department of Health.
Weight: 5%
Rating: 3
Reason for weight: Conflicts inside the department can be caused by a lack of leadership, which
can have an effect on the healthcare industry.
Potential Impact: The discord that has arisen within the Department of Health as a direct result
of the absence of competent leadership has the potential to make both the policies and
partnerships within the healthcare industry unstable.
Reason for rating: Concerns were raised by the corporation regarding the upheaval that was
taking place within the health governing body of the country. Even if the business has
maintained its compliance with the requirements set by the DOH and the FDA, a sudden change
in leadership in the near future could result in changes to the company's policies, which would
have an impact on the organization's internal processes.
T4. According to the results of the global poll, the most important problem that needs to
be fixed is the harmful effects that the pharmaceutical business has on the surrounding
environment (43%).
Weight: 5%
Rating: 4
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Reason for weight: It's possible that if pharmaceutical businesses don't make any measures to
reduce their environmental impact, they'll end up with a negative public image and business
strategies that can't be maintained in the long term.
Potential Impact: It is possible that pharmaceutical corporations will lose customers as a result
of their indifference, given the growing awareness and worries regarding the environment
among the general population.
Reason for rating: The recent investment made by the corporation in solar panels for certain of
their sites resulted in a reduction of the company's overall carbon footprint.
D. EFE Matrix
External Factors Opportunities Weight Rating Score
With a total of 69.40 million people and a contribution rate 0.15 4 0.6
of 63.9%, the working age population of 15-64 years old
has the highest contribution rate of the entire population.
Around 6% Growth in the Philippine Economy 0.12 4 0.48
Philippine Investment Grade (BBB) improves the country’s 0.08 4 0.32
economic outlook
Inflation rate in the Philippines 0.07 2 0.14
Philippine Election 0.05 2 0.10
Threats
ASEAN Integration eases entry of foreign cooperatives 0.15 2 0.30
Uncertainties Regarding the Economy 0.12 2 0.24
Economic Issues and negative interests’ rates 0.10 2 0.20
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Culture of weak Financial Literacy 0.08 3 0.24
Economic Instability due to increase in oil prices 0.05 2 0.10
Lifting of BOC’s ban on new local cooperatives 0.03 3 0.09
TOTAL 1 2.81
E. Strategic Issues Based on External Factors
Suppliers of pharmaceutical distribution companies would be dependent on
pharmaceutical manufacturing companies, suppliers of material handling equipment, and even
software programs that enable their online services. This would be the case because
pharmaceutical manufacturing companies provide the raw materials for pharmaceutical
distribution companies. It makes sense for this to be the case given that pharmaceutical
manufacturing firms are the ones that provide the raw materials for pharmaceutical distribution
companies. It would appear that the negotiating power of all of these different suppliers is quite
low as a direct result of the tremendous competition that exists between all of these different
kinds of businesses. A total of approximately 403 pharmaceutical companies were actively
doing business in the Philippines in the year 2021.
vehicles are all crucial elements that must be present in order for a distribution operation to be
successful. A number of factors, including temperature, light and humidity, ventilation,
segregation, and sanitation, play a very significant part in the storage equipment that is utilized
in warehouses. These factors all contribute to the overall quality of the storage environment.
The term "material handling equipment" refers to any machine that is used to move, store,
regulate, and protect materials or goods during the processes of manufacturing, distributing,
and other operations in the context of the supply chain. This term is also used to refer to the
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term "material handling equipment." The integration of robots into the machinery that is
utilized in this sector of the economy has resulted in the creation of a more level playing field
for the competitiveness of the various firms. Strategic pricing of equipment also contributes to
the competitiveness of a company. This is important given the large initial expenses associated
with investments in such things.
As a direct consequence of this, there will be restrictions imposed on the growth of the
market. Therefore, in order for companies to capture a larger share of the market, they need to
provide the greatest possible pricing for their customers. This is the only way that this can be
accomplished.
III. INTERNAL ENVIRONMENT ANALYSIS
A. Company Resources and Capabilities
Suppliers of pharmaceutical distribution companies would be dependent on
pharmaceutical manufacturing companies, suppliers of material handling equipment, and even
software programs that enable their online services. This would be the case because
pharmaceutical manufacturing companies provide the raw materials for pharmaceutical
distribution companies. It makes sense for this to be the case given that pharmaceutical
manufacturing firms are the ones that provide the raw materials for pharmaceutical distribution
companies. It would appear that the negotiating power of all of these different suppliers is quite
low as a direct result of the tremendous competition that exists between all of these different
kinds of businesses. A total of approximately 403 pharmaceutical companies were actively
doing business in the Philippines in the year 2021.
vehicles are all crucial elements that must be present in order for a distribution operation to be
successful. A number of factors, including temperature, light and humidity, ventilation,
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segregation, and sanitation, play a very significant part in the storage equipment that is utilized
in warehouses. These factors all contribute to the overall quality of the storage environment.
The term "material handling equipment" refers to any machine that is used to move, store,
regulate, and protect materials or goods during the processes of manufacturing, distributing,
and other operations in the context of the supply chain. This term is also used to refer to the
term "material handling equipment." The integration of robots into the machinery that is
utilized in this sector of the economy has resulted in the creation of a more level playing field
for the competitiveness of the various firms. Strategic pricing of equipment also contributes to
the competitiveness of a company. This is important given the large initial expenses associated
with investments in such things.
Despite the Philippines being a less developed country and nearly half of its population
living on less than $2 per day, the price of pharmaceuticals in the Philippines is second only to
Japan in Asia and one of the highest in the world. The price of pharmaceuticals in Japan is the
highest in all of Asia. The case presents an illustration of how a local pharmaceutical company
called The Generics Pharmacy overcame obstacles presented by the standard operating
procedure of the industry to become the most successful pharmaceutical retailer in the country
in a span of only three short years. The Generics Pharmacy, led by its CEO Benjamin Liuson,
was successful in developing a superior value proposition. This was accomplished by
concentrating on the supply and demand side constructs at the base of the pyramid and making
high-quality, low-cost medications accessible to people with low incomes. The organization
was propelled into a position of industry leadership thanks to exceptional leadership,
management, and strategic initiative that were successful in integrating and harmonizing the
pillars of corporate social responsibility, entrepreneurial vision, and resource-based strategy.
B. Competitive Position
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Resources Value Rare Imitation Organization Competitive
Advantage
Brand Yes Yes, No Generics Sustainable
awareness Generics Pharmacy has Competitive
Pharmacy utilized its Advantage
has one of leading brand
the leading position in
brands in the various
industry segments
Intellectual Yes, they Yes, IPR and Risk of So far, the Providing
Property are other rights imitation is firm has not Strong
Rights, extremely are rare, and low but utilized the Competitive
Copyrights, valuable competition given the full extent of Advantage
and specially to can't copy margins in its IPR &
Trademarks thwart the industry other
competition disruption properties
chances are
high
Opportunities Yes, new No, as most Yes, can be Brand Temporary
for Brand niches are of the imitated by extensions Competitive
Extensions emerging in competitors the will require Advantage
the market are also competitors higher
targeting marketing
those niches budget
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C. Value Chain Analysis
As illustrated in the Value Chain diagram, Generics Pharmacy has five generic
categories of primary activities –
Inbound supply chain logistics
Generics Pharmacy is responsible for the actions of receiving, storing, and
disseminating the inputs that are used in the production of their products. It may comprise the
material handling and warehousing of actual products, in addition to the architecture for a
digital media corporation to receive and store client information. At this time, the majority of
Generics Pharmacy's inbound logistics operations are handled by a third party.
Operations
Processes that aid an organization in converting raw materials into completed goods are
referred to as "transformation activities." A broad definition has been chosen for the sake of
this article; it can mean anything from molding plastic to produce objects to leveraging
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consumer data to display adverts to customers based on their usage behaviors, among other
things.
Logistics for the Outbound
Generics Pharmacy participates in these operations in order to facilitate the distribution
of completed products to channel partners as well as ultimate customers. The activities that fall
under the category of outbound logistics are as follows: scheduling, warehousing, order
fulfillment for wholesalers and retailers, processing, and distribution network.
Promotion and Business Development
Generics Pharmacy engages in these operations in order to establish channels via which
customers can purchase the wares of a certain company. These tasks include things like
marketing, pricing, advertising and promotion, sales force management, and channel selection,
among other things.
Services
In order for customers to have a positive experience while using the product, Generics
Pharmacy is required to offer after-sales services and maintenance. Generics Pharmacy's
service activities may involve things like training, installation services, product forward and
backend software alignment, post-sales maintenance, and part supply.
Generics Pharmacy's Support Activities are the ones that aid assistance to the
company's Primary Activities, as the name of this function suggests. Porter classified the
Support Activities into four broad categories, and each of these categories of support activities
can be further subdivided into a number of discrete value activities that are unique to the
industry in which Generics Pharmacy works. The following are the four generic support
activities:
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Firm Infrastructure
The activities that fall under the category of "firm infrastructure support activities" at
Generics Pharmacy include things like quality management, general management, finance and
accounting, planning, and legal services.
Generics Pharmacy is a diversified company even within the industry; therefore, its
infrastructure activities support the entire value chain. However, the extent of these activities
varies, because Generics Pharmacy is itself a diversified organization. At Generics Pharmacy,
for instance, the corporate level is responsible for managing finances and planning, whilst the
business unit level is responsible for managing quality management, accounting, and legal
issues.
The Management of Human Resources
Management of human resources is essential to the success of any organization in
today's competitive business climate, in which every company is racing to transform itself into
a learning organization. At both the business unit level and the corporate level, HRM support
activities include recruiting, skill assessment, people planning, selection, hiring, training and
development, and compensation. These activities can be carried out at either level.
Any company can improve its competitive edge by better managing its human
resources; nevertheless, in certain fields, this is the single most important component. As an
illustration, the Human Resources departments of consulting firms are the primary drivers of
competitive advantage.
The Advancement of Technology
Technology provides support for practically all of an organization's actions in the
present day. In the field of information technology, the creation of new technologies has
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evolved into a source of competitive advantage. Field testing, feature design, component
design, process engineering, and technology selection are all examples of activities that could
be included in the process of developing new technologies at Generics Pharmacy.
Generics Pharmacy's Purchasing Processes and Procedures
Activities that are conducted to purchase inputs that are used by Generics Pharmacy's
value chain are included as part of the company's procurement activities. These activities are
known as "procurement activities" at Generics Pharmacy. Purchase inputs themselves are not
included in this figure. Among the many things that can be considered purchased inputs are
raw materials, supplies, machinery, laboratory equipment, office equipment, and even
buildings.
Procurement, just like every other activity throughout the value chain, makes use of technology
for things like procedures, vendor management, information systems, qualification
requirements for supply chain partners, and continual performance evaluation.
D. Financial Analysis
Below are the income statement and balance sheet for TGP For the first quarter ended
March 31. The statements show that income went up 8.46% between 2021and 2022. Total
liabilities went up by 2% and equity went up by 9%. The statements indicate the company is
financially sound.
June 30, 2022 June 30, 2021
INCOME STATEMENT (₱
millions)
Net sales 42,944 35,832
Gross Profit 10,233 8,155
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EBITDA 3,834 2,891
EBIT 2,044 1,169
Net Income attributable to equity 1,557 724
holders of the Parent Company
Earnings Per Share
Weighted 1.04 0.47
Shares Outstanding (In M)
Weighted 1,491 1,541
OPERATING MARGINS
Gross Profit 23.8% 22.8%
EBITDA 8.9% 8.1%
EBIT 4.8% 3.3%
Net Margin** 3.6% 2.0%
BALANCE SHEET (₱
millions)
Cash, cash equivalents and 22,606 27,796
liquid marketable securities
Current Assets 44,669 46,916
Total Assets 131,423 134,234
Current Liabilities 31,677 32,526
Interest-bearing debt 7,704 7,734
Total Equity attributable to 69,720 71,969
equity holders of the Parent
Company
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Total Equity 73,955 76,513
CASH FLOW (₱ millions)
Net cash flow from (used in) 4,032 844
operating activities
Net cash flow from (used in) (774) 2,797
investing activities
Net cash flow from (used in) (2,506) (4,930)
financing activities
Capital expenditures
E. IFE Matrix
Strengths-Opportunities Weaknesses-Opportunities
(S1,O7) (W10,O7).
The geographic presence of The Project management practices can be improved to
Generics Pharmacy in different exploit the opportunities offered by emerging
regions can help the organization to market segments. It will allow the organization to
get into the international market and successfully handle new product development
target the geographically dispersed projects (W10, O7).
customer base (S1, O7).
(S3,O6). (W12,O6).
Strong online presence on different The Generics Pharmacy can reduce the job stress
social networking sites of The and increase workers’ morale to launch new and
Generics Pharmacy can allow the
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organization to exploit opportunities creative products by exploiting creative thinking
offered by growing e-commerce trend capabilities of its workforce (W12, O6).
(S3, O6).
(S7,O3). (W8,O6).
The well-developed and efficiently The Generics Pharmacy can improve the customer
integrated IT infrastructure of The service to generate the positive word of mouth on
Generics Pharmacy allow it to take different social networking sites (W8, O6).
advantage of emerging innovative
technologies (S7, O3).
Strengths-Threats Weaknesses-Threats
(S5,T4). (W5,T3).
The Generics Pharmacy's access to the An organization may increase the expenditure on
suppliers that offer raw material at a the research and development activities to cope the
lower cost can help it overcome the competitive pressure due to the rising number of
threat imposed by rising inflation (S5, indirect and direct competitors (W5, T3).
T4).
(S8,T2). (W1,T6).
Competent and committed human The organization can improve waste management
capital of The Generics Pharmacy can practices and integrate sustainability in business
overcome the labor shortage problem operations. It will help the organisation to
in the market (S8, T2). effectively handle environmental pressure (W1,
T6).
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(S10,T7). (W7,T4).
Workplace diversity can help an The pricing strategy can be resettled and realigned
organization to take the globalization to maximize the value for money and overcome
as an opportunity instead of threat due challenges imposed by deteriorating economic
to high cross-cultural intelligence conditions (W7, T4).
(S10, T7).
F. Strategic Issues Based on Internal Factors
Numerous different factors, such as the following examples, can be used to determine the
most important strategic groupings of competitors operating within an industry:
• Specialization
• Identification of the Brand
• Strategies based on either push or pull
• Channel determination
• The standard of the item
• Technological position
• Cost of connecting in a vertical position
• Strategy for Setting Service Prices
• Influence in terms of finances or the workplace
• Relationship with the parent organization
• Relationship between governments
It is often vital to identify strategic groups of competing players in terms of features of how
they compete with one other and on factors of where they compete as well. This is true even
though there are many distinct aspects that can be compared between competing individuals.
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IV. STRATEGY FORMULATION
A. SWOT Matrix
Opportunities Strengths
Strengths Strength Opportunities (SO) Strength Threats (ST) Strategies
Strategies
Using Generics Pharmacy Generics Pharmacy can use two
strengths to consolidate and approaches - building on present strengths,
expand the market position. or analyze the trend and build processes to
two-pronged market penetration approach.
Weaknesses Weakness Opportunities Weaknesses Threats (WT) Strategies
(WO) Strategies
Building strategies based on Generics Pharmacy should just get out of
consumer-oriented product these business areas and focus on strength
development and marketing and threats box, or on weakness and
approach. opportunities box.
Strengths
The Generics Pharmacy's Proven Competitive Advantages
Generics Pharmacy possesses the capabilities and resources, which it can put to use to
develop a long-term, sustainable advantage over its competitors in the market. These are the
company's strengths. The positive characteristics of these five essential resources and
capabilities are what contribute to a company's strengths: financial resources, activities and
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procedures, previous experiences and accomplishments, people resources, and physical
resources such as land and buildings.
Generics Pharmacy has high margins since it charges a higher price than its rivals do
for their products. According to Jim Kayalar, who contributed to the case study on The
Generics Pharmacy, this has provided Generics Pharmacy with the resources necessary to not
only defend itself against the challenges of competition but also to invest in research and
development.
Generics Pharmacy enjoys the first-mover advantage in a number of different market
subsectors. It has tried its hand at a number of different things, including entrepreneurship,
leadership, marketing, and strategy. Generics Pharmacy was able to develop a one-of-a-kind
solution to penetrate unsatisfied customer needs with the assistance of the innovations and
entrepreneurship strategies and solutions.
• Intellectual Property Rights
Generics Pharmacy has amassed an extensive portfolio of patents and
copyrights as a result of its commitment to innovation and the purchase of such rights
directly from their original owners. Generics Pharmacy may be able to use this to its
advantage when meeting the challenges posed by competitors in a variety of industries,
including entrepreneurship, leadership, marketing, and strategy.
• If Generics Pharmacy has a solid balance sheet and financial statement, it will be able
to invest in new and different projects, which will further diversify the revenue stream,
as well as boost Return on Sales (RoS) and other metrics.
• Strong Domestic Market in which Generics Pharmacy Competes
The strong domestic market in which Generics Pharmacy competes serves as
both a source of the company's power and a barrier to its expansion and innovation.
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According to the information that was presented in the case study about The Generics
Pharmacy, Generics Pharmacy has a good chance of experiencing rapid expansion in
its domestic market even with a relatively low level of innovative activity; however,
the company will need to make additional investments in research and development in
order to break into the international market. The managers of Generics Pharmacy have
faced the temptation, up to this point, of concentrating solely on the home market.
Generics Pharmacy's ability to simultaneously target multiple subsets of the
domestic market's consumer population is made possible by the breadth and depth of
its product and brand portfolio. - Generics Pharmacy's Diverse Product Portfolio
Generics Pharmacy has been able to create a broad income stream and profit mix as a
direct result of this.
• A solid relationship with the industry's existing suppliers Generics Pharmacy, which is
already established in the market, has a solid relationship with the industry's existing
suppliers as well as the other members of the supply chain. Jim Kayalar claims that the
company is able to raise the quality of its products and services by capitalizing on the
expertise of its suppliers and other partners in the supply chain.
Weakness
The areas, competencies, and skills that Generics Pharmacy does not possess are referred
to as the company's weaknesses. The capability of the company to develop a sustained
competitive edge is hindered as a result. The absence or deficiency of five essential resources
and capabilities gives rise to weaknesses. These are a lack of prior experiences and
accomplishments, people resources, financial resources, physical resources such as land and
buildings, and activities and processes.
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• Organization Culture - It appears that the organization culture at Generics Pharmacy is
still dominated by turf battles within separate divisions. As a result, managers tend to
hold knowledge close to their chests. According to Jim Kayalar of The Generics
Pharmacy case study, this can lead to severe roadblocks in future growth as a result of
information being stored in silos, which in turn can result in missed opportunities in the
marketplace.
• An insufficiently diversified work force – I believe that Generics Pharmacy does not
have a sufficiently diverse work force given that the majority of its growth to this point
has been in its home market. According to Jim Kayalar, this may make it more difficult
for Generics Pharmacy to achieve its goals of becoming successful in the international
market.
• Even though Generics Pharmacy holds a significant number of patents and copyrights,
the company's business strategy is straightforward enough to be easily duplicated. The
intellectual property rights are extremely challenging to put into practice in the industry
that Generics Pharmacy is a part of. It is difficult to stop startups from disrupting
markets at different other levels, according to Jim Kayalar, who claims that intellectual
property rights are successful in preventing rivalry amongst companies of the same size.
• Generics Pharmacy has a stable balance sheet; nevertheless, one measure that needs to
be reconsidered is "Return on Invested Capital." This is because Generics Pharmacy
has a low return on their investments. Return on Invested Capital is the most reliable
measure of profitability, according to Jim Kayalar, who works in the areas of
entrepreneurship, leadership, marketing, and strategy that Generics Pharmacy operates
in. This is in contrast to other measures of profitability, such as Return on Equity and
Return on Assets, which are preferred by financial analysts.
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• Despite the fact that the need for products has not decreased, there is a growing sense
of dissatisfaction among the clients of Generics Pharmacy. This is despite the fact that
the demand for products has not decreased. It can be seen in the reviews that can be
found on a variety of online platforms. Generics Pharmacy ought to concentrate its
efforts on enhancing the aspects of the client experience that occur both during and after
a purchase.
• Generics Pharmacy does not have a very encouraging track record when it comes to
environmental concerns. - Generics Pharmacy does not have a very encouraging track
record when it comes to environmental concerns. Jim Kayalar believes that this could
result in a reaction from customers, since many people today view environmental
safeguards as an essential component of conducting business.
Opportunities
Opportunities are aspects and developments in the macro environment that Generics
Pharmacy can capitalize on to either strengthen their current market position or use them to
grow their business in new and exciting directions. Opportunities can arise as a result of a
number of different circumstances, including technical advancements, an increase in the
amount of discretionary spending available to consumers, political developments and policy
shifts, shifts in consumer tastes, and expanding economies.
• Opportunities in Adjacent Markets – Generics Pharmacy may investigate adjacent
industries in order to enhance market growth, particularly by extending the
characteristics of existing products and services. These industries include
entrepreneurship, leadership, marketing, and strategy.
• Access to International Talent in Global Market – One of the issues that Generics
Pharmacy is currently facing is limited access to high level talent market as a result of
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limited budget. This is one of the challenges that Generics Pharmacy is currently facing.
Generics Pharmacy may be able to tap into the international talent market if they expand
their business into the international market. According to Jim Kayalar, it can also assist
in attracting talent into the domestic market and growing into new sectors such as
entrepreneurial leadership, marketing strategy, and strategic marketing.
• An Increase in the Amount of Money That Customers Have Available to Spend
Generics Pharmacy might use an increase in the amount of money that customers have
available to spend to establish a new business model in which customers start paying
progressively for utilizing the company's products. According to Jim Kayalar, who
worked on the case study for The Generics Pharmacy, Generics Pharmacy can take
advantage of this trend to expand into neighboring fields such as entrepreneurship,
leadership, marketing, and strategy.
• According to Jim Kayalar, globalization, along with the boom in digital marketing and
social media, has considerably reduced the risks of market entry and marketing in
international market. This has resulted in a reduction in the cost of entering the market
and marketing products and services in international markets.
• The Evolving Nature of the Technological Landscape – The surge in popularity of
machine learning and artificial intelligence is causing significant changes to the
technological environment in which Generics Pharmacy operates. Jim Kayalar believes
that Generics Pharmacy will be able to make use of these innovations to improve
efficiencies, reduce costs, and revolutionize procedures.
• The Expanding Size of the Market and the Changing Preferences of Customers - The
size of the market has expanded at a rapid rate over the course of the past decade and a
half. The influx of new clients has also contributed to a shift in the preferences and
tastes of existing customers. Because of this, Generics Pharmacy faces two significant
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challenges: first, it must determine how to keep its loyal clients, and second, it must
choose how to best serve its new consumers. Generics Pharmacy has made efforts to
diversify its business by, first, offering a variety of brands, and then, in response to
feedback from customers, introducing a wide range of new features.
Threats
The macroenvironmental elements and changes that have the potential to derail the business
model of Generics Pharmacy are referred to as threats. Various causes, such as economic
growth, political events and policy changes, an increase in consumer disposable income,
technical breakthroughs, and changes in consumer tastes, can all contribute to the emergence
of potential dangers.
• Generics Pharmacy could hedge the risk against increased protectionism in a variety of
ways, including keeping data in international markets and spreading risk by operating
in countries that are at different stages of their economic cycles.
• Consumers of Generics Pharmacy have gained a substantial amount of bargaining
power over the years, which has led to a major reduction in pricing as a result of the
downward price pressure that is being exerted by these customers. The corporation
could explore horizontal integration in order to integrate its operations and bring about
greater efficiency, but in my opinion, this will only provide temporary relief.
• Government Rules and Bureaucracy – Generics Pharmacy should keep a close eye on
the rapidly changing government regulations under the growing pressure from protest
groups and non-government organization particularly pertaining to environmental and
labor safe.
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B. SPACE Matrix
The information shown in the preceding diagram demonstrates that TGP is actually
more likely to employ an aggressive tactic. Due to the fact that the patent will expire in five
years, TGP will need to conduct additional research and development in the near future in order
to come up with new healthcare treatments. This is necessary in order to satisfy the need of the
market. Therefore, it is essential that TGP adopt an aggressive strategy in order to discover
new medicines. This also presents the chance for TGP to become the industry that dominates
the sector of pharmaceuticals. TGP also needs to concentrate on providing support and services
to its customers if it wants to maintain its competitive edge over other competitors.
C. Internal-External Matrix
The evaluation of the IE Matrix is restricted due to the fact that TGP Pharmacy does
not publish revenue broken down by division or category. This is the same restriction that
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applies to the BCG Matrix. According to the statistics, TGP can be found predominantly in
Region 2 of the matrix. This suggests that TGP should implement "hold and maintain tactics"
through market penetration and product development, as suggested by David et al., 2019. (p.
179). These two tactics are already being implemented by TGP. TGP already "operates retail
specialty pharmacy stores, specialty mail order pharmacies, mail order dispensing pharmacies,
compounding pharmacies, and branches for infusion and nutrition services" in the market
penetration area. In addition, TGP is well-known for its innovative product development, which
is accomplished through collaborative efforts with health plans, pharmacy benefit management
(PBM), and providers, in addition to investments in people and technology. According to the
information that is provided in the IE matrix, it is possible to deduce that TGP Health is aiming
to advance into Region 1, which is referred to as expand and build. The recent acquisition of
the Aetna Health Insurance Company is a clear indication that TGP Health as a whole is
working toward expanding into new markets (TGP Website). TGP is performing exceptionally
well as the market leader in the pharmacy industry, and the company is on track to continue to
maintain that position until 2021.
D. Grand Strategy Matrix
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E. Summary of Strategies
• Introduce a new product or service offered by The Generics Pharmacy - This is the
typical role of the marketing mix, which entails releasing a new product and
communicating the features, superior value proposition, and uniqueness of the product.
• The Generics Pharmacy's market share can be increased through marketing activities in
one of two ways: either by leading to a rise in sales to new customers or by leading to
an increase in sales to existing customers who already have an account with the
company.
• The Generics Pharmacy should focus on encouraging their current clientele to make
larger purchases. It frequently entails selling accessories together with the existing
products or increasing the pace at which the present products are used. Even if you have
a vast arsenal of marketing resources at your disposal, the process of increasing
utilization rate is still somewhat challenging.
• The Generics Pharmacy could benefit from the addition of additional clients. It may
involve launching a version of the product that can appeal to a new segment of
customers or going into new markets. Alternatively, it may involve expanding into
other countries.
• The Generics Pharmacy sales should be increased as a primary focus of marketing
efforts because this will help achieve the goal of increasing overall product sales. It
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could entail picking a new target segment or positioning an existing product in a
different way to appeal to a new target market.
• The Generics Pharmacy consumers' customer loyalty should be improved. Marketing
efforts could be employed to enhance customer loyalty among existing customers by
organizing events and giving post-purchase information and services.
• Establishing the brands of The Generics Pharmacy more thoroughly is a priority. One
of the most important goals of marketing is to raise brand recognition and position the
brand appropriately, and businesses typically devote a sizeable portion of their
marketing budget to this endeavor.
F. Quantitative Strategic Planning Matrix
According to David et al. (2017), the objective of the QSPM matrix is to assist in determining
the relative attractiveness of multiple strategies and to enable an organization to capitalize on
strengths and opportunities identified in the matrix, improve on weaknesses, and avoid or
mitigate the effects of external threats. Additionally, the QSPM matrix is designed to help
determine the relative attractiveness of multiple strategies. When market penetration and
product development are compared, it is clear that market penetration, which received a score
of 5.16 on the QSPM matrix, is the strategy that should be pursued because it offers the most
potential for success. After conducting additional research, TGP ought to think about
expanding its pharmacy operations into states where the population is growing at a steady rate.
Because Generika generates referrals to TGP and helps create sales, product development as a
strategy should not be completely ignored despite receiving a score of 3.89. Both of these
tactics should be utilized by TGP if the company wishes to keep its position as the leading
pharmacy in the sector while also increasing its market share (Fein, 2020).
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The following is an analysis of the recommendations made above in the form of a Quantitative
Strategic Planning Matrix (QSPM) for TGP Pharmacy.
Affordable drug retailer in the
1 Philippines 0.10 4.00 0.40 3.00 0.30
Product Innovation
2 0.10 2.00 0.20 4.00 0.40
Consistent strong financial
3 performance 0.08 3.00 0.24 2.00 0.16
Strong firm integration through
4 mergers and acquisitions 0.07 3.00 0.21 2.00 0.14
Technological Updates
5 0.07 2.00 0.14 3.00 0.21
Strong inventory turnover ratio

6 0.06 3.00 0.18 - -
Reliable supply chain

7 0.06 4 0.24 2.00 0.12
Loyal Customer Base

8 0.06 3 0.18 2.00 0.12
Conscious Organizational Culture

9 0.06 4 0.24 2.00 0.12
Environmentally conscious
10 0.06 3 0.18 3.00 0.18
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Use of new technology to test
differentiated pricing strategy in new
1 markets 0.06 4.00 0.24 4.00 0.24
New taxation policy to increase
2 profitability 0.05 1.00 0.05 1.00 0.05
Decreasing cost of transportation to
increase profitability or reduce cost to
3 customers 0.04 2.00 0.08 3.00 0.12
New trends in consumer behavior

4 0.06 2.00 0.12 2.00 0.12
Government free trade agreements

5 0.03 1.00 0.03 1.00 0.03
New customers from online channel to
6 obtain big data analytics 0.06 4.00 0.24 4.00 0.24
Stable free cash flow to invest

7 0.05 3.00 0.15 3.00 0.15
Government green policies

8 0.03 3.00 0.09 3.00 0.09
COVID 19 vaccinations
9 0.06 2.00 0.12 3.00 0.18
Increase global presence

10 0.04 2.00 0.08 2.00 0.08
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Growing local distributors increase
1 competition 0.08 3.00 0.24 3.00 0.24
Rising raw material costs

2 0.05 3.00 0.15 3.00 0.15
Rising pay level for staff

3 0.06 2.00 0.12 2.00 0.12
Information security and Cyber attacks

4 0.06 2.00 0.12 2.00 0.12
Changing consumer buying behavior to
5 online purchasing vs. physical store 0.06 3.00 0.18 4.00 0.24
Lawsuits
6 0.03 1.00 0.03 1.00 0.03
Lack of global presence

7 0.06 1.00 0.06 1.00 0.06
Low revenue growth

8 0.05 1.00 0.05 1.00 0.05
Number of people with private health
9 insurance 0.04 4.00 0.16 4.00 0.16
COVID 19 reduction of in-store sales

10 0.03 3.00 0.09 3.00 0.09
STAS
4.61 4.31
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V. STRATEGY PLAN
A. Vision and Mission
Vision
To be the drugstore of choice for safe, quality and affordable generic medicines through
the widest, most profitable franchise network nationwide; leveraging on complementary
healthcare services, integrated technology and processes, and the strength of our people and
culture.
Mission
A Filipino Deserves Nothing Less for Less Cost. We understand the value of a healthy
Filipino in making a happy home and in nation building. We shall address the health needs of
every Filipino by providing a complete range of safe, quality, and cost-effective generic
medicines and healthcare products and services. As we profit in this mission, we ensure our
growth is shared among our franchisees, partners and employees.
Slogan
Mabisa na, Matipid pa.
B. Objectives (short term and long term)
The Generics Pharmacy is aware of the need of providing quality medications at prices
that are reasonable. As a result, TGP places its primary emphasis on generic drugs so that it
may provide Filipinos an alternative that is less costly without sacrificing the level of quality.
Because of the increasing demand, the company concluded that the franchising business
model would be the most effective way to distribute and sell their goods across the country,
particularly in more remote places.
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Increase market share and product accessibility by adding mores stores in prime areas as well
as in location where the unserved and underserved segment are situated.
1. Short -Term Objectives (Strategic)
• Expand its target market to middle- to higher-income individuals to cater more
customers and gain market share from the top players in the industry.
• More accessibility to serve the low-income class.
• Potential increase on the profit as a result of incremental revenues brought about by
additional customers.
• Uncertainty of market reception and acceptance.
• Difficulty in finding location to cater to the unserved market.
2. Long Term Objectives (Financial)
• Enhance customers’ responsiveness by providing them wide array of products in the
market Opportunity to capture customers from different segments.
• Expand to higher-income individuals.
C. Recommended Business Strategy
TGP's success can be attributed to the excellent techniques related to 1) providing high-
quality products 2) Reducing the cost of one's goods and services third is franchising, and
fourth is advertising.
49 | P a g e
TGP ought to expand its operations into regions that are home to unserved and
underserved populations.
It is common practice to purchase low-cost medications in sites that offer the greatest
level of convenience, and the presence of retail outlets in areas such as these would increase
both the company's visibility and its level of accessibility.
TGP ought to additionally investigate the possibility of product diversification in order
to target and satisfy the requirements of individuals belonging to a variety of socioeconomic
classes.
D. Corporate Social Responsibility
The Generics Pharmacy operates with a company concept that incorporates CSR
principles. The company operations and processes at The Generics Pharmacy are built in such
a way that they do not become an impediment or a burden in the way of the health and welfare
of both people and the environment. Concurrently, the implementation of these procedures and
designs contributes to the expansion of the company. The Generics Pharmacy's operations are
designed in a way that makes it possible for management to ensure that the company achieves
sustainable business growth by lowering associated risk factors and working toward
community-building goals and aspirations. This makes it possible for management to ensure
that the company achieves sustainable business growth. By concentrating on these three
primary objectives, The Generics Pharmacy works toward maximizing its potential to
positively affect society, the natural world, and the lives of individuals.
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E. Financial Projections
CASH FLOW PROJECTION
The Generics Pharmacy (in millions)
Operating activities 2023 2024 2025 2026 2027 Total
10,293.1 10,795.7 12,412.0 50,490.

Net income 8,238.30 8,751.18
2 5 0 35
31,200.
Depreciation 6,000.00 6,120.00 6,240.00 6,360.00 6,480.00
00
Accounts receivable
- - - - - -
Inventories
- - - - - -
Accounts payable
- - - - - -
Amortization
- - - - - -
Other liabilities
- - - - - -
Other operating cash
flow items - - - - - -
Total operating 14,238.3 14,871.1 16,533.1 17,155.7 18,892.0 81,690.
activities 0 8 2 5 0 35
Investing activities Year 1 Year 2 Year 3 Year 4 Year 5 Total
51 | P a g e
Capital expenditures
- - - - - -
Acquisition of
business - - - - -
Sale of fixed assets -1,000.00 1,000.0

- - - -
0
Other investing cash
-
Total investing
-1,000.00 1,000.0
activities - - - -
0
Financing activities Year 1 Year 2 Year 3 Year 4 Year 5 Total
- -
Long-term 90,951.2 15,023.7 39,524.9
59,501.1 85,998.8
debt/financing 6 6 5 -
8 0
Preferred stock
- - - - - -
Total cash dividends
paid - - - - - -
Common stock
- - - - - -
52 | P a g e
Other financing cash
- -
Total financing 90,951.2 15,023.7 39,524.9
59,501.1 85,998.8
activities 6 6 5 -
8 0
- -
Cumulative cash 105,189. 30,556.8 56,680.7 80,690.
44,630.0 67,106.8
flow 56 8 0 35
0 0
Beginning cash 50,000.0 155,189. 110,559. 141,116. 197,797.
balance 0 56 57 45 15
Ending cash 155,189. 110,559. 141,116. 197,797. 130,690.
balance 56 57 45 15 35
According to the most recent addition to the Asian Development Outlook (ADO) 2022,
the economy of the Philippines will rise 7.4% in 2022, which is an increase over the bank's
previous projection of 6.5% growth. The growth of the nation's gross domestic product (GDP)
is anticipated to decelerate to 6.0% in 2023, down from the prior projection of 6.3%.
F. Supporting Functional Strategies
1. Production/Operations
• Because the Generics Pharmacy engages in mass marketing, an intense distribution
strategy is utilized by the company.
53 | P a g e
• The marketing strategy of The Generics Pharmacy is built on undifferentiated market
categories; hence, an extensive distribution plan is necessary in order to achieve high
levels of market penetration and reach.
• The Generics Pharmacy strives, via the utilization of the intensive distribution, to
achieve the greatest possible coverage of the markets in which it is present.
• The organization implements a hardcore 360-degree integrated marketing strategy and
campaign in order to accomplish the intensive plan. This allows the company to contact
all consumers, across all market groups.
2. Marketing/Sales
• The Generics Pharmacy carries a comprehensive range of products.
• The Generics Pharmacy offers mass-marketed products that are undifferentiated for all
market sectors across the board.
• Additionally, the Generics Pharmacy offers a few carefully selected premium products
to specific consumer subgroups.
• The quality of each and every product in the portfolio remains consistently high.
• All of the items are crafted to fulfill the particular requirements, preferences, and
expectations of customers in the many geographical marketplaces.
• The Generics Pharmacy places a significant amount of emphasis on product innovation
and constantly launches new lines of merchandise in order to sustain customer interest
and loyalty.
3. Finance
• The growth in both the company's sales and its profits is another indication that The
Generics Pharmacy's marketing approach is working effectively.
54 | P a g e
• The Generics Pharmacy is able to effectively monitor the effect and influence of the
marketing plan, as well as measure the effectiveness of doing so thanks to the return on
investment.
4. Personnel
• The Generics Pharmacy employs a significant number of people from a variety of
companies.
• This workforce receives consistent training to ensure that each member is an expert in
their particular field of operations.
• The Generics Pharmacy does not engage in any form of hiring bias.
• By cultivating an organizational culture that is both inspirational and inventive,
Generics Pharmacy assures that its workers will continue to be inspired in their work.
• Generics Pharmacy places an emphasis not only on developing its employees'
organizational commitment and loyalty but also on fostering and sustaining such
commitment and loyalty.
5. MS/IT
• The company makes great use of social media in order to communicate with customers.
• The Generics Pharmacy communicates with customers directly, interacts with them,
responds to their questions and concerns, and solicits their feedback.
• Through digital marketing, the corporation also provides customers with information
and works to cultivate relationships with them.
• In addition, blogging, email marketing, and the production of original content are some
of The Generics Pharmacy's digital marketing strategies.
55 | P a g e
VI. IMPLEMENTATION AND CONTROL
A. The Balanced Scorecard
• Market share in target segments
• Expanding our business with our current customers
• The profitability of the customer and the lifetime worth of the customer
• Delivery of products and services in a timely manner
• Taking care of customer service
THE INTERNAL PROCESS PERSPECTIVE
• The ratio of new sales to total sales as a percentage
• Achieving targets for the introduction of products
• Product development cycle
• The time needed to break even was realized.
BALANCED SCORECARD FOR HUMAN RESOURCES
• The happiness and retention of employees, or the opposite of these (turnover rate)
• The amount of money made or value added by each employee
• Employers' intentional use of redundant skill sets (job-coverage ratio)
• Average length of time needed to retrain an employee
• Original musings (per employee, implemented)
• The availability of information in relation to the requirement.
B. Contingency Planning
• It is the responsibility of the superintendent and the supervising pharmacists to ensure
that the fundamental principles that support safe and professional pharmacy practice
are upheld at all times. These fundamental principles include, but are not limited to,
56 | P a g e
patient confidentiality and privacy, patient counselling, and the safe custody of
medication.
• medicines, continual collaboration with general practitioners and hospitals, etc.
medicines, including prohibited substances. In the event that any of these essential
principles are compromised, it must be for the barest minimum amount of time and for
reasons that are unmistakable, justifiable, and well-documented; these reasons must
also be directly related to the good-faith efforts you are making to manage the effects
of Covid-19.
• Because pharmacy is a health service that is conducted by trained professionals, it is
imperative that you and your staff make the most of all chances to direct customers,
including the general public, to reliable sources of information.
• Make sure that there is no stockpiling taking place at either the pharmacy level or the
patient level. Patients and the general public should be encouraged not to seek supplies
of medicines that are in excess of what they normally require, despite the fact that it is
acknowledged that there may be a large amount of patient pressure at this time. Assure
patients that there is no evidence to suggest that Ireland is likely to face general
medicines supply issues now or in the near future as a result of any potential delays in
the supply chain caused by issues related to COVID-19. This is something that should
be communicated to patients so that they can feel reassured.
• It is the responsibility of pharmacy owners, superintendents, and pharmacists who
supervise other pharmacists to ensure that each pharmacy have a business continuity
plan tailored specifically for that pharmacy. The employees working in pharmacies
ought to be aware of the plan and given the proper information and training on any
activities that they could be expected to perform as a part of the continuity plan.
57 | P a g e
References
Breindel, C. L. (2020). Strategic Thinking: New Frontier for Hospital Management. American
Journal of Health-System Pharmacy, 41(4), 826–827.
https://doi.org/10.1093/ajhp/41.4.826
Harrison, D. L., & Bootman, J. L. (2021). Strategic Planning by Institutional Pharmacy
Administrators. Journal of Pharmaceutical Marketing & Management, 8(2), 73–96.
https://doi.org/10.3109/j058v08n02_06
Harrison, D. L., & Ortmeier, B. G. (2020). Levels of Independent Community Pharmacy
Strategic Planning. Journal of Pharmaceutical Marketing & Management, 11(4), 21–
34. https://doi.org/10.3109/j058v11n04_03
Professional Management. (2019). American Pharmacy, 19(9), 44–45.
https://doi.org/10.1016/s0160-3450(15)32318-7
Taylor, R. (2020). 10 years of success for STRAMA. The Lancet Infectious Diseases, 5(10),
602–603. https://doi.org/10.1016/s1473-3099(05)70228-0
The technology dilemma: Proceedings of a generics group conference. (2021). Technology
Analysis & Strategic Management, 3(3), 249–249.
https://doi.org/10.1080/09537329108524050
58 | P a g e

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Philippine Christian University

THE GENERICS PHARMACY

Estrada, Jeanne Mae C.

Mariano, Maria Fevielyn R.

disproves this ideology. TGP is a for-profit organization that provides low-cost

result, the corporation can sell at extremely low pricing.

EXECUTIVE SUMMARY ................................................................................................................ 2

forward to being like you in our future endeavors.

To the Almighty God, all glory and honor belongs to you.

individual. Superior leadership, management, and strategic initiative were successful in

integrating and balancing the pillars of corporate social responsibility, entrepreneurial

foresight, and resource-based strategy to propel the organization to the forefront.

operation with a primary concentration on the importation and distribution of pharmaceutical

expensive alternatives to more expensive medicines available to all Filipinos in an effort to

satisfy the requirements of their clientele.

II. EXTERNAL ENVIRONMENT ANALYSIS

1. General Economic Conditions and Forecast

generic pharmaceuticals. The category of branded generics is expected to experience the

expand at a far faster rate.

2. Legislation and Political Aspects

subset of the population.

3. Population and Demographics

Community pharmacies supply drugs on prescription, over-the-counter medicines, and

The socio-cultural environment of a society consists of a society's fundamental

Utilizing systems to their full potential

When assessing the information technology requirements for emerging working

to support their day-to-day work.

Discharge and prescriptions sent electronically.

inadequately executed system can potentially lead to an increase in error rates.

Barcode medicine identification

In EP systems, the use of barcode identification of medications has been demonstrated

improve the overall comprehensiveness of a patient's medication history. However, barcode

identification of medicines at the site of administration is an interruptive process. As a result,

medical personnel frequently invent "work arounds" to avoid barcode scanning.

B. Immediate Industry and Competitive Environment (Porter’s Analysis)

Figure 1: Michael Porters Diagram of The Generics Pharmacy

Suppliers of pharmaceutical distribution companies would be reliant on pharmaceutical

manufacturing companies, suppliers of material handling equipment, and even software

403 pharmaceutical companies operating in the Philippines. Multinational corporations such

manufacturers and the former's numerical advantage.

In addition, warehouse equipment, material handling equipment, and transportation

equipment also contributes to the competitiveness.

possible pricing for their clientele.

The competition between competing companies looks to be fierce as a result of the

local distribution organizations. On the other hand, international pharmaceutical manufacturing

businesses almost exclusively depend on other multinational companies, such as Zuelig

transportation vehicles. Additionally, the incorporation of digitalization into the business

wholesalers and distribution organizations, a legally binding agreement must be reached

occurs in the future.

Products and services that are considered to be substitutes include generic

well as branded drug manufacturers, providing exclusive service to branded drug

manufacturers may constitute a danger. As a result of the increasing prices of branded

In addition, another alternative to the primary service of drug distribution comprises

their own distribution systems.

and Drug Administration, is in charge of regulating and monitoring the activities of

wholesalers, importers, or exporters. This is stated in the guidelines. This contains

In addition, certifications obtained from other organizations, such as ISO, result in

to invest in the necessary machinery and infrastructure.