Mobipharm Moving Pharmacy’s Business Plan Essay

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Table of Contents

Introduction
Mission and Goals
Summary of the Mobipharm Moving Pharmacy’s SWOT
Operations and Financial Information of Mobipharm Moving Pharmacy
Marketing Plan
References

Introduction

Business Name

This business will be called the Mobipharm Moving Pharmacy abbreviated as MMP. This business will be located at Glace Bay in the region of Sydney, NS, Canada.

Description of Business

The Mobipharm Moving Pharmacy will offer mobile pharmacy services for the residents of Sydney, NS, Canada. The business will serve all medical prescription requests on a 24-hour basis for all days of the week.

Form of Business Ownership

The form of ownership of the Mobipharm Moving Pharmacy will be through partnership. This choice is informed by the fact that the starting capital is relatively big. Besides, the business needs a lot of commitment from many managers. In addition, this option will reduce the risks that each owner may take in case of losses.

Ideal Customer

The Mobipharm Moving Pharmacy targets customers from the high, middle and low income ends. However, the standard prices for drugs across Canada, the business focuses to gain more customers through quality of services offers to each clients per visit. Specifically, the business targets customers in the age bracket above18 years since this group is allowed by the law to make drug purchases over the counter.

Our Advantages

The Mobipharm Moving Pharmacy will be the first of its kind within the entire region of Sydney, Canada. Besides, the business intends to make sure that customers receive their medical prescriptions in the shortest time and most convenient way. Moreover, the business will introduce discount cards such as the premium, regular and ordinary cards to customers. Customers who get these cards will have to pay even lower for the services as long as the conditions within the cards are met.

Ethical Issues

The Mobipharm Moving Pharmacy will follow the following principles as guidance for sustainable business;

Honesty and integrity in handling the need and concerns of the customers and the business environment.
Professionalism and respect to the personality and foundation of the relationship between the business and customers.
Quality assurance and quick response to any request of the customers.

Mission and Goals

Mission Statement

The mission of the Mobipharm Moving Pharmacy will function on being the leading business in pharmacy industry within Sydney, Canada. To be able to achieve the mission, the proposed Mobipharm Moving Pharmacy business will require having a captivating position value statement and superior product strategy. In this case, the business’s positioning statement will be as follows;

We have the drugs that everyone wants, and at considerable prices. The moving pharmacy services are unique and of high quality. Those that subscribe to these services will have series of discounts and offers besides life membership. The prices are also considerable; one will get the best pharmacy requests and professional services for all the medical prescription.

Business Goals

Short-Term Goals

The marketing goal will be to acquire an average of 100 clients per week for the first 12 months. With a typically well organized commodity pool, this business is geared to quickly increase its market share since the beneficial interests can distributed across the commodity users. This strategy will facilitate the restructuring effective sales and public awareness to develop product knowledge.
One of the product strategies that the business will utilize is to make sure that it attributes the moving pharmacy services to convenience and affordability. The business will charge the pharmacy services at the same rate as the traditional stores as a strategy to attract consumers within the second quarter of the first years of operation.
The business aims to expand its customer base to regions outside the Sydney by recruiting five sales persons who will double up as pick and delivery service providers, for special orders where the vehicles cannot reach, within the first six months of operation.

Long-Term Goals

The Mobipharm Moving Pharmacy intends to roll out a single mobile pharmacy each year within the next three years after capturing the Sydney market. When the plan is successful, the business will purchase more vehicles and roll out other moving pharmacies in the regions surrounding the targeted market.
The business intends to franchise its operations to remote areas within the Sydney region in the next four years. If well merged with appropriate market mix, the strategy will secure a continuous quantitative increase of the market by constantly maintaining relatively fare prices of the services it is offering as well as the maintenance of up to per competition levels from other competitors.

Environmental Analysis

PESTLE Analysis

The business environment in Canada is transparent and predictable. The taxation regime and rules in the country are clear and concise. The political climate in Canada is also serene with no major problems. This environment will make it easy for the entry of the Mobipharm Moving Pharmacy business.

Economic

Economically, Canada is recovering from the effects of the global financial crisis and it is yet to grow exponentially. The economic recovery offers the Mobipharm Moving Pharmacy the potential for increased activity as many customers will embrace the mobile pharmacy services.

Social

The demographic nature of Sydney is that the region has a population of more than 2 million potential customers. Close to 90% of the population fall within the criteria that the Mobipharm Moving Pharmacy is interested in.

Technological

Most of the technological innovations in Canada are connected to the online industry. The Technological environment in Canada is still very young. Most of the technology is imported from Europe, East Asia, and North America. Hence, there is a huge gap for introduction of technological advances in the moving pharmacy services. Since the proposed Mobipharm Moving Pharmacy will be equipped with the best technology, the business is expected to penetrate the market within the shortest time possible.

Legal

The legal environment in Canada is relatively predictable. The kingdom does not have the porous nature of a democracy where laws are constantly changed. The country is more inclined to values than laws. Hence, the business will not have an unpredictable legal environment.

Environmental

The Mobipharm Moving Pharmacy will operate in a business environment where major parameters are known. For example the competitors in the business environment are bounded by the code of conduct. Therefore, the business will find it easy to shape its environment.

SWOT Analysis

Strengths

The majority of the Mobipharm Moving Pharmacy’s potential competitors rely on local customers. The Mobipharm Moving Pharmacy business will have an advantage since it will create consumer awareness through its promotions and advertisements. Besides, the business will move the pharmacy services closer to customers. The business will use strategies like consumer education on how to get the best from the services by acquiring the loyalty card since it has the capacity to quickly expand its network.

Weaknesses

The customer base for the business is narrow since it targets to serve a small geographical area of Sydney. Besides, competition from established business may make it difficult to win clients who have established loyalty to other businesses offering the same services, since the field of pharmacy services depends on customer preference and trust. The Mobipharm Moving Pharmacy business depends on 16 persons, with each pair working on shifts in each vehicle, as the workforce hence may not maximize its gains in the market. The business has the disadvantage of unreliability in service delivery since this team will have to do all the work. Apparently, they cannot keep up with the demand even if they work for more than 60 hours per week.

Threats

The services offered by this company are very sensitive to changing client preference. For instance, a bad report or an unfortunately incident during a visit to the moving pharmacy such as wrong drugs may alter the perception of its clients. This may discourage them from visiting the business in the future. Thus, the business must create a waterproof public relations exercise to survive in this industry.

Opportunities

With a typical well organized commodity pool, this business is geared to quickly increase its market share since the beneficial interests can be distributed across the commodity users. This strategy will facilitate the restructuring effective sales and public awareness to develop product knowledge. If well merged with appropriate market mix, the strategy will secure a continual quantitative increase of the market by constantly maintaining relatively fare prices of the services it is offering as well as the maintenance of up to per competition levels from other competitors.

Summary of the Mobipharm Moving Pharmacy’s SWOT

Market force	Strength	Weakness	Threat	Opportunity
Strategy	Customized services	Small market niche	Changed preferences	Business expansion
Technology	Local magazine easily accessible	Target client relatively traditional	Changing media forms	Online marketing
Competitive advantage	Affordable prices	Sustainability of the entry pricing	Changing customer loyalty	Business expansion
Political and economic conformity	Free market	Unstable business model	Economic swings	Establishment of more branches
Legal conformity	Limited conformity requirements	Sensitive business environment	Tax regime	Structured operations
Cultural aspects	Conformity to Glace Bay culture	Challenge of wining clients	Changed customer preferences	Opportunity for expansion
Process and systems	Simple but effective system	Limited scope of the system	Limited staff due to low business turnover	Opportunity for expansion

Market Share Analysis

In order to establish the potential market share for the proposed business, a research survey was rolled out for potential clients and the results are summarized in the table below.

Category of customers	Market share (Percentage)
Young persons (18-30 years)	30%
Middle aged customers (31-50 years)	45%
Aged customers (51 and above years)	25%

Consumer Analysis

The business targets to reach 6,000 customers in the first year, 9,000 customers in the second year, and 12,000 customers in the third year totaling to 27,000 successful orders and deliveries at the end of the third year in the Sydney market. The business will target three types of customers, which are the aged, middle-aged, and the youthful segments. Further, the customers will be segmented into regular clients and the first time clients in order to ensure that the needs of these segments are customized on the basis of the level of loyalty.

The main value drivers that the business will use in reaching out to the three customer segments are the current demand for flexible, fast, affordable and easy to use methods of placing prescription and buying drugs. Besides, the business will consider specific needs of customers in terms of convenience and customer service to create a need-based marketing strategy through proactive customer participation in information search and product acceptance (Dagnino & Rocco, 2009).

Competitor Analysis

Since the market is relatively underdeveloped, there is no major competitor that may threaten the existence and survival of the Mobipharm Moving Pharmacy. However, if the business ideal becomes a successful venture, there might be local and international competition from companies within the Sydney community and beyond. In order to survive the potential threat of competition in the future, the business will adopt the product and market positioning strategies such as multiple-pricing and high quality of services.

The multiple-pricing strategy will be applied through differentiating the moving pharmacy services by grade and assigning different prices for each category of customers. This means that the company will serve the high-end, mid-end, and low-end customers without locking any potential client out. Besides, the business’ website will have series of services that customers can choose from in placing their prescription (Blythe, 2006). This means that the business will create an environment of own competition by locking out any competitor who might want to benefit within the unexploited customer segment.

Risk Factors

The business may fail to attract potential customers. Given the unique customer preference in the pharmaceutical environment and increased possibility of new entrants into the market, the business may fail to attract reasonable quantity of clientele that would enable it sustain growth in returns. However, the firm has identified potential primary target market that will provide distinct competitive advantage. The business may face unavailable or scarce pharmaceutical products. Most of the drugs that the business plans to sell will be imported in case they are not available locally. The process of procuring the products from abroad will increase expenses, which in turn augment the cost of services provided (Cone, 2011).

Human Resource Management

Personnel

In the process of successfully managing an establishment of the Mobipharm Moving Pharmacy magnitude, it is imperative for the business owners to establish a strong human resource management strategy. The management team will consist of the operations director, marketing director, and supply chain director. All the directors are owners of the business. Under the directors, there will be supervisors will manage the sixteen moving pharmacy attendants. In addition, the business proposes to have a standby marketing team consisting of two employees. Basically, the business will adopt the inverted triangle management model whereby the employees will have to take most of the responsibilities with the directors limited to leadership and goal setting.

Operations and Financial Information of Mobipharm Moving Pharmacy

Income statement. For the three year period

	2015	2016	2017
Sales	7,122,216	7,691,993	8,307,353
Direct Cost of Sales	2,273,776	2,455,678	2,652,132
Operations Payroll	777,312	839,497	906,657
Total Cost of Sales	3,051,088	3,295,175	3,558,789
Gross Margin	4,071,128	4,396,818	4,748,564
Gross Margin %	1	1	1
Operating Expenses
Sales and Marketing Payroll	110,400	119,232	128,771
Advertising/Promotion	36,000	38,880	41,990
Travel	3,600	3,888	4,199
Miscellaneous	18,000	19,440	20,995
General and Administrative Payroll	342,240	369,619	399,189
Utilities	28,800	31,104	33,592
Insurance	29,520	31,882	34,432
Telephone	19,200	20,736	22,395
Other Payroll	154,560	166,925	180,279
Postal Fees	3,600	3,888	4,199
Professional Fees	18,000	19,440	20,995
Housekeeping Supplies	30,240	32,659	35,272
Bad Checks	2,400	2,592	2,799
Business License	840	907	980
Facility Maintenance	36,000	38,880	41,990
Total Operating Expenses	833,400	900,072	972,078
Profit Before Interest and Taxes	3,237,728	3,496,746	3,776,486
EBITDA	3,237,728	3,496,746	3,776,486
Interest Expense	1,038,694	1,121,790	1,211,533
Taxes Incurred	722,232	780,011	842,411
Net Profit	1,476,800	1,594,944	1,722,540

Balance sheet

	2015	2016	2017
Assets
Current assets
Cash	400,000	432,000	466,560
Non-current assets
Fixed assets	10,765,000	11,626,200	12,556,296
Total assets	11,165,000	12,058,200	13,022,856

Liabilities and capital
Current liabilities
Accounts payable
Short term borrowing	1,780,000	1,922,400	2,076,192
Non-current liabilities
Long term borrowing	7,305,000	7,889,400	8,520,552
Total liabilities	9,085,000	9,811,800	10,596,744

Capital
Seed investors	150,000	162,000	174,960
Start up investors	1,930,000	2,084,400	2,251,152
Retained earnings
Earnings
Total capital	2,080,000	2,246,400	2,426,112
Total liabilities and capital	11,165,000	12,058,200	13,022,856
	2015	2016	2017
Assets

Cash flow

Year 1

	January	February	March	April	May	June	July	August	September	October	November	December	2015
Cash Received
Cash Sales	$492,552	$656,736	$985,104	$985,104	$985,104	$985,104	$656,736	$492,552	$220,806	$220,806	$220,806	$220,806	$7,122,216
Subtotal Cash from Operations	$492,552	$656,736	$985,104	$985,104	$985,104	$985,104	$656,736	$492,552	$220,806	$220,806	$220,806	$220,806	$7,122,216
Subtotal Cash Received	$492,552	$656,736	$985,104	$985,104	$985,104	$985,104	$656,736	$492,552	$220,806	$220,806	$220,806	$220,806	$7,122,216
Expenditures
Cash Spending	$115,376	$115,376	$115,376	$115,376	$115,376	$115,376	$115,376	$115,376	$115,376	$115,376	$115,376	$115,376	$1,384,512
payment of utilities	$9,890	$299,762	$394,528	$565,806	$565,552	$565,292	$559,116	$384,362	$293,640	$157,462	$157,184	$156,902	$4,109,496
Subtotal Spent on Operations	$125,266	$415,138	$509,904	$681,182	$680,928	$680,668	$674,492	$499,738	$409,016	$272,838	$272,560	$272,278	$5,494,008
Additional Cash Spent	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0
Principal Repayment of Current Borrowing	$17,990	$18,274	$18,564	$18,858	$19,156	$19,460	$19,768	$20,082	$20,400	$20,722	$21,050	$21,384	$235,708
Long-term Liabilities Principal Repayment	$9,618	$9,700	$9,780	$9,862	$9,944	$10,026	$10,110	$10,194	$10,280	$10,364	$10,452	$10,538	$120,868
Subtotal Cash Spent	$152,874	$443,112	$538,248	$709,902	$710,028	$710,154	$704,370	$530,014	$439,696	$303,924	$304,062	$304,200	$5,850,584
Net Cash Flow	$339,678	$213,624	$446,856	$275,202	$275,076	$274,950	($47,634)	($37,462)	($218,890)	($83,118)	($83,256)	($83,394)	$1,271,632
Cash Balance	$739,678	$953,302	$1,400,158	$1,675,358	$1,950,434	$2,225,384	$2,177,750	$2,140,288	$1,921,398	$1,838,280	$1,755,026	$1,671,632	$20,448,688

Year 2

	January	February	March	April	May	June	July	August	September	October	November	December	2016
Cash Received
Cash Sales	517,180	689,573	1,034,359	1,034,359	1,034,359	1,034,359	689,573	517,180	231,846	231,846	231,846	231,846	7,478,327
Subtotal Cash from Operations	517,180	689,573	1,034,359	1,034,359	1,034,359	1,034,359	689,573	517,180	231,846	231,846	231,846	231,846	7,478,327
Subtotal Cash Received	517,180	689,573	1,034,359	1,034,359	1,034,359	1,034,359	689,573	517,180	231,846	231,846	231,846	231,846	7,478,327
Expenditures
Cash Spending	121,145	121,145	121,145	121,145	121,145	121,145	121,145	121,145	121,145	121,145	121,145	121,145	1,453,738
payment of utilities	10,385	314,750	414,254	594,096	593,830	593,557	587,072	403,580	308,322	165,335	165,043	164,747	4,314,971
Subtotal Spent on Operations	131,529	435,895	535,399	715,241	714,974	714,701	708,217	524,725	429,467	286,480	286,188	285,892	5,768,708
Additional Cash Spent	0	0	0	0	0	0	0	0	0	0	0	0	0
Principal Repayment of Current Borrowing	18,890	19,188	19,492	19,801	20,114	20,433	20,756	21,086	21,420	21,758	22,103	22,453	247,493
Long-term Liabilities Principal Repayment	10,099	10,185	10,269	10,355	10,441	10,527	10,616	10,704	10,794	10,882	10,975	11,065	126,911
Subtotal Cash Spent	160,518	465,268	565,160	745,397	745,529	745,662	739,589	556,515	461,681	319,120	319,265	319,410	6,143,113
Net Cash Flow	356,662	224,305	469,199	288,962	288,830	288,698	(50,016)	(39,335)	(229,835)	(87,274)	(87,419)	(87,564)	1,335,214
Cash Balance	776,662	1,000,967	1,470,166	1,759,126	2,047,956	2,336,653	2,286,638	2,247,302	2,017,468	1,930,194	1,842,777	1,755,214	21,471,122

Year 3

	January	February	March	April	May	June	July	August	September	October	November	December	2017
Cash Received
Cash Sales	535,281	713,708	1,070,562	1,070,562	1,070,562	1,070,562	713,708	535,281	239,961	239,961	239,961	239,961	7,740,068
Subtotal Cash from Operations	535,281	713,708	1,070,562	1,070,562	1,070,562	1,070,562	713,708	535,281	239,961	239,961	239,961	239,961	7,740,068
Subtotal Cash Received	535,281	713,708	1,070,562	1,070,562	1,070,562	1,070,562	713,708	535,281	239,961	239,961	239,961	239,961	7,740,068
Expenditures
Cash Spending	125,385	125,385	125,385	125,385	125,385	125,385	125,385	125,385	125,385	125,385	125,385	125,385	1,504,618
payment of utilities	10,748	325,766	428,753	614,890	614,614	614,331	607,619	417,705	319,113	171,122	170,820	170,513	4,465,995
Subtotal Spent on Operations	136,133	451,151	554,138	740,275	739,999	739,716	733,004	543,090	444,498	296,507	296,205	295,898	5,970,613
Additional Cash Spent	0	0	0	0	0	0	0	0	0	0	0	0	0
Principal Repayment of Current Borrowing	19,551	19,859	20,174	20,494	20,818	21,148	21,483	21,824	22,170	22,520	22,876	23,239	256,156
Long-term Liabilities Principal Repayment	10,452	10,541	10,628	10,718	10,807	10,896	10,987	11,078	11,172	11,263	11,359	11,452	131,353
Subtotal Cash Spent	166,136	481,552	584,941	771,486	771,623	771,760	765,474	575,993	477,840	330,289	330,439	330,589	6,358,122
Net Cash Flow	369,145	232,156	485,621	299,076	298,939	298,802	(51,766)	(40,712)	(237,879)	(90,328)	(90,478)	(90,628)	1,381,946
Cash Balance	803,845	1,036,001	1,521,622	1,820,695	2,119,634	2,418,436	2,366,670	2,325,958	2,088,079	1,997,751	1,907,275	1,816,646	22,222,612

Break-Even Analysis

Total revenue (P * Q) = total cost [Variable (VC * Q) + fixed cost]

1.46 * Q = (0.46 *Q) + 75.66046
1Q = 75.66046
Q = 75.66

Thus, the break-even number of units is 75.66. The break-even amount of sales is €110.75. The break-even annual sales total to €1329.02.The estimated annual revenue for the year 2015 is €7,759.11. This shows that the business is profitable.

The Balance Scorecard for the Business

The balanced scorecard for this business summarises the internal processes, customer, fianancial, and strategies for growth as summarised in the table below.

Elements	Objective	Measurement	Target
Internal Process	Effectiveness of the strategies of the business in the market	The price charged	Average of $50 per service
	The customer responses to services provided	The time that elapses before customers respond	Within one day of business encounter
Customer	The acquisition of customers	The number of new customers	An average of 100 customers per day
	Retention of customers	The frequency of same customers	Five out of each 15 new
	Accomplishment of pre-set goals and objectives	Surpassing the revenue target	Monitor quarterly
Financial	Initial funding	The proportion of financing sources	Debt to Equity financing ratio of 3:2, because debt financing is the best option.
	Revenue growth	The percentage sales growth	Growth rate of 5% each year
	Cash flow/profitability	Percent of income from operations	10% growth each year
Learning and growth	Business self improvement	Areas that require monitoring	Internal inspection two times per day. External inspection one time per week.
	Skilled employees	Number of staff with prior pharmaceutical retail experience	Training complete within two weeks of hire date. Refresher training bi-monthly.
	Development of e-marketing	The number of new online customer inquiries.	25 customers per day

Sources of Financing

Bank loan/Overdraft

Under a bank loan option, the Mobipharm Moving Pharmacy will be in a position to receive funding that is fixed over a period of time. The loan(s) will attract different interest rates, depending on the type and amount that the business will borrow. Reflectively, bank loans are repaid over a longer period of time and repayment schedules is fixed. Besides the bank loan, the Mobipharm Moving Pharmacy has the option of acquiring financing through bank overdraft (Cone, 2011).

Marketing Plan

Industry Analysis

The market size for the pharmaceutical retail business in Canada is estimated to be worth more than one billion dollars. The company targets to capture 5% of this market within the four years of operation since competition are still not very stiff. Since this type of business is relatively new in Canada, the Mobipharm Moving Pharmacy business will be among the first key players and may reap the benefits of being the market leader (Blythe, 2006).

Market Analysis

Market dynamics determine effective sales and public awareness to develop product knowledge to clients in the Sydney region in Canada. Besides, the plan will offer a variety of different distributions channels that will be vital in the attraction of new customers, especially from the low and high economic ends (Scarborough, 2012). The Canadian market is strategically located and can offer the Mobipharm Moving Pharmacy s series of services such as proper infrastructure and relatively big target market base.

Competitive Analysis

The Mobipharm Moving Pharmacy business is strategically located to benefit from the expansive target market. Reflectively, this type of business has low operational costs and high returns. The success is directly proportional to the level of trust and loyalty that customer have on the establishment. Since this business plans to establish a strong business network and reliable customer support services to its online customers, there are high chances of survival and business sustainability (Cone, 2011). Besides, the business has the potential of growth beyond this region.

Competitive Advantage of Products and Services

Due to a fair pricing mechanism for services, competition factors will positively skew to the advantage of the moving pharmacy product proposed by the Mobipharm Moving Pharmacy. With competitive prices for its products and uncompromised trust and reliability of services, this strategy will have the capability of making the company’s operations in Sydney economically feasible and sustainable, while at the same time winning a greater percentage of the market share (Cheverton, 2004).

Image of Products/Services

The Mobipharm Moving Pharmacy business will adopt multiple branding strategies to ensure that customers are in a position to distinguish each product segment to avoid confusing when making online prescription orders. For instance, the business will clearly indicate its scope of operations and type of moving pharmaceutical services for each package offered to customers. The business’ product multi-branding as a positioning strategy will enable it to survive competition.

Product/Service Strategies

The Mobipharm Moving Pharmacy’s product line objective will be to provide quality and reliable moving pharmaceutical services at the convenience of the clients. The services offered by the business will include online payment, online purchasing order, and free online consultancy. This will ensure that the business has a product or service to any one and expand to other regions due to its customer-centricity business model (Kotler & Keller, 2012).

Location/Distribution Strategies

The business will be located along the strategic street within the Sydney region. The business will establish a single central location of operation and a reliable physical address to win the trust of potential customers, despite the proposal to adopt the mobile pharmaceutical store business model (Scarborough, 2012).

Promotional Strategies/Tactics

The business will adopt a flexible and proactive advertisements meant to appeal to each customer segment. Besides, the business will have series of after sales services such as discounts, coupons, and rewards to customers who make the highest number of monthly shopping orders. The business will use direct, online and database marketing through its Business-to-Consumer (B2C) and e-commerce models (Shapiro, 2005).

References

Blythe, J. (2006). Essentials of marketing communications. New York, NY: FT/Prentice Hall.

Cheverton, P. (2004). Key Marketing skills: strategies, tools, and techniques for marketing success. London, UK: Kogan Page.

Cone, S. (2011). Steal these ideas: Marketing secrets that will make you a star. New York, NY: John Wiley & Sons.

Dagnino, G., & Rocco, E. (2009). Competition strategy: theory, experiments, and cases. New York, NY: Rutledge.

Kotler, P., & Keller, K. (2012). Marketing management (14th ed.). New Jersey, NJ: Pearson Prentice Hall.

Scarborough, M. N. (2012). Effective Small Business Management: An Entrepreneurial Approach. NY, New York: Pearson Education.

Shapiro, A. (2005). Capital Budgeting and Investment Analysis. New Delhi, India: Pearson Education India.

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