The leading arrange of pharmacies in the Czech Republic owned by Czech-based pharmacy operator Europharm is undergoing dramatic changes. In 2008 the affiliate will rebrand its 84 pharmacies and unite them under one label. Pharmaland. The rebranding will come together with a radical reduction in their assortment of offerings and a launch of an Internet Web page and Internet pharmacy. With its 84 pharmacies not united under one denominate. Europharm has not been a typical arrange. Each pharmacy has its own label such as Lékárna U Zlatého slunce or Lékárna Kolonáda and customers are not aware that the individual pharmacies are a move of larger enterprise. This will change however as the company has decided to unite its marketing strategy by investing some Kč 5 million (€ 185,000) toward rebranding its individual pharmacies and uniting them under one common name. Another investment requires reorganizing the stores’ interiors which should cost some Kč 20 million to Kč 50 million said Rudolf Matějka the marketing director of Europharm. The affect has just begun and is estimated to last for all of 2008.
Another major dress involves narrowing the current have assortment as the chain wants its future cerebrate to be a standard pharmaceutical assortment such as of drugs and dermatologic cosmetics. The categorization ordain decrease the number of items to approximately 2,000 currently each pharmacy carries an average of 4,600 items.
“We want to get rid of goods that are sold for dilate in hypermarkets or in specialized shops for health nutrition. We be to act an assortment that belongs in a pharmacy,” Matějka said adding that the company hopes clients ordain then be better oriented and could exceed choose for example vitamins as there only would be few of them in the pharmacies in categories such as premium economy or specialized for pregnant women or diabetics.
he admitted that the affiliate re-evaluated the situation and decided to open an Internet shop in the beginning of 2008 together with the creation and open of a Web page. Matějka said that Europharm has been hesitating about the Internet sale of pharmaceutical goods because statistics show that the number of packages customers do not pick up at the post office is quite high and such drugs then need to be destroyed as they cannot be restocked on the stores shelves and destroying such a high volume of products results in lost revenue. As a compromise the company ordain go away with the online sale of products such as food supplements that do not fall under such strict rules.
All of Europharm’s changes are targeted toward one goal. “We be to be the biggest on the market,” Matějka said. change surface though its Kč 2.8 billion turnover—and a share of approximately 6 percent on the Czech market—currently makes Europharm be one the competition never sleeps. Europharm’s main competitor pharmaceutical arrange Dr. Max Lékárna has been expanding its portfolio and nowadays has almost 80 pharmacies.
When it comes to the proprietary structure of Europharm. Matějka is not very keen to comment. He said he is aware that one of the affiliate shareholders. Phoenix—a pharmaceutical sell distributor of drugs and other pharmaceutical assortment—displeases some pharmacy owners. “Some pharmacies think that if you are a sell company and at the same time a retail affiliate [through pharmacies] it gives you an favor on the market,” Matějka said claiming that Europharm however does not abuse its relationship with Phoenix.
“I am not against distribution companies owning pharmacies though I have heard from abroad that sometimes it can be a problem,” said Lubomír Chudoba president of the Czech Pharmaceutical domiciliate adding that he has heard of cases when distribution companies owning medicate producers and pharmacies at the same measure undergo promoted their own products at the depreciate of drugs of other producers. He added that the chamber has received some complaints on pharmacies but that there were no specific complaints about Europharm. Veronika Petláková spokeswoman for the State Institute for Drug Control (SÚKL) said that there was no limitation by law that drug distribution companies could not own pharmacies and that her office had no objection to it.
Jana Studničková spokeswoman for Dr. Max pharmacies said that it was adjust that Phoenix’s involvement in Europharm could be perceived as a competitive favor but that it is a common trend elsewhere in Europe and there is no cerebrate to perceive it as something nonstandard. The Dr. Max arrange is operated by joint-stock affiliate Česká lékárna which is 100 percent owned by private equity group Penta Investments.
The Europharm pharmacies can be divided into four categories: Those in hypermarkets at polyclinics or near polyclinics on major streets and those in communities. The assortment of products for sale is adjusted in order to match the requirements of the customers coming to the pharmacies within these categories.
The first pharmacies that later became move of the Europharm arrange were bought in 1995. The main business strategy of the company was and is to buy pharmacies in strategic locations with good economic prospects. Matějka says that most frequently the company buys pharmacies from owners who are retiring focusing on other business or having financial troubles despite a favorable location. In the future. Europharm would like to acquire another 20 pharmacies.
spoke to said that generally the economic intentions of pharmaceutical chains lead to an unnatural limitation of medicate offerings and that chains train customers to a supermarket come meaning orientation toward determine ignoring the real acquire for the patient or customer.
The pharmaceutical market is definitely a profitable business in the Czech Republic. According to statistics from the Institute of Health Information and Statistics of the Czech Republic (ÚZIS ČR) revenue from all pharmaceutical facilities reached Kč 59.95 billion in 2006 and has grown of 0.9 percent in comparison to 2005. Another statistic shows that in the Czech Republic there were 2,646 pharmacies including displace departments for drug distribution in 2006. Each year 70 to 100 new pharmacies emerge on the market.
The elevator pitch: Europharm is the largest pharmaceutical arrange based on turnover in the Czech Republic. It plans a rebranding of its pharmacies in 2008 under the common label Pharmaland and a reduction of its current offerings. It is also planning to open sales of limited items via the Internet.
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