ePharma 1 Online Business Plan

E-Business
Assignment: ONLINE BUSINESS PLAN Organization Selected:

ePharma
Prepared for:

Prof. Jahanzaib Ismat Malhi Institute of Business Administration University of the Punjab, Lahore

Prepared by: Faisal Manzoor Bajwa MBAE2010-089 Usman Rashid Dar MBAE2010-146 MBA (Executive) Institute of Business Administration University of the Punjab, Lahore
May 02, 2012

ePharma 2 Online Business Plan

ePharma
www.epharma.com.pk

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TABLE OF CONTENTS
EXECUTIVE SUMMARY..................................................................................... COMPANY OBJECTIVES.................................................................................... Goals & Objectives................................................................................................ Vision / Mission Statement..................................................................................... Keys to Success ................................................................................................... Risk Factors.......................................................................................................... Company Summary Opportunities. 4 5 5 6 6 6 7 7

DESCRIPTION OF PRODUCTS & SERVICES...................................................... Products & Services............................................................................................... Future Plans......................................................................................................... Product Fulfillment................................................................................................. MANAGEMENT & ORGANIZATION................................................................... Management Team ............................................................................................................................ Organizational Structure ........................................................................................ Personnel Plan....................................................................................................... FINANCIAL PLAN.............................................................................................. 6.1 Important Assumptions .................................................................................... 6.2 Sales Forecast.................................................................................................. 6.3 Capital Requirements ....................................................................................... 6.4 Break-Even Analysis.......................................................................................... 6.5 Exit / Repayment Strategy................................................................................. 6.6 Projected Profit and Loss .................................................................................. 6.7 Projected Cash Flow.......................................................................................... 6.8 Projected Balance Sheet..................................................................................... 6.9 Business Ratios ................................................................................................ MARKET ANALYSIS & MARKETING PLAN......................................................... Industry Analysis................................................................................................... Target Market....................................................................................................... Competitors.......................................................................................................... Competitive Edge ................................................................................................. Marketing Objectives............................................................................................. Marketing Strategy................................................................................................ Pricing Strategy.....................................................................................................

8 8 9 9 10 10 10 10 11 11 11 12 12 12 12 13 13 13 13 13 13 13 14 14 14 14

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EXECUTIVE SUMMARY
ePharma is an online pharmacy with a mission to provide the online consumers with comprehensive medical information, and a wide variety of pharmaceuticals and medical supplies at reasonable prices throughout Lahore and in future, Pakistan. We will be able to sell prescriptions at reduced prices by carefully maintaining efficiencies in our operations and by targeting a specific segment of the market - those customers who prefer online shopping and do not have time to personally visit markets. By focusing on this segment it gives us additional efficiencies as online buying trend has already captured most of the internet users and it will soon be a popular trend in Pakistan as well. ePharma seeks to avail this opportunity and serve the online consumers. By Providing the customers with home delivery services the company seeks to capture the market ePharma will operate through a website (www.epharma.com.pk) that will serve online consumers. We will thrive by employing friendly and knowledgeable personnel, which, along with our great prices, will drive the repeat business that we will rely upon. We only expect that as the internet trend evolves, the ePharma will appeal more and more to the customer's sense of value and convenience. Our advertising, mainly through ads in major websites, will be targeted at those who are looking to save money on a pricey but necessary and regular expense. ePharma will be led by qualified management with experience in the pharmaceutical industry. We expect to reach profitability by our second year and will generate substantial sales by year three.

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OBJECTIVES
ePharma seeks to create an online sale point where the Customers can buy the pharmaceutical products through internet. It will be a platform where all the necessary details of the products will be available to the consumers to encourage awareness about them. With details of competing or alternative to the desired medicines the consumer can be aware of other such medicines and their comparative positioning, knows what to buy if one is unavailable. The company seeks to serve the consumers with services like medical news, events and forum so that doctors, pharmacists and medical and pharmacy students can also gain benefits from our site as well as general consumers who may benefits from various medical prevention and first aid treatments for diseases like Dengue etc. In the future, the company plans to hold public awareness seminars to educate those hungry of knowledge about various diseases and their remedies. The company desires to promote a healthy Business to consumer relationship by providing them with quality and standards of services and proper guidance. The company seeks to be the leading online pharmaceutical company in the near future.

Business Objectives

Company growth Become established as the leading distributor of pharmaceutical products

Financial Objectives

Create and increase revenue

Marketing Objectives

Increase marketing efforts Expand market area Expand marketing reach Brand recognition Increase telemarketing efforts

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VISION
To achieve & maintain a respectable position in the health care service in Pakistan & also in exporting countries by working with dedication & honesty.

MISSION

Offer latest, innovative, cost effective & high quality products to contribute the basic needs of human beings.

Continuous struggle for the improvement of health care standards. We are committed to enhance the satisfaction of our customers worldwide & serve them with the highest level of professionalism & commitment.

Maintain an environment of responsibility, accountability, integrity and professionalism.

It is the Companys mission to provide website visitors with comprehensive medical information, and a wide variety of pharmaceuticals and medical supplies at reasonable prices. In carrying out our day-today business operations, we strive: To treat our employees with fairness and respect, and create an enjoyable working atmosphere that inspires loyalty and dedication; To follow the philosophy that our customers are our first priority, and ensure that all of our personnel are well-trained in providing reliable, timely and efficient customer service. To be considered as a responsible business leader in the community.

Key to Success
We believe that the key to success in the overgrowing pharmaceutical industry is To establish a strong memorable brand name; To provide a comprehensive site encompassing the needs of both consumers and medical professionals; To become an authoritative source for medical information; To provide a wide range of services and goods to meet the needs of our target audiences.

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COMPANY SUMMARY
Company Ownership Owner is a qualified M.Pharm from Punjab University and has 5 years experience in the pharmacy Business. Due to which he has strong relations with clients and suppliers and experience in the market. Start-up Summary The owner will invest Rs 10,000,000 in the company. The following table and chart show projected initial start-up costs of Eadco Advertising.

Start-up Funding Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required Assets Non-cash Assets from Start-up Cash Requirements from Start-up Additional Cash Raised Cash Balance on Starting Date Total Assets Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities Capital Planned Investment Owner Other Additional Investment Requirement Total Planned Investment 10,000,000 0 0 10,000,000 800,000 0 0 800,000 6,500,000 6,792,000 0 3,500,000 10,800,000 292,000 6,500,000 6,792,000

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Loss at Start-up (Start-up Expenses) Total Capital Total Capital and Liabilities Total Funding

(292,000) 9,708,000 10,508,000 3,500,000

Start-up Requirements Start-up Expenses Legal Stationery etc. Brochures Advertising Expensed Computer Equipment/Software/Website Development) Insurance Total 25,000 7,000 10,000 20,000 200,000 30,000 292,000

OPPORTUNITIES
According to the Population Census Organization of Pakistan (2010), Pakistan has a population of 16.98 million, with a growth rate of 2.69. Besides this health awareness is also increasing day-by-day, which may be helpful in increasing the per capita expenditure in the future. Internet users are also increasing due to which the internet shopping and product inquiries are being popular among the individuals. E businesses have already working in the country. Even Pharmaceutical companies are tending towards electronic markets. Among all the therapeutic groups, two groups namely alimentary tract and metabolism, and systemic anti-infective lead the market with shares of 20.28% and 24.7%, respectively. Excluding these two groups, all the other segments are not contributing in double digits. No doubt that these segments have got extreme importance in the pharmaceutical sector, but either these segments are neglected or these segments are not beneficial for the companies financially. But by looking at the current situation, the number of hypertensive patients is increasing at an alarming ratio, along with the emergence of new diseases.

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Various Therapeutic Segments in Pakistan Market

S.No. Therapeutic Class Share% TOTAL MARKET 100 1 Alimentary Tract & Metabolism 20.8 2 Blood & Blood Forming Organs 3.3 3 Cardiovascular System 7.2 4 Dermatological 3.5 5 GU System & Sex Hormones 2.6 6 Systemic Hormones (excluding sex hormones) 1.0 7 Systemic Anti-Infective 24.7 8 Hospital Solutions 1.0

Growth% 11 10 19 7 13 5 12 13 3

By looking at the above table it is obvious that only two segments are contributing, and no other segment is performing up to the mark. All the pharmaceutical companies should look into these figures and try to explore the segments for not performing up to the mark. Furthermore, it is also an opportunity for the companies to capitalize on this situation and try to generate sales from these segments. The data also highlights that other segments like blood and blood forming organs, dermatology and systemic hormones, has got significant growth, and if focused can contribute significantly to the total pharmaceutical market.

Diseases Burden of Pakistan according to their Occurrence DISEASES Communicable Other Non-communicable Reproductive Health Cardiovascular, Diabetes Injuries Nutritional/ Endocrine Neuro-Psychatric BURDEN 38% 19% 12% 11% 11% 6% 3%

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Risk Factors
No doubt that the Pakistan Pharmaceutical Market is growing at a steady rate but there are certain challenges which pose a great threat to the industry. The Company has identified the following risk factors which could hamper its success: Problems generating visibility and product positioning; Overly aggressive and debilitating actions by competitors; Changes in consumer buying trends; Changes in federal or state/provincial legislation applicable to the industry; Import of raw material which costs a lot of precious foreign exchange Rapid devaluation of the rupee against the major currencies, due to which the profit margins are shrinking Increasing cost of manpower and energy Low R&D expenditure, which can lead to the suffering of the masses for not conducting sufficient research on the newly emerging diseases in the Pakistani environment Political instability is another major factor which is emerging as the major challenge to the pharmaceutical industry, because of discontinuation of the policies Last but not the least, the deteriorating law and order situation, due to which most of companies have suffered in terms of sales and also lack of reach to the customers in the affected areas. Market access is challenging and operational risks are high. One of the major challenges which the pharmaceutical industry faces is the total government control on the prices of all the enlisted products

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Financial Plan
ePharma will initially be funded by Rs. 1,00,00,000 Funded by the Owner, with the help of which the land, building and equipment will be purchased. The company will have its initial inventory worth Rs. 15,00,000 of which Rs.7,00,000 will be paid and rest is on credit. The initial Employment cost will be:

Designation CEO Manager Accountant Sales person Administration MIS Customer service Security Guard Peons Total

Quantity 1 3 3 5 3 4 6 2 2

Salary 80,000 30,000 15,000 12,000 15,000 20,000 12,000 10,000 8,000

Total Cost 80,000 90,000 45,000 60,000 45,000 80,000 72,000 20,000 16,000 5,08,000

However with the growth of the company Additional Staff will be hired as per requirement.

Balance Sheet
Year 2012 Assets Current Assets Cash Inventories Total Current Assets Long-term Assets Land Building Equipment 35,00,000 12,00,000 10,00,000 36,00,000 15,00,000 51,00,000 RS. Year 2012 RS.

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Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Total Current Liabilities Long-term Liabilities Total Liabilities Capital Total Capital Total Liabilities and Capital 1,00,00,000 800,000

57,00,000 1,08,00,000

800,000 0 800,000

1,00,00,000 1,08,00,000

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Marketing Strategies
ePharma plans to market the company through internet where most visited sites will be hired to advertise the company, along with the paper media, radio. The internet users are rapidly increasing in Pakistan providing the opportunity for the businesses to promote E-businesses, and that is our Starting point. Furthermore sponsoring events and other modes of advertisement are also under consideration.

Products & Services

The Company will offer, through its website, a wide variety of medical products and services for sale to both consumers and professionals. Products include pharmaceuticals, medical equipment, supplies, Which Includes:

Products & Services for Consumers

Pharmaceuticals Medical supplies & equipment Herbal preparations Home healthcare items Vitamins and supplements Physician & hospital directories Illness & symptom directory Consumer-oriented health news Drug toxicology guide Substance abuse guide & resources Baby / child health resources Nutrition & fitness resources

Products & Services for Medical Practitioners and Facilities

Pharmaceuticals Medical supplies & equipment Medical schools directory Online medical bookstore, for sale of books, software & videos Local, regional, national & international health alerts Medical news, information, resources Illness & symptom directory Drug toxicology guide Substance abuse guide & resources Professional organizations & services directories Office software Medical office supplies

The Company has planned to established relationships with the leading fulfillment suppliers of pharmaceuticals and medical supplies and equipment.

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ONLINE DATABASES
In addition to our catalog of products, the Company will provide a large comprehensive database of medical information, created and maintained by members of the medical community. The information contained in the database will be updated regularly to ensure that it is timely and addresses new discoveries, research, and developments. The company has also planned to provide medical news services at our website to keep our users aware of the major happenings in the medical world and hence building strong relations with our users. Through our website the Company will also provide a range of practical office and business services for medical professionals, to help them efficiently manage and administer their businesses. The Company plans to continually add new products and services and enhance our planned product lines and service offerings. In response to demonstrated needs of our market, new products / services being developed in the near future include medical record keeping and communications for medical professionals, a professional placement service, and localized medical yellow pages. To protect the Companys proprietary interests and information, adequate policies will be put in place.