elements to pharmacy business models
TRANSCRIPT
ELEMENTS TO PHARMACY BUSINESS MODELS
DAVID HOLDFORD, R.PH., M.S., PH.D.
PROFESSOR, VIRGINIA COMMONWEALTH UNIVERSITY SCHOOL OF PHARMACY
Slides to Accompany “Marketing for Pharmacists”
OUTLINE
1. DEFINE BUSINESS MODEL
2. ILLUSTRATE A BUSINESS MODEL CANVAS
3. DESCRIBE THE ELEMENTS TO PHARMACY BUSINESS MODELS
1. DEFINE BUSINESS MODEL
A BUSINESS MODEL DESCRIBES HOW A BUSINESS OR ELEMENT OF A BUSINESS PLANS TO MAKE MONEY.
BUSINESS MODELS ARE GENERAL, LARGE PICTURE VIEWS OF THE BUSINESS & TYPICALLY GLOSS OVER THE OPERATIONAL DETAILS OF THE BUSINESS
BUSINESS MODELS DESCRIBE:
• THE CUSTOMER VALUE PROPOSITION
• RESOURCES & PROCESSES
• THE PROFIT FORMULA
2. ILLUSTRATE A BUSINESS MODEL CANVAS
THE BUSINESS MODEL CANVAS IS A POPULAR TOOL USED FOR PLANNING & DEVELOPING BUSINESS MODELS
THE BUSINESS MODEL CANVAS ORIGINATED FROM BUSINESS MODEL GENERATION (HIGHLY RECOMMENDED) & HAS BEEN ADAPTED FOR MANY TYPES OF BUSINESSES INCLUDING HEALTH CARE
THE BUSINESS MODEL CANVAS HAS BEEN ADAPTED TO TEACH PHARMACISTS AND PHARMACY STUDENTS HOW TO DEVELOP INNOVATIVE BUSINESS MODELS
Organization's Operation -
Specific background about the organization
where the product/service will
be provided
Strengths, Weaknesses - Your
capabilities to serve targeted
customers
Value Proposition - The case you make
to customers
Secondary Customers - all
other people you may serve
Partners - People or businesses who can help you serve
customers
Opportunities, Threats - Potential
for success or failure in the
market
Primary Customers - People or
businesses you want to serve
Competitors - People or
businesses who compete for your
customers
Costs - Financial and nonfinancial inputs needed to serve customers
Pricing & Reimbursement - Sources of revenue to sustain your value proposition
Communication Plan - How your
value proposition is communicated
to customers
Implementation - Details about critical factors for success of business
Business Model Canvas for Pharmacy Services
Source: (adapted) Osterwalder A, Pigneur Y. Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. Hoboken, NJ.: John Wiley and Sons; 2010.
Organization's Operation -
Specific background about the organization
where the product/service will
be provided
Strengths, Weaknesses - Your
capabilities to serve targeted
customers
Value Proposition - The case you make
to customers
Secondary Customers - all
other people you may serve
Partners - People or businesses who can help you serve
customers
Opportunities, Threats - Potential
for success or failure in the
market
Primary Customers - People or
businesses you want to serve
Competitors - People or
businesses who compete for your
customers
Costs - Financial and nonfinancial inputs needed to serve customers
Pricing & Reimbursement - Sources of revenue to sustain your value proposition
Communication Plan - How your
value proposition is communicated
to customers
Implementation - Details about critical factors for success of business
Business Model Canvas for Pharmacy Services
Source: (adapted) Osterwalder A, Pigneur Y. Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. Hoboken, NJ.: John Wiley and Sons; 2010.
3. DESCRIBE THE ELEMENTS TO PHARMACY BUSINESS MODELS
Organization's Operation -
Specific background about the organization
where the product/service will
be provided
Strengths, Weaknesses - Your
capabilities to serve targeted
customers
Value Proposition - The case you make
to customers
Secondary Customers - all
other people you may serve
Partners - People or businesses who can help you serve
customers
Opportunities, Threats - Potential
for success or failure in the
market
Primary Customers - People or
businesses you want to serve
Competitors - People or
businesses who compete for your
customers
Costs - Financial and nonfinancial inputs needed to serve customers
Pricing & Reimbursement - Sources of revenue to sustain your value proposition
Communication Plan - How your
value proposition is communicated
to customers
Implementation - Details about critical factors for success of business
Business Model Canvas for Pharmacy Services
Source: (adapted) Osterwalder A, Pigneur Y. Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. Hoboken, NJ.: John Wiley and Sons; 2010.
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1. PRIMARY CUSTOMERS
Primary customers are the most important group of individuals served by what is being offered?
Physicians? Employers? Government? New customer? Established customers?
2. SECONDARY CUSTOMERS
These are the other customers served by what you offer
They may be
Internal to your organization
External to your organization
3. VALUE PROPOSITION
This is the promise to customers of the value to be delivered
It explains in a compelling and clear manner why customers should choose you over competing options
4. PARTNERS
With whom will you partner to serve customers?
Will you work with other health care professionals, local businesses, insurers?
Inside the organization
Outside of the organization
5. COMPETITORS
Who will be your current & potential competitors?
If they aren't partnering with you, individuals and organizations may be competing with you.
Intra type competitors – offer same or similar services to your pharmacy
Intertype competitors - provide distinctly different products and services that meet similar customer needs & wants you plan to serve
6. YOUR ORGANIZATION’S OPERATION
1. Tangibles - Location, facilities, and brief description of other products & services provided
2. Mission and Values - Mission of the organization & the values that are important in making choices (e.g., patient-oriented, profit driven, community-oriented)
3. Team - Key members of the team who are planning & providing the service
7. STRENGTHS AND WEAKNESSES
What unique strengths does your organization have that gives you a competitive advantage over other options in the health care marketplace?
What weaknesses give you a disadvantage?
“Marketing of Health Promotion Programs/Activities.” Pharmacotherapy Self-Assessment Program (PSAP) – Sixth Edition. Lenexa, KS: ACCP. 2008.
8. OPPORTUNITIES AND THREATS
What opportunities (that your service could meet) are in the current marketplace?
What are potential threats to the success to your service?
“Marketing of Health Promotion Programs/Activities.” Pharmacotherapy Self-Assessment Program (PSAP) – Sixth Edition. Lenexa, KS: ACCP. 2008.
9. COSTS
What are the major costs of the service being provided?
Startup Costs
Operating Costs
Fixed
Variable
10. PRICING & REIMBURSEMENT
How does the business receive revenue for the service being provided?
What will be the price for each unit of service provided?
Who will pay for the service?
11. COMMUNICATION PLAN
How will you communicate your value proposition to customers?
What messages will you communicate?
What do you want to achieve with your communications?
12. IMPLEMENTATION PLAN
What things do you, the customer, and the payer need to do to make the service a success?
What are the most important things your organization needs to do to successfully implement the program?
How will you know if you are successful or not?
SUMMARY
Planning is essential to prepare for success
Plans themselves are meaningless unless they are used to achieve the organization’s mission
Models need to evolve as they are tested in real marketplace conditions
