Strategic planning process

1. STRATEGIC PLANNING Process David Holdford, RPh, MS, PhD Professor, School of Pharmacy Virginia Commonwealth University Planning to Succeed

2. Slides to Accompany Chapter 4 of “Marketing for Pharmacists” 2

3. Failing to plan is planning to fail Alan Lakein, author of How to Get Control of Your Time and Your Life

4. A goal without a plan is just a wish Antoine de Saint-Exupery French writer (1900 - 1944)

5. In preparing for battle I have always found that plans are useless, but planning is indispensable Dwight D. Eisenhower, 34th President of the United States

6. Learning Objectives Describe the strategic planning process for services & products Discuss business models used in pharmacy practice Compare business models & business plans Contrast goals, strategies, objectives, and tactics Define terminology associated with strategic planning including mission statement, business model, business model canvas, business plan, SWOT analysis, customer value proposition, commodity Identify major elements of business plans 6

7. SETTING ORGANIZATIONAL STRATEGIES Mission Statement: “broad yet specific statement of an organization’s purpose for existence and its future direction.” “All planning and strategies for future action originate (or should) from the mission of the organization” 7

9. Every Part of a Business Plan Derives from the Mission Mission Business Plan Marketing Plan Financial Plan Human Resources Plan Distribution & Supply Mission Business Plan Marketing Plan Financial Plan Human Resources Plan Distribution & Supply Personalized Services Sufficient $’s To Support Personalized Services Competent, Service Friendly Employees Convenient products & Services9

10. 10

11. Everything In And Out Of The Pharmacy Should Support This 11

12. STRATEGIC TERMINOLOGY Goals Strategies Objectives (SMART) Tactics 12

13. Strategic planning occurs at various levels in large health care organizations: corporate division strategic business unit (SBU) product Diabetes Management Program At Store #1989 13

14. WHAT IS THE DIFFERENCE BETWEEN A BUSINESS MODEL AND A BUSINESS PLAN?

15. BUSINESS MODELS AND BUSINESS PLANS BOTH DESCRIBE HOW A BUSINESS HOPES TO ACHIEVE THE MISSION IN A SUSTAINABLE WAY

16. BUSINESS MODELS ARE GENERAL, LARGE PICTURE VIEWS OF THE BUSINESS & TYPICALLY GLOSS OVER THE OPERATIONAL DETAILS OF THE BUSINESS

17. BUSINESS MODELS DESCRIBE: • THE CUSTOMER VALUE PROPOSITION • RESOURCES & PROCESSES • THE PROFIT FORMULA 17

18. BUSINESS MODELS ARE OFTEN DESCRIBED USING A BUSINESS MODEL CANVAS

19. Organization's Operation - Specific background about the organization where the product/service will be provided Strengths, Weaknesses - Your capabilities to serve targeted customers Service/Product – Features and details about your program or service Secondary Customers - all other people you may serve Partners - People or businesses who can help you serve customers Value Proposition - The case you make to customers Opportunities, Threats - Potential for success or failure in the market Competitors – Alternatives for your value proposition Primary Customers - People or businesses you want to serve Costs - Financial and nonfinancial inputs needed to serve customers Pricing & Reimbursement - Sources of revenue to sustain your value proposition Communication Plan - How value proposition is communicated Implementation - Details about critical factors for success of business Source: (adapted) Osterwalder A, Pigneur Y. Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. Hoboken, NJ.: John Wiley and Sons; 2010. Business Model Canvas for Pharmacy Services

20. Organization's Operation - Specific background about the organization where the product/service will be provided Strengths, Weaknesses - Your capabilities to serve targeted customers Service/Product – Features and details about your program or service Secondary Customers - all other people you may serve Partners - People or businesses who can help you serve customers Value Proposition - The case you make to customers Opportunities, Threats - Potential for success or failure in the market Competitors – Alternatives for your value proposition Primary Customers - People or businesses you want to serve Costs - Financial and nonfinancial inputs needed to serve customers Pricing & Reimbursement - Sources of revenue to sustain your value proposition Communication Plan - How value proposition is communicated Implementation - Details about critical factors for success of business Source: (adapted) Osterwalder A, Pigneur Y. Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. Hoboken, NJ.: John Wiley and Sons; 2010. Business Model Canvas for Pharmacy Services

21. BUSINESS PLANS CAN BE CONSIDERED MORE DETAILED VERSIONS OF BUSINESS MODELS THAT PROVIDE SPECIFIC DETAILS ABOUT PLANS FOR SUCCESS

22. MAJOR ELEMENTS OF BUSINESS PLANS Executive Summary Product or Service Description The Pharmacy's Operation SWOT Analysis Primary Targeted Segments/Markets Partners Competitors Revenue, Pricing, and Costs Promotional Plan Implementation Plan Appendices

23. THE REMAINING PORTION OF THIS PRESENTATION WILL DISCUSS WHAT GOES INTO A BUSINESS MODEL CANVAS

24. Organization's Operation - Specific background about the organization where the product/service will be provided Strengths, Weaknesses - Your capabilities to serve targeted customers Service/Product – Features and details about your program or service Secondary Customers - all other people you may serve Partners - People or businesses who can help you serve customers Value Proposition - The case you make to customers Opportunities, Threats - Potential for success or failure in the market Competitors – Alternatives for your value proposition Primary Customers - People or businesses you want to serve Costs - Financial and nonfinancial inputs needed to serve customers Pricing & Reimbursement - Sources of revenue to sustain your value proposition Communication Plan - How value proposition is communicated Implementation - Details about critical factors for success of business Source: (adapted) Osterwalder A, Pigneur Y. Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. Hoboken, NJ.: John Wiley and Sons; 2010. Business Model Canvas for Pharmacy Services 1 2 7 9 6 5 4 8 10 11 3 12 13

26. 1. PRODUCT/SERVICE Describe what is being offered. List features and benefits.

27. 2. PRIMARY CUSTOMERS Primary customers are the most important group of individuals served by what is being offered?

28. 3. VALUE PROPOSITION This is the promise to customers of the value to be delivered by your service (or product) It explains in a compelling & clear manner why customers should choose you over competing options

29. Value Propositions in Retail Business Models 1. Economic - argues that marginal benefits (i.e., utility) offered (compared to competitors) is greater than the costs and sacrifices paid 2. Functional - offers convenience by finding the right products with as little time and as little physical and cognitive effort as possible 3. Emotional – offers arousal of feelings associated with the act of shopping itself, e.g., enjoying shopping with others, the hunt-for-a-bargain, relaxation 4. Symbolic - attaches positive consumption meanings to shopping itself e.g., shopping local, shopping that supports environment 29

31. 4. SECONDARY CUSTOMERS These are the other customers served by what you offer They may be Internal to your organization and/or External to your organization

32. 5. 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

33. 6. COMPETITORS Who is competing with your value proposition? If they aren't partnering with you, individuals and organizations may be competing with you.

35. 7. 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

36. 8. STRENGTHS AND WEAKNESSES What unique strengths does your organization have that gives you a competitive advantage? What weaknesses give you a disadvantage?

37. 9. OPPORTUNITIES AND THREATS What are opportunities that your service could meet? What are potential threats to your success?

38. Organization's Operation - Specific background about the organization where the product/service will be provided Strengths, Weaknesses - Your capabilities to serve targeted customers Service/Product – Features and details about your program or service Secondary Customers - all other people you may serve Partners - People or businesses who can help you serve customers Value Proposition - The case you make to customers Opportunities, Threats - Potential for success or failure in the market Competitors – Alternatives for your value proposition Primary Customers - People or businesses you want to serve Costs - Financial and nonfinancial inputs needed to serve customers Pricing & Reimbursement - Sources of revenue to sustain your value proposition Communication Plan - How value proposition is communicated Implementation - Details about critical factors for success of business Source: (adapted) Osterwalder A, Pigneur Y. Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. Hoboken, NJ.: John Wiley and Sons; 2010. Business Model Canvas for Pharmacy Services 1 2 7 9 6 5 4 8 10 11 3 12 13 PROFIT FORMULA

39. 10. COSTS What are the major costs of the service being provided? Startup Costs Operating Costs Fixed Variable

40. 11. 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?

42. 12. 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?

44. 13. 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? What operational & performance metrics will you collect?

45. Summary Strategic planning is an important skill for pharmacists who wish to market their services Planning requires systems thinking and an understanding of the complexity of pharmacy practice 45

Strategic planning process

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Strategic planning process