Competitive Analysis for a Pharmacy (Example)

A competitive analysis is not just a tool for gauging the position of your pharmacy in the market and its key competitors; it’s also a fundamental component of your business plan.

This analysis helps in identifying your pharmacy’s unique selling points, essential for differentiating your business in a competitive market.

In addition, the competitive analysis is integral to laying a solid foundation for your business plan. By examining various operational aspects of your competitors, you gain valuable information that ensures your business plan is robust, informed, and tailored to succeed in the current market environment.

Identifying Your Competitors in the Pharmacy Sector

The initial step in grasping your position in the pharmacy market is to identify your competitors. Start by cataloging local pharmacies, including big-chain pharmacies, independent local drugstores, and even supermarkets or department stores with pharmacy sections. If your pharmacy focuses on specialized services, like compounding or wellness programs, your direct competitors include other pharmacies offering similar services, as well as online pharmacies. Indirect competitors might consist of health food stores or clinics providing alternative medicine solutions.

Utilize online resources such as Google Maps for a geographical overview of competitor distribution. Platforms like Yelp and Healthgrades provide customer feedback and ratings, offering a peek into competitors’ strengths and potential areas for improvement. For instance, if multiple reviews praise the efficient prescription refill system of “FastCare Pharmacy,” this represents a significant strength of your competitor.

Pharmacy Competitors’ Strategies

Analyzing the strategies of these competitors involves examining several aspects:

• Service Offerings: Evaluate their range of services. If “Wellness Pharmacy” nearby is attracting attention with its holistic health consultations and herbal supplements, it suggests a market trend towards integrated health services.
• Product Range: Look at their product assortment. A pharmacy like “Community Care” that stocks a wide variety of medical devices and home health products might serve a broader customer base than one focusing solely on medications.
• Pricing and Insurance Partnerships: Assess how your pricing compares with that of your competitors. Are your products and services priced competitively with “ValueRx Pharmacy,” or do they align more with the specialized offerings at “Boutique Health”?
• Marketing and Outreach: Consider how competitors reach their audience. Do they maintain a strong online presence, or do they engage the community through health workshops and clinics?
• Customer Service and Experience: Examine the shopping experience. For example, “Friendly Pharm” may be renowned for its personal touch and patient counseling, enhancing overall customer satisfaction.
• Technological Advancements: Notice if competitors are leveraging technology to improve service, such as “MediQuick Pharmacy” with its mobile app for managing prescriptions.

What’s Your Pharmacy’s Unique Selling Proposition?

Contemplate what makes your pharmacy stand out. Perhaps you offer a comprehensive medication management program, or maybe you’re recognized for your innovative telepharmacy services.

Identify market niches through customer feedback and healthcare trends. For instance, the increasing demand for personalized medicine and pharmacogenomics testing could be a market niche if your competitors have yet to offer these services.

Consider your location: A pharmacy in a bustling city area might focus on efficiency and digital services, whereas a pharmacy in a more rural setting could emphasize community involvement and personalized care.

How To Summarize It All In Your Business Plan?

Competitors’ strategies and market positioning can be superposed with your own pharmacy’s value proposition by laying out on a page (or a presentation slide) the main differentiating factors. These factors will show investors and banks:

• How each competitor is positioned in the market
• How your pharmacy compares vs. competitors (what’s your value proposition)

In a competitive analysis, various parameters are used to compare and contrast your pharmacy with its competitors. The parameters listed below are examples of what you might include in your analysis. 

They are not exhaustive but serve as a guide to help you understand key aspects to consider. Each parameter provides insights into different facets of the competitive landscape, helping to paint a comprehensive picture of where your pharmacy stands.

Location

The success of a pharmacy is significantly influenced by its location, impacting customer accessibility and the type of clientele it attracts. A pharmacy in a busy urban area might serve a high volume of customers seeking convenience, whereas one in a residential neighborhood could attract families valuing personalized service.

Location also affects logistics, such as supply chain efficiency and delivery service reach, giving an edge to pharmacies strategically located near suppliers or within a broad delivery radius.

Square Footage (Sq. Ft.)

The size of a pharmacy can indicate its scale of operation and range of services. A larger space might allow for a broader inventory, including health and wellness products, and potentially, a private area for consultations or vaccinations. Conversely, a compact pharmacy might focus on a curated selection of essential items, emphasizing quality and personalized service.

Prescription Services

The core of a pharmacy’s offerings, prescription services, and how they are managed, can set a pharmacy apart. Innovations such as online refills, prescription management apps, or specialized compounding services cater to diverse customer needs, from convenience to customized care.

Online Refills

A pharmacy that offers online prescription refills appeals to tech-savvy customers and those valuing convenience. This service can significantly enhance customer satisfaction and loyalty by simplifying the medication management process.

Google Reviews

Customer feedback, as reflected in Google Reviews, can provide valuable insights into a pharmacy’s service quality, efficiency, and customer satisfaction levels. High ratings can enhance a pharmacy’s reputation, attracting new customers through positive word-of-mouth.

Hours of Operation

Extended hours of operation cater to a wide range of customers, including busy professionals and families needing after-hours service. Flexibility in operating hours can be a significant differentiator in a competitive market.

Delivery Services

Offering delivery services extends a pharmacy’s reach and convenience factor, especially for customers who cannot visit the store in person due to health issues, mobility constraints, or personal preferences for at-home shopping.

Health & Wellness Products

A pharmacy that stocks a comprehensive range of health and wellness products, including over-the-counter medications, supplements, and health aids, meets a broader array of customer health needs, positioning itself as a one-stop health shop.

Vaccination Services

Providing vaccination services, especially in times of heightened health awareness, positions a pharmacy as a proactive health partner in the community, encouraging regular customer visits and enhancing public health.

Number of Pharmacists

A higher number of pharmacists can indicate a pharmacy’s commitment to providing expert advice, personalized service, and reduced waiting times, enhancing the overall customer experience.

Other Comparison Factors

Additional factors worth considering in your competitive analysis to gain a more rounded view include:

• Marketing Strategies: Evaluating how competitors reach their audience can uncover effective advertising avenues and promotional activities.
• Customer Service: The level of customer care, including staff approachability and service speed, can reveal areas for your own business to excel in.
• Brand Presence: Analyzing competitors’ presence both online and offline, including social media engagement and local community involvement, can guide your own branding efforts.
• Product Innovation: Monitoring competitors’ product introductions or unique services can inspire innovation and help maintain a competitive edge.
• Supplier Relationships: Insights into competitors’ supplier connections can provide information on product quality, ethical sourcing, and cost management.