Thesis (Master in Management) -- University of the Philippines Mindanao, 2023

HBI Pharmacy is one of the flagship brands of NCCC Group of Companies under its retail arm, LTS retail specialists, Inc. together with NCCC Supermarket and Choice Mart Brands. It opened in 1978 as NCCC Botica in Davao’s Chinatown. As of June 2023, it has 63 stores in Davao, Soccsksargen and Mimaropa Regions with a total business of Php 700 million pesos derived from its four store formats: big and small counter type stores, drug and beauty and stand-alone formats. Business grew during the Covid-19 pandemic period from 2019-2020 but sales dropped as the country eases out of the pandemic and pharmacy products are no longer essential. But challenges ensued for HB1 Pharmacy as soaring pricing put inflationary pressure on household expenditures particularly for the health and wellness budget. Competitors are also moving aggressively with their expansion plans and marketing innovation. This paper reflects the strategic planning framework according to Eduardo A. Morato Jr. this approach is based on the strategic planning management model performed in a rational, sequential and analytical process. For necessary information, data was gathered from vendors and suppliers of HB1 Pharmacy including 3rd party research parties and from the entity itself. For the next 5 years, HB1 Pharmacy plans to expand its market reach and attract new customers through market penetration by geographical expansion of five stores per year. By the end of 2028, HB1 Pharmacy will have more than 80 outlets in Southern Mindanao. Business will also increase by sixty-three percent (63%) from its 2022 sales figures. Incremental sales of P15 million pesos will result from an increase in brand loyalty through a membership program with a target of 100,000 members in 5 years. Lastly, HB1 Pharmacy aims to be the preferred employer in the pharmacy industry in Southern Mindanao. However, there are challenges identified including funds for both capital expenditure and working capital as well as the organizational infrastructure to support the expansion growth in terms of processes and manpower. Thus, the proposed strategies outline how HB1 Pharmacy will achieve its objectives in the next five years through strategies formulated of Marketing, Operations and Finance Processes. For marketing, campaigns will focus on offering value-added services which manifests HB1 Pharmacy’s value proposition as the preferred health partner of its customers – “HB1 Pharmacy, my Heal Partner.” Furthermore, HB1 Pharmacy also seeks to increase membership of 20,000 per year which will yield incremental sales of Php 15 million pesos. Operations will increase sales by 5 million pesos by offering HB1 Pharmacy’s own brand of generics. Another plan is to revise the layout of existing counter-type formats to capture medicine-buying shoppers only in grocery stores and to explore a new format – drive through as part of its innovation efforts. Developing core competencies by improving On-shelf availability (OSA), Customer Fill Rate (CFR) and improving overall store experience based on customer touchpoints. HB1 Pharmacy will continue to keep margins at thirteen percent (13%) for pharma items; increase other income by eight percent (8%) year on year; minimize inventory losses and reduce instances of held orders. Lastly, HR will equip manpower with skills set to meet demands of customers. An incentive program covering both monetary and non-monetary compensation will be put in place to motivate employees to meet their sales targets.