Business Report: Environmental Analysis of Chemist Warehouse (BUS101)

This business report conducts an environmental analysis of Chemist Warehouse, an Australian pharmacy retailer. It examines key external stakeholders, including the government and competitors, and assesses the impact of political, legal, and technological forces on the company's operations. The report identifies challenges related to regulatory pressures, technological advancements, and the competitive landscape. It provides recommendations for strategic direction, such as transitioning to a franchise model, conducting competitor analysis, and proactively addressing legal and pricing considerations. The analysis emphasizes the need for Chemist Warehouse to adapt its business model and strategies to maintain a competitive edge in the market. This report highlights the importance of adapting to changing market dynamics and the need for strategic planning to ensure the company's continued success and growth. It provides a comprehensive overview of the challenges faced by Chemist Warehouse and proposes practical solutions to enhance its performance.

BUSINESS
ADMINISTRATION

CONTENTS
INTRODUCTION...........................................................................................................................1
Quality of environmental analysis of organization......................................................................1
Analytical value of identified challenges within organization....................................................2
Recommendations........................................................................................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Pharmacy retailers and companies are highly bound to adhere its business operations as
per standardized the medical laws. This report will be based on the analysis of stakeholders’ and
impact of related environmental forces on organization named “Chemist Warehouse” which is an
Australian pharmacy retailer. The company was established in the year 2000 with approximately
8000 employees. The content will focus upon certain external stakeholders and business
environment factors to assess its loopholes and impacts on business. The study will further
provide certain recommendations to overcome identified challenges of company arise due to
certain external forces and elements.
Quality of environmental analysis of organization
External stakeholders
The principle stakeholders who highly impacts current business activities of Chemist
Warehouses are government and competitors (Kenny, 2014). External stakeholders of Chemist
Warehouse directly or indirectly affect its operations such as Government play a vital role in
decision making procedures of company. It continuously imparts a considerable impact on
organization by designing various policies related to drug distribution and manufacturing.
Government of Australia is continuously making different agreements such as Community
Pharmacy Agreement that affect Chemist Warehouse to enhance its accessibility and operations.
It affects regulatory actions of the company and also affects strategic decision making for
business expansion.
Along with it, competitors are also a considerable external stakeholder for the company
that affects its regular operations. For example, Australian pharmacies like Ramsay, Terry White
Chemists are delivering adequate competitions by adopting strategic business models. The
effective business measures and technological frameworks adopted by company’s competitors
affecting its decision making processes. Competitors are continuously delivering high standards
of competition of Chemist Warehouse in every aspect of pharmaceutical business and
components. Further, there is no switching cost for customers to shift to competitors and hence it
affects the sale of Chemist Warehouse.
Influential Environmental Forces

Environmental forces for any pharmacy retailers includes political, legal, technological,
social and other elementary factors that affects business operations (Pinder and Ghosh, 2019).
Political and technological components are the two most influential factors for Chemist
Warehouse which highly influences current situation and activities of company.
Political factors such as pressure on pricing and discount strategy of Chemist Warehouse
has become an issue for it. Accusations of misleading customers with high discounts of
medicines are not able to impart a positive impact in market. Moreover, regulations made by
government to control drug distribution has also affects Chemist Warehouse internal functions
(Boaventura et.al., 2019). There is a requirement of registering any drug to Australian Register of
Therapeutic Goods (ARTG) before its circulation or distribution in Australia, arises complex
documentations and distribution processes. In addition to it, involvement of medical advisory
councils of country also influences its decision making criteria.
In terms of advanced technological devises and its applications, various advancements
have been made under the field of pharmaceutical industries. Application of new information and
communication devices has become an elementary need of Chemist Warehouse. Development of
advanced marketing and advertisements technologies increased the need of high capitals for The
company to regulate advanced business operations (Duus, 2016). Usage of accuracy health
statistical data and its operations arises the need of recruiting health analysts and different related
professionals which require investments.
Analytical value of identified challenges within organization
Based on the assessment of above business components, Chemist Warehouse inhibits
various business challenges. The company faces many challenges due to activities of
stakeholders and related environmental forces. Modifications or advancements in existing
business plan due to implementation of any amendments by bodies like ACPA or other
regulating authorities are one of the issues for company (Hulme, Hughes and Nielsen, 2019). For
instance, location of company’s units must be selected as per the rules of ACPA, such type of
rule restricts the development of its units at feasible place in Australia.
Moreover, the pharmacy retailers are bound to follow the Australian Privacy act of 1988
to secure the breach of privacy of customers. It require a high standards of IT professionals to
monitor IT securities of company. It is also a type of challenge for the company to look after all
the possible risks of privacy and to maintain it within its large business units and centres.

Along with it, due to its partnership model it is difficult for the company to run its
business units smoothly. The inclusion of partnership model has provided it number of liabilities
and thus becoming a type of hurdle for further business activities and operations (Kinicki and
Willioam, 2018).
Furthermore, continuous development of competitors for the company has increased the
level of challenges for it. It increased the need of external assessments and inclusion of
technological aids to strengthen its business and market analysis and its activities. Along with it,
the business model of competitors are also very effective and matches with the modern business
environment that a sort of challenging situation to Chemist Warehouse.
Monitoring and reinstallation of devices in various units with the selection of suppliers,
distributors of machinery has become a challenging situation for the company. Chemist
Warehouse must continue to operate all its units with higher quality of business standards as
compared to its competitors for better service provision.
Recommendations
Chemist Warehouse needs to lay emphasis on its business model where it must transform
its partnership model to franchise model for efficient and effective services. With the
development of franchise model the mode of operations will be centralised and hence the
company will gain better competitiveness (Franco et.al. 2011). Standards of protocols will be
similar for every units which will provide quality and standardization to internal operations.
The company is recommended to conduct an in-depth analysis of its competitors to make
a profitable approach towards its business activities (Schoemaker and Krupp, 2015). It will
provide adequate information of customers and market needs and thus company will be able to
implement quality business activity.
All the measures related to recent and upcoming laws that directly or indirectly affect the
company must be revised at prior basis (Kenny, 2014). It will strengthen the legal analysis of
company and will facilitate further business actions in terms of medical laws.
The company is recommended to alter its pricing and discounting ranges to make an
effective business approach in market and for consumers as well.

CONCLUSION
The report summarised the fact that Chemist Warehouse need to strengthen its business
model in order to achieve desired business plan. It has suggested that shifting its high discount
policies to standardised ranges would be more effective. It also laid emphasis on the fact that
current business model of Chemist Warehouse need to be changed from partnership to franchise.
The report has also reflected the importance of prior assessments for the company that need to be
made to comply with elementary legal frameworks.

REFERENCES
Boaventura, J.M.G., Bosse, D.A., de Mascena, K.M.C. and Sarturi, G., (2019). Value
distribution to stakeholders: The influence of stakeholder power and strategic importance in
public firms. Long Range Planning.
Duus, H.J., (2016). Strategic forecasting: The management perspective. Management Research
Review. 39(9), pp. 998-1015
Franco, M, Haase, H, Magrinho, A and Silva, J., (2011). Scanning practices and information
sources: an empirical study of firm size. Journal of Enterprise Information Management. 24(3).
pp. 268-287.
Hulme, S., Hughes, C.E. and Nielsen, S., (2019). Drug sourcing and motivations among a sample
of people involved in the supply of pharmaceutical drugs in Australia. International Journal of
Drug Policy, 66, pp.38-47.
Kenny, G., (2014). Five questions to identify key stakeholders. Harvard Business Review. pp. 1-
3
Kinicki, J. and Willioam, B., (2018). Management: a practical introduction. Mc Graw Hill.
Pinder, T.A. and Ghosh, D., (2019). Complementary medicine regulation in Australia.
In Nutraceutical and Functional Food Regulations in the United States and around the
World (pp. 387-398). Academic Press.
Schoemaker, P. J. H. and Krupp, S., (2015). The power of asking pivotal questions. MIT Sloan
Managemengt Review.