Strategic Analysis of Chemist Warehouse: HC3141 Report, T3 2019

This report analyzes the business model of Chemist Warehouse, the largest pharmaceutical goods retailer in Australia. The company's strategy centers on a franchisee system, bulk purchasing, and cost leadership to achieve a significant market share. The analysis covers the company's market share, operational strategies, and the factors contributing to its cost leadership, including economies of scale and bulk supply. The conclusion highlights the effectiveness of the cost leadership strategy in the competitive Australian pharmaceutical market. The report provides a concise overview of Chemist Warehouse's strategic approach, supported by references to relevant sources.

INTERNATIONAL
STRATEGIC
MANAGEMENT
CHEMIST WAREHOUSE

BUSINESS MODEL OF CHEMIST
WAREHOUSE
■ Chemist Warehouse is the largest pharmaceutical
goods retailer in Australia. The business model of
the company is based on the trusted franchisee
system for bulk purchase and retailing of the
pharmaceutical goods.Chemist
Warehous
e
Franchise
es
Discou
nt
Retaile
rs
Retaile
rs

MARKET SHARE
■ The company is operating a wide retail chain through various tie-ups
and franchisees across Australia. They have almost 20 percent of the
total market share of the pharmaceutical market in Australia through
their more than 200 retail franchisees.
20%
Market
share
Largest
Pharmaceuti
cal Retail
Chain
More
than 200
retail
outlets

BUSIENSS STRATEGY
■ Chemist Warehouse is following the cost leadership strategy.
■ They supply products to their franchisees at a very low costs and it
enables retailers to offer discounts to the customers.
Cost
Leadership

FACTORS BEHIND COST
LEADERSHIP
■ Economies of scale are one more important factor which
is helping the Chemist Warehouse to follow this strategy
successfully.
■ They supply products to their franchisees at a very low
costs and it enables retailers to offer discounts to the
customers
■ Bulk purchase and supply is the main reason behind
successfully implementation on the cost leadership
strategy

CONCLUSION
■ It can be concluded that, cost leadership strategy
can be a good and helpful business strategy for
an organization in the Australian pharmaceutical
industry. The cost leadership strategy as followed
by the Chemist Warehouse is helping them in the
competitive market situation, to capture a
significant market share of the retail market of the
Australian Pharmaceutical industry.

REFERENCES
■ Chemistwarehouse.com.au. 2020. Chemist Warehouse: Australia's Cheapest
Online Pharmacy . [online] Available at: https://www.chemistwarehouse.com.au/
[Accessed 16 Jan. 2020].
■ Kinyuira, D., 2014. Effects of Porter’s Generic competitive strategies on the
performance of Savings and Credit Cooperatives (Saccos) in Murang’a County,
Kenya. IOSR Journal of Business and Management, 16(6).
■ Moon, H.C., Hur, Y.K., Yin, W. and Helm, C., 2014. Extending Porter’s generic
strategies: from three to eight. European Journal of International
Management, 8(2), pp.205-225.
■ Tansey, P., Spillane, J.P. and Meng, X., 2014. Linking response strategies adopted
by construction firms during the 2007 economic recession to Porter’s generic
strategies. Construction management and economics, 32(7-8), pp.705-724.

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