MS6LB49O: Analysis of Pharmacy2U - SME Management and Development

This report examines the management and growth strategies of Pharmacy2U, a UK-based online pharmacy. It details the company's origins, business concept, and competitive advantages, including its focus on NHS repeat prescriptions and online doctor services. The report analyzes the current level of demand using Porter's Five Forces and discusses Pharmacy2U's growth and development, highlighting key investments and expansions. It also addresses the challenges faced by the company, such as changing market conditions and regulatory compliance, and explores the government support measures available to SMEs in the UK. The report concludes with recommendations for Pharmacy2U's continued success, emphasizing the importance of innovation, customer focus, and strategic adaptation to market dynamics. Desklib provides access to similar reports and study resources for students.

Managing Small and Medium-Sized Enterprises
Module Code: MS6LB49O
UWL ID:
Word count: 2163

Executive Summary
This study mainly describes the management of SMEs like Pharmachy2U including the
growth, key challenges of SMEs, the current level of demand, strategies to maintain, and
government support. Pharmachy2U focuses on the concept of an online pharmacy that brings
the idea of giving online prescription transfers and offers the services of online doctor and
online mail orders to its customers. This company was incorporated in 1999 and owned by
Julian Harrison and Daniel Lee who work for the development of the service of NHS
electronic prescription. This study mainly stated the Pharmachy2U’s services like NHS repeat
prescriptions, online pharmacy services, online doctor services, etc. It has more than 350,000
EPS patients that are nominated till 2019 and also dispensed more than 621,128 prescription
items. Moreover, Pharmachy2U follows some strategies to achieve its desired targeted goals.
It is now trying to open a new dispensary that will have a completely automated system and
the dispensing capability will be up to 6.5 million prescription items in a month. Thus,
Pharmachy2U tries to develop the technology to improve its performance toward its
customers.

Table of Contents
Introduction................................................................................................................................1
Findings......................................................................................................................................1
Nature of the entrepreneur......................................................................................................1
Start-up Process......................................................................................................................1
Business concept and any sources of competitive advantage:...............................................2
The current level of demand and the competitive environment:............................................2
The growth and development of the business........................................................................3
Challenges of managing and running the business.................................................................3
SMEs current growth and development strategy....................................................................4
Government support measures that are available to help the business overcome the
challenges...............................................................................................................................4
Conclusions................................................................................................................................5
Recommendations......................................................................................................................5
Reflective Journal.......................................................................................................................6
References..................................................................................................................................7

Introduction
SMEs can be defined as a special type of company that is ascertained by some number of
employees or some assets which help to generate a certain level of revenues or earnings.
Pharmacy2U is a company which is known as the UK’s largest NHS online pharmacy that
turns into a medium-firm from a small firm. It was founded by the pharmacist Daniel Lee in
November 1999 and launched to the public officially in 2000. This firm mainly involves
conducting electronic prescription transfer services and also manages NHS repeat
prescription on the side of the patients in the UK. This study aims to describe the growth and
management style of SMEs like Pharmacy2U regarding the startup process, nature, key
challenges that are faced, and governmental support. The objectives of this study is to bring
out nature, startup process, and key challenges that are faced in managing and running SMEs
to figure out the competitive environment. Besides, estimating the current level of services
demanded with the explaination of the development strategies and governmental support
towards Pharmacy2U is another major objective.
Findings
Nature of the entrepreneur
When Daniel Lee worked with his father in his business, the plan of giving online mail-order
prescription services came to his mind. The online pharmacy concept is pioneered by Daniel
Lee who took the initiative to deliver online prescriptions and services with low rates more
efficiently and more conveniently to its customers. Daniel, the founder of Pharmachy2U, sold
his apartment to create a website that is named pharmacy2u.co.uk, and finally, it became the
first online pharmacy with all his efforts and hard work. The goal is clear to the entrepreneur
and that’s why he started his business by seeking an appropriate certificate from NHS. The
thought of giving new business is originated from family, values, culture from his family
business which was connected with pharmacy business. The nature of an entrepreneur can be
defined as innovation, patience, hard work, creativity, visionary thinking that helps not just to
grow but to survive in the market. Thus, the entrepreneur's nature can be drawn out to be
hardworking, focused, and courageous.
Start-up Process
At an early phase the founder of Pharmacy2U, Daniel Lee, worked with his father for his
family business and also had a chemist shop in Leeds, UK. When he worked with his father,
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he popped up with a plan to establish a pharmacy that will be based on an internet mail orders
system. When Pharmachy2U is listed as a small business, it has faced financial challenges.
BGF helped this firm with the amount of £10 million for raising the amount of investment
(Pharmacy2U | BGF, 2021). After creating a website for his pharmacy, he used courier
services for his company to supply its services to the customers (Philip et al., 2015). The two
main association of the UK, the British Medical Association and the National Pharmaceutical
Association, both expressed their concerns about the activities of Phamachy2U which flowed
out as a challenge for this new start-up business. But afterward, both of the associations gave
positive feedback and recommended Pharmacy2U to stay open their practices and activities
to rise internet-based pharmacy companies in the UK.
Business concept and any sources of competitive advantage:
This firm mainly involves conducting electronic prescription transfer services and also
manages NHS repeat prescription on the side of the patients in the UK. Initially it was started
its journey as a small-medium enterprise, but now it is growing its business by developing its
services and operations. Pharmacy2U is to focus on the services of NHS repeat prescriptions
which is an authorized service online that is availed by UK customers. Moreover, It has been
managing significantly two service areas such as retail products that are sold online and
prescription drugs in the UK. Therefore, this company aims to lead cost efficiencies over the
pharmacy sector in the Health Department (Owen, 2021). When the coronavirus pandemic
hit, Pharmacy2U’s services became even more critical, as the NHS responded to the crisis
and at-risk patients needed to shelter at home. In this coronavirus pandemic situation,
Pharmacy2U had to respond fast to maintain the rise of demand and it needed to take orders
from its customer of whether it’s diabetes or blood pressure tablets, or whatever the situation
may be (New Relic Is a Prescription for Growth at the United Kingdom’s Biggest Online
Pharmacy, 2021).
The current level of demand and the competitive environment:
For identifying the current level of demand, Pharmachy2U uses Porter’s five forces that help
to narrate the intensity of competitiveness and the attractiveness of the market. This model
helps to determine the business situation in the market, to understand the strength and
weaknesses of an organization’s competitive position, to identify the proper areas for
providing new products and services, to improve the weak point of the organization, and to
know the reasons of switching its customer to its competitors. Now, Pharmacy2U is
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providing its services to more than 100,000 patients with 200000+ items per month and also
directly exerting NHS repeat prescriptions to the patients. Furthermore, The Pharmaceutical
journal disclosed that Pharmacy2U dispenses more than 430,000 prescription items in a
month and ingresses the SCR 31 times throughout the year (Pharmacy2U accessed summary
care records 31 times in a year, NHS Digital data shows, 2019) which make this company
better than its competitors. Now, this firm dispenses up to 700,000 prescription items per
month. Along with its repeat prescription services, it offers assistance with the management
of medication from pharmacists and also clinical advice which helps Pharmachy2U to
increase its competitive advantages.
The growth and development of the business
After getting positive feedback from the associations, Pharmacy2U has confirmed the amount
of £7million of investment from the Fund of Business growth and others to support its home
delivery NHS repeat prescription services (Owen, 2021). While merging with
ChemisDirect.co.uk, Pharmachy2U secured an amount of £10million of capital investment
from the BGF which help to introduce counter drugs in the UK and also to the global market.
G Square Healthcare has invested in Pharmachy2U to develop its online services of NHS
repeat prescriptions which helps to ensure proper infrastructure to meet up the demands of the
customer. This firm also wants to teach its patients how technology can improve and simplify
the way they manage their medication. It achieved 350000 EPS customers in its customer
base and dispatched 621,128 prescription items to UK customers till the end of 2019 (Inside
Pharmacy2U, 2019). Pharmachy2U also added 330,000 NHS patients to its customer base
whereas 5.3 million prescriptions of NHS have been given away in the UK (Pharmacy2U
reports £16m loss in 2018/2019, 2020). As Pharmachy2U is continuing to develop, it will be
starting its state-of-the-art dispensing facility for its customers in North West Leicestershire
in 2020 (2021).
Challenges of managing and running the business
Like all other SMEs, Pharmachy2U’s growth and development haven’t come without any
challenges. After the enlistment as a small enterprise Pharmacy2U has faced economic,
social, political, and also technological challenges. Pharmachy2U has struggled for providing
advanced services to its customers because of the difficulties with the model of
establishment-based remuneration and along with the logistics to obtain the consent of the
patient (Inside Pharmacy2U, 2019). Besides, this firm faces many changing market
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conditions challenges like increased demand for personalized medicines, demand for
generics, preventative products of medicine, etc. (Healy, 2021). As the UK runs under the
influence of the system of parliamentary and politically stable, Pharmachy2U tries to
understand the provision of the act to respond with the relevant laws and regulations. Besides,
Pharmachy2U needs to understand the economy of the UK as UK’s economy is very strong.
PEST analysis helps SMEs like Pharmachy2U to evaluate how the decided strategies fit into
the environment, to encourage their strategic thinking ability, and also to provide a scenario
of all serious external influences on the organization. Through the analysis of these factors,
SMEs can overcome these challenges.
SMEs current growth and development strategy
SMEs like Pharmachy2U uses social media for informing their customers about the available
products and services and also discloses important information about their new services. The
management of Pharmacy2U uses the social media platforms like Instagram, Facebook,
Twitter, etc. for ensuring accessibility to its intended customers. This company tries to
provide different types of pharmaceutical products as per the required condition of its
customers in the UK which makes it different from other pharmaceutical companies. As its
distribution centers are well-connected online, it can interact with its customers to get
feedback, conviction, and preferences which help to develop its manufacturing department
(Pharmacy2U criticized for confusing marketing tactics, 2017). Therefore, Pharmacy2U must
discover some strategies to successfully survive in the market. By optimizing the clinical and
cost-effective use of their services, it contributes to improving the health outcomes of the
patients (Barnett, 2019).
Government support measures that are available to help the business overcome
the challenges
The government of the UK has launched a new policy for the development of SMEs by
providing finance, developing flexible regulations and policies to overcome the challenges.
Besides, It has tried to build the capability of growing and managing small businesses in the
UK. UK’s government supports SMEs to formulate a strategy that results in high growth. It
has tried to encourage innovation by keeping rules and regulations flexible, advised on
managing and running the business properly, and developed skills by providing training.
Thus, the key finding is that Pharmachy2U maintains a broad range of processes, systems and
follows a transparent leadership structure to handle its service delivery and also governance.
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Conclusions
Being the largest online pharmacy in the UK, Phamacy2U offers its customer a different kind
of experience which help to save time and money and also try to make its patient healthier
and happier. Pharmachy2U’s mission is to make modernize healthcare and develop the
outcome of the patient by managing its repeat prescription services. This company tries to
ensure its quality improvement and the procedure and protocols of medical emergencies for
managing its services. It has faced many key challenges in the UK and has overcome these
challenges with its proper management strategies and planning. As Pharmachy2U supports
500,000 patients on an average in a year with their services of NHS repeat prescription, it is
focusing on growing to be the biggest online pharmacy in the UK (New Relic Is a
Prescription for Growth at the United Kingdom’s Biggest Online Pharmacy, 2021). For
managing and running in the UK market, this company needs to understand the desire and
needs of its customer and make flexible strategies to survive in the UK.
Recommendations
Pharmachy2U creates an easier way for its patients to manage their NHS repeat prescriptions
that help to manage their medication. This company can take the following steps to manage
and improve its service quality to its customers.
 Needs to build its strategy on multiple market structures by concentrating and
understanding the preferences and requirements of the customers.
 Must try to bring out some innovative products and needed to set a target of
improvement per year.
 should work for maximizing its financial and operational performances in the UK.
 should work on its teamwork and its entire achievement and try to improve its
infrastructure for gaining its desired goal.
 should be aware of its dispensing services to avoid unexpected delays in taking some
orders.
 should create flexibility in the engagement of employees.
 Needs to develop the clinical audit arrangement and should maintain all recordings of
the incidents to learn from these incidents.
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Reflective Journal
In my regular entries over the 10 weeks of the semester, the learning that I have learned from
those 10 weeks are described below:
In the first week, I have learned the process of starting SMEs in the UK and how SMEs
provide their services. Next week, I have got to know about the current demand for SMEs’
services like the services of Pharmachy2U’s NHS repeat prescription items, online doctor
services, etc. Furthermore, I have come to know in the third week about the challenges that
are mostly faced in the UK while starting up a new SME. In week no. 4, I have gathered
some knowledge about the rules and regulations of SMEs that are needed to maintain and
follow strictly. In the fifth week, I have got to know the development and growth associated
with SMEs in the UK. At the week of six, I have got an idea of how to manage and deal with
the changing situation in the context of SMEs. In week no. 7, I have acquired knowledge
about the strategies that are followed by the SMEs to overcome their challenges. Next week, I
have learned about the importance of evaluating customer’s preferences to achieve the
desired goal of any SMEs. In the ninth week, I have learned about SME's current
development and growth strategy which help them to obtain their targeted goals. In the last
week, I have come to know about the government supports towards SMEs in the UK.
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References
Barnett, N., 2019. Opportunities for collaboration between pharmacists and clinical
pharmacologists to support medicines optimization in the UK. British Journal of Clinical
Pharmacology, 85(8), pp.1666-1669.
BGF. 2021. Pharmacy2U | BGF. [online] Available at: <https://www.bgf.co.uk/case-
studies/pharmacy2u/> [Accessed 18 April 2021].
Healy, P., 2021. The UK Pharmaceutical Industry: Current Challenges and Future Solutions.
[online] Issuu. Available at:
<https://issuu.com/stockholmnetwork/docs/uk_pharma_industry/40> [Accessed 19 April
2021].
New Relic. 2021. New Relic Is a Prescription for Growth at the United Kingdom’s Biggest
Online Pharmacy. [online] Available at:
<https://newrelic.com/resources/case-studies/Pharmacy2U-case-study> [Accessed 19 April
2021].
Owen, V., 2021. Online pharmacy Pharmacy2u secures £7m support. [online] This is
Money. Available at: <https://www.thisismoney.co.uk/money/smallbusiness/article-
4480244/Online-pharmacy-Pharmacy2u-secures-7m-support.html> [Accessed 18 April
2021].
Philip, A., Gessner-Wharton, M., Birney, P., Blee, J., Desai, A., Gorbach, C., Karralli, R.,
Lorimer, D., Munch, K., Nweke, G., Parekh, S., Puebla, M., Cox, R., Pitman, E. and Garey,
K., 2015. Pharmacy Practice Model Initiative task force report: Improving participation in a
survey on hospital pharmacy practices in Texas. American Journal of Health-System
Pharmacy, 72(12), pp.1053-1057.
Publications.parliament.uk. 2021. [online] Available at:
<https://publications.parliament.uk/pa/cm5801/cmpublic/Medicinesandmedical/memo/
MMDB01.pdf> [Accessed 19 April 2021].
The Pharmaceutical Journal, 2017. Pharmacy2U is criticized for confusing marketing tactics.
The Pharmaceutical Journal, 2019. Inside Pharmacy2U.
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The Pharmaceutical Journal, 2019. Pharmacy2U accessed summary care records 31 times in
a year, NHS Digital data show.
The Pharmaceutical Journal, 2020. Pharmacy2U reports a £16m loss in 2018/2019.
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