360 Visits: New Entrants & Peers

Blue: Positive to SugiRed: Negative to Sugi

ST: Low threat to Sugi’s differentiated positioning.LT: Players may present risks but not fatal.

Current Thoughts on Drug

Opportunity

FutureDrug

Strategy& Sector Outlook

• Hard to hire enough sales reps and pharmacists (3-5 needed per store).

• Current deregulation is not enough to enter beyond OTC 2 & 3.

• Mgmt believes Convenience and Drug stores not competitors due to a different customer base.

• Hard to hire enough sales reps and pharmacists (3-5 needed per store).

• Current deregulation is not enough to enter beyond OTC 2 & 3.

• Mgmt believes Convenience and Drug stores not competitors due to a different customer base.

• Sales rep 1 year work experience requirement is tough given employee turnover (planning to work something out with MatsuKiyo with their 400 sales rep).

• Planning to test drug sales at all stores to gauge customer reaction, could potentially decide to expand.

• Sales rep 1 year work experience requirement is tough given employee turnover (planning to work something out with MatsuKiyo with their 400 sales rep).

• Planning to test drug sales at all stores to gauge customer reaction, could potentially decide to expand.

• Dispensing drugs will not become one of their main revenue sources (plan to stick with core convenience goods sales).

• MK and Lawson expansion plan seems unrealistic and no synergies were found between two companies.

• Dispensing drugs will not become one of their main revenue sources (plan to stick with core convenience goods sales).

• MK and Lawson expansion plan seems unrealistic and no synergies were found between two companies.

• Drugs only a small portion of sales with focus to remain on Nakashoku (prepared food).

• Not very interested in Rx or OTC 1 and use OTC2&3 only to expand product line up.

• Find best locations for expansion, implement best practices.

• 7i thinks increasing single family and elderly will favor CS format over DS or SM.

• Drugs only a small portion of sales with focus to remain on Nakashoku (prepared food).

• Not very interested in Rx or OTC 1 and use OTC2&3 only to expand product line up.

• Find best locations for expansion, implement best practices.

• 7i thinks increasing single family and elderly will favor CS format over DS or SM.

• Would like to differentiate and sell Rx and OTC 1 in mid to long term (Lawson also thinks OTC 2 & 3 drugs will not be as attractive as Rx).

• Will try and test through partnership over next 3-5yrs to evaluate potential of drugs and prescription business (partner doesn’t have to be MatsuKiyo).

• Would like to differentiate and sell Rx and OTC 1 in mid to long term (Lawson also thinks OTC 2 & 3 drugs will not be as attractive as Rx).

• Will try and test through partnership over next 3-5yrs to evaluate potential of drugs and prescription business (partner doesn’t have to be MatsuKiyo).

• Focus on efficient operation (SD believes that experience competing in more developed Kanto/Tokyo region gives better logistics / general business operations know-how is better than Sugi).

• SD will suffer more competition with SMs as they carry more food than Sugi or MatsuKiyo.

• Focus on efficient operation (SD believes that experience competing in more developed Kanto/Tokyo region gives better logistics / general business operations know-how is better than Sugi).

• SD will suffer more competition with SMs as they carry more food than Sugi or MatsuKiyo.

SunDrugSunDrugPeer

LawsonLawsonNew Entrant

7i Holdings7i HoldingsNew Entrant