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PHARMACEUTICAL
MANAGEMENT
Nelson T. Tubon, R.Ph., M.S. Pharm., Ph.D. B.M.
Carol Geraldine C. Pablo, MSc.
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Planning
Ano man ang gawat pag dinali-dali, Ay hindi iigi ang
pagkakayari
Anything done with haste, Never
gets done well.
Failing to plan is planning to fail
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PL NNING
is deciding in advance what to do, howto do it, when to do it, who is to do it, and
how to measure performance. It bridges the
gap from where we are to where we want togo.
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Planning
Assess internal resources
Establish goals
Develop general policies andprocedures
Develop business strategies
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Preparing Comprehensive Plan1. Environmental Dimensions
This refers to the specific conditions of the country
A. Economic sector
B. Social sector
C. Political government sector
D. Scientific and technological sector
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Preparing Comprehensive Plan
2.Strategic Dimensions
This refers to the companys basic purpose
and objectives
A. Customers target
B. Product Mix
C. Geographic MarketD. Competitive Strength
E. Objectives and Standards
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Preparing Comprehensive Plan
3.Program Dimensions
This refers to the specific aspects of
operations of a company
A. Marketing
B. Production
C. FinanceD. Administration
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Preparing Comprehensive Plan
4.Behavioral Dimensions
This refers to the human elements in the
organization, which constitutes a very
important factor among Filipinos
A. The individual
B. Group Behavior
C. Interaction
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3 TYPES
1. Strategic plan
Choosing company objectives
Planning the organization
Setting personal policies
Setting financial policies
Setting marketing policies
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2. Management Control
Formulating Budget
Planning staff budgetsFormulating personnel practices
Working capital expenditures
Deciding routine expenditures
3. Operational Planning
Controlling hiring
Monitoring the implementation of policiesControlling credits extension
Scheduling production
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3 OBJECTIVES OF PLANNING
1. To offset uncertainty and change
2. To focus attention on objectives
3. To gain economical and efficient
operations
4. To Facilitate control
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OTHER TYPES OF PLANS
1. Business Plan
To make decision about investing in and moving
forward with a program
2. Resource Plan
To ensure the resources necessary to achieve the goals
and strategy of the organization
3. Organizational Plan
To ensure that the organization is organizedappropriately to meet the challenges in the future
4. Contingency Plan
To provide a fallback option or direction
fail
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Major Components of Planning
1. Goal
2. Mission
GOALA future target or end result that an organization
wishes to achieve
PLANThe means devised for attempting to reach a
goal
MISSIONThe organizations purpose or fundamental
reason for existence
MISSION STATEMENTA broad declaration of the basic,
unique purpose and scope of operations that distinguish
the organization from others of its type
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9 Components of Mission Statements
1.Customers:
Who are the enterprise's customers?
2. Products or services:
What are the firm's major products or services?
3. Markets:
Where does the firm compete?
4. Technology:
What is the firm's basic technology?
5. Concern for survival, growth, and profi tabi l i ty:
What is the firm's commitment towards economic
objectives?
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9 Components of Mission Statements
6. Philosophy:What are the basic beliefs, core values, aspirations and
philosophical priorities of the firm?
7. Self-concept:
What are the firm's major strengths and competitive
advantages?
8. Concern for public image:
What is the firm's public image?
9. Concern for employees:
What is the firm's attitude/orientation towards
employees?
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Mission Statement ExamplesCadbury
"Continuously be the leading, trusted and caring drugstore."
In the years to come, Mercury Drug will keep on looking for opportunities to
further enable customers to have more access to quality, safe and life-saving
medicines, thus enabling them to have more meaningful, healthier and longerlives. It will always pursue its commitment to better and further serve its
customers whose trust and loyal patronage has allowed Mercury Drug to be of
continued service to the nation.
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Pfizer Mission Statement:
"We wil l become the world's most valued company to patients, customers,
colleagues, investors, business partners, and the communi ties where we work
and live."
Pfizer Vision
At Pf izer, we' re inspir ed by a single goal: your health. That' s why we' re
dedicated to developing new, safe medicines to prevent and treat the world's
most ser ious diseases. And why we are making them avai lable to the people
who need them most. We believe that f rom progress comes hope and the
promise of a healthier wor ld.
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MISSION
VISION
GOALS/
OBJECTIVES
PLANS
AND
PROGRAMS
GOAL
ATTAINMENT
THE OVERALL PLANNING PROCESS
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PLANNING CONCEPT
WHERE DO WE WANT TO GO?(OBJECTIVES)
STRATEGIES
WHERE ARE WE NOW?
(present situations/existing resources)
A B C
HOW DO
REACH OUR
OBJECTIVES?
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4 STAGES IN PLANNING
1.Diagnosing the problemSetting objectives:Objectives may be set for the entireorganisation and each department or unit within the
organisation.
Developing premises:Planning is concerned with the future
which is uncertain and every planner is using conjucture
about what might happen in future.
2.Identifying ACAIdentifying alternative courses of action:Once objectives are
set, assumptions are made. Then the next step would be to act
upon them.
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4 STAGES IN PLANNING
3.Projecting the results of each ACAEvaluating alternative courses:The next step is to weigh the
pros and cons of each alternative.
4.Adopting the best ACA
Selecting an alternative:This is the real point of decision
making. The best plan has to be adopted and implemented.
Implement the plan: This is concerned with putting the plan
into action.
Follow-up action: Monitoring the plans are equally important
to ensure that objectives are achieved.
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7 ACTIVITIES IN PLANNING
1. Formulating forecasts2. Establishing objectives
3. Setting policies
4. Determining procedures
5. Developing programs
6. Providing schedules7. Preparing budgets
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Broadly defined target or future end
results set by top management
(Organization Perspective)
Targets or future end results usuallyset by middle management for
specific departments or units
(Department Perspective)
Targets or future end results set by
lower management that address
specific measurable outcomes
required from the lower levels (Unit
or Individual Perspective)
SG
TG
OG
LEVELS OF GOALS
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SP
TP
OP
TOP MANAGEMENT
Organization wide perspective
MIDDLE MANAGEMENT
Department perspective
FIRST-LEVEL MANAGEMENT
Unit/individual perpective
LEVELS OF PLAN
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8 Major Areas of Strategic Goals
Market Standing
Financial Resources
Profit Requirement
InnovationSocial Responsibility
Human Resources
Profit Requirement
Physical Resources
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/ ACCURATE
/ REALISTIC
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5 + years
1 to 5 years
1 year
GOALS
PLANS
OPERATIONAL TACTICAL STRATEGIC
SHORT RANGE INTERMEDIATE RANGE LONG RANGE
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STEPS IN BUSINESS PLAN
1.Evaluate your personal resources and
interest, and resources of the community. Do you have necessary funds?
Do you have the skills or management
experience?
Does government provide financial and technical
assistance?
Are raw materials available?
Are you interested in such business?
Do you have good human relation?
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2.Analyze your market?
Is there a good demand for your product or service?
How many competitors are there in the market?
What is your estimated share in the market?
Who are your customers?
Are they interested in the existing product or service?
Is it possible for you to offer a better quality or a
lower price?
Is there a reasonable profit?
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3.Choose a proper business location
Is it near your prospective customer?
Are there facilities like electricity, water,
transportation, and communication?
Is the place clean, decent, and peaceful?
Do you have good alternatives in case the best
location is expensive?
Is it accessible to raw materials and other
supplies?
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4.Prepare a financial plan
What are your objectives?
How much money do you need?
How will you spend the money?
Where will you get the money?
What are your expenses?
How soon can you recover your money?
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5.Prepare a production plan
Is it more economical to rent to or buy productionequipment?
Can you ensure or improve your product design or
quality?
Can your production facilities meet demand?
Do you have inventory control?
Do you have proper scheduling of production?
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6.Prepare an organizational plan
What type of business organization is most suitable?
Do you know the corresponding laws, policies, and
requirements of your business organization?
Are you aware of the advantages and disadvantages
of each type of business organization?
Who will be the officers and employees of your
enterprise? What are their duties and responsibilities?
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7.Prepare a management plan
What are your goals and objectives?
What are your strategies?
Do you have business policies for your customers?
Do you have human resources development for your
employees?
What is your program of social responsibility?
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THE CONCEPT OF
STR TEGIC
M N GEMENT
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StrategiesLarge scale action plans for
interacting with the environment inorder to achieve long term goals
Strategic ManagementA process
through which managers formulateand implement strategies geared
toward optimizing strategic goal
achievement, given availableenvironmental and internal conditions
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Strategy FormulationThe process of identifying
the mission and strategic goals, conducting
competitive analysis, and developingspecific strategies
Strategic ImplementationThe process of
carrying out strategic plans and maintainingcontrol over how those plans are carried out
Competitive AdvantageA significant edge over
the competition in dealing with competitive
forces
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LEVELS OF STRATEGY
1.Corporate Level Strategy
2.Business Level Strategy
3.Functional Level Strategy
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Identify
Current
MissionAnd
Strategic
Goals
Assess
Env.
Factors
Assess
Org.
Factors
Conduct
Competitive
AnalysisS
W
O
T
Develop
Specific
Strategies
Corporate
Business
Functional
CarryOut
Strategic
Plans
Maintain
Strategic
Control
Strategy
Implementation
Strategy
Formulation
STRATEGIC MANAGEMENT PROCESS
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5 COMPETITIVE FORCES MODEL
1. Rivalry
2. Bargaining power of customer
3. Bargaining power of suppliers
4. Threat of new Entrants
5. Threat of substitute products/services
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1. Set Objectives
2. Identify Constraints
3. Identify Alternatives
4. Gather Appropriate Information
5. 5. Evaluate Alternatives
6. Choose the most Acceptable
Alternatives
THE
DECISION
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Planning Techniques and Tools
1. Forecasting
2. Break-Even-Analysis
3. Scheduling
4. Management by Objectives
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TYPES OF PLANNING TOOLS
1.Quantitative Planning Tool (numericaldata)
A. PERT (Program Evaluation and
Review Technique)
Use to schedule projects whose
completion cannot be precisely
determined
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B.CPM (Critical Path Method)
It is used to schedule and control projects
whose completion can be precisely predicted
C.Break-even analysis compares total revenue
(TR) with total cost (TC)
TR = price x quantity while TC = fixed cost +
variable cost
When TR = TC, it is break-even, means that
expenses are equal
When TR > TC there is PROFIT
When TR < TC it is loss
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2.Qualitative Planning tools do not use
numbers like mathematics
expert judgment, opinion, or experiences.
A.Delphi technique. Forecasts are performed by consultants,experts, or specialists who are outsiders.
B.Brainstormingis a group effort in solving a problem.Employees are free to discuss their ideas or suggestions
C.Quality Circleis a cooperative effort of employees and asupervisor
D.MBO is one-on-one approach which requires face-to-facemeeting between mangers and subordinates.
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Characteristics of Business Plan
Objective
Clear
Logical
Simple
Flexible
Stable
Complete
integrated
OUTLINE OF A BUSINESS PLAN
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OUTLINE OF A BUSINESS PLANCover Sheet: Name of Business,Address
Business Goal
Strategies
Table of Content
Section One
THE BUSINESS
Description of thebusiness
Product/Services
Market
Location of the
Business
CompetitionManagement
Personnel
Application and
Expected effect of loan
Summary
Section Two
FINANCIAL DATA
Source and ApplicationOf funding
Capital Equipment list
Balance Sheet
Break-even Analysis
Income projection
Cash Flow ProjectionHistorical Financial
Reports for existing
business
Income statement
Tax returns
Section Three
Supporting
Documents
Personal balance sheet
Cost of living budget
Credit reports
Letters of referenceJob descriptions
Letters of intent
Copies of leases
Contacts
Legal Documents
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OBJECTIVES. Predetermining the results to be
accomplished, setting goals to guide all operations
of the enterprise
3 Resulting Issues In Setting Operating
Objectives
1. Clearly define broad goals
2. MBO
3. Modifying and improving operating objectives
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MBO
a process through which specificgoals are set collaboratively for the
organization as a whole and every unit
and individual within it; the goals are
then used as a basis for planning,
managing organizational activities, and
assessing and rewarding contributions
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1. Develop overall organization goals
2. Establish specific goals for various departments,
Subunits, and individuals
3. Formulate action plans
4. Implement and maintain self-control
6. Appraise performance
5. Review progress periodically
STEPS IN THE MBO PROCESS
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Strengths of MBO
1.Aids coordination of goals and plans
2.Helps clarify priorities and
expectations
3.Facilitates vertical and horizontal
communication
4.Fosters employee motivation
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Weaknesses of MBO
1.Tends to falter without strong, continualcommitment from top managers
2.Necessitates considerable training of
managers
3.Can be misused as a punitive device
4.May cause overemphasis of quantitativegoals
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6 FACTORS IN DEVELOPING REALISTIC
AND MEANINGFUL OBJECTIVES
1. Review of past performance
2. Setting realistic objectives
3. Stating specific objectives in measurable and
quantifiable terms
4. Upgrading periodically the objectives
5. Ownership in setting objectives by employees
6. Clear communication of objectives to all concerned
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5 STEPS IN ESTABLISHING OBJECTIVES
1. Clearly define the rationale of the existence of the
enterprise
2. Define the economic commitment of individuals
3. Define functional commitment
4. Define the target market and product segment
commitment
5. Define the geographic commitment where company
will focus on
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6 KEY RESULTS AREAS TO CONSIDER IN SETTING
OBJECTIVES
1. Profitability
2. Market share
3. Productivity
4. IT Leadership
5. Career path of employees
6. Enhanced core competencies
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POLICIES.A plan of action or a way of management to
ensure a uniform and consistent manner of
handling basic management problems
ADVANTAGES OF DEFINED POLICIES
1. To deliver wise decisions and judgments
2. Eliminates hasty and frustrating decision on recurringproblems
3. To spend less time deciding on repetitive problems of
employees
4. Improves the quality of decision making
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PROCEDURES. The method of doing things. Setting
control standards for desired outputs, quality, product
and process cost, delivery and customer services, etc.
5 TYPES OF CONTROL MECHANISM
1. Decentralizing without loss of control
2. Creating departments, division and subsidiaries that areprofit centers
3. Defined control targets
4. Using control data for long-range planning
5. Enhancing control through rewards and motivations
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4 CONSIDERATIONS IN USING PROCEDURES
1. Consistency
2. Kept to the absolute minimum
3. Research-based
4. Periodic review and revision as needed
PROGRAMS.The sequence of action steps to be
followed in achieving objectives in the light of a
highly dynamic and volatile environment
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6 STEPS IN EFFECTIVE PROGRAMMING
1. Review objectives
2. Determine major steps
3. Establish correct priorities
4. Systematically set schedule
5. Determine detailed steps on what tasks to be
accomplished and delegating to accountable
managers
6. Review and reconcile
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4 KEY POINTS IN EFFECTIVE PROGRAMMING
1. Periodic improvement
2. Coordination at all levels
3. Stability of programs
4. Active involvement of all concerned
BUDGETS.Allocating resources to accomplish objectives and
carry out programs.
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6 TYPES OF APPROPRIATION
BUDGETS
1. Land, building and equipment
2. R and D for new products and new processes
3. Institutional advertising and other forms of
promotion
4. Training and development of personnel
5. Market penetration strategies
6. Market development strategies
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3 BASIC STEPS IN BUDGETING
1. Translating plans into accounting results
2. Adjusting plans to make it workable
3. The resulting budgets should be useful in
highlighting areas that need corrective
measures3 PRACTICAL USES OF BUDGETS
1. Planning tool in establishing objectives
2. Enables us to determine the most cost-efficient useof scarce resources.
3. Provides a measure of performance
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4 FACTORS TO CONSIDER IN THE
DEVELOPMENT OF BUDGETS
1. Building budgets from the bottom up and top down
2. Budgets based on established programs
3. Accountability for budgets when the managers own the
operations
4. Maintaining the integrity of the budget
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STEPS IN THE PLANNING PROCESS
1. Define or orient the planning process to a singular
purpose or a desired result (vision and mission)2. Assess the current situation
3. Establish goals
4. Identify strategies to reach those goals
5. Establish objectives that support progress toward goals
6. Define responsibilities and timeless for each objectives
7. Write and communicate the plan
8. Monitor progress toward meeting goals and objectives
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Steps Used In the Strategic Planning Process by
Community Pharmacies
1. Develop mission statement
2. Identify strengths and weaknesses
3. Identify threats and opportunities
4. Formulate and select strategies
5. Review pharmacy structure and system
6. Implement strategies
7. Evaluate implemented strategies
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Barriers to Effective Planning
1. Failure to commit sufficient time to the planning effort
2. Interpersonal issues such as struggles over power or
politics and individual or group resistance to change
3. Lack of planning skills
4. Failure to plan far enough into the future
5. Constantly changing environment
6. Failure to implement due to lack of time or lack of
resources
7. Failure to monitor progress
8. Lack of support of top executive/ management
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Internal Strengths and Weaknesses of Pharmacy Services
Programs
FACTORS
1. Profitability
2. Quality
3. Customer service
4. Staff
5. Operations
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External Opportunities and Threats of Pharmacy
Services Program
FACTORS
1. Competition
2. Technology
3. Regulation
4. Reimbursement
5. Costs
6. Market/Customers
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Typical Table of Contents of the Business Plan
1. Executive summary
2. Background and description
3. Market analysis and strategy
4. Operational structure and processes
5. Financial projections
6. Milestones, schedule, and action plan
7. Critical risks and opportunities
8. Exit strategy
9. Conclusion
10. Supportive documents