PHARMACEUTICAL

MANAGEMENT
Nelson T. Tubon, R.Ph., M.S. Pharm., Ph.D. B.M.
Carol Geraldine C. Pablo, MSc.

Planning
Ano man ang gawat pag dinalidali, Ay hindi iigi ang
pagkakayari
Anything done with haste, Never
gets done well.
Failing to plan is planning to fail

PLANNING
is deciding in advance what to do, how
to 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 to
go.

 Planning
Assess internal resources
Establish goals
Develop general policies and
procedures
Develop business strategies

Preparing Comprehensive Plan

1. 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

Preparing Comprehensive Plan

2.Strategic Dimensions
This refers to the companys basic purpose
and objectives

A. Customers target
B. Product Mix
C. Geographic Market
D. Competitive Strength
E. Objectives and Standards

Preparing Comprehensive Plan

3.Program Dimensions
This refers to the specific aspects of
operations of a company

A. Marketing
B. Production
C. Finance
D. Administration

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

3 TYPES
1. Strategic plan
Choosing company objectives
Planning the organization
Setting personal policies
Setting financial policies
Setting marketing policies

2. Management Control
Formulating Budget
Planning staff budgets
Formulating personnel practices
Working capital expenditures
Deciding routine expenditures

3. Operational Planning
Controlling hiring
Monitoring the implementation of policies
Controlling credits extension
Scheduling production

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

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 organized
appropriately to meet the challenges in the future
4. Contingency Plan
To provide a fallback option or direction fail

Major Components of Planning

1. Goal
2. Mission

GOAL A future target or end result that an organization

wishes to achieve
PLAN The means devised for attempting to reach a
goal
MISSION The organizations purpose or fundamental
reason for existence
MISSION STATEMENT A broad declaration of the basic,
unique purpose and scope of operations that distinguish
the organization from others of its type

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 profitability:

What is the firm's commitment towards economic
objectives?

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?

Mission Statement Examples

Cadbury

"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 longer
lives. 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.

Pfizer Mission Statement:

"We will become the world's most valued company to patients, customers,
colleagues, investors, business partners, and the communities where we work
and live."

Pfizer Vision
At Pfizer, we're inspired 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 serious diseases. And why we are making them available to the people
who need them most. We believe that from progress comes hope and the
promise of a healthier world.

THE OVERALL PLANNING PROCESS

MISSION
VISION

GOALS/
OBJECTIVES

PLANS
AND
PROGRAMS

GOAL
ATTAINMENT

PLANNING CONCEPT
WHERE DO WE WANT TO GO?
(OBJECTIVES)

STRATEGIES
A

WHERE ARE WE NOW?

(present situations/existing resources)

HOW DO
REACH OUR
OBJECTIVES?

4 STAGES IN PLANNING
1.Diagnosing the problem
Setting objectives: Objectives may be set for the entire
organisation 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 ACA
Identifying alternative courses of action: Once objectives are
set, assumptions are made. Then the next step would be to act
upon them.

4 STAGES IN PLANNING
3.Projecting the results of each ACA
Evaluating 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.

7 ACTIVITIES IN PLANNING
1. Formulating forecasts

2. Establishing objectives
3. Setting policies
4. Determining procedures
5. Developing programs
6. Providing schedules
7. Preparing budgets

LEVELS OF GOALS

Broadly defined target or future end

results set by top management
(Organization Perspective)
SG

TG

OG

Targets or future end results usually

set 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)

LEVELS OF PLAN

TOP MANAGEMENT

SP

TP

Organization wide perspective

MIDDLE MANAGEMENT
Department perspective

OP

FIRST-LEVEL MANAGEMENT
Unit/individual perpective

8 Major Areas of Strategic Goals

Market Standing

Profit Requirement

Human Resources

Profit Requirement

Financial Resources
Innovation
Social Responsibility

Physical Resources

/ ACCURATE
/ REALISTIC

GOALS
OPERATIONAL

TACTICAL

STRATEGIC

1 year
1 to 5 years
5 + years

SHORT RANGE

INTERMEDIATE RANGE LONG RANGE

PLANS

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?

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?

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?

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?

5.Prepare a production plan

Is it more economical to rent to or buy production
equipment?
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?

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?

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?

THE CONCEPT OF
STRATEGIC
MANAGEMENT

Strategies Large scale action plans for

interacting with the environment in
order to achieve long term goals
Strategic Management A process
through which managers formulate
and implement strategies geared
toward optimizing strategic goal
achievement, given available
environmental and internal conditions

Strategy Formulation The process of identifying

the mission and strategic goals, conducting
competitive analysis, and developing
specific strategies

Strategic Implementation The process of

carrying out strategic plans and maintaining
control over how those plans are carried out
Competitive Advantage A significant edge over
the competition in dealing with competitive
forces

LEVELS OF STRATEGY
1.Corporate Level Strategy
2.Business Level Strategy
3.Functional Level Strategy

STRATEGIC MANAGEMENT PROCESS

Assess
Env.
Factors

Identify
Current
Mission
And
Strategic
Goals

Conduct
Competitive
Analysis
S
W
O
T

Assess
Org.
Factors

Strategy
Formulation

Develop
Specific
Strategies
Corporate
Business
Functional

Strategy
Implementation

Carry
Out
Strategic
Plans

Maintain
Strategic
Control

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

THE
DECISION

6. Choose the most Acceptable

Alternatives
5. 5. Evaluate Alternatives
4. Gather Appropriate Information
3. Identify Alternatives
2. Identify Constraints

1. Set Objectives

Planning Techniques and Tools

1. Forecasting
2. Break-Even-Analysis
3. Scheduling
4. Management by Objectives

TYPES OF PLANNING TOOLS

1.Quantitative Planning Tool (numerical
data)

A. PERT (Program Evaluation and

Review Technique)
Use to schedule projects whose
completion cannot be precisely
determined

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

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. Brainstorming is a group effort in solving a problem.

Employees are free to discuss their ideas or suggestions

C. Quality Circle is a cooperative effort of employees and a

supervisor

D. MBO is one-on-one approach which requires face-to-face

meeting between mangers and subordinates.

Characteristics of Business Plan

Objective
Clear
Logical
Simple

Flexible
Stable
Complete
integrated

OUTLINE OF A BUSINESS PLAN

Cover Sheet: Name of Business,Address
Business Goal
Strategies
Table of Content
Section One
THE BUSINESS

Section Two
FINANCIAL DATA

Description of the
business
Product/Services
Market
Location of the
Business
Competition
Management
Personnel
Application and
Expected effect of loan
Summary

Source and Application

Of funding
Capital Equipment list
Balance Sheet
Break-even Analysis
Income projection
Cash Flow Projection
Historical Financial
Reports for existing
business
Income statement
Tax returns

Section Three
Supporting
Documents

Personal balance sheet

Cost of living budget
Credit reports
Letters of reference
Job descriptions
Letters of intent
Copies of leases
Contacts
Legal Documents

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

MBO
a process through which specific
goals 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

STEPS IN THE MBO PROCESS

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

5. Review progress periodically

6. Appraise performance

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

Weaknesses of MBO
1.Tends to falter without strong, continual
commitment from top managers

2.Necessitates considerable training of

managers
3.Can be misused as a punitive device
4.May cause overemphasis of quantitative
goals

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

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

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

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 recurring
problems

3. To spend less time deciding on repetitive problems of

employees
4. Improves the quality of decision making

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 are
profit centers

3. Defined control targets

4. Using control data for long-range planning
5. Enhancing control through rewards and motivations

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

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

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.

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

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
measures
3 PRACTICAL USES OF BUDGETS
1. Planning tool in establishing objectives

2. Enables us to determine the most cost-efficient use

of scarce resources.
3. Provides a measure of performance

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

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

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

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

Internal Strengths and Weaknesses of Pharmacy Services

Programs

FACTORS
1. Profitability

2. Quality
3. Customer service
4. Staff
5. Operations

External Opportunities and Threats of Pharmacy

Services Program

FACTORS
1. Competition

2. Technology
3. Regulation
4. Reimbursement
5. Costs

6. Market/Customers

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