Differentiate between responsible competitiveness and irresponsible competitiveness. Identify four examples of Dis-Chem's sources of competitive advantage....

 

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Differentiate between responsible competitiveness and irresponsible competitiveness. Identify four examples of Dis-Chem's sources of competitive advantage. Appraise the Dis-Chem vision statement to determine whether it meets the characteristics of a well-formulated vision. Hint: Use a table with the following headings for the evaluation: components, yes/no, excerpts from the vision statement Analyse the market environment of Dis-Chem. 3.1 Use additional resources and the internet to identify the major competitors for Dis-Chem. 3.2 Explain Porter's five forces model and apply it to the pharmaceutical industry. Indicate the strength of each competitive force clearly. Technical requirements Dis-Chem-growing stronger and stronger Dis-Chem was founded in 1979 and is considered the pioneer in the discount pharmacy space. What set Dis-Chem apart from other pharmacies at that time, was the wide range of products on offer. The concept of a retail pharmacy was strengthened when, in the 1980s, Dis-Chem began expanding its offering of non-pharmaceutical products. Dis-Chem continued its expansion efforts and by 1997, introduced its own private label line of pharmaceutical products. Up to 2004, Dis-Chem was mostly a Gauteng store and in 2004, the national store rollout commenced with the opening of the first Dis-Chem in Cape Town. The founders, Ivan and Lynette Zaltzman recognised the importance of responsible leadership and established the Dis-Chem Foundation in 2006 an initiative to support charitable causes in South Africa. Dis-Chem continued its growth trajectory and soon had a strong national footprint and received recognition as one of the anchor stores in new shopping mall developments. In 2014, Dis-Chem was voted the best pharmacy brand by Reader's Digest South Africa. In the same year, Dis-Chem opened its first store in Windhoek, Namibia. By 2016, Dis-Chem celebrated 100 stores and listed close to 30% of their listed share capital on the K Johannesburg Stock Exchange. Dis-Chem expanded its reach after acquiring CJ Distribution, formerly known as CJ Pharmaceuticals. CJ Distribution is a pharmaceutical wholesaler that opened its doors in Delmas, Mpumalanga in 2004. As a wholesale supplier of pharmaceutical products to pharmacies, CJ plays an important role in streamlining the supply chain. Their competitive advantage lies in its extensive distribution network, professional staff and value-added services. They are recognised for personalised service, extensive product lines and several business partnerships. The brainchild of a retail pharmacist who identified a need for a reliable wholesale partner in the supply chain, the formation of the company set the foundation for a disruptive change in the industry. The introduction of Single Exit Pricing (SEP) in 2004 further reinforced the need for a reliable business partner that could support an independent pharmacy's entire business operation. A venture, which initially embraced the pharmacist and their store, has evolved into the supply of services to a wide number of sectors, including hospitals, doctors, the FMCG market, emergency medical services, specialised medical and veterinary services and clinics. To date, CJ Distributions offers access to over 20 000 product lines and their daily deliveries reach areas as far as Limpopo and Mpumalanga, with most pharmacies receiving same-day delivery services. Building on its brand as a leading pharmacy group in South Africa, Dis-Chem sees itself as a destination discount brand and targets customers in the mid to upper Living Standards Measure categories. By 2018, Dis-Chem acquired a basket of supplements and health brands, in partnership with USN, and introduced the concept of Click and Collect. In 2021, Dis-Chem acquired Baby City for R430 million. At the time, Dis-Chem said the baby products sector aligns with its pharmacy offerings. It sought to expand into the baby market which sees 900 000 babies born annually and expand its products categories to add baby gear such as prams, car seats, clothing, developmental toys, among other essentials, in one specialised destination. Executive director of Dis-Chem, Saul Saltzman, explained that "There has been a comprehensive focus on reinforcing the Baby City brand, which was already well- established as the unrivalled leader in its category, while strengthening the offering to shoppers to continually improve the Baby City customer experience." South Africa's baby goods market has experienced significant growth in competition as major retailers bolster their baby offering, even establishing it as a new category within their operations. Retailers such as Clicks and Shoprite are some of Dis-Chem's rivals in the category. Dis-Chem currently has 36 Baby City stores, with one more planned in the short-term. The retailer also acquired a second baby goods retailer brand called Baby Boom. Since acquiring Baby City, Dis-Chem opened a flagship clinic offering ante- and post-natal clinic services aimed at babies and toddlers. "The recently opened Baby City stores have a new look to enhance mom's and dad's shopping experience while continuing to offer the widest range of quality Baby products in store and expertise," Dis-Chem told Business Insider South Africa. 2 However, the clinics will not be limited to primary care but will still function and operate as the other Dis-Chem clinic offering all services found in a Dis-Chem-branded clinic. Dis-Chem also heeded to the call of government to play a meaningful role in the Covid-19 vaccine rollout. Dis-Chem opened its first dedicated vaccination site on the first day of the national roll-out, 17 May 2021. Since then, they have subsequently opened a further nine dedicated sites, at which they have administered more than 58 000 first doses of the Pfizer vaccine to healthcare workers and over 60s over a five-week period. After celebrating 44 years in business, Dis-Chem continues to build on its strengths. Its strategy is built on six pillars aimed at: increasing store footprint - aimed at opening an average of 20 new stores per year driving secondary retail opportunities through innovation - being first to market and enhancing customer convenience through its clinics and e-commerce platform driving revenue, margin and market share growth - negotiating better commercial terms with vendors - achieving strategic advantage through their integrated supply chain distribution cost savings and potential to expand into new geographies practicing good corporate citizenship - through a focus on environmental protection and partnering with Government on the National Health Insurance creating sustainable value for all its stakeholders by driving customer loyalty and strengthening brand recognition Overall, the Dis-Chem strategy is supported by strong human capital, information technology and sound financial and capital management. The Dis-Chem vision is to be the preferred and leading retail pharmacy Group in Southern Africa and to be the preferred partner for our customers, employees, suppliers, the communities in which we operate, our shareholders and regulators; to lead the market in terms of product innovation and range, superior customer service and loyalty rewards; to be the destination outlet of choice for health, beauty and other personal needs of our customers without losing the advantage of convenience; to operate in Southern Africa to take advantage of supply chain and other operating efficiencies. Dis-Chem mission statement: Our mission is to be a committed and caring team that strives to provide consistent value, low prices and service excellence for our customers' health and beauty needs while caring for the communities and environments in which we operate. Dis-Chem CEO affirms that they are confident that their strategies are intact and that they will continue along the strategic trajectory that they have established over the years. His message to shareholders expresses his appreciation for their people and their unrelenting support, contribution and efforts to ensuring that the Dis-Chem Group remains relevant to their vast and growing stakeholder base. Differentiate between responsible competitiveness and irresponsible competitiveness. Identify four examples of Dis-Chem's sources of competitive advantage. Appraise the Dis-Chem vision statement to determine whether it meets the characteristics of a well-formulated vision. Hint: Use a table with the following headings for the evaluation: components, yes/no, excerpts from the vision statement Analyse the market environment of Dis-Chem. 3.1 Use additional resources and the internet to identify the major competitors for Dis-Chem. 3.2 Explain Porter's five forces model and apply it to the pharmaceutical industry. Indicate the strength of each competitive force clearly. Technical requirements Dis-Chem-growing stronger and stronger Dis-Chem was founded in 1979 and is considered the pioneer in the discount pharmacy space. What set Dis-Chem apart from other pharmacies at that time, was the wide range of products on offer. The concept of a retail pharmacy was strengthened when, in the 1980s, Dis-Chem began expanding its offering of non-pharmaceutical products. Dis-Chem continued its expansion efforts and by 1997, introduced its own private label line of pharmaceutical products. Up to 2004, Dis-Chem was mostly a Gauteng store and in 2004, the national store rollout commenced with the opening of the first Dis-Chem in Cape Town. The founders, Ivan and Lynette Zaltzman recognised the importance of responsible leadership and established the Dis-Chem Foundation in 2006 an initiative to support charitable causes in South Africa. Dis-Chem continued its growth trajectory and soon had a strong national footprint and received recognition as one of the anchor stores in new shopping mall developments. In 2014, Dis-Chem was voted the best pharmacy brand by Reader's Digest South Africa. In the same year, Dis-Chem opened its first store in Windhoek, Namibia. By 2016, Dis-Chem celebrated 100 stores and listed close to 30% of their listed share capital on the K Johannesburg Stock Exchange. Dis-Chem expanded its reach after acquiring CJ Distribution, formerly known as CJ Pharmaceuticals. CJ Distribution is a pharmaceutical wholesaler that opened its doors in Delmas, Mpumalanga in 2004. As a wholesale supplier of pharmaceutical products to pharmacies, CJ plays an important role in streamlining the supply chain. Their competitive advantage lies in its extensive distribution network, professional staff and value-added services. They are recognised for personalised service, extensive product lines and several business partnerships. The brainchild of a retail pharmacist who identified a need for a reliable wholesale partner in the supply chain, the formation of the company set the foundation for a disruptive change in the industry. The introduction of Single Exit Pricing (SEP) in 2004 further reinforced the need for a reliable business partner that could support an independent pharmacy's entire business operation. A venture, which initially embraced the pharmacist and their store, has evolved into the supply of services to a wide number of sectors, including hospitals, doctors, the FMCG market, emergency medical services, specialised medical and veterinary services and clinics. To date, CJ Distributions offers access to over 20 000 product lines and their daily deliveries reach areas as far as Limpopo and Mpumalanga, with most pharmacies receiving same-day delivery services. Building on its brand as a leading pharmacy group in South Africa, Dis-Chem sees itself as a destination discount brand and targets customers in the mid to upper Living Standards Measure categories. By 2018, Dis-Chem acquired a basket of supplements and health brands, in partnership with USN, and introduced the concept of Click and Collect. In 2021, Dis-Chem acquired Baby City for R430 million. At the time, Dis-Chem said the baby products sector aligns with its pharmacy offerings. It sought to expand into the baby market which sees 900 000 babies born annually and expand its products categories to add baby gear such as prams, car seats, clothing, developmental toys, among other essentials, in one specialised destination. Executive director of Dis-Chem, Saul Saltzman, explained that "There has been a comprehensive focus on reinforcing the Baby City brand, which was already well- established as the unrivalled leader in its category, while strengthening the offering to shoppers to continually improve the Baby City customer experience." South Africa's baby goods market has experienced significant growth in competition as major retailers bolster their baby offering, even establishing it as a new category within their operations. Retailers such as Clicks and Shoprite are some of Dis-Chem's rivals in the category. Dis-Chem currently has 36 Baby City stores, with one more planned in the short-term. The retailer also acquired a second baby goods retailer brand called Baby Boom. Since acquiring Baby City, Dis-Chem opened a flagship clinic offering ante- and post-natal clinic services aimed at babies and toddlers. "The recently opened Baby City stores have a new look to enhance mom's and dad's shopping experience while continuing to offer the widest range of quality Baby products in store and expertise," Dis-Chem told Business Insider South Africa. 2 However, the clinics will not be limited to primary care but will still function and operate as the other Dis-Chem clinic offering all services found in a Dis-Chem-branded clinic. Dis-Chem also heeded to the call of government to play a meaningful role in the Covid-19 vaccine rollout. Dis-Chem opened its first dedicated vaccination site on the first day of the national roll-out, 17 May 2021. Since then, they have subsequently opened a further nine dedicated sites, at which they have administered more than 58 000 first doses of the Pfizer vaccine to healthcare workers and over 60s over a five-week period. After celebrating 44 years in business, Dis-Chem continues to build on its strengths. Its strategy is built on six pillars aimed at: increasing store footprint - aimed at opening an average of 20 new stores per year driving secondary retail opportunities through innovation - being first to market and enhancing customer convenience through its clinics and e-commerce platform driving revenue, margin and market share growth - negotiating better commercial terms with vendors - achieving strategic advantage through their integrated supply chain distribution cost savings and potential to expand into new geographies practicing good corporate citizenship - through a focus on environmental protection and partnering with Government on the National Health Insurance creating sustainable value for all its stakeholders by driving customer loyalty and strengthening brand recognition Overall, the Dis-Chem strategy is supported by strong human capital, information technology and sound financial and capital management. The Dis-Chem vision is to be the preferred and leading retail pharmacy Group in Southern Africa and to be the preferred partner for our customers, employees, suppliers, the communities in which we operate, our shareholders and regulators; to lead the market in terms of product innovation and range, superior customer service and loyalty rewards; to be the destination outlet of choice for health, beauty and other personal needs of our customers without losing the advantage of convenience; to operate in Southern Africa to take advantage of supply chain and other operating efficiencies. Dis-Chem mission statement: Our mission is to be a committed and caring team that strives to provide consistent value, low prices and service excellence for our customers' health and beauty needs while caring for the communities and environments in which we operate. Dis-Chem CEO affirms that they are confident that their strategies are intact and that they will continue along the strategic trajectory that they have established over the years. His message to shareholders expresses his appreciation for their people and their unrelenting support, contribution and efforts to ensuring that the Dis-Chem Group remains relevant to their vast and growing stakeholder base.