|
|
|
|
|
jean coutu, pharmacie analysis
|
|
|
INTRODUCTION In 1969, Jean Coutu and Louis Michaud began The Jean Coutu Discount Pharmacy in Montreal. In order to adapt to changing markets Jean Coutu revolutionized the pharmaceutical industry by introducing a retail chain that would provide pharmaceutical, parapharmaceutical and retail products at low prices, with superior customer service and extended business hours . Today, Jean Coutu is the largest pharmaceutical retail chain in Quebec. They are the second largest in Canada and the 8th largest in North America. Jean Coutu has emerged as one of the fastest growing pharmaceutical chains in their industry. CLAIM STATEMENT For a company to be considered a good long-term investment, many factors must be taken into account. The most important of these include growth, increasing market share, a sound theory of business, quality of customer service and steady growth in revenue and earnings. After extensive research it is apparent much of Jean Coutu’s success can be attributed to these main characteristics; therefore, making a great long-term investment. EXPANSION One of the obvious factors contributing to Jean Coutu’s increasing presence in the pharmaceutical retail industry is attributed to their ability to expand in both Canadian and American markets. Jean Coutu first entered the Canadian market in 1969 as a single outlet. In 1973, The Jean Coutu Discount Pharmacy began a franchising system in Quebec. At this time, they also opened a warehouse for centralized purchasing in order to lower expenses. In 1982 and 1983, Jean Coutu opened its first stores in both New Brunswick and Ontario. In 1987, Jean Coutu crossed the border into northeastern U.S. states through its affiliates the Jean Coutu Group U.S.A. Inc. In 1995, it made a strategic investment in buying 221 Brooks Drug stores located throughout New England’s seven states . Today Jean Coutu has as many as 252 outlets in Canada and 251 in America with a total of 17,650 employees. In addition, Jean Coutu has opened 40 clinics and one Santé Beauté in Canada. (Annual report, 2000-2001) In addition to this Coutu plans to open 16 more stores in the next year in Canada and the United States. (Jean Coutu profit jumps 29% in forth quarter, Jan 15 2002). As Alfred D. Chandler points out in his article titled “The Enduring Logic of Industrial Success”, two of the main components to insure a company’s success include economies of scale and economies of scope. Economies of scale includes expanding nationally and internationally in order to lower costs and breach new markets. Economies of scope refer to growth into related products. Jean Coutu has been able to achieve both economies of scale, by expanding their outlets in Canada and acquiring outlets in the U.S., and direct use of economies of scope by opening their clinics and the Santé Beauté which are both closely related to Jean Coutu’s speciality. MARKET SHARE AND VISION Their ability to grow in terms of scale and scope has provided them with a large market share. Market share is the size of the slice (share) of the pie (market) that a company maintains. As Chandler points out, this is a crucial component to a company’s success. They are currently the 8th largest pharmaceutical retail chain in North America, 2nd largest in Canada and the largest chain in Quebec in terms of sales and number of outlets. Jean Coutu has been able to maintain this high market share by constantly monitoring the changes in the environment. In their 1999-2000 annual report, Jean Coutu reported that in 1998 they were “pursuing modernization.” They focussed on improvement of customer service and outlets and using state of the art technologies to optimize their business processes. As Peter Drucker mentions in his article “The Theory of the Business,” one of things that makes a theory of business successful is its ability to change and adapt to the changing times. Jean Coutu, in their 2000-2001 annual report, discussed their new theory of business that would help them succeed in the changing markets. Jean Coutu emphasized the importance of having “a clear vision of an ever changing market.” There are four main assumptions that Jean Coutu made about the changing markets. 1. Demography: In 2000, Statistics Canada estimated that 12.5% of the population was over 65 years old and that by 2011 this percentage will increase to 14.5%.
|
|
|
|
Still Can't Find What Your Looking For? Then Try a Essay Search!
|
