upGrad/Deakin Global MBA

Student Assessment Submission Cover Sheet

MBG771 – Strategy Formulation

Course 2 – Strategic Capabilities

Aster Pharmacy

INTERNAL ENVIRONMENT ANALYSIS

“I certify that the attached work is entirely my own, except where material quoted or
paraphrased is acknowledged in the text. I also declare that it has not been submitted
for assessment in any other unit or course.”

Name Dhairyakant Mishra

Student ID: 22116797
Aster Pharmacy

Internal Environment Analysis

Prepared for
Dr. Azad Moopen
Mr. TJ Wilson
Ms. Alisha Moopen
Mr. Anoop Moopen
Mr. Shamsudheen AP
Mr. Suresh Kumar
Dr. Layla Mohamed Al-Marzooki
Prof. Biju Varkkey
Mr. C John George
Mr. Daniel Mintz
Mr. James Mathew
Mr. Sridar Arvamudhan Iyenger

Prepared by:
Dhairyakant Mishra
Date: March 31, 2022
EXECUTIVE SUMMARY

This report presents a critical analysis of the Internal environment of Aster Pharmacy - A division of Aster DM Healthcare. The report identifies
Aster Pharmacy’s strategic and dynamic capabilities and outlines the short-term as well as the long-term business and corporate-level
strategies using different management theories and techniques.
We’ve used different management methods including the Small Wood Ulrich Framework, Value Chain, and VRIO analysis to assess the
internal environment conditions of Aster Pharmacy. The analysis offered a very good clarity on the dynamic and strategic capabilities of Aster
Pharmacy. Further, to understand Aster Pharmacy’s business as well as corporate-level strategy, different management techniques including
BCG, and Ansoff matrix were used.
The organization structure was also analyzed to understand the different dimensions of corporate hierarchy as well as the centralization as well
as the decentralization mix in the decision-making processes.
Through the analytical examination of Aster Pharmacy, It has been learned that the company is poor in its talent management however it did
well in the collaboration and innovations in India. The company’s sensing capabilities are relatively better than its sensing and reconfiguration.
Aster Pharmacy needs to aggressively invest to penetrate the market of Sports Nutrition, OTC drugs, and Wellness Products and should think
about divesting the Feminine Hygiene Care Products.

Currently, Aster Pharmacy has positioned itself only in the southern region of India with over 100+ stores and eyeing to have 650+ stores by the
end of 2025. The company is yet to launch the Online Store which will be very critical for the rapid growth in the Indian Market.
In the end, recommended strategies for the short, medium, and long term have been presented using different management techniques
including The Parenting Mix, Strategy clock, and Change Kaleidoscope
TABLE OF CONTENTS

External Environment Analysis 4

Internal Environment Analysis 6

Strategy Analysis 7
Business Level 7
Corporate Level 7

Strategy Formulation 10
Appendix 12
Small Wood Ulrich Framework 12
Dynamic Capabilities 14
Porter’s Value Chain Analysis 15
VRIO Framework 17
Product Portfolio Analysis (BCG Matrix) 18
Ansoff Matrix 22
The Parenting Matrix 23
Strategy Clock 24
Change Kaleidoscope Model 25
External Environment Analysis

Based on Assignment 1 - Macro-Level Analysis and Industry Level Analysis, Aster Pharmacy which is a retail pharmacy division of its parent
company Aster DM healthcare, entered the Indian market recently, however it's size and coverage in India as compared to its competitors -
Apollo One and Medplus, is very tiny.

Aster Pharmacy currently has over 100+ pharmacy stores in India and its healthcare business has 14 hospitals and 9 clinics with a total number
of 3,757 beds. In Q3 2021, the company earned ₹548.80 crores. The company has plans to have 650+ pharmacy stores by the end of 2025
however its competitors- Apollo One and Medplus already have 4200+ stores and 2477+ stores, respectively.
Mishra_Aster Pharmacy_Dhairyakant(March 2022)

India’s retail pharmacy Industry is very huge and only 8-9% of pharma retail business is organized. Also, the E-Pharmacy industry has been
booming in India and is expected to grow at a CAGR of 44% and is expected to achieve a market size of $4.5bn by 2025.
Mishra_Aster Pharmacy_Dhairyakant(March 2022)

As far as the opportunities for Aster Pharmacy is concerned, the company can widen its coverage in the Tier 2 cities and rural areas where most
of the pharmacy retail chains are yet to enter.

Most pharma retail companies have started aggressively selling wellness, Immunity, and preventive healthcare products after Covid 19
pandemic, as it brought behavioral changes in the people and taught the importance of a healthy body. This also brings a great opportunity for
Aster Pharmacy as the company can add such products and offer them at affordable rates.

As discussed previously, the growth of E-pharmacy is phenomenal in India. Aster Pharmacy already started its E-Pharmacy in UAE, however, in
India, it is yet to be started. Considering the projected growth trajectory of this industry, this could be one of the biggest opportunities for Aster
Pharmacy to leverage.
Another opportunity that Aster Pharmacy may look into it is the Ambulance and Home Nursing Services. A very few companies in the retail
pharma space have either of these. Aster Pharmacy can add these two services to its bucket and may disrupt the existing market.

Aster Pharmacy has also some threats in India, including the entry of new players, the existing competitors, and Inflation. International retail
giants like Amazon and Walmart have already had their online presence in India for a long and if they also decide to open physical retail
pharma-shop, the competition will be severe. Also, the entry barriers in this industry are not strong and the government’s FDI policy for
International retailers is very flexible, which makes the retail pharma industry very competitive.

The biggest threat to Aster Pharmacy is the existing two big companies - Apollo One and Medplus, which have already close to 7000 physical
stores(Apollo+Medplus) in India, Aster is expecting to have 650 stores by 2025, till that time, these two giants will be much ahead from Aster
Pharmacy considering the current growth projections.

In the end, after doing the external environment analysis, we concluded that there is an opportunity in Tier 2 cities and rural areas of India for
Aster Pharmacy, also GOI aims to 2X its health expenditure with an objective to strengthen the health infrastructure, so in coming 10 years, the
company may see a good health infrastructure in India that will be helpful for Aster Pharmacy to grow.

The company can also evaluate the E-pharmacy option also by launching an app, considering the growth of a CAGR of 44% in India, also the
projected 650+ stores by 2025 will not be enough to compete against the competitors - Apollo and Medplus.
Mishra_Aster Pharmacy_Dhairyakant(March 2022)
Internal Environment Analysis

To assess the internal resources of Aster Pharmacy, management techniques and frameworks including Smallwood Ulrich Framework, Porter’s
Value Chain Analysis, Dynamic Capabilities, and VRIO Model have been used.

The Smallwood Ulrich Framework, which analyses 11 capabilities of Aster Pharmacy, suggests that Aster Pharmacy is very poor in the Talent
Management as on most of the employer rating websites, the employees gave very negative reviews to Aster Pharmacy citing the bad word
culture, lower pay, no exposure and bad appraisal system in the company. Capabilities like Speed, Collaboration, and Innovation have
impressed us as it seems Aster Pharmacy is very good at this.

The company has opened 100+ stores within a year in India and is expecting to open 300 stores in the coming 2 years. Also, an investment plan
of ₹900 crores has already been announced for the next 3 years. Partnering with government organizations and schemes like Atal Mission and
Niti Aaayog to offer better healthcare services and collaborating with Motherson to test and validate diagnostic devices and solutions proves
Aster’s good Collaborative capabilities. Aster also positioned itself as one of the leaders in the innovation by pivoting the Satellite Labs, and
Health Experience Centre and introducing AI/blockchain to advance the Digital Primary care. Other capabilities including Leadership and
Efficiency demand improvement and currently act as weaknesses apart from Talent.

While evaluating the Dynamic Capabilities, it is observed that Aster Pharmacy is relatively better at Sensing as compared to Seizing and
Reconfiguration. Aster successfully scanned the business opportunity for Pharmacy retail company in India during Covid-19 and quickly
launched its pharmacy stores in India in Feb 2021, however, failed to introduce online stores/e-pharmacy which witnessed one of the highest
growth during the pandemic.

Moving further with Value Chain Analysis and VRIO, It is observed that the Operations of Aster Pharmacy emerged as its Sustainable
Competitive Advantage as it is valuable, rare, difficult to imitate, and supported by Organisation. Its Services have the temporary advantages
which include its Aster Reward Program as well as the medicine refill reminders. Rest other resources/capabilities have comparative parity only.
Strategy Analysis

Aster pharmacy under a license agreement with ARPL has been running its retail pharmacy business since Feb 2021 with a strategic objective to
become “Your Friendly Neighbourhood Pharmacy”. Aster has over 100 physical stores in India, mostly concentrated in the southern region of
India, and eyeing to target the rural areas of India in the coming 2-3 years.

By the end of 2025, Aster Pharmacy is expecting to have 650+ stores across India however there are no plans for going online or adopting
E-Pharmacy or Telemedicine till writing this report. Though the company wants to expand in India and focus on the Indian market but the
current speed and scaling projection as compared to its competitors Medplus and Apollo One are slow and tiny respectively.
Sohni Das(Feb 2022)

Currently, Aster Pharmacy doesn’t seem to diversify its business and its strategy has no clarity if the company is interested to sense the variety
of opportunities available in the changing environment of India including Online Pharmacy, Home Nursing, Ambulance Services, and
Telemedicine. Aster Pharmacy currently is being controlled by UAE as no CEO for Indian operations has been appointed.
Aster DM Healthcare(2022)

The company doesn’t even spend a reasonable amount on its marketing to make its brand presence as we were unable to find any print or
online advertisement of Aster Pharmacy in recent times. Aster’s current strategy is only to expand the physical stores’ footprint across India
and to offer quality products at affordable rates.

Business Level

According to a KPMG report, the Indian E-Pharmacy market has a projected growth of over CAGR of 40-45% against the global growth of CAGR
of 15-20%. (Vijay Chawla, 2021) and according to a rough estimate, over 900,000 pharma stores exist in India however only 3-4% are operating
in an organized way. (V. RAVICHANDRAN(November 2019).
Most of the organized retail pharma stores have footprints in urban/metro cities, and Tier-II as well as the rural areas, are still unbanked and
there is a huge demand-supply gap. (Ashraf Biran, Economic Times, 2022)

With the help of BCG Matrix, the market growth rate and the market share of the products which have been sold by Aster Pharmacy are
analysed to understand which product needs attention and further investment. Also, the BCG matrix enables us to understand the products of
Aster Pharmacy can be improved or divested.

As far as the wellness products offered by Aster Pharmacy is concerned, it has a very high market share as its market size is worth $1.5 trillion
however its annual growth rate is 5-10% only. Therefore, it falls under Cash Cows and needs to be harvested. Sports Nutritional Products, OTC
Drugs, and Medical Devices have a very high market share as well as a robust market growth in the coming 5 years due to many factors
including the Indian Government’s push for Sports in India, and the rising number of Diabetes and heart patients in India. These three products
fall under Stars and require aggressive investment to capture more market share in the coming 2-3 years.

Feminine Hygiene Care products which have currently very limited demands on Urban Household only due to the adequate awareness as
compared to the rural belt, falls under Question mark. Aster Pharmacy is targeting the rural areas of India and therefore, this is not the right to
divert its focus on such products which are largely getting sold in the Urban cities.

Corporate Level

To understand and assess the corporate level strategies, Ansoff Matrix has been used which gave us a fair idea of the four strategies including
Market Penetration, Product Development, Market Development, and Diversification.

As far as the Market Penetration is concerned, Wellness, OTC Drugs, and Sports Nutrition products should be aggressively penetrated in the
market considering the high growth rate and huge market size. In the Product Development, E-Pharmacy/Online Stores fall. Launching
Telemedicine services using the existing capability and resources of Aster DM Healthcare fall under Market Development. In the previous
assignment, while doing the Blue Ocean analysis, two areas were identified where there is a good scope for Aster Pharmacy were - Home
Nursing Services and Ambulance Service, these two fall under the Diversification quadrant of Ansoff Matrix.

Organisation Structure

As far as the Organisation Structure is concerned, it is primarily a Functional Structure/Vertical Structure where the leadership role is defined
according to the functions. Aster Pharmacy has no such specific and clearly defined organisation structure, therefore we have taken Aster DM
Healthcare, the parent company of Aster Pharmacy, under consideration to analyse the Organisation Structure.

Mr Azad Moopen is the Chairman and Managing Director of Aster DM Healthcare and all the functional heads report to him. The 2nd in the
Hierarchy is Ms Alisha Moopen who is the deputy managing director of the company.

As far as different function head is concerned, Mr Sreenath P. Reddy is heading the finance and is Group Chief Finance Officer. Mr Brandom
Rowberry, in the month of May 2021 appointed as the CEO of Digital Health Business to develop digital capabilities across all the 7 countries
where Aster has a presence.

Mr. N.S Balasubramaniam is the CEO of Aster Pharmacy Retail for the UAE Business and Dr Shanila Lajju is the CEO of Medicare Hospitals and
Medical Centres of Aster DM Healthcare.
Aster DM Healthcare(2022)

After analyzing the Organisation Structure of Aster Dm Healthcare, two functions - Digital Health Business and Pharmacy Retail Division found
directly related to the business of Aster Pharmacy Retail Business.

As far as the strategic objective of Aster Pharmacy is concerned, the company would like to create customer-centric and easily accessible
friendly pharmacies in every neighbourhood that “deliver good health and happiness”.
(Gulf News, 2018)

Recommendations

1. The Organisation needs to appoint an Industry expert who can lead the Pharmacy Retail Business In India considering the projected
expansion program In India, as of now, only the UAE head of Pharmacy Retail Business exists in the company.
(PTI, Dec 2021)

2. The Digital Health Business Segment can be further divided into two parts - E-Pharmacy and Home Nursing Services.

3. Considering the market size of India, India’s Operations needs to be segmentise on a functional basis.

Organisational Structure Of Aster DM Healthcare, Leadership Only

Strategy Formulation

Based on all the management techniques, framework, and research, we’ve segregated strategy recommendations into three parts- Short,
Medium, and Long Term.
Strategy #1 (Short Term)
1. Advertising about the services of Aster Pharmacy to create a brand value and for better positioning in the Indian market.
2. Leveraging on the opportunities of the E-pharmacy Industry in India by opening Online Stores Immediately.
3. Fix the Talent Management issues by offering a better working environment and upskilling opportunities for the overall development of
employees.
Strategy #2(Medium Term)
1. Currently, Aster Pharmacy is concentrated in the southern region of India, it is recommended to expand the physical stores in other
parts of India as well.
2. Aster Pharmacy Retail business has no CEO yet, and therefore the company’s scores on 11 capabilities are not impressive. To build and
develop the strategic capabilities of Aster Pharmacy, A dedicated CEO for India’s Pharmacy business is recommended to appoint.

3. Most Pharmacy Retailers either Medplus or Apollo offers many health-related services inclduing Telemedicine and Diagnostic Test with
a home collection facility. It gives the customer an added value proposition. Therefore it is recommended to add Telemedicine as one
add-on service by Aster Pharmacy by using the existing capabilities and resources of Aster DM healthcare.
Strategy #2(Long Term)
1. In the long run, it is recommended to launch a super app by Aster Pharmacy where the company can bring all the possible elements of
the Healthcare Ecosystem- from Telemedicine to Online Medicine Delivery to Home Collection of samples to Online booking of Bed in
the Hospitals.
2. Aster Pharmacy, in the long run, advanced its physical store and launch hybrid pharma stores in the Tier1 cities where the customers
can just scan the prescription and by using AI and robotics, the medicine will automatically fall from the Kiosk.
Reference

Aman Puri(Jan 2022), Faster, higher, stronger: The rise of India’s sports nutrition market, Healthcareradius, Accessed on March 31, 2022(Link)

Ambition Box(2022), Aster Dm Healthcare Reviews 124 Reviews, Ambition Box, Accessed on March 31, 2022(Link)

ANI(August 2019), Aster to set-up an innovation and research hub in India and GCC, Economic Times, Accessed on March 31, 2022(Link)

Ashraf Biran(Jan 11, 2022), Emergence of retail pharmacy chains in India to streamline unorganized Indian retail pharmacy sector, Financial
Express, Accessed on Feb 21, 2022(Link)

Aster DM Healthcare(2021), Atal Innovation Mission, NITI Aayog Partners with Aster DM Healthcare, Aster DM, Accessed on March 31,
2022(Link)

Aster DM Healthcare(2022), Leadership and Board Of Directors Aster DM Healthcare, Aster DM Healthcare, Accessed On March 31, 2022(Link)

BL Bengaluru(Feb 2022), Aster DM Healthcare Q3 consolidated revenue up 19 percent to ₹2,650 crores, Accessed on March 31, 2022(Link)

Charu Sehgal & Anjan Bose( March 2016), Medical Devices: Making in India - A Leap for Indian Healthcare, Deloitte, Accessed on March 31,
2022(Link)

Glassdoor(2022), Aster Dm Healthcare Reviews 197 Reviews, Glassdoor, Accessed on March 31, 2022(Link)

Gulshan Bakhtiani(March 2022), How Retail Pharmacies are riding the wave of change in wellness sector, Financial Express, Accessed on March
31, 2022(Link)

IBEF(Nov 21), Medical Devices Industry In India, IBEF, Accessed on March 31, 2022(Link)
Indeed(2022), Aster Dm Healthcare Reviews 388 Reviews, Indeed, Accessed on March 31, 2022(Link)

Gulf News(Aug 2018), Aster Pharmacy: Innovation and customer satisfaction helm growth strategy, Gulf News, Accessed on March 31,
2022(Link)

Mishra_Aster Pharmacy_Dhairyakant(March 2022), External Environment Analysis, Deakin, Library, Accessed on March 31, 2022

Norm Smallwood and Dave Ulrich(June 2004), Capitalizing on Capabilities, HBR, Accessed on March 31, 2022(Link)

PTI(June 15, 2021), Motherson, Aster DM Healthcare come together for testing, validation of new diagnostic devices, Economic Times, Accessed
on March 31, 2022(Link)

PTI(Dec 202), Aster Healthcare: Moopen plans to demerge Gulf ops, focus on India, Economic Times, Accessed on March 31, 2022(Link)

PTI(Nov 2021), Aster DM Healthcare to expand in India with Rs 900 cr capex over next 3 yrs, Business Standard, Accessed on March 31,
2022(Link)

Siemens Healthineers(March 2022), Partnership between Aster DM Healthcare and Siemens Healthineers set to advance healthcare innovation
in the UAE & GCC, Siemens, Accessed on March 31, 2022(Link)

PTI(June 2020), COVID-19 impact: Aster DM Healthcare sees 35% fall in India, gulf revenues, Economic Times, Accessed on March 31, 2022(Link)

Vijay Chawla(10 December 2021), E-pharmacies: the future of pharma retail, KPMG, Accessed on March 31, 2022(Link)

V. RAVICHANDRAN(November 2019), RETAIL PHARMACY MARKET SCENARIO IN INDIA, JCT Journal, Accessed on Feb 17, 2022(Link)

Value Research( Feb 2018), Aster DM Healthcare: Information Analysis, Value Research, Accessed on March 31, 2022(Link)
Sohni Das(Feb 2022), Azad Moopen on Aster's India expansion plans and more, Business Standard, Accessed on March 31, 2022(Link)

Appendix

Small Wood Ulrich Framework

Table 1

Factor Rating Explanation Source

Indeed(2022)
After reviewing several credible employer rating websites, it can be established that Aster DM
Healthcare is not good at attracting a good talent pool. The average rating of Aster on these Glassdoor(2022)
Talent websites is 3.5 which makes it either an average company to work for or a company that doesn’t
hire the talent according to its culture. Most of the employees complained about the long working Ambition Box(2022)
hours, bad appraisal, and no career growth.
3
PTI(Nov 2021)
As far as the speed is concerned, the organization is reasonably quick. By the end of 2025, the
company is planning to have 650+ stores in India, the company has already 100+ stores in India Sohni Das(Feb 2022)
within a year and will open 150 stores this year and 150 stores next year.
Speed
Business Line(Feb 2022)
Also, the organization is looking to invest ₹900 crores in three years, ₹300 crores each year. Apart
from these, Aster is aggressively adding healthcare experience centers and labs and is eyeing to have BL Bengaluru(Feb
5 33 labs and 400 experience centers by the end of FY 23. 2022)
Shared
mindset & Aster DM healthcare claims to live its brand promise of “ We’ll treat you well” which extends to
coherent brand employees also. However, from the employees’ standpoint, this doesn’t seem to be completely true Aster DM Healthcare,
identity 3 after reviewing the employees’ feedback shared on different websites. Our Values(2022)

Accountability
3
BL Bengaluru(Feb
2022)
Aster DM healthcare has made successful collaborations in India to gain efficiency. In India, the
company partnered with ​Alfaone Retail Pharmacies Private Limited (ARPPL) under a brand license
Aster DM Healthcare-
agreement to run its Pharmacy Stores.
Innovation(2021)
Collaboration
Another successful collaboration was made last year with Atal Innovation Mission and Niti Aayog to
improve healthcare in India. PTI(2021)

Aster also collaborated with Motherson(medical equipment manufacturer) in 2021 to test and
5 validate diagnostic devices and solutions

Learning
3
As far as the competencies are concerned, the leadership structure looks very fascinating and
constitutes an industry veteran.

For example, The CEO of the Digital Health Business - Mr. Brandon, has a wide range of experience in
Leadership
the Investment firm as well as the Healthcare Industry, his key roles have been primary in strategy Aster Dm Healthcare
and innovations. Leadership
(2022)
3 The same goes with Mr. N S Subramaniam whose professional competency is just phenomenal
considering the position he has served so far.

Aster DM forms enduring relationships of trust with targeted customers. A report, published by a
Customer
financial research website, asserted that Aster has a great pool of repeated customer usage,
connectivity
5 especially the cardiac and neurological services. Value Research(2018)

Strategic unity
3
Aster Dm healthcare is very aggressive when it comes to Innovation. Apart from traditional
healthcare services including the Hospitals and Pharmacy division, the organisation is constantly
adding innovation to its services.
BL Bengaluru(Feb
2022)
Innovation Satellite Labs and Experience Centres are such few examples. The organisation has also partnered
with Technology companies to develop innovative products for the healthcare industry.
Siemens(2022)
Aster also announced to set up the Innovation centers in India to focus on digital primary care by
5 introducing technologies like AI and blockchain. ANI(2019)
During Covid 19, the organisation witnessed a 35% fall in its revenue and failed to perform as per
Efficiency
3 expectations. PTI(2020)

Dynamic Capabilities

Table 2
Seizing Reconfiguring
Sensing
(Ability to mobilize internal resources (Enable the reconfiguration of existing
(Ability to scan external Conclusion Source
to address the available opportunity capabilities to support competitive
threats and opportunities)
and utilise it for the company) advantage in a changing environment)
PTI(Nov 2021)
Aster Pharmacy very
quickly understood the The company mobilize its resources Aster Pharmacy is able to
Sohni Das(Feb 2022)
opportunity in the Indian very fastly during Covid 19 and The pharmacists and other experts leverage the new
Pharmacy Market, which is opened its first store in Feb 2021, till working in the Aster DM healthcare have opportunities available in
Business Line(Feb,
largely unorganised, and now it has 100+ stores and planning been mobilized to make the most of it. the Indian Pharmacy
2022)
only 8-9 % of it is to add 300 more stores by FY 2023 Industry.
organised.
BL Bengaluru(Feb 2022)
The E-Pharmacy witnessed
phenomenal growth during Aster Pharmacy failed to introduce
Aster Pharmacy failed to reconfigure the Aster Pharmacy is a little
the Covid 19 due to the E-pharmacy services, although the Aster
existing capabilities to support competitive reluctant in acquiring new
lockdown and change in company has e-pharmacy services in Pharmacy(2022)
advantage in a changing environment capabilities.
the behavior of people at UAE.
large.
During Covid 19, we’ve witnessed a
behavioral change in the people as The company has
more focus on preventive healthcare successfully managed to
Adding Wellness Product The company successfully reconfigure its Mishra_Aster
products including Immunity, offer the products and
and Sports Nutrition in the resources to support the existing Pharmacy_Dhairyakant(
Wellness, and Nutritional products services according to the
basket capabilities. March 2022)
were given. Aster Pharmacy very customers’ demands in the
quickie adapt to it and added these changing environment.
products on their website.
Porter’s Value Chain Analysis

Table 3
Factors/ Activities Description Source
Handling of external vendors, Stockists, and suppliers of different pharma products
including the OTC Drugs, Personal Care Hygiene, feminine care, wellness products, and Aster Pharmacy
Inbound logistics sports nutrition belong to Inbound Logistics. Website(2022)
The allocation of the products across all the 100+ pharmacy stores according to the
demand of stores, checking the validity of prescriptions before processing the medicine
order, Inventory management and billing of the products belong to Operations.

The company uses Gofrugal and Net trade Systems for its operations. Aster Pharmacy
Operations Website(2022)
Home Delivery of the medicine and other wellness products to the customers belongs Aster Pharmacy
Outbound Logistics to Outbound Logistic. Website(2022)
Promoting the efficacy of each medicine, as they are expected to treat specific
ailments, Secure Rewards Program, offering discounts, subscription plans, and Mega
Saving offers on medicines belong to Marketing and Sales of Aster Pharmacy.

The company has positioned itself as the Neighbourhood pharmacy, however, no

Marketing and marketing or promotional activities have been observed either in print or in digital Aster Pharmacy
sales media. Website(2022
Primary chain Chat Support, Customer Care Services, Booking Medicine order on Whatsapp, Medicine Aster Pharmacy
activities Services Refill Reminders, and Processing return of medicines belong to Services of Aster Website(2022)
Pharmacy.
Infrastructure here pertains to all the 100+ pharmacy stores of Aster Pharmacy
operational in India and is under construction. The company is primarily concentrated
in the southern region of India including Karnataka, Tamilnadu, and Kerala.

It also includes the infrastructure required to continue legal, finance, accounting,

administrative tasks, quality assurance, and public relations in order to continue and Aster Pharmacy
Firm Infrastructure maintain operations efficiently. Website(2022)
To fulfill all the primary activities, Aster Pharmacy hires the workforce including the
administrative staff and operational staff - pharmacists, merchandisers, business
analysts, salesman, and custom care executives. From hiring to the training of these
staff belong to Human resource management.

The HRM system requires a lot of improvement considering the employee reviews on
Human Resource the feedback websites including Indeed.com and Glassdoor. The talent management Aster Pharmacy
Management system as explained in Ulrich also is very poor. Website(2022)
The ERP software to process the orders & inventory management, the online support
for customer services, and research & development to achieve the required efficiency,
all belong to the Technology Development of Aster Pharmacy.

Aster Pharmacy is yet to begin the Online orders as currently if you order online, it
Technology takes you to the Whatsapp without any further communication, hence technologically, Aster Pharmacy
Development a lot to do. Website(2022)
Negotiations with the existing external vendors(Inbound Logistics), acquiring new
Secondary vendors, and maintaining relationships with the vendors belong to Procurement of Aster Pharmacy
Activities Procurement Aster Pharmacy. Website(2022)
VRIO Framework
Table 4
Difficult to Supported by
Valuable Rare? Competitive Implications
Resource / Capability Inimitate Organisation

Talent No - - Competitive Disadvantage

Inbound logistics Yes No - - Competitive Parity

Operations Yes Yes Yes Yes Sustained Competitive Advantage

Outbound logistics Yes No - - Competitive Parity

Marketing and sales Yes No - - Competitive Parity

Services Yes Yes No - Temporary Advantage

Firm Infrastructure Yes No - - Competitive Parity

Human Resource
Yes No - - Competitive Parity
Management

Technology Development Yes No - Competitive Parity

Procurement Yes No - - Competitive Parity

Product Portfolio Analysis (BCG Matrix)

Table 5
Product
Category-wise Market share Market growth Quadrant Strategy

Based on the report published by McKinsey,

the wellness market size worth $1.5 trillion.
Due to the change in consumer behavior post The market growth of the wellness product is
the Covid 19 pandemic, the consumer has projected at 5-10% annually. Considering the CAGR
become more conscious of a healthy body of Indian retail pharmacies of 44%, the market
Wellness Products and healthy mind and hence witnessed this growth of wellness products is relatively low. Cash Cow Harvest
sudden uptick in the market share however as
the pandemic hysteria subsides, the demand
may slow down. Gulshan Bakhtiani(2022)

Gulshan Bakhtiani(2022)

The Indian sports nutrition market size is over The Y-O-Y growth of the Sports Nutrition market is
₹1,300 crores which are highly dominated by about 25%.
foreign brands and hold 80% of the market
share. Considering India’s success in the Olympics and in
other International games accelerated the Sports
Preserve/Inv
Sports Nutrition Nutritional products Multivitamin, Melatonin, nutrition market and the government’s recent Stars
est More
5-HTP, Fish Oil, Vitamin D3, and curcumin campaigns like Khelo India motivated to adopt
supplements have been selling like a hot cake sports in their lifestyle and thus the industry has
in India. have been witnessing this market growth.

Aman Puri(Jan 2022) Aman Puri(Jan 2022)

OTC drugs are the traditional drugs inclduing
medicines for Flu, Cold, Body Pain, and Fever.
In India, the share of sales of OTC drugs The market growth rate of the OTC drugs Market is Preserve/
OTC Drugs Stars
witnessed an uptick of 30% a CAGR of 9.2% in the next 5 years. Invest more

Modgor Intelligence(2019)

The market is expected to increase at a 37% CAGR

to reach $50 bn in 2025. The growth is considerably
India is among the top 20 countries when it high and hence Aster Pharmacy should invest
comes to Medical Device Industry. The market more. With the rising number of patients suffering
size of the Medical devices in India in 2020 from Diabetes and Heart Diseases in India, the Preserve/Inv
Medical Devices Stars
was $10.36 bn. medical device industry has a huge potential in the est More
coming years.
IBEF(Nov 2021)
IBEF(Nov 2021)
Charu Sehgal & Anjan Bose( March 2016)
It is expected to expand at a CAGR of 16.87%
The market size of the feminine hygiene and during the 2021 – 2025 period. Aster Pharmacy is
care products worth ₹32.66 Bn in 2020. The currently concentrating its business in the Southern
Feminine Care
larger contribution comes from the Urban region of India and planning to expand in rural Question Improve/Div
and Hygiene
Households. areas where the awareness of Hygiene is very low, Marks est
Products
hence these products won’t be selling too much.
Research Markets(2021)
Mordor Intelligence(2019)
BCG Matrix- Portfolio Analysis - Aster Pharmacy Products
Ansoff Matrix

The four strategies of the Ansoff Matrix are

1. Market Penetration: Products analyzed in the BCG Matrix - Wellness Products, OTC Drugs, and Sports Nutrition
2. Product Development: E-Pharmacy or Online Pharmacy Stores in India.
3. Market Development: Aster Pharmacy is yet to launch Telemedicine Services in India. With the support of existing Infrastructure - Aster DM
Healthcare, the company should develop and position itself in the telemedicine industry in India.
4. Diversification: As per the blue ocean framework, analyzed in the previous report of external environment analyses, a new market where Aster
Pharmacy can introduce products is - Home Nursing and Ambulance Services.

Mishra_External Environment Analysis Aster Pharmacy_Dhairyakant ( Blue Ocean)

The Parenting Matrix
Strategy Clock
Change Kaleidoscope Model

Table 6
Factor Description Source

Aster Pharmacy must start implementing the strategic changes immediately to position itself as one of the fast-growing
pharmacy retail divisions in India in the coming 1-3 years. The company’s holding company has already aggressively
started investing in India and is expected to invest ₹900 Crores in the next three years, which definitely going to also Sohni Das(Feb
Time help Aster Pharmacy. 2022)
Aster Pharmacy’s growth and size as compared to its competitors - Medplus and Apollo One is very tiny. Aster has only
had 100+ stores in India and is largely concentrated in the southern region of India. Also, the company is yet to start Mishra_Aster
E-pharmacy in India. Considering all these factors, Aster must focus on launching and expanding its Online Store Pharmacy_Dhairy
Scope business as it requires fewer efforts and the expansion will be very rapid than the physical store expansion. akant(2022)

1. The Brand Name of Aster Pharmacy needs to be changed. The name doesn’t suggest that it is related to the
Pharmacy retailing business. A lot of brands these days have been changing their brand name to position themselves in
changing environment. For example, Facebook changed to Meta. Its competitors like MedPlus sound like
medicine-related companies however Aster doesn’t have such brand recall value.

2. The average rating of Aster on the employee feedback website is 3.7, which makes Aster a very average company to
work for. Employees on different websites suggest that the company has a bad working environment, a lot of politics,
horrible appraisals, and limited exposure. It is suggested that Aster should learn from this feedback and create a
Preservation stress-free and employee-friendly environment so that good talents can be retained.

3. Tailored Training programmes, Encouraging rewards and recognition programs, Upskilling programmes and Mental
support are suggested to implement as soon as possible to avoid such complaints widely available on the feedback
websites. Glassdoor(2022)
3. All the necessary records from purchase to the sale of drugs, data related to the patients and other necessary
records must be preserved.

Aster Pharmacy has no clear leadership. Aster DM healthcare UAE has a CEO of its Retail Pharmacy Division, however
for India, it is missing. The head of Marketing and Procurements is there according to the LinkedIn Profiles however the Aster DM
CEO is not yet appointed. It is highly recommended to appoint a CEO for India operations and further appoint other Healthcare
Power heads who can lead the company to achieve its strategic objective in the coming 1-3 years. Leadership(2022)

In the changing environment, it is very important to have a workforce that is dynamic and adaptive accordingly but in
the case of Aster Pharmacy, such a workforce is missing as they have numerous complaints on work culture. Therefore
to create a ready workforce, it is highly recommended to fix the work culture and introduce the latest technology to
Readiness train them to enable them to work in the changing environment. Glassdoor(2022)

Aster Aster Pharmacy - a subsidiary of Aster DM

Healthcare Dubai has a very big name in the UAE and has been in the industry for more than 3 decades. The company’s Mishra_Aster
balance sheet shows that the company is financially well off and has the capacity to build and expand its resources Pharmacy_Dhairy
Capacity inclduing land, labour, and material. akant(2022)

It is recommended to Aster Pharmacy develop its brand communication and marketing capabilities in order to position
the brand Aster Pharmacy in the minds of the Indians. Aster is not a new brand in India, and before launching its 1st
store in India in 2021, the company has its footprints before with its hospitals and clinics however the visibility of Aster Mishra_Aster
Pharmacy is very poor against its competitors Apollo One and Medplus. If Aster Pharmacy wants to capture more Pharmacy_Dhairy
Capability market share, an aggressive marketing strategy needs to be planned out. akant(2022)

After analysing the Linkedin, it is learnt Aster Pharmacy has employees who are based in South India and considering
the concentration of Aster Pharmacy stores, it seems ok however It is recommended to onboard people from different
regions and cultures to ensure diversity in the company which will later help the company when it expands in the other Linkedin, Aster
Diversity regions of India. Pharmacy(2022)