Table of Contents
Executive Summary ........................................................................................................................ 2
Introduction ..................................................................................................................................... 3
Literature Review............................................................................................................................ 5
Business Growth Strategy ........................................................................................................... 5
On-Shelf Availability (OSA). ..................................................................................................... 7
Ecommerce .................................................................................................................................. 9
Application of the Business Processes to NMC ........................................................................ 10
Analysis of Models ....................................................................................................................... 12
Business Growth Strategy ......................................................................................................... 12
Market Penetration ................................................................................................................ 12
Market Development ............................................................................................................. 14
Product Development ............................................................................................................ 15
Diversification ....................................................................................................................... 16
Capabilities Supporting to Support Business Growth Strategy ............................................. 17
On-Shelf Availability ................................................................................................................ 18
E-commerce .............................................................................................................................. 19
Conclusion .................................................................................................................................... 20
Recommendations ......................................................................................................................... 21
Works Cited .................................................................................................................................. 22
Al Nahdi Medical Company
Executive Summary
This business report explores the application of three business processes within NMC: growth
strategies, e-commerce, and OSA. These business procedures help firms to motivate
organizational performance in terms of sales and profits growth. Supported by several
capabilities‒ people, administrative, information technology, and leadership‒NMC applies an
elaborate market penetration strategy to increase its existence in the current market. The
company is expanding its presence in Riyadh after exerting its presence in the western KSA.
Moreover, in its market development strategy, the company targets the GCC market, especially
the UAE, to enter new markets and extend to new geographical locales. The company operates
product development and concentric diversification strategy to enhance subsisting products and
services and introduce new products or business lines‒ the company established Nahdicare,
insurance services, and hospital operations. NMC maintains a 99% OSA, with its shelves
restocked daily, unlike its primary competitor that retains a 73% OSA, restocking its shelves
every three days. The company undertakes an e-commerce business by selling products and
delivering services online. Despite these achievements, the company should enhance market and
product development strategies to realize significant sales and profits growth
Introduction
Al Nahdi Medical Company (NMC) denotes a leading chain of Saudi retail pharmacy
headquartered in Jeddah. It operates a kingdom-wide network of stores in about 145 villages and
conurbations across the Kingdom of Saudi Arabia (KSA). NMC is a ubiquitous and fast-growing
company in the KSA. NMC was founded in 1986 as a sole proprietorship with two pharmacy
stores in the City of Jeddah (“History”). In 2003, the SEDCO Company bought a fifty percent
stake in the company. NMC transmuted from a sole proprietorship into a limited liability
company (LLC) in 2004. In 2007, NMC inaugurated its vision, mission, and value statements. In
the same year, the company revamped its supply chain system to improve logistics activities.
Further developments occurred in 2011 when NMC developed a central order system to
cover all regions of KSA. In 2013, the company launched a novel corporate strategy and a new
brand identity to promote its expansion. In 2014, this LLC launched the Nuhdeek Loyalty
Program to reward dedicated workers and devoted customers (“History”). The following year
saw the opening of Nahdi premium stores amid other advancements of its retail pharmacy outlets
(“History”). Overall, the company has undergone progressive and steady growth and expansion
since its inception in 1986.
NMC has elaborate vision and mission statements. NMC’s vision is “To be the most
trusted and loved pharmacy-led retailer making a difference in the life of every guest we serve”
(“Overview”). Equally, its mission is “to exceed our guest expectations, every day, by providing
them with personalized, high-quality health, wellness, and beauty products & services through
our expertise and extended reach” (“Overview”). Besides, several values underpin this company:
integrity, leading with purpose, care, excellence, and interdependence. NMC targets to be a
champion of innovation and remain genuine with its actions and true to its mission
(“Overview”). Besides, NMC works with high efficiency and discipline across the entire value
chain, striving to be best in class in all its actions. The company collaborates with its business
associates and the community to achieve mutual success. As a whole, the company’s vision and
mission statements, along with the values of interdependence, excellence, care, purpose-driven
leadership, and integrity, underpin its continued growth.
As a part of NMC’s firm belief in being a community pharmacy, NMC serves the
community with its products and educates society via multiple health awareness and disease
prevention initiatives. It deploys its extensive local knowledge and countrywide network to
invest in the Saudi community’s development (“Nahdi”). Moreover, the company operates
social responsibility programs for health, wellness, and future generations. In this regard, NMC
seeks to:
Empower people with knowledge and belief in both their capacity and ability to improve
their quality of life through innovative and effective health awareness programs. By
bridging the knowledge gap with our expertise and reaching so many through our
widespread network across the country, we equip people with tools to improve their
health, lifestyles and ultimately add beats to their lives (“Social Responsibility”).
The health-focused social sustainability initiative enhances medication adherence and
ameliorates vaccination rates to cut preventable maladies (“Social Responsibility”). Likewise,
the wellness-based social responsibility program fosters a healthier lifestyle via enhanced
nutrition and fitness to reduce obesity rates in the KSA. Finally, the coming generations-centered
social responsibility initiative bridges the knowledge gap concerning nurturing the child’s
developing body and mind (“Social Responsibility”). As a whole, these efforts make NMC a
socially responsible pharmaceutical business.
Literature Review
Business Growth Strategy. Growth is vital to the survival of any business venture. Intense
competition in today’s highly regulated and depressed economies necessitates businesses to
devise strategies to increase their comparative market share and profits (Dugguh et al. 23;
Kemppi et al. 1). In this regard, dynamic companies formulate and execute elaborate business
growth strategies to augment business profit and remain afloat in the operating market (Dugguh
et al. 23). In a business context, growth entails “an increase in the total sales volume per annum,
an increase in the production capacity, increase in employment, increase in production volume,
increase in the use of raw material, increase energy and power” (Dugguh et al. 23). Simply put,
business growth denotes an augmentation in a firm’s scale of operations accompanied by a
heightening of its outputs and resources. A business growth strategy means a company’s game
plan that prompts future-oriented tactics interacting with the competitive milieu to accomplish
the firm’s objectives (Dugguh et al. 23). In essence, a company’s efforts to achieve business
growth inform its corporate success.
There are two primary strategic growth alternatives for firms: organic acquisitive growth
(Kemppi et al. 2). Organic business growth encompasses developing a firm’s internal resources,
while acquisitive corporate growth means acquiring external resources by a firm. In particular, it
entails one firm buying “ controlling interest in another firm, and the acquired business is
integrated within the current operations or becomes a subsidiary of the acquirer’s portfolio
(Kemppi et al. 2). Both of these business growth strategies exhibit numerous merits and
demerits. Besides achieving more monopoly (bargaining) power in the market, acquisitive
business strategies deliver “a means to trade resources that otherwise would be difficult to trade
them individually being non-standard, firm-specific, involving tacit knowledge” (Kemppi et al.
2). Companies can also use acquisitive growth strategies to retain and develop their resources by
combining them with purchased complementary facilities (Ojwaka and Deya 252). In this regard,
a business growth strategy serves as a strategic plan formulated and executed to extrapolate an
establishment’s performance and gain a competitive edge in the market. However, implementing
an acquisitive business growth strategy is disadvantageous in that a company may obtain
redundant assets due to difficulties realizing synergy benefits due to organizational path
dependencies that trigger core rigidities that constrain the exploitation of synergy benefits
(Kemppi et al. 2). Likewise, an organic business strategy is limited regarding bounded rationality
that may impede companies from quickly developing novel internal resources to fulfill their
competitive demands (Kemppi et al. 2). Organically growth corporations cannot deploy benefits
associated with a vast knowledge pool acquired through acquisitive business growth strategies,
such as mergers and acquisitions (M&As, Kemppi et al. 2). Utilizing such a knowledge pool may
result in a variation of ideas and enhance firm performance.
Growth strategies entail introducing new products to the market and adding novel
features to existing products. The most typical business strategies include market expansion,
market penetration, diversification, product expansion, and acquisition (Dugguh et al. 25;
Ojwaka and Deya 251). Market penetration centers on expanding sales of a firm’s existing
products or services in a subsisting market. According to Dugguh et al., market penetration
entails “attracting new customers for the product and increasing the usage or purchasing rate of
existing customers; it is often achieved by increasing activities through more intensive
distribution aggressive promotion and competitive pricing” (25). Market expansion (market
development) involves moving existing products or services to a new market to augment sales in
new geographic zones. Product expansion (product development) entails introducing a novel
concept into a firm’s current market. This strategy enables companies to grow by creating
improved products for existing markets. According to Dugguh et al., companies pursue product
innovation tactics in upcoming markets and market innovation techniques in a mature niche
market (25). Business growth through diversification entails companies selling products to new
markets. In essence, because of the growth model’s riskiness, a company should conduct
thorough market research before deploying it.
Concentrated and limited growth strategies help firms direct resources and efforts to the
profitable escalation of a single product in a single market with one dominant technology
(Dugguh et al. 26). In particular, this business growth strategy attempts to cut costs and
circumvent substantial debt amounts that companies incur due to rapid growth tactics (Dugguh et
al. 26). Finally, the new business growth strategy serves as an alternative expansion avenue,
which entails “pursuing customers in different ways, for instance selling a company’s products
or services online” (Dugguh et al. 26). For example, customers can utilize the internet to access a
firm’s products and services in a new alternative format. As a whole, a firm can deploy different
strategies to increase sales and achieve business growth.
On-Shelf Availability (OSA). This concept denotes “the availability of products for sale to a
shopper, in the place they expect it and at the time they want to buy it” (Nagle). Many factors,
including phantom inventory and voids, impact on-shelf availability (Moorthy et al. 47). Out-ofstock (OOS) transpires when a retailer temporarily oversells a product, making it unavailable in
the retail outlet (Nagle). In contrast, phantom inventory occurs when a product is OOS, but the
inventory accounting system still shows the item on hand (Moorthy et al. 47). OOS culminates in
unforeseen high demand, inventory imprecision, low shelf monitoring, and low restock
frequency (Moorthy et al. 47). Phantom inventory transpires due to theft, spoilage, or damaged
items (Nagle). Product voids transpire when a stock-keeping unit (SKU) is authorized for an
outlet without tags located on the shelf and devoid of on-hand inventory (Nagle). This ABNOS
(authorized but not on the shelf) results from category assortment, limited space, or shopper
demographics.
Ensuring a high OSA is critical for modern retailers. OSA is a measure of retail
performance as it helps retailers avoid OOS that decreases customer loyalty and leads to lost
sales. In this regard, OSA constitutes a measure of the number of products available in a saleable
condition to patrons at the place they expect and when they want to purchase the offering
(Moorthy et al. 47). Perpetuating OSA or lessening OOS helps improve in-store inventory
management and, hence, OSA serves as a critical indicator of retailer performance and customer
satisfaction (Moorthy et al. 47). Twenty-five percent of OSS conditions in retail outlets are shelf
OOSs‒ a situation where a product is available in the inventory but not present on the shelf when
the customer looks for it (Moorthy et al. 47; Moussaoui et al. 4). Hence, ensuring adequate OSA
can help a company increase product sales and profitability.
Retailers and producers suffer substantial losses due to poor OSA. A recent study showed
that manufacturers and retailers lose an equivalent of 2.3 percent and 4% percent of annual
sales, respectively, because of poor OSA. Indeed, inadequate OSA produces long-standing
negative impacts on customer demand (Moussaoui et al. 3). There is a positive correlation
between store loyalty and OSA. Retail outlets with less frequent OOS events are more likely to
have shoppers stay in the store and buy substitutes when faced with an OOS than those with
more frequent OOS events (Moussaoui et al. 3). OSA is an essential feature of customer service.
In this regard, European and American grocery shoppers consider OSA the third most central
customer service component, after more product/service promotions and shorter queues
(Moussaoui et al. 3). As a whole, OSA is a vital performance lever for manufacturers and
retailers.
Ecommerce. The pharma e-commerce market is experiencing exponential growth. Indeed,
economists expect the sector to gain significant market growth during the 2020-2017 period
(Data Bridge Market Research).
Figure 1: Expected growth in the global pharma market. Source: Data Bridge Market Research.
Many patients prefer doorstep delivery of medicaments due to the unobtainability of some
medicines on retail pharmacy stores, adoption of novel technologies based on artificial
intelligence (AI), and growing acceptance of internet services in society (Data Bridge Market
Research). Figure 1 shows that the pharma e-commerce market in the Middle East will grow
exponentially between 2020 and 2027.
The deployment of e-commerce has evolved from a technology-driven to a user-driven
business process in the last two decades. Consequently, e-commerce has become synonymous
with strategy, communication, and business practice (Kanungo 98). This business process
facilitates information exchange and transaction execution among individuals and enterprises
(Kanung0 98). In particular, e-commerce supports electronic communication adaptation for
business processes through electronic data interchange (EDI). The pharmaceutical industry is
research and development (R&D)-intensive, and associated companies deploy e-commerce to
achieve and maintain a competitive market advantage (Kanungo 98). E-commerce provides
pharmacies with better modes of transactions to accomplish a competitive edge and sustained
growth. E-commerce business processes increase firm value through several key fundamental
processes, including marketing, high-value drug innovation, clinical development and trial,
project and people management, and sales (Kanungo 98). Synchronizing e-commerce and
growth strategies enable a firm to achieve real value, which produces three significant impacts.
The practice improves the latest clinical developments’ value, augments shareholders’ value,
boosts patrons’ dividends by increasing revenues and profits, and cuts the time‐cycle of research
and application (Kanungo 98). Collectively, these achievements add considerable firm value and
encourage corporate growth and development.
Application of the Business Processes to NMC. NMC deploys all three business
processes: business growth strategy, OSA, and e-commerce. Research on NMC shows the firm
deploys market penetration, market development, product development, and diversification
tactics regarding growth strategy. To increase its presence in the current market (market
penetration), NMC started to extrapolate its existence in Riyadh‒KSA’s Central region‒ after
penetrating the Western part. This effort coincides with the National Transformation Program
and the vision 2030 of the Kingdom. To enter a new market or new geographical locale (market
development), the company intends to target the GCC market, beginning with the United Arab
Emirates (UAE). The company also undertakes various initiatives to improve its existing
products. Regarding the diversification strategy, which entails developing new products or
business line, NMC has established a polyclinic (Nahdicare), insurance services, and began
operating pharmacies of other hospitals. The company is also targeting operating hospitals in the
future. Hence, NMC operates several comprehensive business growth strategies.
The company boasts of robust capabilities for supporting its growth strategies. The
company has vast people capabilities, as evidenced by its high-qualified and vastly experienced
personnel. It also possesses unique organizational resources, such as an elaborate governance
structure and comprehensive customer service and operations standards. NMC has robust IT
capabilities and maintains vital leadership facilities. It operates programs for equipping managers
and their deputies with knowledge about best leadership practices to run a pharmaceutical
business excellently. Collectively, these capabilities are vital for managing and perpetuating the
company’s growth strategies.
Furthermore, the company employs OSA and e-commerce business processes. Regarding
OSA‒product availability on the shelf – Nahdi maintains 99 percent OSA, and it restocks its
shelves daily. In contrast, its most significant competitor, Al Dawa Pharmacy‒has around 73
percent OSA and replenishes after every three days. NMC runs a robust e-commerce network,
selling its products, and delivering essential medical services online. The company has a robust
IT infrastructure, unmatched internet connectivity, and vast inventory accounting systems. On
the whole, OSA and e-commerce are central business procedures at NMC.
Analysis of Models
Business Growth Strategy. NMC operates several growth strategies with significant success.
Figure 2 below shows the types of business growth strategies deployed by the company to boost
its growth.
Figure 2: Growth strategies deployed by NMC
Market Penetration
Figure 2 shows that in existing markets, the company deploys a market penetration strategy to
introduce novel products to subsisting markets. Market penetration constitutes an internal growth
tactic for augmenting a company’s existing market share. Market penetration strategies
encompass using price variations and product promotion to boost sales (Ojwaka and Deya 254).
By deploying market penetration strategies, NMC seeks to increase its presence in current
markets. Firms can deploy several market penetration efforts, including ramping up existing
marketing efforts, devising novel marketing tactics or expanding to novel marketing avenues,
tweaking its strategy to match rivals, and reducing its offering’s price to outcompete its
competitors. In this regard, NMC took steps to extrapolate its existence in Riyadh (Central
regions of KSA) after penetrating its western part. One market penetration strategy NMC utilizes
entails undertaking widespread marketing efforts. For instance, the pharmacy conducted a
promotional campaign dubbed “Spread the Infection of Hope.” Although many consider Al
Nahdi a trustworthy brand, management realized that its patrons lacked an emotional bond. This
marketing effort transpired through widespread online invitations on social media platforms,
especially Facebook, and has received over seventy thousand Facebook interactions, over
twenty-six million impressions on all social networking sites, and approximately US$ 1 million
worth of free public relations (PR) coverage. This marketing effort enabled NMC to grow its
presence in Riyadh and Jeddah.
Another market penetration strategy deployed by NMC involves offering competitive
prices for its products and services in existing markets. Euromonitor International’s 2016 market
report shows that NMC provides reasonably competitive pricing for its products and services in
its store-based and non-store retailing. The company’s expansion to the Kingdom’s western and
central regions correlates with its ability to offer reasonable prices affordable to many people.
The capacity for competitive pricing emanates from its size; NMC has a network of more than
1,100 pharmacies (Reuters). Market penetration entails attracting new patrons and augmenting
existing customers’ usage and purchasing rate through competitive pricing, intensive
distribution, and aggressive promotion (Dugguh et al. 25). Since aggressive distribution
reinforces a firm’s market penetration efforts, NMC has tightened shipment planning using
Oracle SCM Cloud. Oracle Transportation Management Cloud Service afforded NMC
instantaneous visibility into the supply chain and compliance. It also empowered the firm to
renovate shipment planning and compliance by substituting labor-intensive procedures with an
efficient and sleek value execution chain to reinforce growth and achieve a competitive edge in
the market (“Nahdi Medical Tightens Shipment Planning”). Given its vast distribution network,
the company has expanded to more than 130 conurbations and villages across KSA. It relies on
more than 160 trucks operating from four distribution centers to disseminate its products and
increase its market presence in the KSA. Overall, operating a vast promotion and offering
competitive prices for its products have allowed NMC to extrapolate its presence in more KSA
regions.
Market Development
This growth strategy involves introducing a subsisting product or service offering in a new
market. This market development strategy is appropriate for regional companies that want to
expand to new markets, when new markets are opening up, and when new uses are found for an
existing product (Dugguh et al. 25). Market expansion tactics trigger subsisting products’ sales in
new markets. These business growth strategies encompass entering new geographical areas and
adjusting product packaging to spur sales and profits growth (Ojwaka and Deya 254). To sell its
products in new markets/geographical regions, NMC targets the Gulf Cooperation Council
(GCC) market, especially the UAE. It has expanded its operations in North Africa and has an
extrapolating presence in the UAE, selling a wide range of pharmaceuticals (AlKhaleej Today).
The company has recently installed Infor Treasury to support its market expansion/development
efforts. In this respect, implementing Infor Treasury has empowered the firm to change its
finance department’s operations completely. Indeed, NMC can now achieve significant success
with available resources and gain and analyze a wealth of data to plan as it expands operations
with medical clinics in the KSA and new pharmacies in domestic and GCC markets (AlKhaleej
Today). In general, Infor Treasury is a useful tool for enabling a firm to extend its operations to
new markets.
The firm is gearing its efforts toward expanding its market presence by establishing
pharmacies in different GCC countries. NMC has enacted the Infor Treasury Management
system to gather relevant data to support its market expansion activities. Researchers note that
before entering a new geographical area to sell existing products, a company’s management
should consider the internal and external organizational environment to identify available
resources, demographics, and social, economic, and political variables that may impact its
operations (Ojwaka and Deya 254; Dugguh et al. 25). Data is essentials for scanning and
assessing NMC’s environment before launching its products and services in new markets. Albeit
not prominently, NMC deploys market development tactics to vend existing product and service
offerings in new markets.
Product Development
Product development/product expansion entails introducing a new product or service concept
into a firm’s subsisting market. Indeed, this tactic applies to a company offering new products to
the current market. In a product expansion strategy, an organization attempts to extrapolate by
creating enhanced product and service offerings for its existing market (Dugguh et al. 25). The
tactic is more appropriate for emerging markets and encompasses two primary activities:
modification/adaptation of existing products and formulation of an entirely new product (Ojwaka
and Deya 254). Figure 2 shows that NMC operates its product development strategy by
introducing new products in an existing market. The company has taken several steps to enhance
current products and services to motivate organizational performance in sales and profit growth.
Most of the company product development activities center on service enhancement. In
2019, NMC’s Business Process Re-engineering leadership team, in partnership with
Resilience&, created a more efficient and agile manner of delivering medical services to
customers (Consultancy-me.com). For service enhancement through strategic transformation, the
consultancy firm analyzed associated processes against best practices and benchmarking tools
and deployed a performance review apparatus to fine-tune the company’s services in the future
(Consultancy-me.com). NMC has also seen a UX renovation with the execution of a complete
omnichannel commerce experience across its digital avenues and retail stores provided by the
global digital commerce and creative design consultancy Redbox Digital (Consultancy-me.com).
One week after the launch, NMC encountered the highest site traffic, the best basket size, and the
highest conversion rates in years (Consultancy-me.com). These activities have reinforced service
quality and allowed NMC to experience sales and profits growth. For the most part, although in a
limitedly, NMC has made several efforts geared toward service development.
Diversification
Diversification strategies entail a company vending new products/product lines in new
markets/geographical areas. Diversification strategies may be either concentric or conglomerate.
Concentric diversification denotes a growth approach in which a firm expands by adding new
products and services to existing product and service lines to pull new customers. Contrariwise,
conglomerate diversification represents a growth model involving adding new products or
services significantly different from a business’s present offerings. It transpires when a company
diversifies into a forte entirely unrelated to its current business. Inferentially, NMC perpetuates
concentric diversification entailing introducing new products in new markets.
Al Nahdi established polyclinics (Nahdicare), insurance services, began operating other
hospitals’ pharmacies and targets running hospitals in the future. In addition to running online
clinics to capture vaster markets in GCC countries, the company established Nahdicare Clinics to
provide individuals with holistic and personalized in- and out-patient medical services. These
clinics’ inauguration represented a significant milestone for a firm that expands its healthcare
offerings and delivers holistic medical facilities in KSA. After establishing Nahdicare Clinics,
the company’s CEO, Yasser Joharji, asserted that Jeddah Nahdicare Clinics’ launch reflected
NMC’s deep commitment to providing exceptional, transformative personalized care accessible
to all community member. The inauguration also demonstrated the pharmacy’s efforts to
enhance Saudi citizens’ quality of life by delivering value-based medical care. Establishing
polyclinics, insurance facilities, and hospital operations has allowed NMC to target and enter
new market segments and grow its sales and profits. In essence, since the firm offers novel
offerings in new market segments, it executes a concentric diversification strategy.
Capabilities Supporting to Support Business Growth Strategy
NMC has robust capabilities for reinforcing its business growth strategies. First, it possesses vast
people capabilities, as evidenced by its highly-qualified and vastly experienced workforce.
Second, the firm has unique organizational resources, including an elaborate governance
structure, comprehensive customer service standards, and detailed operational protocols that
effectuate operations. Third, it boasts extensive IT capabilities (a robust and modern IT
infrastructure to support operations). For instance, the company has installed Infor Treasury
Management systems to streamline its payment system and serve customers better. The firm also
launched a smart pharmacy that deploys intelligent robots to prepare and dispense medications,
manage inventory, and scrutinize drug safety and expiry dates. The smart pharmacy reduces drug
preparation and customers’ waiting time. Finally, NMC possesses strong leadership capabilities.
In this regard, it runs programs to equip executives with knowledge of best leadership practices
for excellently operating a pharmaceutical business. On the whole, these capabilities are vital for
operating and perpetuating NMC’s growth strategies.
On-Shelf Availability. OSA is a useful concept in the precincts of retailing. Indeed, ensuring
OSA and circumventing OOS events is a store is a critical factor for guaranteeing customer
gratification. As such, logistics rationalization is essential to avoid OOS and reinforce OSA
events to facilitate business profitability. Hence, ensuring adequate OSA has been critical for
boosting NMC’s profitability.
NMC strives to retain an adequate OSA‒ product availability of the shelf‒ and cut the
chances of a customer missing their desired product in retail outlets. In particular, the company
maintains about 99% OSA, stocking its shelves daily. In contrast, NMC’s closest and strongest
competitors, Al Dawa Pharmacy, keeps around 73% OSA and stocks its shelves every three
days. To ensure adequate in-store OSA, the company integrated an Operatus solution into its
entire retain chain to support cost-effective, web-based store communications and task
management. Operatus’ innovative solutions help NMC improve the management of its
extensive network of nationwide stores. Effective store management is essential for ensuring
adequate OSA and cutting OOS events (Moorthy et al. 48). By effectuating store
communications and task management, the Operatus solutions can support logistics
rationalization, enhance the supply chain, and ensure a constant flow of products into the stores
to avoid prolonged OOS events. Logistics rationalization of an entire supply chain guarantees
adequate OSA and improves business sustainability. Hence, Operatus solutions enable NMC to
maintain adequate OSA and circumvent OOS events.
Moreover, Oracle SCM Cloud provides NMC with an indirect way to perpetuate
adequate OSA by tightening shipment planning. Poor shipping planning, which begets
inadequate in-store replenishment, compromises efforts to maintain high service levels upstream
of the shop, causing the system to fail at the final point-of-sale, where availability portends the
most significant influence on sales and consumer comportment (McKinnon et al. 251). Executing
the Oracle Transportation Management Service increased NMC pharmacy fleet utilization rates
by an average of 5% to 10% and speeds delivery tracking with Oracle (“Nahdi Medical Tightens
Shipment Planning with Oracle”). To keep pharmacy outlets stocked, NMC, with the aid of
Oracle SCM Cloud, operates a fleet of about 160 trucks from four distribution centers (“Nahdi
Medical Tightens Shipment Planning with Oracle”). On the whole, automating shipment
planning, accelerating proof of delivery evidence, and improving truck utilization using Oracle
solutions enables NMC to maintain adequate OSA and avoid OOS events.
E-commerce. E-commerce is becoming a ubiquitous practice in the pharmaceutical industry.
Research shows that e-commerce has become synonymous with strategy, communication, and
business practices, supporting e-transactions for business processes through EDI (Kanungo 98).
E-commerce boosts sectoral value through several fundamental procedures: project and people
management, high-value drug innovation, clinical development and trial, sales, and marketing
(Kanungo 98). In this respect, NMC has synchronized e-commerce with its corporate strategy to
increase sales and enter new markets. It is increasingly undertaking online product sales and
services. As a result, it has entered new markets and fostered its growth prospects.
NMC established an online pharmacy to boost sales and profits and increase its presence
in the GCC market. The online pharmacy offers medications, vitamins and supplements, healthy
foods, medical equipment, haircare, skincare, makeup and accessories, and other daily essentials.
Besides, it allows customers to obtain expert medical advice and e-prescriptions. The pharmacy
is a part of the NahdiOnline that provides delivery and pharmacy location services. Through the
online pharmacy, the company has captured a vaster market both in KSA and GCC countries. To
increase online sales and service delivery, NMC partnered with Redbox Digital that provided the
company with an omnichannel solution, which enabled the pharmacy to grow exponentially. As
a result, site traffic grew by 150% to 200%, new customers increased by 67%, repeat buyers rose
by 33%, and the company experienced a 600% revenue growth in six months (“Nahdi”). As a
whole, e-commerce constitutes a central business process in NMC to promote sales and profits
growth.
Conclusion
Business growth strategies, OSA, and e-commerce are essential business processes for NMC.
Indeed, executing market penetration, market development, product development, and concentric
diversification strategies, along with maintaining adequate OSA, reducing OOS events, and
undertaking e-commerce activities, have enabled NMC to enter new markets, improve existing
products, create new innovative products, increase the company’s market presence, and grow
sales and profits. Despite its accomplishments, the company has weak product/service
development and market development strategies.
Recommendations
The company should enhance market and product development strategies to promote more
significant sales and profits growth. Regarding the market development strategy, NMC should
increase efforts to enter new geographical areas and adjust its product packing to spur sales and
profits growth. In particular, the company should target more GCC markets and, through ecommerce, introduce existing products and services in new markets. Concerning product
development strategy, NMC should undertake two primary activities: modification/adaptation of
existing products and formulation of an entirely new product. Indeed, the pharmacy should
endeavor to introduce novel products in existing markets. Ultimately, NMC will increase its
presence in existing markets, enter new markets, and increase sales and profits.
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