Institute of Management, Nirma University

Final Report on:

The Summer Internship Programme
(April10 June14)
Organization: Apollo Pharmacy

Submitted by
Hitesh Gulati 121322
(MBA Full Time: 2012-14)
On July 1
st
, 2013
Submitted to: Prof. Jayesh Aagja
&
Placement Office


2
DECLARATION

I hereby declare that my Summer Internship Project titled Performance of Private
Labels" and "Pharmacy Store Insights" are original work done by me under the
guidance of Mr. Atul Ahuja, Vice President- Retail at Apollo Pharmacy Div of Apollo
Hospitals Enterprises Ltd., E-18/B-1, Mohan Cooperative Industrial Area, Mathura Road,
New Delhi-110044.
This project has been submitted to Prof. Jayesh Aagja & Mr. Neeraj Arora - Institute of
Management, Nirma University in partial fulfilment of academic requirement for the
Master of Business Administration (MBA) programme.
I also confirm that the project has not been submitted to any other university nor has it
been done by any other student earlier for an academic requirement.

3
AUTHOR OF THE PROJECT : Hitesh Gulati

COMPANY NAME : Apollo Pharmacy, Div of Apollo Hospitals
Enterprises Ltd.

ADDRESS : E18/B-1, Mohan Co-operative Industrial Area,
Mathura Road, New Delhi 110044


DATE OF REPORT : 1
st
JULY, 2013

PURPOSE OF REPORT : Performance of Private Labels and Pharmacy
Store Insights

PREPARED FOR : Apollo Pharmacy, Div of Apollo Hospitals
Enterprises Ltd.

SUBMITTED TO : Professor Jayesh Aagja &
Mr. Neeraj Arora, Manager, Corporate Relations


4

Table of Contents

Executive Summary ............................................................................................ 5
Part A: Profile of the Organization ................................................................ 6
Apollo Hospitals ............................................................................................... 6
Company Vision ................................................................................................ 7
Mission Statement ........................................................................................... 7
Apollo Pharmacy .............................................................................................. 7
Private Label ...................................................................................................... 8
Apollo Hospitals - Directors ......................................................................... 9
MCKINSEYs 7S Model .................................................................................. 21
The Seven Interdependent Elements in the Mckinsey Framework
............................................................................................................................. 22
Competitive position in the Industry (Using Porters Framework)
............................................................................................................................. 24
Part B Project Work ..................................................................................... 27
Private Label Growth:.................................................................................. 27
Evolution Of Private Labels: ...................................................................... 27
Trends In Market .......................................................................................... 28
Future Trends: ............................................................................................... 30
Private Labels at Apollo Pharmacy: ........................................................ 31
Design and Pricing Strategies Followed for PL products: ............... 34
Commercial Implications Of Private Label .......................................... 34
Price Of Private Label Products ............................................................... 35
Performance of Private Label Products (Research Based Project)
............................................................................................................................. 37
Pharmacy Store Insights (Research Based Project).......................... 49
Part C Learning .................................................................................................. 55



5
Executive Summary

Apollo Hospitals is a major hospital chain based in Chennai, India. It was founded by
Dr. Prathap C. Reddy in 1983. Its net worth is Rs 2,300 cr. Apollo Pharmacy a unit of
Apollo Hospitals is a 30 years old retail pharmacy chain having 1500 stores spread over
major cities of India, which includes Delhi, Chennai, Bengaluru, Mumbai, Ahmedabad,
Jaipur, Patna, Kolkata, Hyderabad and also in district level in states like Tamil Nadu,
Andhra Pradesh. The closest competitor in terms of number of store is Med Plus with
1250 store. Other competitor includes Guardian (120 stores), Religare (110 stores), Dial
for Health and 98.4.
Apollo Pharmacy has various Private Label products ranging from Instant Energy, Health
Food, Vitamin / supplements, Baby Care, Skin Care, Oral Care, Men's Grooming,
Hygiene, OTC, Clinical Aid, Home Aid and Generics. PL products accounts for 5% of
total sales of the store.
Various projects implemented during internship period consisted of comparing PL
products based on their performance using measures like Returns per Shelve. Next
viability of opening up a new store was analyzed by taking Net Present Value instead of
Breakeven time. Also various customer insights were collected like activities a customer
go through when in store, thus finding various opportunities for cross selling.


6
PART A: Profile of the Organization
Apollo Hospitals
Apollo Hospitals is a major hospital chain based in Chennai, India. It was founded by
Dr. Prathap C. Reddy in 1983. Its net worth is Rs 2,300 cr.
Company Overview
It is often said that nothing happens, unless there is a dream first. At the genesis of the
Apollo story there was a dream. A dream so powerful, that it helped transform the medical
landscape in India.
The dream nurtured and grew within Dr. Prathap C Reddy, the founder Chairman of
Apollo Hospitals, until the point of inflection happened in 1983. A young man
succumbing to an ailing heart was what it took to ignite Dr. Reddy's vision into a reality -
a vision where quality healthcare was given, where the pursuit of clinical excellence was
daily endeavor, India a hub in the medical tourism map and where the Apollo family
touches and enriches lives every minute, every day.
Today, with over 8500 beds across 50 hospitals, and a significant presence at every touch-
point of the medical value chain, Apollo Hospitals is one of Asias largest healthcare
groups. Commenced as a 150 bed hospital, today the group has grown exponentially both
in India and overseas. Its growth is often said to be synonymous with India emerging as a
major hub in global healthcare.
Apollo Hospitals is driven by a single thrust, to provide the best standards of patient care.
It is this passion that has lead to the development of unique centers of excellence across
medical disciplines, within the Apollo Hospitals network. Apollo Hospitals has JCI
accreditations for 7 of its hospitals, the largest by any hospital group in the region.
True to its founding principles, the group has made quality healthcare accessible to the
people of India, and even overseas. It has become an institution of trust, and a beacon of
hope to so many searching for a cure for their ailments.

7
The legacy of touching and enriching lives stems from the pillars of the Apollo philosophy
- experience, excellence, expertise and research. We pride ourselves for constantly being
on the cutting edge, and going the extra mile to stay relevant and revolutionary.
The Apollo Hospitals Group is the pioneer of integrated healthcare delivery in India. This
vision led the group to earmark time and resources to strengthen each vital cog in the
process of healthcare delivery. As a result of these efforts, the group today is in a unique
position to exponentially increase its healthcare cover. This will be critical in order to meet
future requirements.
Apollo Hospitals Group, today, is an integrated healthcare organization with owned and
managed hospitals, diagnostic clinics, dispensing pharmacies and consultancy services. In
addition, the groups service offerings include healthcare at the patients doorstep, clinical
& diagnostic services, medical business process outsourcing, third party administration
services and health insurance. To enhance performance and service to customers, the
company also makes available the services to support business, telemedicine services,
education, training programs & research services and a host of other non-profit projects.
Company Vision
Apollo's vision for the next phase of development is to 'Touch a Billion Lives'.
Mission Statement
"Our mission is to bring healthcare of International standards within the reach of every
individual. We are committed to the achievement and maintenance of excellence in
education, research and healthcare for the benefit of humanity"
Apollo Pharmacy
Apollo Pharmacy is a 30 years old retail pharmacy chain with its first outlet opened in
1983. It is spread over major cities of India, which includes Delhi, Chennai, Bengaluru,
Mumbai, Ahmedabad, Jaipur, Patna, Kolkata, Hyderabad and also in district level in states
like Tamil Nadu, Andhra Pradesh.

8
Apollo Pharmacy is the largest pharmacy chain of India having 1500 stores all over India,
the closest competitor in terms of number of store is Med Plus with 1250 store. Other
competitor includes Guardian (120 stores), Religare (110 stores), Dial for Health and 98.4.
Private Label

Apollo pharmacy provides a range of private label brands which includes Instant Energy,
Health Food, Vitamin / supplements, Baby Care, Skin Care, Oral Care, Men's Grooming,
Hygiene, OTC, Clinical Aid, Home Aid and Generics. PL products accounts for 5% of
total sales of the store.

9
Apollo Hospitals - Directors
ACG Worldwide Chairman Mr. Ajit Singh
Chairman, Apollo Hospitals Group

Mr. Ajit Singh efforts at ACG have always been focused on creating innovative and
practical solutions for the global pharmaceutical and healthcare industries. In the future,
we shall continue to pioneer new technologies and products, and work towards achieving
improved inclusive growth for all our stakeholders," said Mr. Singh, Chairman at ACG
Worldwide (formerly Associated Capsules Group), Asia's largest pharma machinery and
consumables supplier.
Since 2005, Mr. Singh has served on the Board of Pharmaceutical Sciences of the
International Pharmaceutical Federation (FIP) as an Expert Member. He also served as
Vice-President and now continues as an Executive Committee Member of the
Organization of Pharmaceutical Producers of India (OPPI). He was also nominated on the
International Board of the Controlled Release Society, USA.

Executive Directors
Gurmit kaur - Corporate HR at ACG Worldwide
Hemant Mharte - Head Sales & Marketing at ACG Worldwide
Sunil jha - President HR at ACG Worldwide
Gargi lad - Assistant Manager - Corporate Marketing

10
V.C shaju - General Manager - Corporate HR at ACG Worldwide
Anuj Kabra - Head - Global Business at ACG Worldwide
Nikunj Desai - GM Strategic Sourcing at ACG Worldwide (Pam,Pampac,Pam Glatt &
ACG Inspection)






















11




Stores In Delhi
Apollo Pharmacy have 119 stores In Delhi located at following location:
S.N
O.
LOCATION ADDRESS PHONE NO.
1.
Sarita Vihar Indraprastha Apollo Hospital
Delhi-Mathura Road, Sarita Vihar,New Delhi 110076
011-41626200
011-26825536
2.
Noida, Sector -
26
Indraprastha Apollo Hospitals
E 2, Sector 26 Noida, Uttar Pradesh
0120-4338867
0120-4548498
3.
Vasant Kunj,
IMCL Clinic
Building No, 1, Sector- B, Pocket- 7, Nelson Mandela
Road, Vasant Kunj, New Delhi 110070
011-26139972
011-40574262
4.
Connaught
Place
Shop No. : G - 8, Marina Arcade,
Connaught Place, New Delhi 110001
011-23711838
011-43631726
5.
Hamdard Nagar Majeedia Hospital, Jamia Hamadard, Hamdard Nagar,
New Delhi 110062
011-29959756
011-64648710
6.
Dwarka, Sector
- 4
G 1, Flat No.- 11, Block MLU Manish Abnav Plaza,
Sector 4, Dwarka, New Delhi
011-28081709
011-43601961
7.
Supreme Court
of India
Chamber No. 2, New Chamber Supreme Court of India,
Bhagwan Das Road, New Delhi 110001
011-23388582
8.
Karol Bagh,
Shree Jeewan
Hospital
Shree Jeewan Hospital 67/1, New Rohtak Roat ,
Karol Bagh, New Delhi 110005
011-23517338
011-64648755
9.
Laxmi Nagar C-1, Aruna Park, Laxmi Nagar, New Delhi 110092 011-22440313
011-43601953
10.
East of Kailash,
The Apollo
The Apollo Clinic
F- 4, East of Kailash, New Delhi
011-26451002
011-40576131

12
Clinic
11.
East Patel Nagar Shop No. -10A/31, East Patel Nagar
New Delhi 110008
011-25882629
011-43466193
12.
Kailash Colony Shop No. 2, Plot No. : HS 20, Kailash Colony Market,
New Delhi
011-29245612
011-40574327
13.
Gole Market Shop. No. - 121, Plot No.-I, Block -88, Lady Harding
Road (Bangla Sahib Marg) Gole Market, New Delhi -
110001
011-23363743
011-64648752
14.
Rohini, Sector -
9
Shop No- A-16 & 23, North Ex Mall Sector - 9,
Rohini, New Delhi- 85
011-27552210
011-43466203
15.
Malviya Nagar Shop No. - 18, Old Market, Malviya Nagar, New Delhi 011-26672056
011-40570389
16.
Jang Pura Shop No. 370 - 371/3, Lachman Chamber, Sahi Hospital
Road, Jangpura, Bhogal, New Delhi
011-24374849
011-43602750
17.
Alaknanda Shop No-1, Building No, H-3,
Shopping Centre, Kalkaji (Alaknanda) New Delhi-19.
011-26030990
011-64648754
18.
Mayur Vihar,
Phase - II
Shop No-11, 12, Durga Complex,
B Block, Mayur Vihar - II, New Delhi
011-22727887
011-43466186
19.
Dwarka, Sector
- 10
Shop No. : G-3, Ground Floor, Manish Royal Plaza,
Plot No. 20, Sector - 10, Dwarka, New Delhi
011-25073491
011-43089564
20.
Vasundhara
Enclave
Shop No.G - 1 & G-4, Vardhaman Plaza,
Vasundhara Enclave, Delhi - 91
011-22624655
011-43588223
21.
R.K. Puram,
Sector - 9
Shop No.- 7, Sector 9, R.K. Puram, New Delhi 011-26183936
011-64648748
22.
Khanna Market Shop No.- 46, Khanna Market, New Delhi 011-24641258
011-64648751
23.
Krishna Nagar No. : F-3/17, Krishna Nagar, Delhi - 51 011-22099435
011-43465649
24.
Rohini, Sector -
13
Shop No. - 18, CSC 2, DDA Market, Sector - 13,
Rohini, Delhi 85
011-27550848
011-

13
43602391
25.
Mansarovar
Garden
Plot No. F-296, (A - Part), Ground Floor,
Mansarover Garden New Delhi - 110015
011-25468193
011-64648747
26.
Hari Nagar No. : WZ - 409A, Janak Park, Clock Tower,
Hari Nagar, New Delhi
011-25141063
011-64648753
27.
New Delhi Rly
Station
(Ginger Hotel)
Rail Yatri Niwas, Jinger Hotel, Ajmeri Gate,
New Delhi Railway Station, New Delhi
011-23232878
28.
Vishwash Nagar No. 545/1-B, (60' Road), Vishwash Nagar, Shahdara,
Delhi
011-22304626
29.
Pandav Nagar Shop No.3, Pandav Nagar, Delhi - 92 011-22481582
011-43466202
30.
Saini Enclave
(Karkardooma)
Shop No. G-2 & G-11, Sagar Chambers, Saini Enclave,
Karkardooma, Vikas Marg Extn., Delhi
011-22378543
011-43601915
31.
R.K. Puram,
Sector - 8
Shop No.21, Sector - 8 Market, R.K. Puram,
New Delhi - 110022
011-26176421
011-64648749
32.
Vikas Puri, 'H'
Block
Shop No.- 14, Block - H, LSC
Vikas Puri, New Delhi - 110018
011-28541156
011-43466195
33.
Vijay Nagar,
Kingsway Camp
Shop No. - G/14A, Vijay Nagar, Kingsway Camp
Delhi - 110009
011-27252600
011-64648756
34.
Mayur Vihar,
Phase - I
Shop No. : A - 8, (Old No. - 392) Khasra No. - 63,
Aacharya Niketan, Mayur Vihar Phase - I,
Delhi - 110091
011-22759780
011-43631798
35.
Jawahar Marg Shop No. - 5251, Kohlapur House - 32, Jawahar Marg,
Chandrawal Road, Delhi - 110007 (Near Kamla Nagar)
011-23852450
36.
Kirti Nagar Shop No. : F-3, F Block MarketKirti Nagar, New Delhi -
110015
011-
25191030011-
43466187
37.
I.P. Extension
(Patparganj)
Shop No. - 16, CSC No. - 2, Zone - 13,
Patparganj, Delhi - 110092
011-22240089
011-43464936

14
38.
Sarita Vihar,
Pocket - 'H'
Shop No. -15, Plot No. - 5, Pocket - H
LSC, Sarita Vihar, New Delhi - 110076
011-29945961
011-40571973
39.
Dwarka, Sector
- 7
Shop No. : G-47, Vardhman Star City Mall
LSC-III, Sector - 7, Dwarka, New Delhi
011-25086389
011-64648750
40.
Mukherjee
Nagar
Shop No. : G-7, Plot No. : A 31-34, Jaina Building,
Commercial Complex , Mukherjee Nagar,
New Delhi - 110009
011-27651396
011-43466194
41.
West Patel
Nagar
Shop No. - 1, Property No. - 13/2, West Patel Nagar
New Delhi - 110008
011-25883150
011-64648757
42.
West Punjabi
Bagh
Shop No. - 2, Property No. - 2, 1/45A,
West Punjabi Bagh, New Delhi
011-25225484
011-43464935
43.
Chitranjan Park Property No. : D - 776, Chitranjan Park
New Delhi - 110019
011-26273151
011-40574880
44.
Savita Vihar Shop No. : G-6 & G-7, Alliance Tower - II, Plot No. - 7,
LSC Rastrey Jan, Savita Vihar, Delhi - 110092
011-22158358
011-43631797
45.
Mayur Vihar,
Phase - II
(Pocket - A)
Shop No. - 10, Pocket - A, CSC, Trilokpuri,
North of Lake (Mayur Vihar Phase - II) Delhi
011-22784270
011-43601941
46.
South
Extension, Part -
I
Plot No. -10, Block No. - E, D.L.F., South Extension
Scheme,
Part - I, New Delhi - 110049
011-24654888
011-40575209
47.
Old Rajinder
Nagar
Plot No.- 60/15, Old Rajinder Nagar,
New Delhi - 110060
011-25753151
011-43466189
48.
Kalkaji Shop No. - 1, Plot No.F - 3, Kalkaji
New Delhi - 110019
011-41003937
011-26474792
49.
Mayur Vihar,
Phase -I,
Extension
Shop No.-4, Plot No -4, Chetan Plaza, Near Samachar
Apartment, Mayur Vihar Phase-1 Extension, Delhi-
110091
011-22712301
011-45152753
50.
Janak Puri,
Block - 'C'
Shop No. - G-3 & G-4, Ashoka Tower, Block - C,
Community Centre, Janak Cinema Complex, Janak Puri,
011-25515474
011-25512344

15
New Delhi - 110058 011-41071608
51.
Lajpat Nagar Shop No. - 1, Plot No. -1, Block - A, Lajpat Nagar - III
New Delhi - 110024
011-29836813
011-41006643
52.
Pitampura Shop No. - 2, 'QU' Block, CSC, Pitampura
New Delhi
011-27346739
011-65963889
53.
Rajouri Garden C-70, Major Sudesh Kumar Marg, Opp. Madhav Park,
Near Main Market Rajouri Garden, New Delhi - 110027
011-
45089440
54.
Greater Kailash
- II
Shop No. -2, Ground Floor, Property No. : S-349, Greater
Kailash Part - 2, New Delhi - 110048
011-29224260
55.
Paschim Vihar Shop No. - 20, CSC, Block : GH - 13, Paschim Puri,
Area G-17, New Delhi - 110087
011-25259204
56.
East Punjabi
Bagh
Shop No. - 4, Plot No.- 1, Road No.-5, Village Bassai
Darapur
East Punjabi Bagh, New Delhi
011-28314207
57.
Daryaganj Dr. Shroff's Charity Eye Hospital
5027, Kedarnath Road, Daryaganj, New Delhi - 110002
011-23280363
58.
R.K. Puram,
Sector - 12
Shop No. - 22, Sector - 12, R.K. Puram, New Delhi 011-26174699
59.
Shalimar Bagh Shop No. -1, Ground Floor, Mahadevi Chamber, Plot No.
-5, Block - BN, CSC Shalimar Bagh, Delhi
011-27486082
011-42258376
60.
Pitampura, JP
Market
Shop No. - JP/1, JP Market, Pitampura, New Delhi 011-27324606
61.
Mandavli
Fazalpur
Shop No. G - 5, Ground Floor, Manish Plaza, Plot No. -2,
LSC-II, Mandavli Fazalpur (Patparganj, I.P. Extension)
Delhi - 92
011-22771769
62.
Vivek Vihar Shop No. : G-1, & G-2, Ground Floor, Vardhman's
Arihant Tower, Block-D Market, Vivek Vihar, Delhi -
110095
011-22143717
63.
Janak Puri, Shop No. - 02, Block - B, Community Centre, 011-25542172

16
Block - B Janakpuri, New Delhi - 110058
64.
Anand Vihar Shop No. - 2, Ground Floor, Block - C, L.S.C. Market ,
Anand Vihar, New Delhi
011-22143907
65.
Model Town Shop/Plot No. - 12, Block F-14, Model Town, Delhi -
110009
011-27241301
66.
Patparganj
(Madhu Vihar)
Shop No. - 29, Ground Floor, New No. - 29A, CSC - I,
Zone : E-13, Patparganj, Delhi - 110092
011-22231012
67.
Rohini, Sector -
18
Shop No.- 14 & 19, C.S.C. - 2, Block - B, D.D.A. Market,
Sector - 18, Rohini, New Delhi - 110089
011-27299557
68.
Lajpat Nagar
(Krishna
Market)
Shop No. - 1, Krishna Market, Lajpat Nager - I,
New Delhi - 110024
011-29820520
69.
Madhuban
Chowk (Saroj
Hospital)
Saroj Hospital & Heart Institute
Ground Floor, Plot No.-2, Institutional Area, Sector -14
Extension, Madhuban Chowk, Rohini, New Delhi -
110085
011-27553088
70.
Preet Vihar Shop No. : G5-A, Plot No.- 8, Community Center, Chopra
Commercial Complex , Preet Vihar, New Delhi - 110092
011-22529924
71.
Kingsway Camp Property No. - 1993, Outram Lines, Kingsway Camp,
Delhi 110 009
011-27605728
72.
Rohini, Sector -
3
Shop (Property) No. - 32, Block - D, Pocket - 14, Sector -
3,
Rohini, New Delhi
011-27514809
73.
Laxmi Nagar
(Guru Ram Das
Nagar)
Shop No. - 02, Property No. - 117 & 118, Khasra No.-
53/25, Guru Ram Das Nagar, (Laxmi Nagar) Harmandar
Colony, Mouza Khureji Khas, Shahdara, Delhi
011-22042798
74.
Kotla Mubarak
Pur
Property No. - 1463/1, Ground Floor, Gurdwara Road
Main Kotla Mubarak Pur, New Delhi - 110003
011-24602088
8826992335
75.
Pitampura "CU"
Block
Shop No. : G -1, Plot No.-4, Vardhman Taru Plaza, LSC,
Block - CU, Pitampura, New Delhi - 110034
011-27345243
8826992336

17
76.
Rana Pratap
Bagh
Shop No. - 1, Property No.: D - 1/1, (Old No. D - 35)
Rana Pratap Bagh, Delhi - 110007
8826992337
77.
Vasundhara
Enclave
Shop No.: G-37 & G-38, Vardhaman Sunrise Plaza Plot
No. - 1, LSC, Vasundhara Enclave, Delhi - 11006
8826992338
78.
Noida, Sector -
27
Sab Mall, E- 331, M-12, Sector- 27, Noida 0120-2540606
0120-4272860
79.
Indirapuram
(Amrapali
Green)
Shop No.UG-10, Amrapali Green, Vaibhav Khand,
Indirapuram, Ghaziabad, Uttar Pradesh
0120-4162830
0120-6498224
80.
Noida, Sector -
62
Shop No. : PG 2 & 27, T.O.T. Mall, C - 58/15-A,
Sector 62, Noida, Uttar Pradesh
0120-2403998
0120-4276375
81.
Raj Nagar
(Ghaziabad)
Shop No. - 6 & 15, Plot No. - 11/179, Raj Nagar
District Ghaziabad, Uttar Pradesh
0120-2820817
82.
Vaishali, Sector
- 4
Shop No. - 2 & 6, Commercial Plot No. - 7,
Lajwanti Plaza, Sector - 4, Vaisali, District - Ghaziabad
Uttar Pradesh
0120-4160431
0120-6492617
83.
Noida, Sector -
29
Shop No. - 33, Brahmputra Shopping Centre,
Sector - 29, Noida, District - Gautam Budh Nagar,
Uttar Pradesh
0120-4272746
0120-6498223
84.
Noida, Sector -
41
Plot No. - 6, Block : C- 98, Sector - 41, Noida,
District - Gautam Budh Nagar, Uttar Pradesh - 201301
0120-
2570986
0120-4272760
85.
Noida, Sector -
110
Plot No. -7, Block : A-2, Sector -110, Noida,
District - Gautam Budh Nagar, Uttar Pradesh
0120-4347894
0120-6498451
86.
Noida, Sector -
25
Shop No. - 8, Jalvayu Vihar Shopping Centre, Sector - 25
Noida, District Gautam Budh Nagar, Uttar Pradesh
0120-4545019
0120-6498452
87.
Indirapuram
(Ashiana
Arcade)
Shop No. - UG-18, Ashiana Arcade, Plot No. C-1, Golden
Residency Enclave, Indirapuram, Ghaziabad, UP
0120-4125128
0120-6498453
88.
Indirapuram Shop No. - 2, Retailex Mall, Abhay Khand - II, 0120-2607614

18
(Abhay Khand -
II)
Indirapuram,
Ghaziabad, Uttar Pradesh
0120-4238216
0120-6499152
89.
Vasundhara,
Sector - 12
Shop No. - 202, Upper Ground Floor, Plot No. - 12/513,
Sector - 12, Vasundhara, Ghaziabad, Uttar Pradesh
0120-4336117
0120-6498454
90.
Gandhi Nagar,
Ghaziabad
Shop No.- 8, Near Hari Manadir, New Gandhi Nagar,
Ghaziabad, Uttar Pradesh
0120-4336116
91.
Gamma - II,
Greater Noida
Shop No. GGS - 9, Gamma Shopping Complex,
Sector Gamma-II, Greater Noida, Uttar Pradesh
0120-4266738
0120-2322029
0120-6454117
92.
Indirapuram
(Regalia
Heights)
Shop No. MS-04, Regalia Heights, Shipra Sun City - I
Indirapuram, Ghaziabad, Uttar Pradesh
0120-2650465
0120-4108594
93.
Noida, Sector -
26
Shop No. - 106, Jaipuria Plaza, Commercial Plot No. - 68
A
Block - D, Sector - 26, Noida, Uttar Pradesh
0120-2442574
0120-4251254
94.
Indirapuram
(Amrapali
Royal)
Shop No. : LGF - 06, Amrapali Royal Commercial
Complex
Plot No. - 2B, Vaibhav Khand, Indirapuram, Ghaziabad,
Uttar Pradesh
0120-2607079
0120-4320282
95.
Vaishali, Sector
- 5
Shop No. - 17, Ground Floor, Sector -5, Vaishali,
Ghaziabad, Uttar Pradesh
0120-6477081
0120-4320102
96.
Noida, Sector -
53
Shop No. : S-38, Bolck - S, Kanchan Junga Shopping
Complex, Sector - 53, Noida, U.P.
0120-4203122
97.
I Gate Patni,
Noida
No. - 139-140, NSEZ, Noida, Uttar Pradesh - 201301 0120-4543150
98.
Indirapuram
(Gyan Khand)
Shop No. UG - 3, Plot No. C.S.-9, Gyankhand,
Indirapuram,
Ghaziabad, Uttar Pradesh
0120-2605450
99.
Indirapuram
(Orange
County)
Shop No. LGF-110, Orange County, Ahinsa Khand 1st
Indirapuram, Ghaziabad, Uttar Pradesh,
0120-4103341
8826994490

19
100.
R.D.C. Raj
Nagar
(Ghaziabad)
Shop No. : R.D.C. - 16, Raj Nagar, Ghaziabad, Uttar
Pradesh
0120-4113545
101.
Vasundhara,
Sector - 4B
Shop No. : UGF -1, Plot No. : 1- D, Reliance Plaza, Sector
- 4B,
Vasundhara, Ghaziabad, Uttar Pradesh
8826994491
102.
Gurgaon,
Galleria
Shop No.- SG - 061, Ground Floor Galleria, DLF City,
Phase - IV, Gurgaon, Haryana
0124-4057978
0124-4117978
103.
Gurgaon, South
City - II
(Block - F)
Shop No. - GF - 21, Block -F, Shopping Plaza
South City - II, Gurgaon, Haryana
0124-4285260
0124-4240780
104.
Gurgaon, Sector
- 14
The Apollo Clinic
SCO - 1, Sector - 14, Gurgaon, Haryana
0124-4285262
0124-2300502
105.
Gurgaon, Sector
- 56,
The Apollo
Clinic
The Apollo Clinic
SCO : 68-69, Sector : 55-56, Gurgaon, Haryana
0124-4285261
106.
Gurgaon, Qutub
Plaza
Shop No. - C-3, DLF Qutub Plaza, DLF City,
Phase - I, Gurgaon, Haryana
0124-4240781
107.
Gurgaon, Palam
Vihar
Shop No.: S-96, Palam Vyapaar Kendra, Palam Vihar,
Gurgaon, Haryana
0124-4073041
108.
Faridabad,
Sector - 15
Shop No. - 145 P, Sector - 15, Faridabad, Haryana 0129-2261870
0129-4175067
109.
Gurgaon, Sector
- 23
Shop No. - 3, Ground Floor, Sector - 23 & 23A Market
Gurgaon, Haryana - 122017
0124-4258783
110.
Neelam Chowk,
Faridabad
Shop No.- 57, N.I.T. Chowk, Faridabad (Haryana) 0129-2417935
0129-4025067
111.
Gurgaon, Sector
: 55 - 56
Shop No. - 92, Sector : 55 - 56, Gurgaon, Haryana 0124-4387325
112.
Gurgaon, Sector Booth No. - 158, Sector : 31, Gurgaon, Haryana 0124-4387326

20
: 31 - 32
113.
Gurgaon,
Sushant Lok
Shop No. - GF - 53, Sushant Vyapaar Kendra,
Sushant Lok, Phase -1, Gurgaon, Haryana
0124-4477603
114.
Gurgaon, Sun
City
Shop No. - 23, LGF, Suncity Arcade,Suncity,
Gurgaon, Haryana
0124-4233972
115.
Gurgaon, South
City - II
(Block - B)
Shop No. - 11, Shopping Plaza, Block - B, South City - II,
Sohna Road, Gurgaon, Haryana.
0124-4233971
116.
Gurgaon, Vatika
City
Shop No. : GF - 05, Vatika City Market, Sector - 49
Gurgaon, Haryana
0124-4285263
8826992282
117.
Gurgaon, The
Sapphire
Shop No. : G - 86, Ground Floor, The Sapphire, Sector -
49
Gurgaon, Haryana
0124-4510462
8826992281
118.
Gurgaon, Sector
- 14
Shop / Booth No. - 118, Sector : 14, Near Huda Office
Gurgaon, Haryana
0124-4265376
8826992284
119.
Gurgaon, Aryan
Hospital
Plot No. - 4, Ranjan Garden, Cant Area, Old Railway
Road, Gurgaon, Haryana
0124-4510472
8826992328


21
MCKINSEYs 7S Model
The McKinsey 7S Framework is a management model developed by well business
consultants Robert H. Waterman, Jr. and Tom Peters (who also developed the MBWA
Management by Walking Around" and authored In Search of Excellence in the 1980s.
This was a strategic vision for groups, to include l and performance) the model can be
used to understand how the organizational well-known businesses, business units, and
teams. The 7S are structure, strategy, systems, skills, style, staff and shared values.
The model is based on the theory that, for an organization to perform well, these seven
elements need to be aligned and mutually reinforcing. So, the model can be used to help
identify what needs to be realigned to improve performance, or to maintain alignment
during other types of change.

The Seven S Framework first appeared in "The Art of Japanese Management" by Richard
Pascale and Anthony Athos in 1981. They had been looking at how Japanese industry had
been so successful, at around the same time that Tom Peters and Robert Waterman were
exploring what made a company excellent. The Seven S model was born at a meeting of
the four authors in 1978. It went on to appear in "In Search of Excellence" by Peters and
Waterman, and was taken up as a basic tool by the global management consultancy.

Objective of the Model: To analyze how well an organization is positioned to achieve its
intended objective.

Use of this model: The model is most often used as a tool to assess and monitor changes
in the internal situation of an organization.
1. Improve the performance of a company
2. Examine the likely effects of future changes within a company
3. Align departments and processes during a merger or acquisition
4. Determine how best to implement a proposed strategy

22
The Seven Interdependent Elements in the Mckinsey Framework
The basic premise of the model is that there are seven internal aspects of an organization
that need to be aligned if it is to be successful. They are categorized into 2 broad headings:
1. Hard Elements Strategy Structure Systems
2. Soft Elements Shared Values Skills Style Staff

HARD ELEMENTS SOFT ELEMENTS
Strategy
Structure
System
Shared Values
Skills
Style
Staff

"Hard" elements are easier to define or identify and management can directly influence
them: These are strategy statements; organization charts and reporting lines; and formal
processes and IT systems.
"Soft" elements, on the other hand, can be more difficult to describe, and are less tangible
and more influenced by culture. However, these soft elements are as important as the hard
elements if the organization is going to be successful.

7 Elements
1. Strategy: the plan devised to maintain and build competitive advantage over the
competition.
2. Structure: the way the organization is structured and who reports to whom.
3. Systems: the daily activities and procedures that staff members engage in to get the job
done.
4. Shared Values: called "super ordinate goals" when the model was first developed,
these are the core values of the company that are evidenced in the corporate culture and
the general work ethic.
5. Style: the style of leadership adopt
6. Staff: the employees and their general capabilities.

23
7. Skills: the actual skills and competencies of the employees working for the company.

1. Strategy: Strategy signifies the course of action that an organization adopts in order
to expand and excel its business. It reflects on all those steps and actions that an
organization plans in order effectively handle its customers & competitors. Apollo
Pharmacy is a leader in pharmacy retail with 1500 stores all over the country
strongly capitalizing on its parent brand (Apollo Hospitals) brand name. Under the
retail sector, Apollo Pharmacy aims to provide health care related products in its
stores. Along with many national brands it also provides many Private Label Health
Care Products.
2. Structure: With 1500 stores all over country, each store is sized around 100 sq
meters. The stores also provide home delivery covering a radius of 2 km around the
store.
3. System: Apollo Pharmacy store is a mix of convenience stores located in residential
areas and hospitals and specialty stores having narrow product line confined to
health care products and deep assortments. Stores are seven day open from 8 am to
11 pm in summers and 8 am to 10 pm in winters.
4. Shared Values: One of the central objectives of each employee at store is to provide
best service to the customer.

24
5. Skills: Skills refers to the expertise of the organization in being successfully able to
deliver services as per the expectations of the customer. The key attributes which
could be associated with Apollo Pharmacy store are understanding the mood of
customer and helping them accordingly. Being a pharmacy store many customers
come with mild health problems like light fever and wants recemendations from
store helpers for the possible medicine. So store employees should have basic
understanding of common disease and their cure.
6. Style: In the IT Services - Apollo Pharmacy practices centralized distribution system
where all products national brands and private labels stock is maintained in godown
and the sent to each store. Fast moving items are automatically ordered when
minimum level is attained, while slow moving items are reordered on store
manager's request. In ungent requirment a store can also get products from another
store having excess stock. Delivery model is period based with period of two days.
7. Staff: Apollo Pharmacy employs one regional store manager, one store manager and
4 helpers. Mix of male and female helpers is preferred b the company. An
operational team is also present to look into the logistics of the products. For Private
label products there is an Executive for each product category, with merchandising
manager governing all products on whole.

Competitive position in the Industry (Using Porters Framework)
The five force framework reputedly known as the Porters Five forces Model has been
developed by Michael Porter Professor, Harvard Business School and has been
published in his book Competitive Strategy: Techniques for Analyzing Industries and
Competitors in the year 1980. Since then, the model is considered as a significant tool for
analyzing an organizations industry structure in terms of strategy.
Porters Five Force model is institutionalised on the concept that a corporate strategy
should be able to capitalize on the opportunities and safeguard the organisation from the

25
potential threats of the external environment. Porters Five Forces are briefly classified
into Horizontal & Vertical competition which includes:
Competitive Rivalry (Horizontal) Bargaining Power of Suppliers
(Vertical)
Threat of New Entrant (Horizontal) Bargaining Power of buyers (Vertical)
Threat of Substitution (Horizontal)
Porter's Five Forces

Horizontal Competition:
Competitive Rivalry: In pharmacy retail chain Apollo Pharmacy is leader with 1500
stores country wide and closest competetior Med Plus having 1250 stores. Main threat for
Apollo is from unorganized sector as they are present for long time and haave built
relations with local customer. Also they are able to provide additional discount by not
providing the bill of purchase.

26
Threat of Substitution: Health care products being a vary basic necesity wont decline in
near future. As the concept require the have wide assortments other stores are reluctant of
keep its inventory. So threat of substitution is of less magnitude.
Threat of New Entry: Retail stores having high operational cost and high fixed costs
reuire business to run on loss for initial time. Apollo has 1500 stores country wide and
thus enjoys superior position. Although threat of new entrant is there but it will be gradual.
Vertical Competition:
Supplier Power: National Brands supplier enjoys the supplier power and can dictate their
terms but private labels are effective way to reduce the power. Apollo Pharmacy outsource
the manufacturing of private label products to regional players and thus enjoys less or no
supplier power.
Buyer Power: Generally there are more than one pharmacy stores present in one locality
and customers are not loyal to any one store specially to organized store the customer have
buying power. But here again private label products helps company to hold the customers
as those private label products are avaliable only on their stores. Stores also provides
services like Loyalty Membership cards and Home Delivery to hold their customers.

27
Part B Project Work

PRIVATE LABEL GROWTH:


Growth in private label sales at retail stores is basically owing to the consumers
perception of the brand image of that particular store. The name Apollo has become
synonymous with trust and values that it has imbibed over the years and the same are
reflected in each transaction at Apollo Pharmacy. Consumers think that any in house
product being offered by Apollo would be certainly good in terms of quality and offer
value for money, a name that they can always rely upon
EVOLUTION OF PRIVATE LABELS:
PHASE 1: IMPORT
In the late 19
th
century,cooperative retailers in particular imported exotic products that
were sold loose or were pre packed under the traders logo
RETAILER
CONSUMERS
Well informed, well educated
Consumer trust
Long market presence of PL
RETAIL ENVIRONMENT
Highly developed market
Highly concentrated market
International players
High density of outlets
Fierce price competition
Discounter expansion

28
PHASE 2: VALUE ALTERNATIVES
In the 20
th
century retailers began to evaluate value alternatives to established brands
especiallly in categories as paper products with lower levels of brand loyalty.
PHASE 3: SEGMENTATION BY PRICE
While economy lines have been used to defeat price aggressive retailers such as discount
stores,standard lines,sold mostly under the retailers banner name,have offered brand like
quality at lower price while premium priced lines have been developed to expand the price
and quality spectrum.
PHASE 4: SEGMENTATION BY CATEGORIES(SUB BRANDING)
Many retailers have started to develop special interest brands catering for specific
consumer segment.Depending on the ranges concerned,sub brands have been either used
or totally new fantasy labels.
PHASE 5: SEGMENTATION BY BRAND ATTRIBUTES,ETHICAL
CREDENTIALS
The development of private labels satisfying consumer demand for products thst embrace
ethical credentials.

TRENDS IN MARKET
(1) PRIVATE LABEL SHARE TRENDS
Over the past several years, private label has consistently accounted for about 16% of CPG
spending and one-fifth of products purchased. Though not remarkable, the growth trend
has been slightly positive each of the past four years. This past year has seen escalating
growth rates as consumers increasingly turn to private label in order to save money on
packaged goods. Private label share growth has accelerated across all income segments
over the past year as consumers struggle under intense economic pressures.

29

(2) CHANNEL SHARE

Private label share varies across retail channels, and is highest among grocery retailers.
Share growth, however, is strongest among retailers in the drug channel. Over the past
year, private label share of drug sales (dollar and unit) climbed one full point. The catalyst
behind this growth is likely multi-pronged.
As illustrated in IRIs Transforming Economy: Shoppers in Crisis drug channel basket
rings have grown as consumers increasingly turn to the channel for local fill-in trips. At
the same time, self-care behavior is up sharply, reflective of consumer efforts to limit
expenditures wherever possible, including efforts to reduce trips to the doctor.

(3) DEPARTMENT SHARE
Private label offerings of OTC products have grown significantly over the past year, lifted
by growing numbers of prescription products moving to OTC, and retailer efforts to
capitalize on functional and customized product features to create a unique private label
offering (e.g. fast-melt variations, slow
release, etc).
Across channels, private label now represents one-third of healthcare department units and
one-quarter of department sales. Private label unit growth within the healthcare
department has significantly outpaced growth in any other department. This is good news
for drug retailers. As a destination location for healthcare products, the channel is well-
positioned to compete

(4) PRIVATE LABEL PURCHASE SEGMENT
The concentrated nature of private label extends beyond the number of categories offered,
also describing the number of habitual private label purchasers in CPG today.

30
Though nearly everyone purchases some private label products at some point- private
label penetration remains firm at 100%- a notable 33% of shoppers are considered heavy
buyers of private label goods. This valuable private label consumer segment actually
accounts for nearly two-thirds of private label sales.

(5) CONSUMER SPENDING BY SEGMENT
Private label penetration and share of spending is strongly impacted by demographics.
Transforming Economy: Shoppers in Crisis report reveals, though, that in these tough
economic times, wealthier consumers have stepped up private label purchase activity as
they seek value through substitution rather than opting out of a category completely.
Another key indicator of private label spending is household size. Private label
penetration increases sharply with household size. Particularly in todays economy, larger
households are looking to stretch their CPG dollars as far as possible. Private label
products go a long way to answering this need for value. To compete effectively, retailers
must strictly adhere to segmented private label strategies. Multi-tiered offerings will bring
broader appeal, and those retailers that successfully establish a halo brand will reap
sizable private label share increases.

FUTURE TRENDS:
(1) Multiple Availability of private labels in co-operation with other retailers: This
goes hand in hand with decreasing brand availability. Safeway in the US launched the
Better Living Brands Alliance in a bid to expand its organic and healthy eating private
labels via third parties Waitrose, UK, sells its private label products via Indian Retailer K
Raheja in its Hyper CITY stores
(2) Channel Blurring: Foodservice companies bring their products on retailers shelves
and vice versa. McDonalds tomato ketchup is available from supermarkets, for instance
in Germany Wal-Mart sells chilled drinks under its private labels

31
(3) Co-branding and tailor-made solutions as a result from co-operation with
manufacturer brands to tailor their offers to their target groups French Fromagerie Bels
cheese brand Babybel with Aldis Be light healthy eating private label.
Private Labels at Apollo Pharmacy:
Category Products
Instant Energy Drinks Glucose D
ORS

Herbal Juice Aloe Vera Juice
Amla Juice
Karela Juice
Noni Juice
Honey
Green Tea
Diet Green Tea
Sweetner
Breakfast Cereals
Granola Bar
Oil

Digestive Health Antacid
Triphala
Sat-Isabgol

Vitamin/ Supplements Multi Vitamin
Dietry Supplement
Chawanprash
Protein Supplement


32
Baby Care Hygiene
Bibs
Matt
Feeding Bottle
Diapers
Wipes

Skin Care Moisturisers
Lotions
Rose Water
Scrubs
Shampoo
Soaps
Face Wash
Shower Gel

Oral Care Toothbrush Adult
Toothbrush Kids
Toothpaste
Mouthwash

Men's Grooming Shave Gel
Shave Cream
After Shave Lotion
Deodrant Soap
Hair Gel
Deodrant Spray
Shaving Brush
Shaving Razor


33
Hygiene Refreshing Wipes
Soft Tissues
Nail Clippers
Cotton Buds
Cotton Balls
Adult Diapers
Sanitary Pad
Hand Sanitizers
Hand Wash

OTC Condoms
Talcum Powders
Air Fresheners
Lozenges
Cough Syrup
Cough Drops
Candies
Vapour Rub
Vapour Inhaler
Pain Balm
Lip Balm
Petroleum Jelly
Anti Fungal Cream

Clinical Aid Povidone Iodine Solution
Povidone Iodine Ointment
Disinfectant
Crepe Bandage
Medical Support
Microporous Surgical Tape

34

Home Aid Nebulizer
Blood Pressure Moniter
Vapourizer
Thermometer
Pregnancy
Test Card
Hot Water Bottle
Pain Relief
Adhesive Bandage
Antiseptic Liquid
First Aid Kit
Design and Pricing Strategies Followed for PL products:
1. Price Competetion: The Prices of PL products are less than their National Brand
counter part, thus giving consumers benefit of low price.
2. Me-Too: The design of PL products are similar to their national brands counter
part thus conveying the message of what products it substitutes.
COMMERCIAL IMPLICATIONS OF PRIVATE LABEL
Retailers are focusing on Private Label as a means to delivering gross margin and Brand
Enhancement objectives. Higher and unavoidable overhead costs are driving the need for
improving Gross Margins
Private label allow Retailers to design for their specific target market
Increased channel control allows Retailers flexibly to be responsive to trend cycles
Increased product differentiation protects the Retailers market share
The commercial implications of Private label are:
Improve Profitability

35
Build and maintain consumer loyalty.
Reinforce Market Position
Increase Consumer Choice
Match Products more precisely to Retailers Customers

Some other factors include:
Enhancement of Store Image
Better control of Supply Chain and Product quality
Differentiation from competitors

PRICE OF PRIVATE LABEL PRODUCTS
Private Label products may be cheaper to produce for a number of reasons:
(i) Where private label uses the manufacturer brands as the benchmark it might be seen as
capitalizing upon some of the original product development and marketing;
(ii) Manufacturers may produce private label at prices that reflect only the direct
manufacturing costs in order to fill excess production capacity;
(iii) If the manufacturers sales force and distribution channels are not used, the retailers
buying price can be reduced;
(iv) If the retailer has enough (marginal) buying power, it might be able to negotiate a
reduction in the manufacturers profit margin
An Example of the Costs Avoided with Private Label


36
SN COMPONENT MANUFACTURED
BRAND
PRIVATE
LABEL
1. Raw Materials 35 35
2. Packaging Material 12 12
3. Manufactured Costs
Variable
Fixed

9
5

9
--
4. Research & Development 3 --
5. Sales Force 4 --
6. Advertising & Promotion 9 5
7. Transport & Distribution 5 2
8. Other Costs 10 10
9. Operating Profit 8 2
10. Retailer Buying Price 100 75

In the above mentioned example, all costs are an approximate prediction. The actual costs
may actually vary across different product categories.
PRICE


37
Pricing by Private Brand may either be:
Premium Pricing
Value for money pricing
Both of them contribute towards
Store Image Store LoyaltyCustomer FootfallsStores Bargaining PowerStore
marginStore Profits

In sum, the benefits to a retailer from the introduction of store brands are
(i) Higher unit margin on national brands
(ii) Expansion of the category sales and
(iii) Higher category margin from sales volume

Performance of Private Label Products (Research Based Project)
Central Problem:
Apollo having variety of PL products of different sizes and different prices it complicated
to compare their performances.
Objectives Summer Internship Programme
To compare the performance of PL products in most appropiate way.
Action Plan:
To compare the performance interview was conducted with merchandising manager and
executive of all product categories. In all three methids were used to eveluate the
performance of PL products quantitatevily.

38
1. Average sales per month: This method gives clear picture about cash flow due to
the product and its movement. But as different product had different margins
comparing based on sales itself is not enough.
2. Average returns per month: This method being more closely related to margin is
prefered over Average sales per month.
3. Returns per Shelve: In a small retail store of size 200-250 sq ft, physical space is
also a matter of concern. There are only limited shelves where products can be
displayed. So products of small size have advantage over products acquring more
space. In this method a hypothetical shelve is considered which is filled only with
one type of pruduct. The returns (returns=sales-cost) of this shelve will denote
much accurate performance measure as it include store's operational cost.
A basket of products was chosen as adviced by the merchandising manager. Following
products was considered for the pilot study.
ITEM NAME Category MRP
AP THERMOMETER DIGITAL Home Aid 195
AP AMLA JUICE 1 LTR. Health Food 205
AP SENSITIVE TOOTH BRUSH 12S Oral care 35
AP COUGH DROPS 300S JAR OTC 1
AP BP MONITOR Home Aid 1999
AP AMLA JUICE 500ML Health Food 130
AP GREEN TEA 25'S Health Food 85
AP NONI JUICE 500ML Health Food 550
AP ALOE VERA JUICE 500 ML Health Food 160
AP ALOEVERA JUICE 1 LTR Health Food 245
AP HAND SANITIZER 100ML Hygeine 55
AP HAND SANITIZER 250 ML Hygeine 99
AP HAND SANITIZER 50ML Hygeine 35
AP PREMIUM TOOTHBRUSH Oral care 28

39
AP DAILY FRESH TOOTHBRUSH TWIN
PACK Oral care 35
AP POPULAR TOOTHBRUSH Oral care 18
AP SUPER CLEAN TOOTH BRUSH Oral care 10
AP PREMIUM SERIES TOOTH BRUSH Oral care 22
AP TOOTHPASTE MENTHOL 80GM Oral care 33
AP TOOTHPASTE RED GEL 80GM Oral care 33
Now the sales figure of all products were collected for past year from April '12 to March
'13. Problems faced at this step was that some products was released only 6 months back,
some products were out of stock due to operational problems and thus suffered sales drop.
To avoid this average quantity sold per month was calculated ignoring period of out of
stock. Also the prices were inflated during past year quite a few times and for almost all
products. As described by the merchandising manager prices were inflated not to affect
sales but due to increased manufacturing cost and to maintain constant margin. Thus in
order to measure their performance their quantity sold was multiplied by current price to
calculate hypothetical average sales per month.
ITEM NAME Category MRP
Average
quantity sold
per month
Average Sales
per month
AP BP MONITOR Home Aid 1999 592.5714286 1184550.29
AP THERMOMETER
DIGITAL Home Aid 195 5228.75 1019606.25
AP AMLA JUICE 1
LTR.
Health
Food 205 4549.333333 932613.33
AP GREEN TEA 25'S
Health
Food 85 10699.77778 909481.11
AP NONI JUICE
500ML
Health
Food 550 1388.9 763895.00
AP SENSITIVE
TOOTH BRUSH 12S Oral care 35 21558.41667 754544.58

40
AP COUGH DROPS
300S JAR OTC 1 697278.1667 697278.17
AP AMLA JUICE
500ML
Health
Food 130 5297.5 688675.00
AP ALOE VERA
JUICE 500 ML
Health
Food 160 3383.916667 541426.67
AP ALOEVERA
JUICE 1 LTR
Health
Food 245 2204 539980.00
AP HAND SANITIZER
100ML Hygeine 55 7109.5 391022.50
AP PREMIUM
TOOTHBRUSH Oral care 28 7625.416667 213511.67
AP PREMIUM
SERIES TOOTH
BRUSH Oral care 22 8536.166667 187795.67
AP HAND SANITIZER
50ML Hygeine 35 4659.416667 163079.58
AP DAILY FRESH
TOOTHBRUSH TWIN
PACK Oral care 35 4364.333333 152751.67
AP POPULAR
TOOTHBRUSH Oral care 18 8470.333333 152466.00
AP HAND
SANITIZER 250 ML Hygeine 99 1487.166667 147229.50
AP SUPER CLEAN
TOOTH BRUSH Oral care 10 11617.66667 116176.67
AP TOOTHPASTE
MENTHOL 80GM Oral care 33 3164.166667 104417.50
AP TOOTHPASTE
RED GEL 80GM Oral care 33 851.5714286 28101.86

41
Thus at this stage we got products ranked based on average sales per month. To get returns
by each product costing of each product was considered. The cost included following :
1. Manufactures Price
2. Excise
3. Freight Charges
4. Logistics
5. Sales Tax
A list was complied with cost of each product and its margin percent was calculated.
ITEM NAME Category MRP Cost
Margin
Margin
Percent
AP THERMOMETER
DIGITAL Home Aid 195 60.544 134.456 68.95%
AP AMLA JUICE 1
LTR. Health Food 205 82.28 122.72 59.86%
AP SENSITIVE
TOOTH BRUSH 12S Oral care 35 13.112 21.888 62.54%
AP COUGH DROPS
300S JAR OTC 300 136.29 163.71 54.57%
AP BP MONITOR Home Aid 1999 926 1073 53.68%
AP AMLA JUICE
500ML Health Food 130 45.804 84.196 64.77%
AP GREEN TEA 25'S Health Food 85 28.27 56.73 66.74%
AP NONI JUICE
500ML Health Food 550 288.2 261.8 47.60%
AP ALOE VERA
JUICE 500 ML Health Food 160 72.138 87.862 54.91%
AP ALOEVERA Health Food 245 135.124 109.876 44.85%

42
JUICE 1 LTR
AP HAND SANITIZER
100ML Hygeine 55 19.437 35.563 64.66%
AP HAND
SANITIZER 250 ML Hygeine 99 49.874 49.126 49.62%
AP HAND SANITIZER
50ML Hygeine 35 14.3 20.7 59.14%
AP PREMIUM
TOOTHBRUSH Oral care 28 14.212 13.788 49.24%
AP DAILY FRESH
TOOTHBRUSH TWIN
PACK Oral care 35 18.458 16.542 47.26%
AP POPULAR
TOOTHBRUSH Oral care 18 9.724 8.276 45.98%
AP SUPER CLEAN
TOOTH BRUSH Oral care 10 5.434 4.566 45.66%
AP PREMIUM
SERIES TOOTH
BRUSH Oral care 22 12.144 9.856 44.80%
AP TOOTHPASTE
MENTHOL 80GM Oral care 33 19.998 13.002 39.40%
AP TOOTHPASTE
RED GEL 80GM Oral care 33 22.429 10.571 32.03%
The margin percent when multiplied by sales gives the returns per month for the product.
ITEM NAME Category MRP
Margin
Percent
Sales Returns
AP THERMOMETER
DIGITAL Home Aid 195 68.95%
1019606.2
5 703036.81
AP BP MONITOR Home Aid 1999 53.68%
1184550.2
9 635829.14

43
AP GREEN TEA 25'S Health Food 85 66.74% 909481.11 606998.39
AP AMLA JUICE 1
LTR. Health Food 205 59.86% 932613.33 558294.19
AP SENSITIVE
TOOTH BRUSH 12S Oral care 35 62.54% 754544.58 471870.62
AP AMLA JUICE
500ML Health Food 130 64.77% 688675.00 446028.31
AP COUGH DROPS
300S JAR OTC 1 54.57% 697278.17 380504.70
AP NONI JUICE
500ML Health Food 550 47.60% 763895.00 363614.02
AP ALOE VERA
JUICE 500 ML Health Food 160 54.91% 541426.67 297317.69
AP HAND SANITIZER
100ML Hygeine 55 64.66% 391022.50 252835.15
AP ALOEVERA
JUICE 1 LTR Health Food 245 44.85% 539980.00 242166.70
AP PREMIUM
TOOTHBRUSH Oral care 28 49.24% 213511.67 105139.25
AP HAND SANITIZER
50ML Hygeine 35 59.14% 163079.58 96449.93
AP PREMIUM
SERIES TOOTH
BRUSH Oral care 22 44.80% 187795.67 84132.46
AP HAND
SANITIZER 250 ML Hygeine 99 49.62% 147229.50 73058.55
AP DAILY FRESH
TOOTHBRUSH TWIN
PACK Oral care 35 47.26% 152751.67 72194.80
AP POPULAR Oral care 18 45.98% 152466.00 70100.48

44
TOOTHBRUSH
AP SUPER CLEAN
TOOTH BRUSH Oral care 10 45.66% 116176.67 53046.27
AP TOOTHPASTE
MENTHOL 80GM Oral care 33 39.40% 104417.50 41140.50
AP TOOTHPASTE
RED GEL 80GM Oral care 33 32.03% 28101.86 9001.96
In above table products are arranged according to returns per month.
Next to calculate returns per shelve, a typical shelf was cleared and then fully filled by
each product. The number of products that can be accommodated on each shelve was
noted.
ITEM NAME Category MRP
Self Use
type
Box
Size
Capacit
y in one
Shelf
Total
Units in
one shelf
AP
THERMOMETER
DIGITAL Home Aid 195 Box 10 8 80
AP AMLA JUICE 1
LTR.
Health
Food 205
Individu
al Units 1 32 32
AP SENSITIVE
TOOTH BRUSH 12S Oral care 35 Box 11 9 99
AP COUGH DROPS
300S JAR OTC 1 Box 300 10 3000
AP BP MONITOR Home Aid 1999
Individu
al Units 1 7 7
AP AMLA JUICE
500ML
Health
Food 130
Individu
al Units 1 32 32
AP GREEN TEA 25'S
Health
Food 85
Individu
al Units 1 40 40

45
AP NONI JUICE
500ML
Health
Food 550
Individu
al Units 1 32 32
AP ALOE VERA
JUICE 500 ML
Health
Food 160
Individu
al Units 1 32 32
AP ALOEVERA
JUICE 1 LTR
Health
Food 245
Individu
al Units 1 32 32
AP HAND
SANITIZER 100ML Hygeine 55
Individu
al Units 1 50 50
AP HAND
SANITIZER 250 ML Hygeine 99
Individu
al Units 1 40 40
AP HAND
SANITIZER 50ML Hygeine 35
Individu
al Units 1 75 75
AP PREMIUM
TOOTHBRUSH Oral care 28 Box 11 9 99
AP DAILY FRESH
TOOTHBRUSH
TWIN PACK Oral care 35 Box 11 9 99
AP POPULAR
TOOTHBRUSH Oral care 18 Box 11 9 99
AP SUPER CLEAN
TOOTH BRUSH Oral care 10 Box 11 9 99
AP PREMIUM
SERIES TOOTH
BRUSH Oral care 22 Box 11 9 99
AP TOOTHPASTE
MENTHOL 80GM Oral care 33
Individu
al Units 1 119 119
AP TOOTHPASTE
RED GEL 80GM Oral care 33
Individu
al Units 1 119 119
To calculate returns per shelve number of shelves were calculated to store one month's
inventory.

46

ITEM NAME Category MRP
Total
Units in
one shelf
Average
Monthly
Sales
Total
Shelves
AP THERMOMETER
DIGITAL Home Aid 195 80 5228.75 65.36
AP AMLA JUICE 1 LTR.
Health
Food 205 32 4549.33 142.17
AP SENSITIVE TOOTH
BRUSH 12S Oral care 35 99 21558.42 217.76
AP COUGH DROPS 300S
JAR OTC 1 3000 697278.17 232.43
AP BP MONITOR Home Aid 1999 7 592.57 84.65
AP AMLA JUICE 500ML
Health
Food 130 32 5297.50 165.55
AP GREEN TEA 25'S
Health
Food 85 40 10699.78 267.49
AP NONI JUICE 500ML
Health
Food 550 32 1388.90 43.40
AP ALOE VERA JUICE 500
ML
Health
Food 160 32 3383.92 105.75
AP ALOEVERA JUICE 1
LTR
Health
Food 245 32 2204.00 68.88
AP HAND SANITIZER
100ML Hygiene 55 50 7109.50 142.19
AP HAND SANITIZER 250
ML Hygiene 99 40 1487.17 37.18
AP HAND SANITIZER 50ML Hygiene 35 75 4659.42 62.13
AP PREMIUM
TOOTHBRUSH Oral care 28 99 7625.42 77.02

47
AP DAILY FRESH
TOOTHBRUSH TWIN PACK Oral care 35 99 4364.33 44.08
AP POPULAR
TOOTHBRUSH Oral care 18 99 8470.33 85.56
AP SUPER CLEAN TOOTH
BRUSH Oral care 10 99 11617.67 117.35
AP PREMIUM SERIES
TOOTH BRUSH Oral care 22 99 8536.17 86.22
AP TOOTHPASTE
MENTHOL 80GM Oral care 33 119 3164.17 26.59
AP TOOTHPASTE RED GEL
80GM Oral care 33 119 851.57 7.16
Now monthly margin was divided by number of shelves to get returns per shelve.
ITEM NAME Category MRP
Total
Shelves
Average
Monthly
Margin
Returns per
shelve
AP COUGH DROPS 300S
JAR OTC 1 23 380504.70 16371.00
AP THERMOMETER
DIGITAL Home Aid 195 65.36 703036.81 10756.48
AP NONI JUICE 500ML
Health
Food 550 43.40 363614.02 8377.60
AP BP MONITOR Home Aid 1999 84.65 635829.14 7511.00
AP AMLA JUICE 1 LTR.
Health
Food 205 142.17 558294.19 3927.04
AP ALOEVERA JUICE 1
LTR
Health
Food 245 68.88 242166.70 3516.03
AP ALOE VERA JUICE
500 ML
Health
Food 160 105.75 297317.69 2811.58
AP AMLA JUICE 500ML Health 130 165.55 446028.31 2694.27

48
Food
AP GREEN TEA 25'S
Health
Food 85 267.49 606998.39 2269.20
AP SENSITIVE TOOTH
BRUSH 12S Oral care 35 217.76 471870.62 2166.91
AP HAND SANITIZER
250 ML Hygiene 99 37.18 73058.55 1965.04
AP HAND SANITIZER
100ML Hygiene 55 142.19 252835.15 1778.15
AP DAILY FRESH
TOOTHBRUSH TWIN
PACK Oral care 35 44.08 72194.80 1637.66
AP HAND SANITIZER
50ML Hygiene 35 62.13 96449.93 1552.50
AP TOOTHPASTE
MENTHOL 80GM Oral care 33 26.59 41140.50 1547.24
AP PREMIUM
TOOTHBRUSH Oral care 28 77.02 105139.25 1365.01
AP TOOTHPASTE RED
GEL 80GM Oral care 33 7.16 9001.96 1257.95
AP PREMIUM SERIES
TOOTH BRUSH Oral care 22 86.22 84132.46 975.74
AP POPULAR
TOOTHBRUSH Oral care 18 85.56 70100.48 819.32
AP SUPER CLEAN
TOOTH BRUSH Oral care 10 117.35 53046.27 452.03

Thus the products were ranked according to returns per shelve.


49
Pharmacy Store Insights (Research Based Project)
Analyzing the business model of the pharmacy retail chains to understand the potential
margins and return ratios that the business can generate. These analyses have been done at
store level based on discussions with the operational team.
Sales mix - Typically in a pharmacy store, prescription drugs account for 70-75% of the
total sales, followed by 20-25% sale from OTC products and 5-7% from private label
goods.
Margin Gross margin on prescription drugs is 20-22%, 8-10% on the OTC products and
35- 40% on private label goods.
Fixed costs A store with 250-300 sq ft of area has fixed cost of 1 mn per year,
including rentals, electricity expenses, staff costs and other incidental expenses.
Investments and working capital Initial investment per store is 2 mn which includes
security deposits to the lessor, interiors and pre-operative expenses. Working capital
requirements would be negligible as inventory requirements of 30-35 days are offset by
credit period of 30-35 for the goods purchased.
Various financials reports were collected of the firm of past five years to calculate the Beta
for the firm (Apollo pharmacy is not a separately listed company so financials reports of
Apollo Hospitals were considered).


50
DESCRIPTION Mar-12 Mar-11 Mar-10 Mar-09 Mar-08
Shareholder's Funds 2352.27 1772.16 1541.78 1370.86 1238.04
Long-Term Borrowings
Secured Loans 368.51 484.17 471.43 436.55 292.20
Unsecured Loans 53.16 74.46 218.56 12.93 13.44
Total Debt 421.67 558.63 689.99 449.48 305.64
Interest 63.60 55.15 37.75 22.32 19.90
Interest rate debt 15.084% 9.871% 5.471% 4.965% 6.510%
Average Intrest Rate 8.380%


from paper risk free
market
rate risk premium


9.510% 22.960% 13.450%

Tax Rate(%) 31.562% 32.528% 31.599% 31.450% 29.878%
Average Tax Rate 31.403%

Total Debt/Equity(x) 0.267 0.434 0.448 0.330 0.250
D/V
0.21055497
9
0.30286989
8
0.30916817
4
0.24797852
2
0.19991871
6
E/V
0.78944502
1
0.69713010
2
0.69083182
6
0.75202147
8
0.80008128
4
Average D/V
0.25409805
8

Average E/V
0.74590194
2

Beta for Apollo
Hospitals
0.32933046
6



51
Cost of Equity 13.939%
Cost Of Debt 8.380%

WACC 11.858%

Thus WACC (Weighted Average Cost of Capital) for Apollo Hospital comes out to be
11.858%. Using this WACC we can compute Net Present Value (NPV) for a store, which
will help in taking decision of opening a store.
Assuming a new store generates average of 50 bills per day with average value of Rs 150.
Thus daily sales will be Rs 7500. Now with the following details yearly analyses will be:
Revenue per day 7500
Growth 15%
Growth Period 3
Inflation 0.08
WACC 11.86%

Gross Margin 22.20%
Fixed Cost 1000000
Initial
Investment 2000000
Depreciation 100000
Interest 200000
Tax Rate 31.403%


Year 0 1 2 3 4
5 and
Onwards
Initial
Investment 2000000.00
Revenue

2737500.00 3148125.00 3620343.75 4163395.31 4496466.94

52
Expenses

607725.00 698883.75 803716.31 924273.76 998215.66
Operating Profit

2129775.00 2449241.25 2816627.44 3239121.55 3498251.28
Fixed Cost

1000000.00 1080000.00 1166400.00 1259712.00 1360488.96
EBITDA

1129775.00 1369241.25 1650227.44 1979409.55 2137762.32
Depreciation

100000.00 108000.00 116640.00 125971.20 136048.90
Interest

200000.00 200000.00 200000.00 200000.00 200000.00
PBT

829775.00 1061241.25 1333587.44 1653438.35 1801713.42
Tax

260576.52 333264.50 418790.12 519233.77 565797.00
PAT

569198.48 727976.75 914797.32 1134204.58 1235916.42
Net Cash Flow -2000000.00 569198.48 727976.75 914797.32 1134204.58 10422479.85
Net Present
Value 468752.82

Initially a growth of 15% is considered for a period of 4 years from 5th year onwards
growth is taken as inflation rate.
Here we can see NPV of around 4.5 Lacs. But if we slightly alter our assumption of 50
bills per day to 40 bills, analyses will be as follows:



53
Revenue per day 6000
Growth 15%
Growth Period 3
Inflation 0.08
WACC 11.86%

Gross Margin 22.20%
Fixed Cost 1000000
Initial
Investment 2000000
Depriciation 100000
Intrest 200000
Tax Rate 31.403%


Year 0 1 2 3 4
5 and
Onwards
Initial
Investment 2000000.00
Revenue

2190000.00 2518500.00 2896275.00 3330716.25 3597173.55
Expenses

486180.00 559107.00 642973.05 739419.01 798572.53
Operating Profit

1703820.00 1959393.00 2253301.95 2591297.24 2798601.02
Fixed Cost

1000000.00 1080000.00 1166400.00 1259712.00 1360488.96
EBITDA

703820.00 879393.00 1086901.95 1331585.24 1438112.06
Depriciation

100000.00 108000.00 116640.00 125971.20 136048.90
Intrest

200000.00 200000.00 200000.00 200000.00 200000.00
PBT

403820.00 571393.00 770261.95 1005614.04 1102063.17
Tax

126812.70 179436.11 241887.47 315795.73 346083.91
PAT

277007.30 391956.89 528374.48 689818.31 755979.25
Net Cash Flow -2000000.00 277007.30 391956.89 528374.48 689818.31 6375170.99


54
Net Present
Value -620961.71

Here we can see although the store has positive cash flow since year one but NPV is less
than one. So financially this is not a good option to consider.
But again in retail chain increasing number of store is considered as a good option if one
can financially support it as in future one can leverage its presence to drive more sales.
Measures to drive more sales can be:
1. Upselling: This option is viable for prescription-based customers, as they require
specific product of specific quantity.
2. Cross Selling: This option is best suited for pharmacy stores as customer can be
persuaded for supplement products to their prescription.
To properly implement Cross selling one needs to know Customer Insights.
Typically customers are of three types:
1. Prescription-Based customer: This customer has a doctors prescription and
requires specific prescription drugs of specific quantity.
2. Prescription Drugs on Advice: These customers have minor sickness and buy
prescription drugs based on advice given by the store incharge.
3. Product Seeking: These customers are in store to buy products other than
prescription drugs. These customers can be most valuable as they can be
influenced to buy PL products that have highest margin.
An observational research was conducted across five different store with cumulative
sample size of 100 customers. This study revealed that all customers out of the sample can
with a specific purpose and belong to one of three categories but while observing the
displayed products made impulsive decision to buy additional products. Thus the time a

55
customer spends in a store is also crucial. The time spent by a customer can be broken
down into three parts:
1. Entry to order: When customer enters they informs the store in charge about their
demands, customer is busy during this time period. According to study customer
spent around 11sec in this period.
2. Waiting: While the store in charge collects the order of customer the customer is
waiting and this is the crucial time when they can be influenced to cross sell by
other in charge. Study revealed that customer spent around 1 min and 41 seconds
in during this period.
3. Billing: While customer is not busy during this stage but none was willing to buy
more products as billing was already in progress. Customer spent around 29
seconds in this period.

PART C Learning
The Internship was extremely helpful for me to understand workings of a big corporate.
Various tolls, which were helpful to me included:
Research Methodology: I took two projects and both were experiment based.
While I got data from secondary sources of from one of the project an in store
observational study was conducted with the help of store manager.
Financial Investment: At Apollo Pharmacy while opening a new store breakeven
point is estimated and if it is somewhere below 18 months it is considered a good
investment. I tried to apply the method of Net Present Value to estimate value of a
new store taking the cost of capital into account.
I also picked up various new skills, which included:

56
Returns itself is not important for any business. There are many constraints to
which business has to stick. Like at store physical space is a constraint, so returns
per shelve is a better valuation than monthly margin.
I learned how a customer behave while in a store and what all activities he go
through before leaving the store. Due to this one can find opportunities of
increasing sales per bill by cross selling.
I also learned about how PL products are able to get good margin and maintaining
to quality by enhancing the value chain.