The identification of variables which universally and significantly influence the return on assets (ROA) of retail pharmacies in South Africa

Abstract

A retail pharmacist who wishes to ensure the long-term survival of his or her business in a free enterprise system must make the pharmacy's profitability the prime objective. In South Africa, the profitability of retail pharmacies and, thus, of their continued operation, are threatened by increasing competition among retail pharmacies and from dispensing doctors. Nonetheless, the profitability can be enhanced even in these circumstances by adopting a strategic management approach. The research hypothesis of this article is that there are specific controllable internal strategic management variables which universally and significantly influence the return on assets (ROA) of South African retail pharmacies. Multiple regression analysis was used in the study and it was found that the variance in the ROAs of South African retail pharmacies is explained by several strategic management variables. These are associated significantly (on a 5% level) with pharmacies' ROA and include variables such as the sole proprietorship and the partnership as forms of business organization, the purchase ratio and the analysis of strengths and weaknesses as part of their strategic management. Mark-up pricing and the closed corporation as a form of business organization are negatively related to ROA.

'n Kleinhandelapteker wat die langtermyn-voortbestaan van sy of haar ondenreming in 'n vryemarkstelsel wil verseker, moet die winsgewendheid daarvan as primere doelstelling nastreef. In Suid-Afrika word die winsgewendheid en oorlewing van kleinhandelapteke deur toenemende mededinging tussen apteke onderling en deur resepterende geneeshere bedreig. Desnieteenstaande kan die winsgewendheid van apteke gehandhaaf word deur 'n strategiese bestuursbenadering toe te pas. Die navorsingshipotese van hierdie artikel is dat spesifieke, beheerbare interne veranderlikes betreffende strategiese bestuur bestaan, wat die opbrengs op bates (ROA) van Suid-Afrikaanse apteke universeel en beduidend beinvloed. Meervoudige regressie-analise is in die studie gebruik en daar is bevind dat die variansie in die ROA's van Suid-Afrikaanse apteke deur verskeie veranderlikes betreffende strategiese bestuur verklaar kan word. Hierdie veranderlikes toon 'n beduidende verband (op 'n peil van 5%) met die ROA's van apteke en sluit veranderlikes in soos die eenmansaak en vennootskap as ondernemingsvorme, die aankoopverhouding, en die ontleding van sterk en swak punte van die onderneming as deel van strategiese bestuur. Die toeslagmetode van prysbepaling en die beslote korporasie as ondernemingsvorm toon 'n negatiewe verband met ROA.