In recent years, pharmacy has moved on from being a product-based industry to one with more focus on professional services as a new source of income.

A study of the airline industry illustrates how passengers look at the price and services offered and are willing to trade one for the other and are willing to pay accordingly. Business gurus are of the opinion that the most successful companies are those that trade on the 'productivity frontier'. If you plotted them on a graph with service differentiations on one scale and relative selling price on the other, airlines that tried to offer the best service at the best price were the ones that failed. At one end you would have EasyJet and Ryanair trading successfully on cheap no-frill fares and at the other you have Emirates and other premium airlines doing equally well. However, British Airways tried to do both, got caught in the middle and racked up millions of pounds of losses at one point in its history.

In community pharmacy, independents can never compete with the large multiples on price and therefore should play to their strengths by aiming to give a much better professional service. The best place to trade is on the frontier, as shown in the diagram below illustrating the concept of the service/price trade-off.

It is a good idea to use this method to plot your own current position on a similar graph. Use what you find to decide the action you need to take to move your own organisation to the 'productivity frontier' €“ the best position for your business.