Since we’re on the topic of FarmaPatria, I thought this paper from MIT’s Sloan School was interesting. The authors, Cyrus Gibson and Ari Levy, tell the story of Locatel.
It’s so rare to read something praising a succesful, innovative and, yes, private Venezuelan business initiative.
The money quote, discussing Locatel’s modest beginnings in an industrial section of Caracas:
“The results astounded John and Luis (the founders). From the opening day there were lines into the streets waiting to get in. Contrary to expectations the store attracted customers from far outside the neighborhood, including many from upscale parts of Caracas…
From 1999 to 2004 the number of stores grew from 6 to 37 (Exhibit 1). At one point, stores were being opened at the rate of one per month. Stores were almost universally successful. Most achieved breakeven in the first day of operation, compared to similar businesses in the United States which required over four years. Store sales grew from $10 million to $221 million. During this period, Locatel, through its stores and supply and wholesale business, became the number one player in the medical equipment market, and the number two player among the pharmacy retail chains, accounting for 5% of total sales of medicines in Venezuela. At the same time, Locatel was able to maintain a uniformly high quality of store appearance and service. Ratings by large suppliers and third-parties showed Locatel’s brand image and consumer reputation were the best in its industry in the country.”