1. 360 Visits: New Entrants & Peers Blue: Positive to Sugi Red: Negative to Sugi ST: Low threat to Sugi’s differentiated positioning. LT: Players may present risks but not fatal. Current Thoughts on Drug Opportunity Future Drug Strategy & Sector Outlook Hard to hire enough sales reps and pharmacists (3-5 needed per store). Current deregulation is not enough to enter beyond OTC 2 & 3. Mgmt believes Convenience and Drug stores not competitors due to a different customer base. Hard to hire enough sales reps and pharmacists (3-5 needed per store). Current deregulation is not enough to enter beyond OTC 2 & 3. Mgmt believes Convenience and Drug stores not competitors due to a different customer base. Sales rep 1 year work experience requirement is tough given employee turnover (planning to work something out with MatsuKiyo with their 400 sales rep). Planning to test drug sales at all stores to gauge customer reaction, could potentially decide to expand. Sales rep 1 year work experience requirement is tough given employee turnover (planning to work something out with MatsuKiyo with their 400 sales rep). Planning to test drug sales at all stores to gauge customer reaction, could potentially decide to expand. Dispensing drugs will not become one of their main revenue sources (plan to stick with core convenience goods sales). MK and Lawson expansion plan seems unrealistic and no synergies were found between two companies. Dispensing drugs will not become one of their main revenue sources (plan to stick with core convenience goods sales). MK and Lawson expansion plan seems unrealistic and no synergies were found between two companies. Drugs only a small portion of sales with focus to remain on Nakashoku (prepared food). Not very interested in Rx or OTC 1 and use OTC2&3 only to expand product line up. Find best locations for expansion, implement best practices. 7i thinks increasing single family and elderly will favor CS format over DS or SM. Drugs only a small portion of sales with focus to remain on Nakashoku (prepared food). Not very interested in Rx or OTC 1 and use OTC2&3 only to expand product line up. Find best locations for expansion, implement best practices. 7i thinks increasing single family and elderly will favor CS format over DS or SM. Would like to differentiate and sell Rx and OTC 1 in mid to long term (Lawson also thinks OTC 2 & 3 drugs will not be as attractive as Rx). Will try and test through partnership over next 3-5yrs to evaluate potential of drugs and prescription business (partner doesn’t have to be MatsuKiyo). Would like to differentiate and sell Rx and OTC 1 in mid to long term (Lawson also thinks OTC 2 & 3 drugs will not be as attractive as Rx). Will try and test through partnership over next 3-5yrs to evaluate potential of drugs and prescription business (partner doesn’t have to be MatsuKiyo). Focus on efficient operation (SD believes that experience competing in more developed Kanto/Tokyo region gives better logistics / general business operations know-how is better than Sugi). SD will suffer more competition with SMs as they carry more food than Sugi or MatsuKiyo. Focus on efficient operation (SD believes that experience competing in more developed Kanto/Tokyo region gives better logistics / general business operations know-how is better than Sugi). SD will suffer more competition with SMs as they carry more food than Sugi or MatsuKiyo. SunDrug Peer Lawson New Entrant 7i Holdings New Entrant