Reference no: EM13800792
Evaluate McKesson's positioning (Porter's 5-forces) and unique resources (VRIO) vis a vis its rivals.
Cardinal Health Cardinal Health competed with McKesson in drug and medical supplies distribution, consulting and data management, and retail pharmacy franchising through its Medicine Shoppe franchise. Cardinal had made some 50 acquisitions since 1980 and was the 19th-largest U.S. company in 2011,74 with sales over $102 billion. Roughly 85% of its sales came from drug distribution; pharmacies, including CVS and Walgreen's, were its biggest customers.75 Cardinal's medical equipment manufacturing and clinical technologies units were spun off into a new entity in 2009.
Cardinal Health acquired its apothecary, Medicine Shoppe (founded in 1968), in 1995. It had more than 700 U.S. locations and 200 stores in Canada, Asia, and the Middle East. Locations sold mainly health-related products and earned 97% of sales from prescription drugs. Because these pharmacies tended to focus on long-term care and chronic conditions such as diabetes, their customers skewed older. As of 2011, close to 15% of Medicine Shoppe locations housed nurse-run mini health clinics.
Medicine Shoppe charged royalty fees (based on franchisees sales) until 2009,77 when it began offering monthly fees that were either fixed or based on franchisees' sales (plus origination fees).78 Some people speculated that this change came about because Medicine Shoppe franchisees were unhappy paying large sales-based fees. After the franchise agreement was restructured, Cardinal Health's gross margin fell by some $65 million and Medicine Shoppe's sales fell roughly 2.5%.
AmerisourceBergeln AmerisourceBergen handled roughly 20% of drugs sold and distributed in the U.S.88 It had $80 billion in annualized revenue and was ranked 27th on the Fortune 500.81 Its main customers included drug manufacturers and health care providers, to whom it also provided business support and consulting services, and product packaging solutions. AmerisourceBergen Drug Corporation provided distribution and pharmacy management solutions to improve pharmacies business operations. Pharmacy customers were based at hospitals and alternate sites, as well as retail pharmacies (chain and independent). Good Neighbor Pharmacy, AmerisourceBergen's retail pharmacy brand (akin to Health Mart and Medicine Shoppe), included some 3,600 pharmacies.
Amerisource Bergen's specialty group offered an array of services for specialty drug manufacturers, pharmacies, and patients. The company led the specialty drug distribution market in oncology, biopharmaceuticals, and vaccines, and offered specialty physician networks and programs such as group purchasing, clinical trial support, and practice management. IT for community-based oncology practices was offered through Ion Solutions, a company under AmerisourceBergen's specialty group, which acquired IntrinsiQ a decision support system for oncologists. For example, IntrinsiQ's IntelliDose software supported decisions related to clinical dosing.