Case Study of McKesson Corporation
Description of the company’s performance
McKesson Corporation is one of the leading providers of health care products and services. When it comes to analyzing the external environment; the political, economic, social, technological (PEST) analysis shows that the environmental situation is favorable for the company. The environmental factors are giving the company a chance to succeed in its endeavor. In politics there is no direct problem that might affect the company. In terms of economy the company might experience growth and prosperity in this field. In terms of society people have to buy health products thus the company may find this beneficial for them. In terms of technology the industry tends to be improving and because of this the new advancing technology can help the McKesson lessen its production cost and acquire more profits.
When it comes to revenues McKesson is acquiring some success. In 1996 the revenue of the company was at $12,964.8, it increased to $15,710.8 the following year. The company experienced more significant increase in 1998 when the company registered revenues of $ 20,857.3.In analyzing the internal environment SWOT analysis can be used. In the swot analysis of the company its strength is the presence of a clear goal, the weakness of the company is the lack of information on health care they give to clients, the opportunity for the company is the merger with HBOC, the threat for the company is HBOC as a separate identity. Through the analysis of the internal and external environments added with the revenues the company acquired it can be said that the company is doing well and will continue to perform well as long as it tries to make the right decisions on merging with HBOC and improve the weakness it has and counter the threats it may face. To continue the success of the revenue the company has to improve the products and services it offers these results in more consumers for the company and then higher revenues.
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I. Current Situation
McKesson Corporation is one of the leading providers of health care products and services. Their products and services are mostly distributed to pharmacies, both independent and chain as well hospitals and other health care organizations that are located in the United States and Canada. The leading position of McKesson is due to the fact that they are a major wholesale distributor in an industry where the average net profit is estimated to be 2 percent. However, McKesson has not always concentrated on the pharmaceutical industry. Previous strategies and policies of the company sought to dominate different markets. In the beginning, they are one of the largest liquor distributors in the United States. They also specialty foods, beauty products, bottled water and general merchandise. Since they aimed to lead in different markets, they entered many acquisitions and mergers. This introduced them to the difficulties of the markets that they wished to dominate. They only started making a name in the pharmaceutical industry in the 1980s when they acquired various medical and pharmaceutical companies. By the 1990s, the company decided to concentrate on furthering their edge on the pharmaceutical industry. This was evident when they sold acquired companies that are not related to health care like Armor All Products and Millbrook Distribution. They also formulated a mission statement that says all about their aspiration inside the pharmaceutical industry. “[Becoming] the world leader in health care supply management by assisting its consumers in improving patient care while lowering or controlling cost” With this mission statement, McKesson aims to provide high margin generic drugs. This objective resonate their mission of lowering or...
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