Cardinal Health Case Analysis

Topics: Health care, Strategic management, Medicine Pages: 9 (2463 words) Published: May 15, 2012
Cardinal Health, Inc. Company History
Cardinal Health was founded in 1971 when founder Robert D. Walter opened a small distribution center in Columbus, Ohio, then named Cardinal Foods, Inc. In 1979 the food distributor branched out into pharmaceutical distribution when the company purchased a Zanesville, Ohio, drug distributor and became known as Cardinal Distribution ("Our history," 2011). The company evolved over the next several years; they went public and was renamed Cardinal Health in 1983, sold its food distribution segment in 1988, and become a global corporation with $103 billion in revenues and $1.5 billion in annual operation earnings in 2011 (Annual Report, 2011). Through several acquisitions over the past three decades Cardinal Health provides products & services to help hospitals, pharmacies and other healthcare providers meet the growing challenges of the healthcare industry ("Our history," 2011). Cardinal Health, Inc. Vision Statement

Cardinal Health’s vision is “to be the healthcare industry leader in providing a diverse, inclusive work environment that reflects the marketplace and communities where we do business while maximizing our competitive advantage through innovation, profit and adaptability” ("Our commitment," 2011). As one of the top organizations in the healthcare industry, Cardinal Health is in the position to drive efficiency through the system and improve the cost-effectiveness of care so that both provider customers and supplier partners are prepared for success in the changing healthcare industry (2011 Annual Report, p. 2) Key Elements of the Business Strategy

Walter decided to take Cardinal into pharmaceutical wholesaling at a time when this industry lacked synergy, acquiring 69 companies from 1980 through 2010, with more than half of these between 1998 and 2002 (Pearce & Robinson, 2011, p. 18-11). The key element of the growth strategy was to acquire businesses that expand or complement existing businesses (Pearce & Robinson, 2011, p.18-4). Walter outlined his core strategy and vision for the future in the 2001 stating strong internal growth combined with the meaningful acquisitions and significant partnerships as being the factors to contribute to the company’s growth. “Each acquired company met our standards of being outstanding by itself, fitting closely into our strategy, and making Cardinal collectively stronger for the future" (Pearce & Robinson, 2011, p.18-4). Domestic and Global Environments

Cardinal Health built a wholesale distributor of pharmaceuticals in the U.S. and then expanded internationally. Starting in 1983 and over the next decade they expanded its increasingly fast-growing pharmaceutical distribution business with the acquisition of more than a dozen U.S. drug distributors ( The company gradually expanded their value chains position in both directions, partnering with both suppliers and customers to incrementally add value for both. In global markets, Cardinal Health acquired pharmaceutical and medical-surgical commercial operations in Canada, the U.K., Puerto Rico, and most recently China through the November 2010 Yong Yu acquisition. Cardinal expects to “be making a number of small to mid-sized acquisitions” in China (Coldwell, 2011). Recent acquisitions

In 2010 Cardinal Health acquired three major businesses totaling more than $2.3 billion that both strengthened core businesses and launched new platforms for growth ("Wharton asia business," 2011). These businesses included P4 Healthcare, a business that provided the catalyst into the fastest growing sector of the pharmaceuticals industry, particularly oncology (Kalmans, 2010). The second is Kinray, a regional drug distributor that has repositioned Cardinal Health as a leader in serving independent retail pharmacies. Cardinal Health attributed the 2% boost over the previous quarter to $23.2 billion in the pharmaceutical segment for second-quarter revenue for fiscal...

References: Cardinal health: committed to creating a culture of inclusion. (2009, October 1).
Cerra, A. (2011, February 2011).Kinray acquisition drives cardinal health 's q2. Retrieved from healths-q2
Coldwell, E
Glenn, B. (2011, November 8).Cardinal health looks to build china business, but has
long way to go
Our commitment. (2011). Retrieved from
Our history. (2011). Retrieved from
Pearce, J
Walker, M. (2011, October 4).Cardinal health – developing effective high potential talent
management programs
Wharton asia business conference - keynotes (2011). Retrieved from
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