McKesson Harvard Case Solution & Analysis

McKesson Case Solution 

Porters five forces analysis For McKesson

According to the strategic development process,McKesson put more focus on which tool is helpful and it found SWOT analysis to be better. Companies, which sell drugs, face many challenges as their research takes a lot of time while there is a lot of pressure from many sides based on prices. (Henderson, Rebecca, & Cockburn, 1994).

If we talk about Porters Model, each option has its own characteristics. It is expected that Primary Care option is more general and deal with the overall health therefore more primary physicians are present hence, thepowerof buyers as well as suppliers is higher and that tends to decrease profits. However, due to presence of greater number of physicians rivalry and competition is high, as each physician will try to get maximum number of patients.

In case of Rheumatology physicians focus on adult diseases and Rheumatologists are considered as expert in muscles, bones and joint related disease. Therefore due to focus on a specific field there are less number of physicians are operating in this field as number of patients are also low but it involves expensive technologies and instruments therefore bargaining power of suppliers is high and bargaining power of buyers is considered as low. There are less number of physicians are operating in this field therefore, competition is also in this segment.

In case of Gastroenterology, gastroenterologists are considered as expert in the treatment of cancer, hepatitis, liver and heartburn diseases. As the US population aged, therefore the demand of gastroenterologist is high therefore bargaining power of buyers is low but it also involve expensive and advance technology machines therefore bargaining power of suppliers is high. As less number of Gastroenterologists are operating in US therefore competition is low with respect to this segment.

In case of Orthopedics, Orthopedics surgeons treated musculoskeletal diseases as these diseases are more common in aged person and number of aged persons is increasing in US continuously. Therefore,demand of Orthopedicssurgeons is high and it is expected that currently there are less number of Orthopedics Surgeons are operating as compared to the number of patients therefore bargaining power and rivalry is less in this segment. While treating musculoskeletal patients involves expensive and technologically advance machineries in addition to the exercise practises, therefore bargaining power of suppliers is high in this segment.

(Hill, Terry, & Westbrook, 1997)

Threat Of new entrants

It is expected that with respect to the Primary care, Orthopedics, Rheumatology and Gastroenterology each sector is considered as profitable as number of patients are increasing in US in each above mentioned segment therefore due the high profitability threat of new entrants is high in each segment.

It is expected that less entry barriers in each segment as it be found that numerous physicians supply directly to customers and break the mediation of distributors. While physicians are considering automatic processes and they don’t prefer any sort of receipts as they are focusing on online and internet based correspondences as it is helpful in managing the reminder of drug dosses and follow ups and other type of online management options.

Primary care physicians are cost effective and efficient at the same time as they are highly specialized as well as their switching cost is high even those who are working can easily switch on the basis of referrals.....................

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