This is a continuation on the company McKesson ….remember?
Introduction
McKesson Corporation was founded in 1833 is one of the oldest companies in the United States that deals with the provision of health services and information technology. The company is currently the largest distributor of pharmaceutical products while providing one of the largest networks with infrastructure that is extensive for the healthcare industry. The company is known to be one of the very first ones to embrace the use of technology such as bar codes for its products to be distributed, Radio Frequency Identification (RFID) tags and the automation of pharmacies. As at May 2017, the company was number 134 on the Forbes List for Best Employers for Diversity. It also had a market cap of $30.5 billion in the same period with a staff of 68,000. Globalization and technological changes are some of the key things that affect various businesses with McKesson being one of them.
Impact of Globalization and Technological Changes
Globalization is the process of integration and interactions of people and businesses across the world aided by advances in transportation and communication. There is no aspect of modern life that has not been affected by globalization in one way another and the pharmaceutical industry has not been spared (Wild, Wild, & Han, 2014). Globalization is one of the key drivers of economic growth in any organization across the world. For a long time, the pharmaceutical industry has been one that has been dominated in terms of production and consumption by companies such as McKesson from countries with a high income. Due to globalization most of these companies are slowly moving towards developing markets in other countries that have numerous opportunities for them. The company has businesses in Canada, United Kingdom, Australia and New Zealand.
Technology had changed the way most companies like McKesson do business. The company is among the strongest companies to embrace the use of technology in its operations which has given it an edge over its competitors. The company has been at the forefront of encouraging the use of various technologies and incorporated strategic initiatives that transforms the provision of healthcare services to clients. The company was also recognized in 2016 as one of the top technology innovators in the healthcare industry. The use of technology by McKesson in an innovative way has contributed a great deal to its success and the gaining of competitive advantage over its competitors.
Industrial Organization Model and Resource-Based Model
The industrial organization model looks at the environment that the business operates and explains that the forces outside of the business have the tendency of affecting its profitability. The five forces of competition found within the industrial model are external environment, industry, assets, skills, and strategy. The five will then be used by the management of McKesson to formulate a strategy that would make it possible for the company to earn above-average returns. If McKesson makes use of this model, they will have evaluated their competitors (Barney, 2014). They will then proceed to gather information about the companies that would help them find out which of their competitors earn above-average returns. One they have chosen a company, the management will then proceed to formulate a strategy that will make it possible for them to earn above-average returns. To implement the strategy, the management at McKesson will need to ensure that the required skills and assets are available to make it possible for them to earn above-average returns like the company they had selected.
The resource-based model can be used by McKesson to conduct an in-depth analysis of one of their successful competitors with the intention of finding out how unique the competitor is. The management should also look at what resources the company has that make it possible for them to earn above-average returns. The model also makes it possible for McKesson to evaluate the strengths and weaknesses of their competitor against its own. It is also important to determine the capabilities that will make it possible for the company to do better than its competitors. After analyzing its capabilities and resources, the company should then proceed to determine its competitive advantage that it can use against its competitors in the quest to earn above-average returns. Based on the analysis of the two models, I believe that McKesson should use the resource-based model as they seek ways to earn above-average returns as opposed to the industrial organization model. This is because the company will focus more on its strengths and weaknesses and the correct allocation of resources to acquire competitive advantage (Barney, 2014).
Mission and Vision Statement
The success of any business is determined by how clear its strategy is defined and communicated to its stakeholders. The vision and mission statements are used by a company to come up with a summary of its strategy in a simple way that will be understood by its stakeholders (Rothaermel, 2015). The vision statement of any company is a description that is used to define what the company would like to achieve or any accomplishments to be made in a specified amount of time. It is meant to also help the organization create a picture of where it is headed to while inspiring its staff. The mission statement, on the other hand, is used to define what the business does and how it intends to conduct its business. It is also used to define the interaction between its stakeholders and what their contribution to the success of the company is.
McKesson’s vision is to gather together various medical resources such as clinical knowledge, and process expertise with an objective of lowering the costs of healthcare products and services and hence making the services affordable (www.mckesson.com). The company has been able to achieve its vision since it was incepted through the provision of the best healthcare services and products in collaboration with their partners. The company has also made it possible for most people to be able to access quality healthcare services and products at a cost that is affordable. The vision statement for the company is the foundation of its mission statement that places more emphasis on working with like-minded partners in the healthcare industry.
McKesson’s mission statement demonstrates the partnership of the organization with various stakeholders in a bid to create a sustainable and affordable health care (www.mckesson.com). This mission statement shows that McKesson values the contribution of its stakeholders and knows that without their partnership that it will not be possible for them to provide the best healthcare. The company seeks to work with its partners and other healthcare organizations to help them offer the best services to their clients while being able to control its costs, reduce the wastage by developing efficient ways of offering their services and improving quality. McKesson has also been successful since it has been able to establish a network that has made the provision of smarter healthcare services while creating intelligent networks that will make it possible for people to receive the best healthcare possible.
McKesson Stakeholders
Stakeholders are persons, organizations or groups of people who have an interest in the running of the organization and will be affected anytime anything happens to the organization. Not all stakeholders are the same and there classified as internal stakeholders and external stakeholders (Lawrence & Weber, 2014). Internal stakeholders at McKesson are those stakeholders are the direct entities who have a direct influence on a business such as employees, managers, the owners, and investors. Employees of McKesson are paid well by the company and that is why are able to perform their duties as allocated. They also ensure that the products that are produced are of high quality. The managers have the task of ensuring that the operations of the company run as they should and nothing is interrupted. McKesson continues to be successful since its management ensures that its operations are not interrupted and the quality of products produced is not compromised. The investors have provided the business with the capital it needs to run its operations and have therefore contributed to its success.
External stakeholders do own any part of McKesson but will be affected by the actions of the company. They are made up of customers, suppliers, the government and unions among others. The success of any organization will be affected by its relationship with its external stakeholders as much as they do own any shares within it. The ability of McKesson to provide its suppliers and customers with quality products have helped it establish a loyal customer base which contributes to its success. The company has also adhered to all regulations set by the governments in the countries where they have branches thereby ensuring continued operations.
Conclusion
As one of the oldest companies in the United States and one of the highest revenue earners in the country, it is clear that several factors have contributed to its success. The company has been able to gain competitive advantage even in the face of globalization and technological changes. Each of the divisions of the company has also remained profitable making it possible for the company to make more acquisitions of other companies as it seeks to increase its operations and market share.
References
Barney, J. B. (2014). Gaining and sustaining competitive advantage. Pearson Higher Ed.
http://www.mckesson.com/about-mckesson/who-we-are/
Lawrence, A. T., & Weber, J. (2014). Business and Society: Stakeholders, ethics, public policy. Tata McGraw-Hill Education.
Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education.
Wild, J. J., Wild, K. L., & Han, J. C. (2014). International business. Pearson Education
Answer previewThe environment an organization exists in plays a key role in the success of the organization since it has factors that can readily affect it as well as those that are beyond its control. Factors that can readily affect the organization in a positive or a negative manner are normally found within the general environment (Hill et al., 2014)…(2800 words)