Rite Aid Corporation Essay Example

a problem for Rite Aid and also for other pharmacy companies. Due to recession people are looking for low price medications or people get their medicine from other countries where they can find low price medications. Political/ Legal:

Rite Aid faces market place challenges since it entered the industry almost 50 years ago. Rite Aid has struggle with issues such as Medicare fraud, executive malfeasance, human resource and quality control issues and company accounting scandals. The stock price started dropping and also Rite Aid was in billions of dollars in debt and hundreds of underperforming stores. Rite Aid faces the ongoing challenges of rising health care expenses for its employees, contract raises, and payroll, as wells as the current and building challenges of a slow economy.

Porter’s five points. * Competitive rivalry (high) The competitive rivalry is moderate to high. The major competition is faced from other drugstore retailor that provides similar services. The two major competitors are Walgreen and CVS. These both companies has rapidly expended into this market. The both have more than 14,000 retail locations nationwide. Individually, the two companies have a market capitalization that Rite Aid four times over. * Barrier of Entry (medium)

Barrier of Entry power is medium. The primary reasons are because of the issues with regulation, capital requirements, and economies of scale. To open up a new drug store will cost high amount of money and it also depend the type of locations. * Substitute (medium)

Substitute power medium. Major substitute is mail-order. Internet has make everyone life easier and people order there medications online and mail-order companies medications can be bought at

low cost. * Power of supplier (moderate)

Supplier power is moderate. In pharmacy industry there are many suppliers such as biotech firms, Pharmaceutical manufacturers and drug wholesalers. The suppliers have very low bargaining power and the companies in the pharmacy industry can switch from their suppliers without incurring a very high cost. * Power of buyer (High):

Buyer power is high. Buyers may easily choose between other pharmacy companies. Buyer (consumers) will go to those stores where they can find low price medications and any other thing. Thus, whenever potential buyer feels that his/her needs won’t be satisfy, he/she can easily switch to competitors.

Competitor Analysis: Rite Aid is facing competitions from within the drug retailing industry. Rite Aid is also facing competition from Walgreen and CVS in US because both companies are major player in drug store retailing industry. Walgreen is the largest drug store in North America. Walgreen provide his pharmacy customers with high quality drugs at low prices.

Walgreen manufacture his own line popular drug products. Walgreen has rapidly expanded into this market and it has over 7,500 stores across the US supporting specialty pharmacy, home infusion services, and as well as drug store pharmacy need. CVS is also a biggest company in drug store retelling industry. CVS has over 7,000 pharmacy stores today. CVS also expanded internally by opening small health and beauty aid stores in shopping malls. CVS continues to spread its operation by now offering mail-order pharmacy and in store clinic service. CVS provides clinic services nationwide under the MinuteClinic brand name.

Internal Analysis: Rite Aid position in the markets is moderate because there

are many drug store companies and it is very competitive market. Rite aid is currently developing its own private brand of products to be sold in it stores under the brand name “Simplify” and it has also implemented several loyalty program including Wellness+, a program designed to attract customers which is good for rite aid to bring more customers and compete shoulder to shoulder with major players within its industry. But still Rite Aid has to do so much to gain its name in the market.

Alternative strategies: After examining all the factors involved one of the strategic moves that Rite Aid can take is penetration of the US market and also globally. Competition is rising in the US market as more drug store retelling companies are coming into the market and making their way to the people. Rite Aid should open up more locations in USA and Canada and globally. Rite Aid should serve 24 hours and also they should also open mail order pharmacy which will help Rite Aid to make their way into the market. After facing many challenges Rite Aid is making their way to drug store market but still they have so much to do to gain more customers. They have Wellness+ program with is good for Rite Aid to attract customers toward them.