Free «Cardinal Health Inc. Case Analysis» Essay Sample


Cardinal Health Inc is a health care service company based in Dublin, Ohio, and the United States. This Fortune 500 Company is one of those institutions that have changed the way health care services are accessed for a long time. The focus of Cardinal Health Inc. on the way to distribute their pharmaceutical products has changed the way health care business is organized. This is an organization that distributes both medical and pharmaceutical products to many different locations globally. The company also manufactures various surgical and medical products that include surgical apparels, gloves, and those products that are used in the management of fluids. Within the United States, the company owns the largest radio pharmacy network.

This company aims to become the leading one in the health care industry. It provides the most diverse and inclusive work environment that reflects the communities it serves. They plan to do this while, at the same time, keeping a competitive advantage over other companies by applying the right innovation, maintaining the profit margin, and being able to easily adapt to different situations and environments. Its mission is to be able to attract the most talented workforce who will input their skills to meet the needs of the market and its diversifications.



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The company currently employs over 30,000 employees in its various branches which are located on all five continents. The company has grown to such an extent that it has been ranked no. 21 in the current list of Fortune 500. The activities of Cardinal Health Inc’s have expanded into provision of logistics and supply solution, repackaging and distribution of the pharmaceutical products. Other equipment used in monitoring patients is also supplied. These services are aimed at ensuring that patients are well taken care of in cost effective ways but with great efficiency and quality. According to the 2010 estimates from the company’s website, the revenue runs to US$ 98.5 billion, total assets are worth US$ 19.99 billion, while the net income is US$ 642 million.

Environmental Analysis

Cardinal Health Inc. is the major provider of health care services in the United States. Over time, it has grown to cover a larger medical market than any other company. The structured management has been able to effectively make this company more profitable with each passing year. Many hospitals, pharmacies, and supermarket departments mostly depend on medical and pharmaceutical supplies from this company. This is the main reason for their dominance, especially in the United States’ market. This has also led to the expansion of its activities in new areas.

In spite of the success that Cardinal Health has achieved, there still exist more challenges that this company has to adequately deal with in order to improve or maintain the current trend. There are also new rival companies gaining more ground in the market. They pose threats to this company’s success. There are also more costs being incurred in the process of seeking compliance in business deals. These are majorly associated with federal laws. Such costs have a bearing on the outcome of the financial situation of the company. These are just a few of the challenges that Cardinal Health is faced with in its attempts to control the market.

A SWOT analysis of this company reveals various strengths, weaknesses, threats, and opportunities that the company has. These are summarized in Table 1 below. It is obvious that since Cardinal Health Company already has a number of strengths, weaknesses also exist. In the internal environment of this company, the strengths include the ability to carry out large-scale operations with a broad range of products. This provides the company with a strong market position. However, this market is only US-based; they do not have control of markets outside the US. Another weakness is that some of the company’s products are recalled due to some faults in technology. In the external environments, opportunities that are available are the acquisitions that the company can and has also made. It is also obvious that the US population is majorly aged. Targeting at this generation provides the opportunity to sell the company’s products. However, strong competition still threatens these opportunities to a great extent.

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Table 1.

SWOT Analysis of Cardinal Health Inc. Company.

  Favorable Unfavorable
Internal Factors


  • Larger market position
  • Larger operation scale
  • Broader range of services and products
  • Advance technology
  • Good management
  • Cardinal Health brand name


  • Recalling of the products
  • Reliance on the US economy
  • Poor customer services
  • Inefficiencies in their work
External Factors


  • Expansion to the international markets
  • Expansion of the generic markets
  • The aging US generation
  • Population growth
  • Growth into Chinese market



  • Competition
  • Government regulations
  • Consolidation of retail pharmacies



Problem Identification

Some current trends indicate that Cardinal Health Company needs to work out certain strategies of coming up with ways of remaining steadfast. The main problem that exists is the rising cost of doing business. Markets continue to change with each passing year. For instance, the interventions made by the government adversely affect the health care industry. It should be noted that health care is the major area to which the government allocates much of its spending. Therefore, any change in the government’s spending on health care affects other subsectors of the economy. Prices of the products are sometimes undervalued to fit the current situation.

There exists a problem with how efficiently the products supplied by this company work. The ability of coming up with products that are better than those of competitors will give the competitive edge. At the moment, products provided by this company have the same value as those produced by its competitors. Supplying surgical products may not be enough. The supplied equipment should be able to accomplish more tasks for the company and buyer hospitals or clinics. There is a need of coming up with a distinct branding system that will be able to categorically distinguish the company’s products from the rest. Furthermore, the supplied products should be accompanied with things like modules to enhance their use. This can encourage more consumers to choose the products due to their convenience and ease of use.

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Online sales play a major role in today’s business. Lack of an e-brand for Cardinal Health Company is also an obstacle to the required increase in sales and distribution. This company controls a large portion of the market. The business line that the company uses has got a model with a number of web applications. What the company lacks is a single brand image that will be able to provide consistent information to on-line users. This needs to be modeled in a way that will enable the ease of e-business. The model should also be able to integrate the organizational and business structures with the purpose of coming up with an efficient and constant e-business strategy. Lack of such a holistic model has led to less efficiency in the leadership ability of dealing with on-line businesses.

The presence of Cardinal Health Company has not been felt much in the markets outside the United States. Its major market is the US one. This does not seem to be doing well, since there is increasing competition within this market. Due to the fact that the company has branches on five continents, it does not manage to efficiently control. Still, the company has all necessary means to expand its presence in other markets, which is really important for increasing the revenue of the company.

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Facts and Assumptions

Operating Rooms (OR) are always labor intensive. Operating procedures do require adequate preparations which involve arranging a number of items necessary for the processes. Some of these items include gloves, swabs, scalpels, and many other instruments. In most cases, clinical officers are responsible for crosschecking necessary items, picking them and then transporting them to operating rooms. If this work is done by a single person, it may be cumbersome with high possibilities of making errors. The attention paid to picking and crosschecking the equipment should instead be allocated to a patient.

This is something that requires innovation to help ease the working process. This company is the main supplier of surgical and pharmaceutical products to many hospitals and clinics across the nation and beyond. Its products stand a chance of gaining more ground if it can come up with an organized way of pre-preparing the supplies.

The stiff competition from other companies offering the same products plays an important role in working out more strategies for the company. Although some real data of how far this completion has reached is missing, an assumption that can be made is that without proper ways of making service delivery better, competitors are likely to gain more ground in the market. It is evident that there is not a well-organized model within the company’s web that stipulates the structure with a clear vision. Online marketing has not been well-utilized for the benefit of the organization. It is also evident in the lack of a single brand for the company’s products. Therefore, consumers are not able to actively interact with products online. This has deprived the company of some revenue that could be very important.

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To ensure that company keeps afloat in the market, a number of strategies should be implemented. These strategies address the challenges that have been noted above. First, it is worth noting that hospitals prefer to acquire equipment that makes their work easier in dealing with patients. Therefore, Cardinal Health Company should be able to come up with a module that arranges its supplies. This responsibility lies with the Medical Products and Services Division which should ensure that such modules allow for easy picking of equipment, thus leading to more efficiency and accuracy during surgical procedures. Such a strategy will also lead to better care for patients while cutting down on labor costs of the hospital. Having an organized module of picking would also help reduce supply wastages that may occur during the process of selecting and picking by clinical officers. The company could greatly increase sales by using this strategy of supplying pre-assembled surgical instruments.

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Providing an online governance structure would help in creating an easy way of management. A successful model would include clear lines of management structures that are essential in stating roles of every leader. Moreover, in order for the company to gain more ground in markets outside the United States, there is need to make more acquisitions in some other countries, for example China. This would enlarge the world market share, which is something that would ensure more supply chain is added to the existing ones. In the long run, sales would be increased, thus raising the company’s revenue.


These alternatives are very important to the company. Implementing these strategies would ensure that different expected changes are adequately tackled. The company faces a lot of challenges both within and outside the US. Repackaging their products would encourage more clients to choose the company’s products due to their ease of use and some other benefits. For instance, supplying surgical products in pre-assembled cases would make clinical nurses’ work easier, and in the long run, they would be able to take better care of patients. They would also spend less on selecting and crosschecking instruments.

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Acquisition is another good strategy for the company. It made some acquisitions in the past within the United States, and the results were very positive. This is the reason for their dominance in this market. Implementing the same strategy in foreign markets would work to boost their market base. This would mean that more products would be supplied to more countries outside the US.


Implementation of these strategies would require the appearance of competent departments that are able to coordinate very well. The online governance strategy would be implemented in stages taking into consideration the present plan. This would be essential in understanding the total cost of web properties. Acquisition of other pharmaceutical companies outside the US market would also be made after a thorough market research and ensuring that all government regulations are followed. The market research would show market trends of the countries in which acquisitions are made.

It will be prudent to also mention that the efficiency of work in these new markets would only depend on improvements that are made by the management and workforce. The continued supply of products would play a big role in maintaining the market loyalty. Supply of pre- assembled surgical instruments would require some thorough work done by the workforce. An error at this stage would mean that an operation would turn fatal. Therefore, trained professionals are required in assembling the right instruments for the right operations. The goal of doing this should be for hospital clinical officers to carry out operations under convenient conditions. Any failure or wrong package would lead to customers’ withdrawing from the products and turning to another company.


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