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McKesson Corporation

McKesson SWOT Analysis
BusinessHealthManagementMarketingSWOT & PESTLE Writing

SWOT Analysis of McKesson

by Shamsul June 5, 2022

SWOT Analysis of McKesson

 

McKesson managers can take advantage of SWOT analysis, an important strategic planning tool to conduct a situational analysis of the company. It is an excellent tool for identifying the current strengths, weaknesses, opportunities, and threats. These are some essential business factors that can influence the business and performance of McKesson. We do the SWOT Analysis of McKesson and learn how to achieve the success from their experience.

McKesson is one of the largest American companies that provide health information technology, care management tools, medical supplies, and distribution of pharmaceuticals. It is a leading organization in its industry. Till now, they have maintained their market position by reviewing and conducting a careful SWOT analysis. However, it is a simple analysis to perform but requires the coordination of various departments working within the organization such as finance, strategic management, marketing, information, and operations.

This tool helps the organization to review its internal as well as external strategic business factors. Without further wait, let’s read the SWOT analysis of McKesson.

Company Name: McKesson Corporation

Founders: Charles Olcott, John McKesson

Founded: 1833, New York, New York, United States

Headquarters: Irving, Texas, United States

CEO: Brian S. Tyler (Apr 01, 2019-)

Type: Pharmaceuticals

Sector: Healthcare and Pharma

Tagline: It’s not just a package, it’s a patient.

Unique Selling Proposition: McKesson makes the business of health care run better.

Customers: Healthcare technology and pharma distributors.

Target Consumers: Pharmacies, hospitals, medical, and pharmaceuticals manufacturers

Revenue: 238.228 billion dollars (2021)

Net Income: -4.539 billion dollars (2021)

Strengths of McKesson | SWOT Analysis of McKesson

Being a leader in its business environment, McKesson has so many positive points and strengths. These factors allow the company to thrive in the industry at a fast pace. These factors give the company a competitive edge and increase its annual revenue and net earnings. It also enables the organization to penetrate new markets. Here are some important strengths of McKesson,

  • The brand portfolio of McKesson is highly strong. They have invested a lot in creating a robust brand portfolio since its launch. It is an important strength of the brand. Just because of this strength, the company can invest in the development of new products and attract new customers without spending so much on marketing or advertising.
  • McKesson’s go to market policies are really successful for its brand and even products.
  • The company offers a high level of customer satisfaction through its amazing product line and services. Indeed, its customer base is really strong and loyal to the brand. They have established strong relations with customers. As a result, McKesson’s brand equity is also very strong, giving the company a big edge over competitors.
  • In the last few years, McKesson has integrated several technology firms and other brands to enhance and modernize its performance and business operations. It has helped the brand create a robust supply chain network system. The company has such a good track record when it comes to mergers and acquisitions.

  • The company has strong relationships with dealers and distributors. The most significant advantage of this relationship is that they not only train their sales team on how to sell McKesson’s products and actually take part in the promotion of the organization. They also convince customers how they can take ultimate benefit of McKesson’s products and services. This thing works in favor of the company and increases its brand awareness.
  • McKesson knows how to venture into a new market. They are really good at entering new markets. Moreover, their performance in new markets is commendable and allows the company to increase its revenue stream. They are continuously diversifying their business into different countries to become a leader.
  • The major strength of the company is that it has reliable suppliers. The strong base of suppliers enables them to get raw materials at competitive prices and quickly. So, they do not face any supply chain issues from suppliers.
 

Weaknesses of McKesson | SWOT Analysis of McKesson

Just like strengths, McKesson has some weaknesses too. Weaknesses are the areas that require improvement for further growth. Weaknesses can disrupt business performance and allow competitors to take the lead. The biggest advantage of SWOT is that it identifies your weaknesses that you can easily improve to maintain your competitiveness and market position. Below, we have curated some important weaknesses of McKesson.

  • It is an era of new technologies and innovation. Technology is the most crucial factor in making business easier for any company. McKesson does not have a strong technological infrastructure as compared to its competitors. Technology is necessary for expanding and improving the business. They need to invest more money in technological infrastructure in order to integrate the business process. Currently, investing in technology is not the main priority of McKesson, which can be considered its weakness.
  • As compared to the competitors, the company has major gaps in product variety. This lack of new products can give a big opportunity to its competitors to make a huge impact in the market by offering new products and services.
  • According to economic experts, the net contribution percentage and profitability ratio is very alarming for McKesson and below the market average.

  • Due to the entry of fresh players in the market, the company has lost a significant amount of market share because the new companies are eating its market share. These are some vital challenges that McKesson should solve. They should develop an internal feedback system to contact the sales team immediately to fix present issues.
  • The company’s financial planning department is not so strong. They failed to conduct effective financial planning. The inequality in the liquid and current assets shows that McKesson can use cash in a better way to enhance its product line.
  • The overall business structure of McKesson is only well-matched with the company’s current business model. So, it is facing trouble in expansion and introducing new product line.
  • Over the years, the McKesson company has acquired several companies and startups to boost its working and business performance. But, they failed to integrate with the work culture of these companies. This thing has created plenty of problems for the organization. So, technically speaking, the track record of mergers and acquisitions is not so successful.
 

Opportunities for McKesson | SWOT Analysis of McKesson

  • The firm can take advantage of decreasing transportation costs to deliver its products to different corners of the world easily. It is a wonderful opportunity for McKesson to gain market share and boost its productivity by exploiting this advantage.
  • After several years of slow growth and economic recession, the economic cycle is now getting better, which directly increases the spending power of customers. The organization can increase its market value and attract new consumers efficiently.
  • Government support in different matters such as free trade agreements and the adoption of the latest technology can boost the company. They can capture new markets by enhancing their offers and services.
  • By adopting new technologies, the company can make cost-effective products and re-adjust its pricing strategy. It will help the brand retain its loyal customers and target new ones efficiently.

  • A lower inflation rate can be proved beneficial for McKesson as it brings economic stability to the market.
  • The development of the industry will dilute the opportunities of competitors. Indeed, McKesson can exploit this factor in its favor to enhance its market competitiveness.
  • Governments are taking serious steps for the environment and building new environmental policies. Moreover, these policies will create plenty of opportunities for companies like McKesson. The company can adopt ethical practices and promote greener products just to take the attention of customers and environmentalists.
  • McKesson should diversify its e-commerce platform in order to increase its online sales. With an online channel, McKesson can easily understand the needs of customers in a better way and can develop useful products to satisfy their requirements. By investing in an online platform, the company can open several doors to growth and expansion.
 

Threats to McKesson | SWOT Analysis of McKesson

  • Bestselling or profitable products are seasonal in nature. When the season is over, this could affect the sales and revenue stream of the company negatively. Also, this factor can disturb the long or short-term goals of the company.
  • New environmental policies such as Paris Agreement 2016 could be harmful to the business working of McKesson.
  • The organization is highly exposed to the liability laws of different countries. They can face different liability claims. It is another serious threat to the profitability and sustainability of the brand.
  • The rising cost of raw materials and production can also create trouble for the company in the future. This factor poses a huge threat to McKesson.
  • Being an international organization, McKesson is highly vulnerable to currency fluctuations and exchange rates. Political instability is also a big threat.
  • McKesson can experience lawsuits and legal actions in different countries over several issues. They can face criticism over standards and foreign laws.
  • In the American economy, the culture of isolationism is growing swiftly. This factor can badly impact the profitability and annual earnings of McKesson.
  • It is nearly impossible to reduce the risk of low-quality products from counterfeit brands. They can destroy the image or reputation of McKesson in the international markets, especially in the developing markets.

 
 

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McKesson PESTEL Analysis
BusinessManagementMarketingSWOT & PESTLE Writing

PESTEL Analysis of McKesson Corporation

by Shamsul June 5, 2022

PESTEL Analysis of McKesson Corporation

 

To analyze the external business environment of McKesson, PESTEL is one of the most valuable and proven tools that help to recognize political, economic, social, technological, environmental, and legal factors. These are crucial business factors that can impact the working system as well as the revenue flow of a company like McKesson. So, managers at McKesson should exploit this tool to identify potential opportunities and threats. Let’s workout on the PESTEL Analysis of McKesson Corporation.

McKesson Corporation is one of the leading American distributors of pharmaceuticals and health information technology. Certainly, it provides care management tools and medical supplies. The impact of PESTEL factors is not only on McKesson but also on the other market companies. Conducting a PESTEL analysis will give you an idea of how to boost profitability by reducing hurdles. PESTEL also provides clear information about current market challenges that McKesson is going to face in the future.

A highly stable political and economic environment is ideal for the ultimate growth of companies like McKesson. There are so many other advantages of performing a PESTLE analysis of your company that you can read below.

 

Political Factors | PESTEL Analysis of McKesson Corporation

Different countries have different political systems. Some countries have stable political systems and few have unstable governments. An unstable political system brings so many dangers and risks for foreign companies like McKesson. They can hurt the company’s long-term profitability in a matter of seconds. Being an international firm, McKesson is highly vulnerable to political risks. To gain a competitive advantage in any country, McKesson should assess the given political factors,

  • Product labeling.
  • Risk of invasion from other political parties or military.
  • Political system in the country.
  • Preferred trading partners.
  • Incentives and taxation.
  • Safety regulations.
  • Legal infrastructure.
  • Antitrust laws.
  • Intellectual property protection.
  • Overall corruption level in the country, especially in drug wholesale.
  • Tariffs and trade limitations.
  • Pricing limitations.
  • Necessary employee benefits.
 

Economic Factors | PESTEL Analysis of McKesson Corporation

PESTEL efficiently identifies the economic factors of an organization. Some important economic factors like inflation and foreign exchange rates can instantly destroy the business and its profitability. They help to decide companies like McKesson whether this country is ideal for investment or not. It also helps to uncover important economic factors like growth rate and interest rates necessary for a company’s smooth working. Keep reading to check some vital economic factors that McKesson must identify,

  • Interest rates.
  • Economic growth.
  • Discretionary income.
  • Quality infrastructure.
  • Efficiency and labor costs.
  • Recession.
  • Recovery rate.
  • Type of economic infrastructure in the country.
  • Intervention from the government in the drug whole sector.
  • Comparative benefits.
  • Stability of economic or financial system in the country.
  • Skill level of employees.
 

Social Factors | PESTEL Analysis of McKesson Corporation

Social norms and the overall culture of the society plays a major role in defining the success of any company. In 21st century, people still buy those products based on their beliefs and attitudes. McKesson needs to design a specific business strategy that works in different societies and cultures without creating further challenges. In PESTEL, managers must uncover the following social factors before entering a new market,

  • Leisure interests.
  • Gender roles.
  • Social convention.
  • Culture.
  • Attitude toward health.
  • Attitude toward the environment.
  • Overall education level in the country.
  • Entrepreneurial spirit.
  • Skill level of people.
  • Demographics.
 

Technological Factors | PESTEL Analysis of McKesson Corporation

Indeed, for better working and running a business in a smooth way, it is necessary for McKesson to adopt the latest technologies. So, the organization can increase its revenue flow and business by working with advanced technology. Every company is updating its technological infrastructure in order to take competitiveness in the industry. McKesson must analyze the following technological factors,

  • Latest technological advancements made by companies.
  • Impact of technology on product development and current offerings.
  • Diffusion of technology.
  • Technology’s impact on cost structure.
  • Impact on value chain system.
 

Environmental Factors | PESTEL Analysis of McKesson Corporation

These days, everyone is highly concerned about the environment. The government is imposing strict environmental laws on companies in order to reduce carbon footprint and emission rate. Companies like McKesson must evaluate the country’s environmental regulations before operating in it. McKesson is highly exposed to environmental and liability laws. Before conducting the PESTEL analysis of McKesson, you should evaluate the following environmental factors,

  • Environmental change.
  • Overall weather.
  • Laws regarding pollution.
  • Air, water, and environmental pollution.
  • Recycling.
  • People’s attitude toward eco-friendly and green products.
  • Efforts in making renewable energy sources.
  • Waste management especially in drug wholesale.
  • Endangered species.
 

Legal Factors | PESTEL Analysis of McKesson Corporation

There are so many countries in the world that have different legal infrastructures. The legal institutions are not so influential in these countries. This thing makes these countries highly unfavorable for doing business. A company like McKesson Corporation should wisely analyze important legal factors before starting working in these countries. Here are some vital legal factors that McKesson must take into account,

  • Health laws.
  • Safety laws.
  • Data protection.
  • Copyright and intellectual property law.
  • Employment laws.
  • Anti-trust laws, especially in the healthcare industry.
  • Discrimination laws.
  • Online platforms and consumer rights.

 

Need Help or Advice in Content Management:

Do you want more advice? Do you have good practices to share? Express yourself in the comments.

Moreover, if you want any help to write content to drive more traffic and boost conversions, get in touch through Contact our team?

Do you want any help writing quality content, driving more traffic to your website, and boosting conversions? You can contact me through my Freelancer.com profile also. I always prefer to work through Freelancer.com for smooth functioning. Here you pay safely and securely.

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