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Rite Aid Corporation Challenges Case Study

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Updated: Apr 27th, 2022

During the 2010s, Rite Aid Corporation, as one of the leading pharmacy retailers in the USA, suffers from the significant economic pressure and intensified competition within the industry. The observed financial losses of the company support the idea that Rite Aid Corporation needs the revision of the current managerial and economic strategies implemented and followed in the company.

Today, the company has to compete with such giants of the industry as Walgreens Corporation and CVS Caremark Corporation. However, the financial reports provided by Rite Aid Corporation state that the company needs to cope with the debts and to improve the work of run-down stores to change the situation for better and to focus on the effective strategic management (Hitt, Ireland, and Hoskisson).

That is why, it is essential to identify the problems and challenges experienced by the company which prevent it from concentrating on the competitive advantage and from creating value within the competitive industry, and it is necessary to analyze the alternatives to propose the plan of the further actions.

The economic activities and profitability of Rite Aid Corporation are characterized by significant unmanageable debts and underperforming stores which organization and management are not capable to attract the variety of customers typical for the industry. Thus, the economic and financial losses associated with the performance of run-down stores are the main problem of Rite Aid Corporation.

The next connected problem is the intensive competition within the industry, which cannot be won until Rite Aid Corporation solves its financial and strategic issues.

The associated problems or challenges to influence the development of the company negatively are the shortage of professionals characteristic for the industry in general and the decrease in number of less expensive generics which can contribute to improving the retailer’s economic situation.

The next global problem which influences Rite Aid Corporation directly is the trends to change retailing pharmacy with the other services such as mail-order pharmacies (Hitt, Ireland, and Hoskisson).

Thus, the existing alternatives to cope with the problems in relation to the current industry tendencies are the expansion of the services to involve the mail-order pharmacy functions and sales according to the specific Internet-based drug prescription services. Furthermore, it is essential to focus on in-store clinic market as the potential for development.

While orienting to the mail-order pharmacy functions, Rite Aid Corporation can provide customers with convenient and cost-saving services. The pros of the alternative are in possibilities to refer to the experience of CVS Caremark Corporation.

The focus on the Internet-based drug prescription services is advantageous because of expanding the company’s frames, but this shift can be too challenging. The in-store clinic market is competitive because of the presence of Walgreens Corporation, but it provides the space for the expansion.

From this point, the proposed actions should be based on orienting to the mail-order pharmacy functions because of the apparent profitability of the sphere, and this action can contribute to overcoming the experienced financial losses. The company can become less dependent on the industry’s development while expanding the frames for competition and providing the mail-order pharmacy services.

The decrease in number of less expensive generics can be overcome with changing the pricing policy and avoiding strict financial controls typical for the company’s stores. Furthermore, the problem with the shortage of professionals can be resolved with references to the company’s optimization and focus on providing the additional mail-order pharmacy services.

The discussed actions can have more positive consequences than negative ones because Rite Aid Corporation will rely on the new trends within the industry while expanding the frames also in the company’s strategic management. The fact of adding the mail-order pharmacy functions can require the changes in the strategies, but the overall results are expected to be positive.

Works Cited

Hitt, Michael, Duane Ireland, and Robert Hoskisson. Strategic Management: Competitiveness and Globalization. USA: Thomson South-Western Publishers, 2013. Print.

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