Cardinal Health

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Cardinal Health

• Kristina Garabedian
• Tommy Petramalo
• Steven Seelye

2
History

• Began as Cardinal Foods in 1971
• 1984 focused on Healthcare Distribution Industry
• Since 1983 they have acquired over 60 companies
• 2007 voted as Forbes most admired firm and
  Fortune 500 ranked 19th

3
Products/Services

• Pharmaceutical distribution
• Surgical masks, drapes and gowns
• Fluid suction and collection products
• OnSiteSM service surgical instrument repair
• Interventional radiology products, special
  procedures
• Products are used in 90 of hospitals
• 50 of surgeries use Cardinal Healths products

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Stock Chart
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Mission Statement

• Cardinal Health, Inc. (NYSE CAH) is a global
  company serving the health-care industry with
  products and services that help hospitals,
  physician offices and pharmacies reduce costs,
  improve safety, productivity and profitability,
  and deliver better care to patients. With a focus
  on making supply chains more efficient, reducing
  hospital-acquired infections and breaking the
  cycle of harmful medication errors, Cardinal
  Health develops market-leading technologies,
  manufactures medical and surgical products and is
  one of the largest distributors of
  pharmaceuticals and medical supplies worldwide

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Target Market

• Cardinal Health is a global healthcare company,
  serving
• Hospitals/Providers
• Hospitals
• Physician offices
• Surgery centers
•  Retail pharmacies
• Retail chains
• Community/Independent
•  Suppliers
• Medical suppliers
• Laboratory suppliers

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Future of Industry

• Healthcare Distributors
• Three major competitors
• Forecasted market growth

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Strengths

• Large scale of operations
• Four different operations products and services,
  technology and services, pharmaceutical
  technology and services, and pharmaceutical
  distribution and services and operates in over 20
  different countries.
• High returns
• Record high returns on assets, investment and
  equity compared to the industry averages in
  recent years.
• Diverse product portfolio
• The diverse range of offerings provided by the
  company meets the different requirements of
  manufacturers as well as health care providers.
• Performance of clinical technologies and services
• clinical technologies and services segment
  represented a strong performance in 2006.

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Weaknesses

• High dependence on few suppliers
• High dependence on a few suppliers means Cardinal
  Healths business would be severely affected if
  it loses any supplier.
• Weak profitability of pharmaceutical distribution
  and services and pharmaceutical technologies and
  services
• Decreased selling margins due to competitive
  pressures.
• Higher costs within the nuclear pharmacy services
  business.
• Costumer concentration
• A significant portion of the companys revenue
  growth has been derived from a limited number of
  large customers.
• Any losses in sales from one of their few
  customers would effect their operations and
  financial condition.

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Opportunities

• Aging US population
• Almost all revenues comes from the healthcare and
  pharmaceutical industries, the outlook for which
  is positive owing to the aging of the US
  population (baby boomers).
• Increasing demand for patient monitoring systems
• The demand for patient monitoring systems is
  expected to increase 5.4 annually to 9.1
  billion in 2010.
• Acquisitions
• Medicap, Snowden Pencer Holdings, Geodax
  Technology, ParMed Pharmaceutical, a
  telemarketing business, Denver Biomedical, and
  MedMined are just a few examples.

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Threats

• Deficit Reduction Act
• The government intends to cut its spending on
  Medicare and Medicaid as a part of its Deficit
  Reduction Act of 2005.
• Demand for supplies would go down.
• Regulations
• The company is subject to various local, state,
  federal, foreign and transnational laws and
  regulations, which include the operating and
  security standards of the DEA, the FDA.
• Strong competition
• Some of Cardinal Healths business segments
  operate in highly competitive areas.
• In the pharmaceutical technologies and services
  segment, the company competes on several fronts
  both domestically and internationally

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Elements of the Marketing Mix
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Additional Three Ps
Service Ps
Physical Evidence
Process
People
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Techniques to Help Strategic Planning
Management Commitment
Continual Attention
Creativity
Effective Strategic Planning
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Promotion in Marketing Mix
Overall Marketing Objectives

• Promotional Mix
• Advertising
• Public Relations
• Sales Promotion
• Personal Selling
• Promotional Plan

• Marketing Mix
• Product
• Price
• Promotion
• Price

Target Market
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Suppliers

• Alaris Products
• Medical Products and Services
• Pyxis Products
• SP Laboratory Products

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Any Questions?