Shareholder Value vs. Stakeholder Value. Pick one company that was discussed by your classmates in Discussion 1. Do not select your own company and do not select a company that has already been discussed in this discussion forum. In your opinion, which of the following best characterizes the purpose of the firm? Explain your answer and describe possible implications to the other stakeholders. For example, if you believe the purpose of the firm is to “maximize shareholder value”, what would be the implications to customers or employers? If you believe the purpose of the firm is to “create value for a broad set of stakeholders”, what would be the implications to shareholders, customers, or employees?
Company: McKesson Corporation
Indicate whether the company is a for-profit or non-profit organization: For-profit
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Company mission statement: “Together with our customers and partners, we are creating a sustainable future for health care. Together we are charting a course to better health.”
Company vision statement: “To advance the health care system for better health for all.”
Corporate Strategy – in which industry or market does the firm compete? Healthcare (pharmaceuticals)
Business Strategy – how does the firm compete within its industry or market (competitive advantage)? According to Preston Pysh who is a writer for Forbs, there are four main components regarding McKesson’s competitive advantage. First, Mckesson delivers 1/3 of all prescription medicine in North America. The second advantage is efficiencies of scales; in total, McKesson has around 45 distribution centers between the US and Canada which “achieve a 99.98% order accuracy across North America distribution and services and a 99.90% inventory accuracy across International distribution and services” (Pysh, 2017). Next is their intangible assets; McKesson has a large patient portfolio as well as 48 “U.S. protected patents.” Protected patents make it very hard for competitors to enter certain market spaces. And lastly, McKesson competes with two other pharmaceuticals that they blow out of the water in the ROA, ROIC, FCF/Sales, net profit margin percent, and operating margin percent.
Fun little fact from reading about McKesson…When a company is a competitor of theirs, they normally eventually just buy the competitor out.
McKesson Values. (n.d.). Retrieved September 4, 2018, from https://www.mckesson.com/about-mckesson/mckesson-values/
Pysh, P. (2017, October 19). The Intrinsic Value Of McKesson Corp. Retrieved September 4, 2018, from https://www.forbes.com/sites/prestonpysh/2017/10/18/mckesson-mck-stock-value/#3ca2709b3ed4 (Links to an external site.)Links to an external site.
We Stand for Better Health. (n.d.). Retrieved September 4, 2018, from https://www.mckesson.com/about-mckesson/who-we-are/