In this chapter, through my interpretation, it talks about how any business can twist the threats that they might have face and turn it positive or offset the threat so it would not harm the company.
Rite Aid have face so many problems during the last decade and even more so now.
There were many threats that Rite Aid somehow overcome to be able to withstand the numerous competition today, such as:
Entry – What helped Rite Aid set apart from all other small or big pharmacies is that Rite Aid is a well known pharmacy that everyone knows. In addition, what makes it difficult for other pharmacies to enter the market is the regulations that they need to go through, in order to become an establish entity within the pharmacy game. Rite Aid also have the technology and brand name to keep it afloat in this game, compared to others, and most importantly, they have not had recent big news that can cause their customers to go to another.
Rivalry & Substitutes – What makes Rite Aid special is that the company have 3 distribution center and most importantly they have a Pharmacy Benefit Management, EnvisionRxOptions PBM. This will likely help Rite Aid reduce their cost for administrative purposes for the numerous medications that they dispense daily, helping them stay alive in the fight between all the pharmacies. In addition, in recent years, with the bought out of half their properties, Walgreens have given Rite Aid an opportunity to gain a 10 year contract with McKensson deal where Rite Aid can have their medications at the same rate as Walgreens.
Suppliers – Rite Aid have numerous suppliers, depending on the medication, whether it is a specialty medication or generic. As I described above, currently Rite Aid had obtain the rights for a discounted price from McKensson for 10 years, thanks to Walgreens, and by my guess. After the 10 year contract have ended, they would likely to use that contract as leverage to lower down the price of other company or use the same company to establish a price within the range they were getting. However, in this economy, I think any company would likely want to obtain their business.
Buyers – Rite Aid’s customers have many choices in getting their prescription medications. However, there is one thing that can catch their attention. Rite Aid’s Thrifty Ice Cream that has been established in “California since 1940, has moved up the 101 and now have 8 signature flavors available in Washington, Oregon, and Idaho”. Rite Aid’s Thrifty Ice Cream alone helped Rite Aid 3rd quarterly earnings to be in the positive. This one perspective can be laughable, but as long it is getting customers and increasing profits, I would say that is genius.
Alan's Perspective 