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Final presentation rad

Final presentation rad






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    Final presentation rad Final presentation rad Presentation Transcript

    • Case Analysis
      Presented By: Hannah Muegge
      Rebecca Quinones
      Emmanuel Rodriguez
      Ross Rotwein
    • Presentation Overview
      Internal Mismanagement
      SWOT Analysis
      Proposed Solution
    • RITE AID Corporation - History
      Mission Statement
      To be a successful chain of friendly, neighborhood drugstores. Our knowledgeable, caring associates work together to provide a superior pharmacy experience, and offer everyday products and services that help our valued customers lead healthier, happier lives.
    • History(continued)
      Began in 1958 when Alex Grass incorporated Rack Rite Distributors, Inc
      1962: Thrift D Discount Center opened in Scranton, Pennsylvania 
      1962: U.S. federal legislation repealed the fair trade laws that fixed minimum retail prices on most products
      1963-1983: Acquisitions and growth across the US bringing sales in excess of over $1 Billion
      1999: Internal investigation reveals undisclosed holdings between the Corporation and original founders, the Grass Family.
      1998-1999: Accounting errors and discrepancies reveal losses of $1.06 billion
      2003: Martin Grass pleads guilty, and six other former executives are charged with accounting fraud. A civil lawsuit is still pending.
    • Unionization of Rite Aid
      Closures of over 250 Rite Aid stores nation-wide
      Company loses money and leading to poor working conditions
      Formations of unions begin in search of fair contracts and better lifestyle
    • Employee Free Choice Act
      Employees say Rite Aid is trying to undermine the formation of new Unions.
      EFCA would allow people to freely join a union and give them the freedom to bargain.
      Employees state Rite Aid engages in “illegal firing.”
      EFCA gives employees the right petition without intimidation.
    • ILWU Riots
      The International Warehouse and Water Union founded in 19th century along the pacific coast by the longshoremen
      Riots of unfair treatment in Lancaster, California.
      Strengthen “alliances with other unions for collective bargaining.”
    • “Day of Action”
      December 15,2010: day of protest to raise awareness of unfair treatment of workers.
      Protests conducted at 40 different stores through-out 13 states.
      Lancaster, California center of protests.
      Revolted that “28 times over the increases of their insurers.”
      400 employees in New York left without jobs due to store closures.
    • SWOT Analysis
    • Strengths
      Ranked number 100 in the Fortune 500
      3rd largest pharmacy in the nation.
      About 4,800 stores
      $221 million Revenue increase from 2009 to 2010 (View revenue chart next slide)
      67.9% sales from pharmaceutical products and 32.1 % from other over the counter products.
      Great employee benefits and over 97,000 associates.
      E Business: www.riteaid.com
    • Revenue Chart
    • Weaknesses
      Lost over $130 million 2010
      Has closed about 229 stores.
      Still plans to close 117as losses double.
      Darren Beckom:Former –Rite Aid Employee
      What’s next?
    • Weaknesses(continued)
      Credibility. Bad reputation after:
      Rite Aid corporate bust.
      Accounting scandal revealed.
      Corporate officers arrested, including CEO Martin Grass.
      Will stockholders and investors forgive Rite Aidcorporate?
      Rite Aid has improvedand focused more onbusiness ethics.
    • Weaknesses(continued)
      Financial weaknesses
      Rite Aid has lost $79.07 million in the last quarter of 2010.
      The 3rd largest pharmacy has been reporting losses since 2007.
      Results that shareholders have no more equity.
      Rite Aid has a $6.2 billion in long-term debt.
    • Opportunities
      Advertising and Credibility recognition:
      Non-for-profit organizations
      Rite Aid Foundation:
      Donated $4.9 million to Children’s Miracle Network
      Donated $50 Thousand to American Red Cross to assist relief efforts in Japan.
      Awarded grants totaling more than $11 million to about 820 organizations and 488 communities.
    • Opportunities (continued)
      Financial side:
      Successfully refinanced around $343 million in loans.
      Back in the game with NYSE:
      More potential for prospective Rite Aid investors, and current stockholders/investors.
      Assessed by consulting companies to improve management.
      Rite Aid still remains one of the top pharmacies in the nation, being the 3rd largest drugstore.
    • Threats
      Two types of threats:
      1) Internal Threats
      Dangers that can affect business internally, such as employees, employee turnover, union strikes, debt, management, and so on.
      2) External Threats
      Dangers that the company can encounter from the outside (externally). Examples can include: competition, demand, economy, tax increases, inflation, and so on.
    • Internal Threats(continued)
      Pharmaceutical products are not the only ones with expiration dates…
      Unfortunately, union contracts expire as well…
      Rite Aid’s contract withUnited Food and Commercial Workers (UFCW) Local 880.
      Contract expired April 2010, still trying to negotiate.
      UFCW is on strike against Rite Aid Pharmacies.
      Union strike is telling customers to stop supporting Rite Aid
      This is has created more negative credibility towards Rite Aid.
      More than 60% of sales come from pharmaceutical products!
    • Internal Threats(continued)
      Rite aid is at a $79.04 million loss in last quarter of 2010. (Income statement)
      Rite Aid Income Statement Quarterly-11/27/2010
      Total Revenue: $6.20 BillionGross Profit: $1.64 BillionOperating Income: $63.01 MillionNet Loss: $(79.07) Million
    • External Threats
      Competitors: None of them have net losses!
      Walgreens Quarterly Income Statement-2/28/2011Total Revenue $18.50 BillionGross Profit $5.32 BillionOperating Income $1.21 BillionNet Income $739.00 Million
      Publix Quarterly Income Statement-12/25/2010Total Revenue $6.43 BillionGross Profit $1.80 BillionOperating Income $488.93 MillionNet Income $342.10 Million
      CVS Quarterly Income Statement-12/31/2010Total Revenue $24.77 BillionGross Profit $5.09 BillionOperating Income $1.77 BillionNet Income $1.03 Billion
    • Proposed Solution
      Negotiate an agreement that will suit Rite Aid, their employees, their investors, and the union.
      Rite Aid employees need instruction regarding unions.
      Improvement in Rite Aid communication towards their employees.
    • Action vs. Reaction
      Action is faster than reaction!
      Rite Aid needs to act as soon as possible in order to overcome the obstacles that face Rite Aid with such threats!
      Rite Aid is still ranked the 3rdlargest pharmacy in the nation! Rite Aid still has potential to act before reaction hits!
    • Conclusion
      Rite Aid Corporation and other unionized drug stores in the New York area have been offered an agreement by the National Health and Human Services Employees Union.
      . Rite Aid’s part would be to recognize Union 1199 as the collective bargaining agent if more than half of their employees sign cards expressing their interest to join Union 1199
      Rite Aid stands to gain at least $40 million through pharmaceutical sales.