Cardinal Health Case Analysis Essay

2470 Words May 22nd, 2012 10 Pages
Cardinal Health, Inc. Company History
Cardinal Health was founded in 1971 when founder Robert D. Walter opened a small distribution center in Columbus, Ohio, then named Cardinal Foods, Inc. In 1979 the food distributor branched out into pharmaceutical distribution when the company purchased a Zanesville, Ohio, drug distributor and became known as Cardinal Distribution ("Our history," 2011). The company evolved over the next several years; they went public and was renamed Cardinal Health in 1983, sold its food distribution segment in 1988, and become a global corporation with $103 billion in revenues and $1.5 billion in annual operation earnings in 2011 (Annual Report, 2011). Through several acquisitions over the past three decades
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Cardinal Health customers also benefit from integration, due to the strategic aggressive growth and acquisitions of well-run companies in adjacent market, which help address the complex healthcare operations and patient challenges. The creation of value for Cardinals customers was accomplished due to concentration of four operational divisions: 1. Clinical Technologies and Services (3% of revenue in 2007) - develops drug delivery technologies and provided consulting and other services that improve quality and efficiency in health care. 2. Medical Products Manufacturing (2% of revenue in 2007) - develops, manufactures, packages, and markets products for patient care 3. Supply Chain Services – Pharmaceutical (86% of revenue in 2007) – distributes pharmaceuticals 4. Supply Chain Services – Medical (9% of revenue in 2007) – distributes medical surgical and laboratory supplies (Annual Report, 2007)
Recommendations
Cardinal’s largest customers, Walgreen and CVS, accounted for approximately 23 percent and 22 percent, respectively, of total revenue for fiscal 2011. The combination of the five largest customers, including Walgreens and CVS, accounted for approximately 59 percent of total revenue for fiscal 2011 (Annual Report, 2011). To better service these customers Cardinal Health should

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