Free Custom «Analysis of a Company» Essay Paper

Introduction and adoption of the internet has in recent years as a market place and a marketing tool, attracted thousands of companies and individuals. It is not strange to find people doing their shopping online more conveniently than walking to shopping malls and supermarkets. Amazingly, almost every need of customers can be met on the internet ranging from food, shelter and medication. One of the known companies in the world which deals with online operations is Drugstore.com Inc. Drugstore.com is an online pharmaceutical company specializing in health and beauty services and products. The company's headquarters are in Bellevue, Washington. As an online company, Drugstore.com instigated its operations on February 24, 1999. The company management has remained focused in ensuring the growth and good performance of the company not only in the United States but across the globe regardless of its passed record. As a way of understanding Drugstore.com, this paper explores the company's operations and future prospects with regard to performance and planning. To achieve a comprehensive analysis, the research basically considers some of the steps being taken by the company.One of the ways in which drugstore.com has been promoting its performance and enhancing growth is through partnership with other companies especially those which operate online like Amazon, known for online books and others which do not market their services and products online. For instance, Drugstore.com's partnership with Rite Aid stores gives it an opportunity to trade Rite Aid products and allows its customers to collect their medical prescription (Neirinckx 2000). The company also sells vitamins from another business partner, General Nutrition Center. It is however important to mention that the company terminated its partnership with Amazon.com in the year 2005. It also manages other storefronts at: AtHisBest.com, sexualwellbeing.com, allergysuperstore.com and Beauty.com just but a few examples. In order to meet the needs of its customers and others who are prospective, the company owns an "FSA store" which stocks products that can be acquired using several modes of payment, use of health saving account and supple spending account. This flexibility greatly contributed to the adoption of the Inventory Information Approval System in the year 2005.As a marketing strategy which has been considered efficient for drugstore.com, partnership led to the expansion of customer domain making its products known by very many people most of whom have turned to be not only potential but reliable customers. A part from partnership, drugstore is also considering purchase of other stores like Salu Inc., which was acquired last year at a price of $ 36 million. Since 1999 when the company was established, Drugstore.com has continued to give priority to its customers through customer loyalty and good service delivery. This has augmented its ability to maintain its customers with 82% of them representing repeat customers who boost the sales of the company with a significant margin.

 

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Although drugstore.com is headquartered in Washington, United states, its operations are also based in Canada. However, the good news for everybody around the world is that these products are found online allowing shopping at whichever destination in the world. The Purchase of International Vision Direct Corp. in the year 2003 reformed the operations of the company into four major sectors which are: local pick-up pharmacy, vision, over the counter and mail-order services. According to the performance record of the company in 2006, over-the-counter services accounted for approximately 48% of the total sales, followed by pharmacy with 40% and vision contributed 12% of the overall sales.OTC which is the best performing segment of the company mainly offers health services which do not require prescription, personal care products and beauty. However, products found in specialized stores like GNC Live Well are also available online on drugstore.com giving every person an opportunity to use them beyond borders. Other channels through which services are offered by OTC include but not limited to microsites, beauty web stores and partnership web stores which play a major marketing role. Where exactly does drugstore.com source OTC get its products? Majority are from different distributors and manufacturers to ensure that customer needs are met with ease. Adverts are also sold on the company's OTC website. As a key strategy, drugstore.com focuses on providing a variety of products ranging from household, beauty, personal care among others at cutthroat prices, giving its customers an opportunity to experience distinct shopping adventure. To ensure that customers make informed shopping decisions, the company guarantees that there is enough information available online. As a future strategic plan, the company is considering to increase partnership levels with companies like Medco Health Services and Rite Aid with superb customer and public awareness (Neirinckx 2000). The company also looks forward to increasing microsites with an aim of reaching specific customers. In addition, expansion of international markets is among the strategies that the company is putting in place to continue enjoying good performance benefits.

On the other hand, the mail-order segment is charged with delivery and supply of prescription drugs to customers. The company offers mail delivery services to several pharmacy benefit management companies with underway plans of expanding its services through increasing of service outlet channels. PBM companies like Amazon also promote marketing services for various drugstore.com products. The third segment of the company, pick-up pharmacy provides prescriptions for drugs and other products which can be collected at Rite Aid stores (Form 10-K for DRUGSTORE COM INC). The vision segment offer vision products like contact lenses via Vision Direct.The benefits and profits realized by Drugstore Company are mainly from sale of its products. It operates for an average of 52 weeks in a year with each fiscal quarter having 13 weeks. Financial records of the company reveal that reasonable growth has been realized in recent years with orders having increased by 20% in 2009 to 1.8 million new orders. On the other hand, repeat orders decreased to a total of 70% due to a rise in partnership strategies (Form 10-K for DRUGSTORE COM INC). Due to proper planning and strategy implementation, the number of customers rose to up to 3 million with a percentage increase of 18 compared to 2008.It is worthy noting that growth and expansion of Drugstore.com Company has continued to be witnessed in the first quarter of 2010 financial with projection of a better future. This report was made on April 4, 2010 which indicated that the company recorded a net sale of $ 118,328,000 compared to $ 98,315,000 a year ago. This was an appreciable increase augmented by expansion of the operational domain. On the other hand, the company registered operating loss worth $2, 553,000 which was an increase from $2,174,000 for the previous financial year. To add, operations of the company gave a loss of $ 2,161,000 higher than $ 2,131,000 which was realized in the previous financial year. In general, Drugstores.com had a net loss of $ 2,616,000 against $ 854,000 net income. The net cash obtained by April 2010 was $2,966,000 against a value of $ 1,820,000. There was also an increase in the amount spend on buying of fixed assets in relation to partnership and expansion to $2,339,000 (Mehl & Santell 126).With the strategic plans being adopted and implemented by the company, there are high expectations in terms of performance in the next few years. Expansion of partnership domain with other companies is likely to increase the number of orders which will result in higher sales. However, the company has to maintain its strong loyalty by being driven by the burden of customer satisfaction.