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Cardinal Health

Integrative Case 3.1:
Corporate Strategy at Cardinal Health
Discussion question 1: What are the benefits and costs of Cardinal Health’s product-related diversification strategy?
Firstly, Walter started implementing its product-related strategy on time, in 1996, when FoxMeyer went bankrupt. If, the company was not diversified and dependent only on one product division, it might have ended up as FoxMeyer.
Also, the drug distribution division has been forced to lower its prices by health care providers, patients, insurance companies and HMOs. Moreover, related costs are increasing, reducing profit margins of the company. This division is not as profitable as other three divisions, generating less than 50% of the company’s total profits, even though 80% of Cardinal Health’s revenue comes from this division. On the other hand, other three product divisions are much more profitable and have higher growth rates. Due to its diversification strategy, today, it has very healthy......


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Approximate Word Count: 807
Approximate Pages: 4 (250 words per double-spaced page)

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