Rite Aid Corporation

During the 2010s, Rite Aid Corporation, as one of the leading pharmacy retailers in the USA, suffers from the significant economic pressure and intensified competition within the industry. The observed financial losses of the company support the idea that Rite Aid Corporation needs the revision of the current managerial and economic strategies implemented and followed in the company.Advertising We will write a custom case study sample on Rite Aid Corporation specifically for you for only $16.05 $11/page Learn More Today, the company has to compete with such giants of the industry as Walgreens Corporation and CVS Caremark Corporation. However, the financial reports provided by Rite Aid Corporation state that the company needs to cope with the debts and to improve the work of run-down stores to change the situation for better and to focus on the effective strategic management (Hitt, Ireland, and Hoskisson). That is why, it is essential to identify the prob lems and challenges experienced by the company which prevent it from concentrating on the competitive advantage and from creating value within the competitive industry, and it is necessary to analyze the alternatives to propose the plan of the further actions. The economic activities and profitability of Rite Aid Corporation are characterized by significant unmanageable debts and underperforming stores which organization and management are not capable to attract the variety of customers typical for the industry. Thus, the economic and financial losses associated with the performance of run-down stores are the main problem of Rite Aid Corporation. The next connected problem is the intensive competition within the industry, which cannot be won until Rite Aid Corporation solves its financial and strategic issues. The associated problems or challenges to influence the development of the company negatively are the shortage of professionals characteristic for the industry in general and t he decrease in number of less expensive generics which can contribute to improving the retailer’s economic situation. The next global problem which influences Rite Aid Corporation directly is the trends to change retailing pharmacy with the other services such as mail-order pharmacies (Hitt, Ireland, and Hoskisson).Advertising Looking for case study on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Thus, the existing alternatives to cope with the problems in relation to the current industry tendencies are the expansion of the services to involve the mail-order pharmacy functions and sales according to the specific Internet-based drug prescription services. Furthermore, it is essential to focus on in-store clinic market as the potential for development. While orienting to the mail-order pharmacy functions, Rite Aid Corporation can provide customers with convenient and cost-saving services. The pros of the alternati ve are in possibilities to refer to the experience of CVS Caremark Corporation. The focus on the Internet-based drug prescription services is advantageous because of expanding the company’s frames, but this shift can be too challenging. The in-store clinic market is competitive because of the presence of Walgreens Corporation, but it provides the space for the expansion. From this point, the proposed actions should be based on orienting to the mail-order pharmacy functions because of the apparent profitability of the sphere, and this action can contribute to overcoming the experienced financial losses. The company can become less dependent on the industry’s development while expanding the frames for competition and providing the mail-order pharmacy services. The decrease in number of less expensive generics can be overcome with changing the pricing policy and avoiding strict financial controls typical for the company’s stores. Furthermore, the problem with the s hortage of professionals can be resolved with references to the company’s optimization and focus on providing the additional mail-order pharmacy services. The discussed actions can have more positive consequences than negative ones because Rite Aid Corporation will rely on the new trends within the industry while expanding the frames also in the company’s strategic management. The fact of adding the mail-order pharmacy functions can require the changes in the strategies, but the overall results are expected to be positive. Works Cited Hitt, Michael, Duane Ireland, and Robert Hoskisson. Strategic Management: Competitiveness and Globalization. USA: Thomson South-Western Publishers, 2013. Print.Advertising We will write a custom case study sample on Rite Aid Corporation specifically for you for only $16.05 $11/page Learn More This case study on Rite Aid Corporation was written and submitted by user Kiara Fowler to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.

Liquidity risk, conduit, and securitization issues Essay Example

Liquidity risk, conduit, and securitization issues Essay Example Liquidity risk, conduit, and securitization issues Essay Liquidity risk, conduit, and securitization issues Essay Underestimating the importance of liquidity risk is one of the important facts behind today financial crisis. In the past years liquidity risk has not been taken into account in stress testing, funding strategies, and portfolio management (Wehinger 2008). In large and complex institutions, benefits as well as challenges arises with a potential for internal liquidity provision to seem adequate but with harder to assess funding risks at the aggregate level. According to Wehinger (2008), while designing funding strategies, risks under stressed market conditions with sever liquidity shortages should be included for secured funding. Bank should also consider about securitization of assets and the use of conduits as those can be subject to reputation risks. Central Bank should provide clear specification on the conditions under which it would work as a lender of last resort and Central Bank should consistently communicate those rules with the commercial banks. And most importantly, risk management of bank should take into account the fact that, there is a chance of liquidity to turn into insolvency if liquidity problems weigh on investors confidence and weaken the companys equity base. In the quarterly bulletin of Bank of England (2009), it has been mentioned that overall liquidity conditions have yet to normalise to any significant degree. In order to meet banks longer terms liquidity demands, UK government already extended the term of Bank of Englands Permanent Discount Window Facility. According to the report on Enhancing Market and Institutional Resilience by Financial Stability Forum (FSF) 2008, International standard setters should enhance accounting, disclosure and audit guidance for valuations. Firms valuation processes and related supervisory guidance should be enhanced. Apart from that, reasonableness and consistency tests should be applied for valuation and price verification. In June 2008, The Basel Committee on Banking Supervision published ten principles related to Supervisory guidance for assessing banks financial instrument fair value practices. Those principles are influenced by considering value measurement and modelling challenges faced by banks during the present financial crisis. The main objectives behind publishing those principles are to help banks supervisor while assessing banks valuation processes and to promote improvement in banks risk management and control processes. One of the main amplifiers of the crisis was the lack of transparency regarding the risk profile of institutions and structured products. Wellink, 2009. According to the Basel Committee on Banking Supervision (2009), economic capital model of a bank should be effectively documented and integrated in a transparent way and senior management should consider that model seriously while making business decision and for risk management of bank. For this purpose, bank should emphasize on achieving robust estimates of stand-alone risk on absolute basis and developing the flexible capacity for enterprise-wide stress testing. In order to have transparency in securitisation processes and markets, market participants and securities market regulator should work together to expand information on securitised products and their underlying assets (Financial Stability Forum, 2008). Reform of rating processes by Credit Rating Agencies can also enhance the transparency (US Presidents Working Group on Financial Markets, 2008). PWG (2008) suggests forming a private sector group to ensure the integrity and transparency of reports. Third Pillar of Basel II framework can help Bank to increase transparency (Wellink, 2009 PWG, 2008). Pillar three of Basel II mainly focused on disclosures related to securitisation, off-balance-sheet exposures and trading activities. This paper presents a review of the financial crisis on banking sector and implication of the bank management to cope with this crisis. Several reforms has been suggested in this paper following Institute of International Finance (IIF), Basel Committee on Banking Supervision, Financial Stability Forum (FSF), Bank for International Settlement (BIS), US Presidents Working Group on Financial Markets. Some of the recommendations are already being implemented. However, the recent initiatives at the G-20 level are being considered as a first step towards encompassing reforms to help cope with present financial crisis (Wehinger, 2008). Wellink (2009) also support the initiatives taken by Basel Committee and hope that those initiatives should limit the risk that weaknesses in banks amplify shocks between the financial and real sectors.