Executive Summary
With aging
American population and the macro-economy tanking, the only secure industry as
of late is healthcare. Whether in good times or bad, people will still come
down with colds, require surgeries, and have medical emergencies.
Founded in 1971
by Robert D. Walter, Cardinal Foods started out as an Ohio-based food
wholesaler. In 1979, the company began wholesaling drugs as Cardinal
Distribution. After many mergers and acquisitions, Cardinal Health (NYSE: CAH)
went public in 1983. Today Cardinal Health has $87 billion in revenue and
employs more than 47,000 people.
Cardinal
Health’s primary service is distribution of pharmaceuticals (87% of FY 2008
operating revenue) and medical device products (9%) (Schwed,
2009). Sub-businesses segments include supply chain software development and
manufacturing of expendable medical products. The manufacturing of products
allows backward vertical integration for the company.
Customers for
Cardinal Health include hospitals, pharmacies, physicians, drug stores, supermarkets,
and research laboratories. The largest customers are CVS Caremark (22% of
revenue) and Walgreens (19%). The largest five customers account for 52% of
revenue (Cardinal Health 10-K, 2008).
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