The Role of Entrepreneurial Opportunities in McKesson Corporation

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McKesson Corporation is a healthcare products and services distributor based in the USA. The company has been able to develop a global footprint through its expansion into Canada, UK, Australia and New Zealand. Its business model is largely business to business (B2B) since its customers are majorly pharmacies, hospitals, medical labs, surgery centers, physician offices, among others. Its products include medical supplies, medical information technology, and other pharmaceutical items. The adoption of intrapreneurial and entrepreneurial opportunities is a significant strategy in bringing about growth and sustainability within the company.

Entrepreneurial Opportunities

The analysis of internal and external factors of a company using the SWOT analysis helps in identifying opportunities that the company can take advantage. The environmental analysis using the PEST framework also forms a basis for opportunity identification. One strength of the company is operational efficiency which results in a lean operational cost budget (Braunerhjelm, Ding, & Thulin, 2018). The relatively low operational costs have been facilitated by factors such as adoption of new technology and effective management. This is also an opportunity for McKesson to continue with global expansion in order to grow the revenue base. The operational cost savings, in this case, should be used to finance direct and indirect investments in global markets such as South America, Europe, and Asia. McKesson has the resources, expertise and a strong brand that could ease its entry into these markets.

McKesson may also use mergers and acquisitions as a business expansion strategy both locally and internationally. This strategy is effective especially when a company acquires or merges with a competitor since the market size is effectively expanded. Business combination is also an opportunity for McKesson to tap its underutilized market potential such as the retail consumer market. Considering the social aspect of the PEST framework, acquiring a company which understands the cultural and social dynamics of a local market increases the chances of a successful venture.

It is also notable that the company has limited business segments due to over-reliance on B2B customers. There is an opportunity to expand its market segments by tapping into business to consumer (B2C) segment and business to government (B2G) segments (Bagheri & Akbari, 2018). Establishing medical supplies retail stores in various parts where McKesson operates is another entrepreneurial opportunity for the company. The company has resources and capacity to open such stores that will sell directly to the consumers. Furthermore, the existing B2B online trading platform should be expanded to the B2C market. The online retail platforms in the healthcare market are still underutilized due to issues such as counterfeits which makes this process difficult. However, McKesson has a strong brand and utilizes technology such as RFID to differentiate its unique products.

The company could further diversify its products and services by offering healthcare services by establishing hospitals and clinics either directly or through a franchise model. McKesson should take advantage of the fact that it has a strong and trusted brand that is internationally recognized. Their several years of operating in the healthcare industry give them an advantage of having experience and human resource power which it can leverage in for its entry into this business segment. Setting up hospitals and clinics is resource intensive and thus McKesson should consider using both direct investment strategy as well as using the franchise model. Using the franchise strategy, McKesson may license hospitals and clinics to operate and market themselves using its brand. In exchange, such hospitals and clinics will pay royalty fees to McKesson as agreed upon between the two parties. This is an additional and significant new revenue stream for the organization (Miller & French, 2016).

Entrepreneurial Assessment

The most viable entrepreneurial opportunity for McKesson is to venture into offering healthcare services directly to consumers through clinics and hospitals. The company already has a broad range of products and services but this still remains an untapped opportunity which could turn out to be highly lucrative for McKesson. McKesson is already an established brand and has the capacity to strengthen its brand even further through marketing initiatives such as corporate social responsibility (CSR) and corporate sponsorship. The strong brand legitimizes its strategy to roll out a franchise model for hospitals and clinics (Bagheri & Akbari, 2018). The entrepreneurial venture is viable basing on several factors such as political, economic, social and technological factors.

From a political perspective, the franchise model is easy to operate since the residents in a foreign country are best suited to understand the political dynamics. Through franchising, the operations in the McKesson branded hospitals are actually run by residents of the specific country (Braunerhjelm, Ding, & Thulin, 2018). Economic factors include cost of capital, labor cost, interest rates and foreign exchange factors among others. Opening up hospitals and clinics in all the regions that McKesson operates is capital intensive when considering the cost of medical equipment and machinery as well as the buildings. However, under the franchise model, McKesson does not incur the capital expenditure since it licenses independent parties to carry out the actual investment. For international branches and divisions, McKesson may use hedging tools such as derivatives to mitigate foreign exchange risk. The company further has a large number of employees with expertise in different areas of healthcare. This will make it easy for the company to venture into the entrepreneurial opportunity.

The social aspects dictate how individuals perceive a brand which plays a critical role in making purchase decisions. A strong brand is therefore advantageous for a company in terms of attracting more sales, positive word of mouth and repeat purchases (Miller & French, 2016). Conducting activities such as CSR and corporate sponsorships aid in increasing the popularity of the brand and thus it grows to be an attractive brand even to investors. Finally, technological factors are highly relevant in the current business environment. Technology platforms are critical for the marketing of new entrepreneurial ventures. McKesson uses various platforms such as Facebook and Twitter to create awareness of the brand and product offering. Technology will thus help the organization in the new entrepreneurial venture.

Trends in Healthcare

Globally, healthcare has continued to be influenced by the increased adoption of health insurance by population masses. From the political arena, regulations have continued to shape healthcare insurance. For instance, the Obama Care Act is an example of a legislation that pushes for increased adoption and anti-discrimination of the population seeking to get health insurance. Similar trends have continued to be replicated globally which therefore means that business has to align themselves to benefit from this aspect. Legislation with respect to affordable healthcare means that the proportion for the insured population expands every day. As such, McKesson should work towards creating strategic partnerships with key insurance companies in the areas it operates in order to tap a significant proportion of the insured individuals into their healthcare facilities (Poba-Nzaou, Uwizeyemungu, Raymond, & Paré, 2014).

Technology is also a critical trend that has been reshaping the healthcare sector. Globally, technology has continued to affect demand and supply of healthcare products and services. On the supply side, technology increases the efficiency of services and also reduces the cost. Furthermore, technology has continued to expand the possibilities in terms of the effectiveness of treating various illnesses. Information technology has also helped hospitals to store, preserve and retrieve patients’ records in a quicker and efficient manner (Stryker & Stryker, 2017). The platforms through which healthcare institutions can reach their potential markets have also expanded due to information technology. From the demand side, customers are continuously demanding for high-quality services backed by accurate records and medical history. These are key factors in guiding their purchase decisions. Therefore, the adoption of technology significantly determines how much an entrepreneurial sector in healthcare succeeds.

Legal and regulatory trends are also quite relevant in the healthcare sector. The high sensitive nature of the health sector makes it highly regulated through federal and state laws. The aspect of international operations means that McKesson is exposed to varying regulatory requirements in the different regions they operate in. for instance, some laws require pharmaceutical companies to make disclosures to the authority while importing some chemicals or drugs (Ginter, Duncan, & Swayne, 2018). Failure to adhere to regulations attracts punitive fines from the authorities. Businesses operating in the healthcare sector are thus being increasingly cautious to avoid being classified as non-compliant.

The healthcare sector has high geographical disparities since some areas are underserved as compared to other areas. Such disparities are caused by low levels of income in some areas as well as the inaccessibility of national health insurance programs by a section of the population (Bagheri & Akbari, 2018). The healthcare infrastructure and facilities in some areas are poorly developed. McKesson may, therefore, address this gap by setting up healthcare centers in areas identified as being underserved, locally and internationally. This will go a long way in reinforcing the entrepreneurial strategy of the organization.

Impact on Opportunities

The trends in the political aspect affect entrepreneurial opportunities for McKesson in several ways. Politics play a major role in shaping how businesses in the healthcare sector operate. This means that political issues such as affordable healthcare legislation determine the future of the sector. The political push for inclusiveness in national health insurance programs means that companies operating in this sector have to align themselves with such legislation through partnerships with institutions offering health insurance (Stryker & Stryker, 2017). McKesson should be at the forefront in embracing the provisions of the affordable care act legislation which will help the company attract this market segment.

The trend of technology adoption has had a positive impact on healthcare institutions which are highly innovative. Technology has come with several advantages such as improved healthcare services as well as cheaper and more effective marketing platforms. Furthermore, technology presents a resourceful platform for conducting market research which is a necessary step before making an entrepreneurial venture. McKesson should also utilize technology to capitalize on the new entrepreneurial opportunities in various ways. First, they should use technology to carry out research on the potential markets for their new product. Secondly, technology should be used to create awareness and marketing the company in order to strengthen the brand (Poba-Nzaou, Uwizeyemungu, Raymond, & Paré, 2014).

McKesson should be careful so as to avoid getting into legal and regulatory problems which may cripple its strategy to roll out the new entrepreneurial venture. Failure to abide by legal regulations results in lawsuits, penalties, and fines which are expensive for an organization (Bagheri & Akbari, 2018). Exorbitant lawsuits and legal sanctions may significantly dent a company’s strategy. To avoid such eventualities, McKesson should have an active compliance department charged with ensuring all laws and regulations with respect to healthcare are adhered to.

The geographical disparities in the delivering of health care services are an opportunity for McKesson to invest in hospitals and clinics in underserved areas. This will not only help in improving the revenue base of the organization but will also positively impact the society. Social entrepreneurship is a contemporary concept that entails societal conscious investments that come with positive social impact (Stryker & Stryker, 2017). Through societal conscious entrepreneurship, the organization is able to build its reputation while positively impacting the lives of thousands.

Impact on Sustainability

Sustainability refers to the capacity of McKesson to continue being in profitable operations into the unforeseeable future. Political factors are aimed at protecting the population and other stakeholders from undue exploitation from providers of healthcare services. The businesses operating in this sector are affected both positively and negatively by political factors. In various countries, the policy may be aligned to encouraging investments in the healthcare sector, while in other countries, this is not the case. In America and Canada, the healthcare policy supports investments into the sector and this should encourage McKesson to expand in order to build resilience and sustainability in the organization (Ginter, Duncan, & Swayne, 2018).

Technology is also a critical element in building sustainability within an organization. Technology increases the efficiency of various operations within an organization which subsequently brings down operational cost. Low operational costs result in higher profitability for the organization which builds up the financial strength of an organization. Also, the adoption of technology increases the number of products and services that McKesson has the capacity to offer (Poba-Nzaou, Uwizeyemungu, Raymond, & Paré, 2014). The organization may thus use technology to expand its product portfolio which results in a larger revenue base.

Legal and regulatory compliance issues are meant to cushion stakeholders from undue competition or unfair practices from other stakeholders. Legal requirements, therefore, ensure that all healthcare institutions obey the set-out rules and procedures which ensure that patients are protected. Through adherence to laws and regulations, stability is entrenched in the healthcare sector which is good for stakeholders such as McKesson. Compliance brings about predictability which in turn minimizes the level of risk facing a given sector.


            Entrepreneurship and intrapreneurship are crucial elements of innovation within a healthcare institution. With innovation come greater possibilities, growth, resilience, and sustainability. The process of identifying entrepreneurial opportunities for an organization is often based on environmental analysis based on models such as SWOT as well as PEST analyses. McKesson has a viable entrepreneurial opportunity by opening hospitals and clinics in the regions it operates, either directly or indirectly. Establishing a franchise model for McKesson branded hospitals is a strategic opportunity for the organization to capitalize on its strong brand and good reputation. Through licensing healthcare institutions to use the McKesson brand, the company will also earn substantial revenue as royalty fees from the licensees. The result of getting into this venture will be increased levels of revenue and a higher level of sustainability for McKesson.


Bagheri, A., & Akbari, M. (2018). The impact of entrepreneurial leadership on nurses’ innovation behavior. Journal of Nursing Scholarship, 50(1), 28-35.

Braunerhjelm, P., Ding, D., & Thulin, P. (2018). The knowledge spillover theory of intrapreneurship. Small Business Economics, 51(1), 1-30.

Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2018). The strategic management of health care organizations. Hoboken, NJ: John Wiley & Sons.

Miller, F. A., & French, M. (2016). Organizing the entrepreneurial hospital: Hybridizing the logics of healthcare and innovation. Research Policy, 45(8), 1534-1544.

Poba-Nzaou, P., Uwizeyemungu, S., Raymond, L., & Paré, G. (2014). Motivations underlying the adoption of ERP systems in healthcare organizations: Insights from online stories. Information Systems Frontiers, 16(4), 591-605.

Stryker, S., & Stryker, J. (2017). Beneficial leadership and corporate social responsibility. International Journal on Global Business Management & Research, 6(2), 1-103.

January 19, 2024


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