Paper Sample on Rite Aid Corporation: Market Leader with Sustainable Advantage

Introduction

The Rite Aid Corporation is an organization that deals with the sale of medicine and wellness products. Initially, it was a market leader, which a sustainable competitive advantage in the market it was operating. It had numerous branches, which had a large sales volume, which enabled it to earn high revenue levels. Moreover, because of its size, goodwill enabled the organization to attract and retain customers. Moreover, it benefited from favorable switching behavior, as customers changed their loyalty from other competitors to the organization. The success was enjoyed during the management spearhead by its founder, Alex Grass. Later, Alex Grass handed over leadership to his son, Martin Grass, when the corporation enjoyed a great deal of success through its operating activities. However, the son did not manage the organization, as well as the father, did. It went ahead to make poor decisions, which cost it its market leadership and lost the competition to other organizations that were in the market. Furthermore, the management was involved and convicted fraud, which led to an unfavorable turn of events for the organization and poor strategies.

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In this case scenario, various players are highlighted, who are important in determining the organization's current position. First, is the top management of the organization; first, under the founder's stewardship, Alex Grass. When he was at the top of the organization's management, it enjoyed a great deal of convenience, which enabled the organization to be a market leader. There were sound leadership practices, and the organization kept pace with the industry (Thimbleby, 2013). That was the major reason for its market leadership status. However, under the leadership of Martin Grass, there was a drastic drop in leadership quality at the organization. That was reflected through the scandals that were spearheaded by the top management. Therefore, the major parties in the case are the organization's leadership, responsible for the planning, controlling, directing and organizing the multiple operating activities. The other major character was the competitors present in the market where Rite Corp operated, which affected the quality of operations. The major characters in the case are responsible for the Rite Corporation's success or failure because they either directly or indirectly influenced the course of its activities. The management was responsible for decision-making, while the competitors directed the market trends, which were to be adopted by the organization to enhance its success.

Major Issues

In this case, multiple issues are responsible for the unfavorable turn of events for the corporation. First, there is a failure by the management to make plans for the dynamic market. Various disruptions have been introduced in the market due to embracing more convenient supply chains and logistics (Gosman & Ammons, 2013). There have been mergers and acquisitions, which have led to dominance by some of the players. For example, there is Amazon, which disrupted the traditional business model. Despite being a new player in the market earlier dominated by Rite Corp, it gained market leadership quickly. That led to the loss of market share and the other organization's value that existed before it. That was a problem of the new leadership by Martin Grass, the inability to forecast market trends and re-engineer business processes to enable success based on the organization's operations. If the leadership had engaged in innovative practices, the organization would still be a market leader; hence enjoying more sales and a better brand.

The other major issue with Rite Corp is a fall in the shareholder confidence in how the organization is managed. That is based on quantitative data, which shows the organization is on a downward trend in its operating activities. First, when you look at their revenue trend between 2017 and 2018, it reflects organizational failure. There was a fall in revenues of approximately 34%. That is such a huge drop in sales, yet the shareholders have invested in the organization. Furthermore, the number of states with Rites stores dropped from 31 to 19, which was the other indicator of organizational failure (Bitner & Dasher, 2007). To show disapproval of the organization's management, there was appointed an external oversight authority. In addition to the internal indicators of managerial ineffectiveness, there is an external indicator of failed acquisitions (Hambrick & D'Aveni, 1988). When an organization has sound operations, acquisitions are undertaken smoothly. However, in this case, the acquisitions were either disapproved by shareholders of parties outside the organization. That reflected the poor quality of operations by the organization.

For the organization to change its unfortunate fortunes, there are various options t can choose to adopt. They can either be short or long term in nature, which will enable the organization to regain its market leadership position. First, it can take on a restructuring strategy for the long term to change its business model. Moreover, it can take on partial acquisitions in the long term with other organizations, which are market leaders. The other long-term strategy can be through diversification into other areas, offering better services and adding the investments to its portfolio. There are also some short term strategies the organization can choose to implement. First, changing its leaders to more effective ones can be a viable option. Moreover, it may choose to hire external parties, as shown in the case, to undertake strategic management along with industry best practices and trends. Lastly, there is the option of restructuring operations in some departments to enhance consistency with industry trends.

Conclusion

The Rite Corp case is an example of an organization that lost its market leadership due to managerial faults. That is typical in most organizations that are managed by the family. There is the chance of succession to a family member, who may not be adequate for the managerial role they are tasted with. They end up making mistakes; most of which are strategic; which cost the organization its success and market leadership like in this case. Therefore, leadership should be left in the hands of professionals; with adequate qualifications and capabilities. Moreover, there is the issue of lagging behind industry trends. In this case, the organization is a victim of the dynamics in the industry. The organization kept its traditional operations in a changing industry. Those are the major causes of failure in this case, which, when revisited, can lead to the revival of the organization's success.

References

Bitner, L. N., & Dasher, A. (2007). Examining Corporate Governance Policies as a Routine Part of Financial Analysis. Com. Lending Rev., 22, 3. https://heinonline.org/HOL/LandingPage?handle=hein.journals/cmlrv22&div=23&id=&page=

Gosman, M. L., & Ammons, J. L. (2013, July). RITE AID CORPORATION. In Allied Academies International Conference. International Academy for Case Studies. Proceedings (Vol. 20, No. 2, p. 3). Jordan Whitney Enterprises, Inc. https://search.proquest.com/openview/193239b1e0a1ea54a325be1ea11726f2/1?pq-origsite=gscholar&cbl=38772

Hambrick, D. C., & D'Aveni, R. A. (1988). Large corporate failures as downward spirals. Administrative science quarterly, 1-23. https://www.jstor.org/stable/2392853?seq=1

Thimbleby, H. (2013). Technology and the future of healthcare. Journal of public health research, 2(3). https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4147743/