Businessmodel of Henry Schein

Customer Segments

Henry Schein has a niche market business model, with a specialized customer segment. The company targets its offerings at medical professionals, dental professionals, and animal health practitioners.

Value Proposition

Henry Schein offers two primary value propositions: convenience and brand/status.

The company offers convenience by making life simpler for customers. Its value-added services segment provides helpful software, education, and other components that help to boost practitioner efficiency. Its “Schein Direct” program offers door-to-door air package delivery to practitioners. Lastly, in North America 99% of its orders are shipped the same day the order is submitted.

The company has established a strong brand due to its success. It bills itself as the world’s largest provider of health care products and services to office-based dental, animal health, and medical practitioners. It offers over 110,000 branded products and Henry Schein private-brand products in stock, as well as over 150,000 additional products available as special-order items. It maintains operations/affiliates in 33 countries and serves over one million customers in more than 190 countries. It generated sales of $10.6 billion in 2015 and its sales have increased at a compound annual growth rate of 15% since it became public. It is a member of the Fortune 500, S&P 500, and NASDAQ 100. Lastly, it has won many honors, including the following:

• Recognition as one of the World’s Most Admired Companies by Fortune
• Recognition as one of America’s Best Employers by Forbes
• Recognition as one of the World’s Most Ethical Companies by the Ethisphere Institute
• Ranking as #1 in the Wholesalers: Health Care industry category in the Fortune 500 ### Channels

Henry Schein’s main channel is its direct sales team, which includes field sales consultants and telesales representatives. The company promotes its offerings through its website, social media pages, and direct marketing. It distributed 34 million pieces of direct marketing copy in 2015, including flyers, catalogs, order stuffers, and other promotional materials.

Customer Relationships

Henry Schein’s customer relationship is primarily of a self-service nature. Customers utilize its products while having limited interaction with employees. That said, there is a personal assistance component. The company operates 199 equipment sales and service centers globally that offer repair, installation, and technical services for its customers.

Key Activities

Henry Schein’s business model entails designing, developing, and manufacturing its products for its customers and delivering related services.

Key Partners

Henry Schein’s key partners are the over 3,000 suppliers that provide it with the equipment and materials it needs to manufacture its products.

Key Resources

Henry Schein’s main resources are its human resources, who include the engineers that design, develop, and manufacture its products and the salespeople that sell them. It also maintains important physical resources in the form of its 61 distribution centers worldwide (with four million square feet of space) that provide rapid order fulfillment.

Cost Structure

Henry Schein has a value-driven structure, aiming to provide a premium proposition through significant personal service and frequent product/service enhancements. Its biggest cost driver is cost of sales, a variable expense. Other major drivers are in the areas of sales/marketing and administration, both fixed costs.

Revenue Streams

Henry Schein has one revenue stream: revenues it generates from the sale of its products (consumable products, equipment, and software) and services to customers.