Businessmodel of Rite Aid

Customer Segments

Rite Aid has a mass market business model, with no significant differentiation between customer segments. The company targets its offerings at all consumers who seek retail pharmacy products and services.

Value Proposition

Rite Aid offers three primary value propositions: convenience, cost reduction, and brand/status.

The company offers accessibility by making certain services easy to use. It maintains a subsidiary called RediClinic, through which it operates retail clinics in several locations. The outlets are staffed by physician assistants and board-certified nurse practitioners who can treat over 30 common medical conditions and write prescriptions. They can also provide a wide variety of preventive services, including screenings, medical tests, immunizations, and basic physical exams. The clinics are useful for consumers who are unable to access traditional health care facilities at a given time.

The company reduces costs through a variety of options. It operates the wellness+ with Plenti loyalty program, through which it offers consumers in-store savings and the ability to redeem coupons. Members can also earn points for puchases that can lead to up to 20% off non-sale prices.

The company has established a powerful brand due to its success. It is the third largest retail drugstore chain in the U.S. and largest on the East Coast in terms of number of stores and revenues. It maintains over 4,600 stores in 31 states and in the District of Columbia.

Channels

Rite Aid’s main channel is its network of retail stores located around the country. The company promotes its offerings through its website, social media pages, broadcast/digital advertising, loyalty programs, contests/sweepstakes, and educational programs focused on specific health concerns.

Customer Relationships

Rite Aid’s customer relationship is primarily of a self-service nature. Customers utilize its products while having limited interaction with employees. That said, its RediClinics offer a personal assistance component through the provision of health care services for consumers.

Key Activities

Rite Aid’s business model entails distributing retail pharmacy products and delivering related services to customers.

Key Partners

Rite Aid’s key partners are as follows:

• It purchases all of its branded pharmaceutical products and nearly all of its generic pharmaceutical products from McKesson Corporation.
• It purchases its non-pharmaceutical merchandise from various manufacturers and wholesalers.
• It sells private brand and co-branded products supplied by several competitive sources.
• It maintains a strategic alliance with GNC through which it operates more than 2,300 GNC stores within Rite Aid stores and will open at least 170 additional ones by December 2019. ### Key Resources

Rite Aid’s main resources are its physical resources, namely the over 4,600 retail drugstores it operates around the country. It also maintains important human resources in the form of its 88,000 Retail Pharmacy segment associates and 1,500 Pharmacy Services segment associates.

Cost Structure

Rite Aid has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is cost of revenues, a variable expense. Other major drivers are in the areas of sales/marketing and administration, both fixed costs.

Revenue Streams

Rite Aid has one revenue stream: revenues generated from the sales of its products (primarily merchandise and prescription drugs) to customers.