QUOTE AND NEWS
Stock Blog Hub  Mar 6  Comment 
McKesson Corporation (MCK) recently announced that it has completed its previously announced acquisition of PSS World Medical, Inc. McKesson paid $2.1 billion for the acquisition including PSS World Medical's debt of about $480 million and...
StreetInsider.com  Dec 26  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/McKesson+%28MCK%29+Gets+Early+HSR+Act+Termination+in+PSS+%28PSSI%29+Merger/7969693.html for the full story.
Wall Street Journal  Dec 21  Comment 
Medical-supplies company PSS World Medical made a $43 million repurchase of its own shares last year, buoying the stock before bad news hit, even as four top managers were selling company shares.
Reuters  Oct 26  Comment 
PSS World Medical Inc : * Moody's: pss world's purchase by McKesson credit positive, no rating change
Benzinga  Oct 25  Comment 
The following are the M&A deals, rumors and chatter circulating on Wall Street for Thursday October 25, 2012: McKesson to Purchase PSS World Medical for $29.00/Share Cash The Deal: McKesson Corporation (NYSE: MCK) and PSS World Medical...
StreetInsider.com  Oct 25  Comment 
PSS World Medical, Inc. (Nasdaq: PSSI) 32.7% HIGHER; McKesson Corporation (NYSE: MCK) and PSS World Medical announced today that the two companies have signed a definitive agreement under which McKesson will acquire all outstanding shares of PSS...
StreetInsider.com  Oct 25  Comment 
McKesson Corporation (NYSE: MCK), a leading healthcare services and information technology company, and PSS World Medical, Inc. (NASDAQ: PSSI), announced today that the two companies have signed a definitive agreement under which McKesson will...
Benzinga  Oct 25  Comment 
PSS World Medical (NASDAQ: PSSI) shares jumped 32.64% to create a new 52-week high of $28.65. McKesson (NYSE: MCK) announced its plans to buy PSS World Medical for $1.46 billion. Provident Financial Holdings (NASDAQ: PROV) shares gained 0.42%...
Wall Street Journal  Oct 25  Comment 
McKesson agreed to acquire PSS World Medical for $1.46 billion in cash as the medical-products distributor looks to broaden its products and services.
Benzinga  Oct 25  Comment 
McKesson Corporation (NYSE: MCK) and PSS World Medical, Inc. (NASDAQ: PSSI), announced today that the two companies have signed a definitive agreement under which McKesson will acquire all outstanding shares of PSS World Medical for...




 

Company Overview

PSS World Medical, Inc. (PSSI) is a distributor of medical products and equipment, pharmaceutical products, healthcare information technology and billing services to alternate-site healthcare providers, including physician offices, long-term care and assisted living facilities, home healthcare and hospice providers. The company has forty full service distribution centers strategically located to efficiently serve all 50 states throughout the U.S. They operate in two business segments: The Physician Business and Elder Care Business (Gulf South Medical Supply).

The Elder Care Business which is operated under the name Gulf South Medical Supply, is a national distributor of medical supplies and related products and solutions to the long-term and elder care industry. They sell supplies to nursing care facilities, home care and hospice industries, and assisted living. Through the Elder Care Business they also offer to be the provider of Medicare Part B billing services, either on a fee-for-service or full-assignment basis and Medicaid Billing services to the assisted living market.

PSSI leases warehouse and office space for its 40 full-service distribution centers, 41 break-freight locations, six ancillary service centers, and two redistribution facilities, in locations across the U.S. They lease their corporate office in Jacksonville Forida ofa bout 150,000 sq. ft. PSSI's service center locations consist of approximately 2,700,000 sq. ft. of leased space with facilities ranging in size form 1,000 sq. ft. to 169,000 sq. ft. [1] [2]

Core Strategies

They have four core values which they abide by to enhance and grow their customer base[3]:

Strengthen

  • This strategy is the core of PSSI's purpose, and is essentially a leadership based initiative. PSSI operates because they are focused on and want to improve the strengths of clinics through improving their level of success and financial health, allowing them to address their most dire issues.

Reach

  • In 2010, Reach was able to win the firm 10,000 new customers. The center of this particular 'core strategy' is to grow the PSSI customer base.

Lean

  • Lean, is the PSSI Core Strategy that is focused solely on improving the efficiency of the firm. In a commodities market style, efficiency is key and cutting costs may determine who the survivor is.

Our Health

  • Our Health is focused on strengthening PSS World Medical. This initiative is focused on improving the profitability of this particular firm.

With the new implementation of these four core strategies, fiscal year 2010 brought in 10,000 new customers in the Physician Business and Gulf South Medical Supply brought in 300 new facilities, even after starting the program at a latter point during the year. Furthermore, these four strategies, more importantly the "Reach" strategy, has helped differentiate PSSI in the market by providing solutions and efficiency to existing customers as well. Leadership initiates are important for management to have because not only does it help create a 'culture' in a firm, but the employment's embrace of initiatives such as these can make a significant difference in operations and profitability.

Business Analysis

The Physician Business

The Physician Business, about 700 sales professionals, distributes medical supplies, diagnostic equipment, pharmaceutical related products and healthcare IT to alternative site healthcare providers in the US.

Customers

The Physician Business sells products to office-based physicians who specialize in internal medicine, family practice, primary care, pediatrics, OB/GYN, general practice, and other specialties. Their target market consists of approximately 598,000 physicians practicing in 234,000 offices throughout the United States.

Supply Chain

The Physician Business utilizes 27 full-service distribution centers, 34 break-freight locations, and 2 redistribution centers. A full-service distribution center serves as a general warehouse through receiving inventory directly from manufactures and redistribution centers and distributes products to customers and break-freight locations.

Full distribution centers are located in: Aiea,HI, Charlotte, NI, Columbia, SC, Denver, CO, Elgin, IL, Fairfield, NJ, Fullerton, CA, Grand Prairie, TX, Houston, TX, Jacksonville, FL, Kennesaw, GA, Leetsdale, PA, Lousiville KY, Lubbock, TX, Memphis, TN, New Orleans, LA, Olathe, KS, Orlando, FL, Phoenix, AZ, Richmond, VA, Rogers, MN, Rochester, NY, Salt Lake City, UT, Schertz, TX, Seattle, WA, Wareham, MA, and West Sacramento, CA. [4]

Break-freight locations receive packaged customer orders from distribution centers and distribute them to customers through either leased delivery vehicles or third party transportation providers.

Break freight locations include: Albany, NY, Little Rock, AR,Baton Rouge, LA, Nashville, TN, Bethlehem, PA, Newark, CA, Big Bend, WI, Omaha, NE, Birmingham, AL, Pompano Beach, FL, Chatsworth, CA, Portland, OR, Chattanooga, TN, Raleigh, NC, Chesapeake, VA, Roanoke, VA, Cincinnati, OH, San Diego, CA, Cleveland, OH, St. Louis, MO, Columbia, SC, St. Petersburg, FL, Fredersricksburg, VA, Tallahassee, FL, Indianapolis, IN, Troy, MI, Knoxville, TN, Tulsa, OK, Lanham, MD, Tyler, TX, Lafayette, LA, West Babylon, NY, Las Vegas, NV, and Warminster, PA.[5]

Redistribution facilities are located in Fullerton, CA and Jacksonville, FL and are shared by both the Physician Business and Elder Care Business operating segments.

Purchasing, for both the Physician Business and Elder Care Business, is centralized at the shared services segment in Jacksonville, Florida.

Sales channel is complemented by myPSS.com, a customer internet ordering portal, Instant Customer Order Network, a laptop-based sales force automation tool which enables the Physician Business to increase customer service through local market product selection and pricing flexibility, and "SmartScan," a handheld inventory management device that allows customers to order products electronically and provides basic inventory management functions.

Information Technology

The Physician Business uses "ICON" which is a laptop-basd sales force automation application that improves custmer service by providing quick and easy access to customer order history, accounts receivable detail, on-hand inventory quantities for the local distribution center and has the ability to place orders over a secured wireless network.

The Physician Business also offeres an internet portal, myPSS.com, to increase customer satisfaction through allowing customers increased access to sales history, accounts receivable detail, and available inventory. 70% of customer orders are received through either "ICON" or myPSS.com

Online order processing is assisted through “SmartScan,” a handheld inventory management device that allows customers to order product electronically and provides basic inventory management functions. SmartScan accounts for 6% of online orders.

Products

The Physician Business sells approximately 158,600 different products consisting of disposable supplies, pharmaceuticals, diagnostic equipment, non-diagnostic equipment, and healthcare IT solutions. [6]

Branded Medical-Surgical Disposable Supplies. Includes paper goods, needles and syringes, gauze and wound dressings, surgical instruments, sutures, examination gloves, orthopedic soft goods, tongue blades and applicators, sterilization and intravenous solutions, specimen containers, reagents for diagnostic equipment, and diagnostic rapid test kits.

Select Medical-Surgical Disposable Supplies. Through its brand, Select, PSS sells paper goods, needles and syringes, gauze and wound dressings, surgical instruments, sutures, examination gloves, orthopedic soft goods, tongue blades and applicators, sterilization products, specimen containers, diagnostic equipment reagents, and diagnostic rapid test kits.

Pharmaceutical Products. Includes various vaccines, injectables, inhalants, topicals, opthalmic ointments and solutions, otic solutions and oral analgesics, antacids and antibiotics, injectable anesthesia agents, narcotics, and pain management drugs.

Diagnostic Equipment. Includes various equipment lines such as blood chemistry analyzers, automated cell and differential counters, immunoassay analyzers, bone densitometers, electrocardiograph monitors and defibrillatora, cardiac stress systems, cardiac and OB/GYN ultrasound, holter monitors, flexible sigmoidoscopy scopes, and microscopes.

Non-Diagnostic Equipment. Includes all other equipment used in a medical practice such as aesthetic lasers, autoclaves, examination tables, medical scales, and furniture.

Healthcare Information Technology. Includes healthcare information products and services designed to improve the accuracy, efficiency, and effectiveness of physician business practices.

The Elder Care Business

Customers

The Elder Care Business, about 150 sales professionals, distributes medical supplies to the long-term and elder care industry in the United States. Their primary customers include nursing homes, home care and hospice industry, as well as the assisted living market segment.

Supply Chain

The Elder Care Business uses 13 full-service distribution centers, 7 break-freight locations, 6 ancillary service centers, and 2 redistribution centers.

The Elder Care's full-service distribution centers are located in: Austell, GA, Omaha, NE, Fort Lauderdale, FL, Ontario, CA, Gahanna, OH, Orlando, FL, Londonderry, NH, Ridgeland, MS, Mesquite, TX, Sacremento, CA, Middletown, PA, Windsor, WI, and Morrisville, NC.[7]

Their break freight locations include: Eau Claire, WI, Olathe, KS, Fairfield, NJ, Little Rock, AR, Houston, TX, Shertz, TX, and Indianapolis, IN.[8]

Lastly, their ancillary service centers are located in: Birmingham, AL, Indianaplis, IN, Fresno, CA, Spokane, WA, Vancouver, WA, and Redmond, WA. [9]

Information Technology

The Elder Care Business has an internet portal of its own, myGSOnline.com, which also increases customer service through increased access to sales history, accounts receivable detail, and available inventory. 84% of customers in the Elder Care Business are completed through electronic orders. SmartScan also helps the Elder Care Business and accounts for 1% of customer orders.

Products

Elder Care distributes about 47,100 different medical and related products including medical supplies, personal care items, feeding supplies, point of care testing devices, advanced wound care, home medical equipment, and other supplies required by long-term patients. [10]

Services

The Elder Care Business, through its wholly-owned subsidiary (Proclaim, Inc.), provides Medicare Part B billing services on a fee-for-service or full-assignment basis and Medicaid billing services to the nursing home and assisted living market.

Shared Services

The Shared Services segment consists of business units providing administrative services for the operating segments providing standardized service delivery at an efficient operating cost. Allocation of shared operating costs is proportionate to the revenues of each operating segment.

Supply Chain

As noted above, purchasing for the entire company is done through the Share Services department located in Jacksonville, Florida. PSSI's stragety is to purchase goods directly from manufactures and they reached several milestones during 2010, 2009, and 2008 including:

  • expanding PSSI's global sourcing resources in Asia and Europe
  • increasing the capacity of redistribution infrastructure in the United States
  • expanding the Select product offering
  • designing and implementing a security assessment program for global manufactures

Employees

PSS employs 3,650 full-time and part-time employees. PSS offers 112 online training courses, and during 2010 conducted 52 classes for over 1,250 employees.

Information Systems

PSSI has realized the importance of operating efficiently and continuing to become more efficient. During 2010, PSSI began to implement a warehouse management system (WMS), licensed from Red Prairie, with the intention of further streamlining warehouse management, enhance inventory controls, and improve customer service. [11]

Subsidiaries

PSSI is divided into many different subsidiaries, all 100% owned, listed below:

  • Gulf South Medical Supply, Inc. - United States
  • Physician Sales & Service, Inc. - United States
  • Physician Sales & Service Limited Partnership - United States
  • PSS Holding, Inc. - United States
  • PSS Service, Inc. - United States
  • ThriftyMed, Inc. - United States
  • WorldMed Shared Services, Inc. - United States
  • Proclaim, Inc. - United States
  • Ancillary Management Solutions, Inc. - United States
  • Cascade Medical Supply, Inc. - United States
  • PSS Global Holdings - Bermuda
  • PSS Global Sourcing CBT - China (Peoples Rep. Of)
  • PSS China Sourcing Limited - China (Peoples Rep. Of)
  • PSS Global Sourcing Hong Kong Limited - Hong Kong
  • PSS HK1 Limited - Hong Kong
  • PSS Global Sourcing Limited - Hong Kong
  • PSS China Sourcing Limited - Hong Kong
  • PSS Southeast Asia Limited - Malaysia [12]


Long Term Debt

As of April second, 2010 PSSI had $188,822,000 long term debt outstanding, with $881,000 current, compromised of:

  • $20,000 2.25% senior convertible notes which mature on March 15, 2024
  • $187,101,000 of 3.125% senior convertible notes, maturing on August first, 2014
  • $1,701,000 of capital lease obligations

It's important to note PSSI has a line of credit which matures on September 30, 2012. Their revolving line of credit allows for maximum borrowings of up to $200,000,000, which may be increased up to $250,000,000. [13]

Industry Analysis

Companies in the medical equipment wholesale industry are highly reliant on the current state of the economy and the market in which it operates. PSSI operates in the 28 billion dollar subsegment of the 61 billion dollar industry. The industry is expected to grow due to increased awareness in the healthcare industry, aging population, new medical technology and treatments, health care legislation and increased third party insurance coverage. The elder care market is expected to grow due to the aging U.S. senior citizen population and increased care they need. The elderly population is supposed to double within the next 40 years according to the U.S. Census Bureau, which is a positive for the industry. As these segments grow, PSSI's puts itself in a position to grow its' market share. The healthcare industry is undergoing a magnitude of legislation and regulation changes in the United States. These changes will allow government and privately funded programs to be able to pay such charges to medical companies. State and federal governments will be able to pay off any debt or reimbursements they currently owe to such companies. This could potentially be problematic for PSSI if the government decides to extend contracts with other distributors. In all, the medical wholesale industry is expected to thrive which is a positive outlook for PSSI, as long as they continue to keep contracts.

Competitors

Image:PSSI_table.jpg

Owens & Minor, Inc. (OMI) together with its subsidiaries, distributes medical and surgical supplies, and provides supply chain management services in the United States. Owens & Minor, Inc. was founded in 1882 and is headquartered in Mechanicsville, Virginia. It offers a product line of medical and surgical supplies to healthcare providers under the MediChoice private label to acute-care hospitals, U.S. DOD, ambulatory surgery centers, physician’s practices, clinics, home healthcare organizations, nursing homes and rehabilitation centers. It also offers:

  • PANDAC: an operating room-focused inventory management program that helps healthcare providers to control suture and endo-mechanical inventory
  • SurgiTrack: a surgical supply service, which includes the assembly and delivery of surgical supplies in procedure-based totes based on a healthcare providers surgical schedule
  • OMSolutions: a supply chain consulting, customer technology, and resource management service
  • WISDOM Gold: an Internet-based supply spend management, data normalization, and contract management solution
  • CSS: an inventory and contract management service that enables healthcare providers to track and manage physician-preference products and medical/surgical inventories
  • OM Healthcare Logistics: provides third-party logistics and business process outsourcing services [14]


Patterson Companies, Inc. (PDCO) operates as a distributor serving the dental, companion-pet veterinarian, and rehabilitation supply markets in North America. The company was formerly known as Patterson Dental Company and changed its name to Patterson Companies, Inc. in June 2004. Patterson Companies, Inc. was founded in 1877 and is based in St. Paul, Minnesota. The company is divided into three segments:

  • Dental Supply Segment: provides consumable dental supplies, impression and restorative materials, hand instruments, sterilization products, anesthetics, infection control products, paper, cotton, and disposable products, toothbrushes, dental accessories, office products, x-ray machines, hand pieces, dental chairs and hand piece control units, diagnostic equipment, dental lights, compressors, chair-side restoration systems, and inter-oral cameras, hardware and networking solutions and patient education solutions.
  • Veterinary Supply Segment: offers consumable supplies, such as lab supplies, paper goods, needles and syringes, gauze and wound dressings, sutures, latex gloves, orthopedic and casting products, pharmaceuticals, diagnostics, biologicals, and equipment and software.
  • Rehabilitation Supply Segment: provides dressing and grooming devices, toileting, dining, and bathing aids, braces, splints, and orthotics; exercise bands, putty, weight balls, mats, walkers, canes, wheelchair accessories, rolls, wedges, seating and standers, mobility assistance products, motor stimulation product, products for heating and cooling therapies, electrical stimulation, laser, ultrasound, paraffin, iontophoresis, therapeutic creams and lotions and rehabilitation equipment and software. [15]


Henry Schein, Inc. (HSIC) distributes healthcare products and services primarily to dental practitioners and laboratories, physician practices, animal health clinics, and government institutions. It operates in the United States, Australia, Austria, Belgium, Canada, the People’s Republic of China, the Czech Republic, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, New Zealand, Portugal, Slovakia, Spain, Switzerland, the United Kingdom, Iceland, Israel, Saudi Arabia, and the United Arab Emirates. The company was founded in 1992 and is headquartered in Melville, New York. It operates in two segments:

  • Healthcare Distribution Segment: offers consumable dental products, dental laboratory products, and small equipment, large dental equipment, medical products and animal health products.
  • Technology Segment: offers software and related products, and value-added solutions that primarily include practice management software systems for dental and medical practitioners and animal health clinics. Its services also consist of financial services and continuing education services for practitioners. [16]


McKesson Corporation (MCK) offers medicines, pharmaceutical supplies, and information and care management products and services for the healthcare industry to hostpitals, physicians, homecare providers, retail pharmacies. It serves customers in North America, the United Kingdom, Ireland, other European countries, Asia Pacific, and Israel. The company was founded in 1833 and is based in San Francisco, California. It operates through two segments:

  • Distribution Solutions Segment: distributes ethical and proprietary drugs, medical-surgical supplies and equipment, and health and beauty care products in North America. This segment also provides specialty pharmaceutical solutions for biotech and pharmaceutical manufacturers. It also sells financial, operational, and clinical solutions for retail, hospital, and long-term care pharmacies.
  • Technology Solutions Segment: offers enterprise-wide clinical, patient care, financial, supply chain, and strategic management software solutions. It also offers pharmacy automation for hospitals. In addition, this segment provides InterQual claims payment solutions, medical management software, and care management programs. [17]

Summary

When comparing operating and profit margins of the competitors, PSSI is in the middle of its competition, however, it is above the industry average. This shows that the company is operating and returning profits better than the industry, which investors see as a positive. Even though they are in the middle range when compared to other distributors, it is important to take into account that some companies do have higher operating expenses than others. When looking at gross margin, it blows all of its competition out of the water. This tells investors that the company's gross profit in relation to revenue is greater than its' competitors. This could mean many things for the company: management is managing costs efficiently or that PSSI has far more sales than its' competitors. The return on equity and assets are also higher than competitors, which is a positive for the company and its’ shareholders. Shareholders like to see a high return on the equity they front for the company. PSSI’s debt to equity is relatively high, which may not be ideal for the company. In all, PSSI is in better position than its’ competitors and is doing much better than the industry as a whole.

Competitive Advantages

While Porter's Five Forces is a solid starting point for analyzing the competitive landscape of a company, Bruce Greenwald's simplified, yet more critical approach to incumbent competitive advantage analysis is a much more robust approach for PSS World Medical's analysis. The basic approach that will be taken will resolve around two key questions: do any competitive advantages actually exist, and if determined they do, which ones are they? These questions will be answered by observing three different areas of competitive advantage.

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Economies of Scale

Economies of scale, as a competitive advantage, is something that is typically observed by manufacturing firms, with high fixed costs that can be spread over a substantial output. However, it is possible that a firm such as PSSI could experience economies of scale if it were able to move its product substantially faster than its competitors. So substantially, in fact, that it would have to realize a decline in total cost per unit that would end up actually being material financially. The firm would in turn be able to pass along the savings per unit to customers until it drove away all or most competition.

However, PSSI does not have a competitive advantage with regards to economies of scale; this is supported by two main reasons. First, the shear size of PSSI's operations simply are large enough to experience a higher level of economies of scale relative to its peers. The latter reason that PSSI is not experiencing this particular is because there are several competitors who are larger than them, and would likely be able to spread more product across more fixed costs, again resulting in a lower cost per unit.

Efficiency

In a commodities style market, where new entrants are just as favored in competition as are experience incumbents, efficiency becomes the true distinction between success and failure, or even survival and bankruptcy. PSSI, as mentioned above, has a program which is part of its core strategies (realistically tactical measures) called Lean.

Lean, a program designed specifically at cutting costs, consolidating operations, and streamlining processes. Two particular result of this program was the implementation of two major software management changes. PSSI, during FY2010, licensed and implemented a warehouse management system from Red Prairie. The point of this shift is to streamline warehouse and inventory control and management as well as allowing PSSI to improve their customer service capabilities through streamlining these processes. In addition to the new management software system from Red Prairie, PSSI also implemented and licensed a contracts and rebates administration software platform from SAP. This system is intended to assist PSSI in reducing rebate claim denials and further cut operating costs associated with those activities.

A solid indication of PSSI's ability to cut costs is evident through their "Save 300" program. "Save 300" was a program aimed at cutting costs so substantially during the downturn that 300 people would not have to laid off. Needless to say, PSSI feels that "Save 300" was quite successful and achieved its goal of protecting those workers from unemployment. While this program may bear little significance with forward analysis, it offers a strong testament to what this business is capable of achieving when the entire firm embraces an idea.

Opportunities, Risks and Threats

Opportunities

In a commodities based industry, efficiency, as mentioned above, is the determining factor of which businesses survive and which crumble. What this means with regards to opportunities is that there are no incumbent advantages and that entrants are just as likely to succeed as aged companies. Ultimately, this poses both a risk and an opportunity for PSSI because the competitive landscape is entirely a level playing field.

PSSI utilizes information technology to improve customer service, allowing them to add a personal touch and establish strong customer relationships. Their "ICON" platform allows their sales force to quickly access very specific customer information. The "SmartScan" device assists customers with basic inventory management while also providing quick and convenient ways to order more product, accounting for 6% of online orders. The myPSS.com and myGSOnline.com internet portals provides 24 hour access to online ordering. Most efficiencies of online ordering have already been captured, 84% of customers in Elder Care are completely through electronic orders and 70% of Physician orders are done electronically. Lastly, they have recently adopted a warehouse management inventory system to further streamline warehouse operations. [18]

H1NI/Swine Flu

During 2010 the Physician Business experienced increased sales of influenza test kits, surgical masks, medical gloves, and hand sanitizers, and other product categories related to the H1N1/Swine flu pandemic. Thanks to the pandemic PSSI recorded $52.5 million in additional net sales for 2010, when compared to 2009. Although management doesn't forecast these increased revenues going forward, this is a positive sign that future pandemic threats or outbreaks would have a positive impact on PSSI's sales. [19]

Risks and Threats

The most notable risk that is posed to PSSI is through the threat that the new healthcare legislation has yet to be completely interpreted. There is a growing resistance to the bill across the nation that may cause substantial resistance to the bill accomplishing any social, financial or economic reform. Further, in the 10-K, the management makes a point to not attempt to predict how they feel this bill will affect business simply because they don't know. The healthcare bill was a major reform for the country and will not likely be settled as an issue within the near future.

Although PSSI's strengthen and reach core strategies attempt to improve customer service, is not a competitive advantage. 70% of Physician orders and 84% of Elder Care orders are done online, and with eCommerce the critical differentiator is price. Customers could easily replace PSSI with a competitor who likely has the same product offerings through a similar online system and pay comparable prices.

As noted above, PSSI is heavily dependent upon its computer systems and the internet for receiving customer orders. Although the threat is relatively remote, a computer attack or virus, intended to damage the company or disrupt online communications, could have devastating consequences to PSSI.

As mentioned above, the competitive landscape for this firm is both a risk and an opportunity. That is because their competitors are just as likely to be able to erode PSSI's earnings as PSSI is able to theirs. Efficiency, in an industry such as this one, means that a company either has a better bottom line than their competitors, or is even able to pass those savings along to its customers in order to compete away business.

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References

  1. Mergent - Property
  2. PSSI 10k
  3. PSSI Annual Report
  4. Mergent Property
  5. Mergent Property
  6. PSS World Medical Brands site
  7. Mergent - Property
  8. Mergent - Property
  9. Mergent - Property
  10. PSS World Medical Brands site
  11. PSS World Medical 2010 Annual Report
  12. Mergent Subsidiaries
  13. Mergent LTD
  14. Owens & Minor 10k
  15. Patterson 10k
  16. Henry Schein 10k
  17. McKesson Corporation 10k
  18. PSSI 10k
  19. PSSI 10k p.31
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