Wal-Mart, America’s largest chain of retail stores, has successfully explored its adjacent space to enter the healthcare market. Years of research has helped the retail giant to provide for the healthcare needs of its millions of customers across the country. The company now offers a simple bundle of medical services, which customers can purchase along with their bag of groceries. Wal-Mart stores are aggressively striving to serve their customers by being a one-stop buying destination for healthcare products as well (Abrams, 2014). Wal-Mart has been running by the side of many of its stores more than one hundred clinics for many years through lease agreement with local clinics and other healthcare providers. Recently, the company has started its own clinics, popularly branded as a one-stop destination for primary healthcare, in many locations across America. Almost 20 percent of American population lives in areas with no sufficient access to primary healthcare, as reported by the United States Health Resources and Services Administration. Wal-Mart, with its wide rural network of retail stores that covers areas that do not have proper access to primary healthcare, is optimistic about expanding its healthcare services in these locations.
Wal-Mart’s primary strategy to venture into the new area is to provide healthcare service to everyday customers at very cheaper prices and thereby becoming America’s largest primary healthcare provider. Currently, the company clinics charge patients only $ 40 for a visit whereas employees of the company and their family members who are covered by its insurance plans can avail the service at $ 4 for a visit. Wal-Mart’s healthcare business model explores beyond giving fundamental acute care; instead, it offers a variety of services linked to primary healthcare including preventive care and wellness and managing chronic conditions. In short, Wal-Mart makes revenues from its new adjacent space from its pharmacies, optical services, clinical services and health insurance services. As part of its clinical services Wal-Mart makes revenues through collecting service charges for preventive healthcare and regular health services for a prescribed list of health ailments and associated screening and testing. Apart from basic care it generates revenues through emergency care, conducting lab tests, referral to various other specialists and immunization (How Wal-Mart Makes Money? Understanding Wal-Mart Business Model, 2015). Currently, Wal-Mart is conveniently promoting its innovative brand of health and wellness through its partners like DirectHealth.com and Quad Med.
Wal-Mart’s late entry into the new sector after keenly watching the healthcare market in the US has helped it to capitalize on the wellness market established by its competitors besides learning a lot of valuable lessons. For instance, its competitors like CVS Health Group and Walgreens have already started feeling the impact created by Wal-Mart through a significant decrease in customer visits. Similarly, in the states of South Carolina and Texas that do not provide access to primary healthcare for many since Medicaid is not properly expanded, Wal-Mart’s low cost clinics proved to be a grand success. Wal-Mart’s revolution of setting new standards in delivering healthcare is also significantly influencing the healthcare industry in the country. As a result, other health care providers and hospitals are compelled to increase the quality of their service to continue in the industry. Wal-Mart’s revenue generation of $288.05 billion in the US. during the financial year 2015, 11 % came from its Health and Wellness sector.
Wal-Mart has become a one-stop shopping place for many Americans. The fact that the annual visits to the emergency department of US. hospitals is 130 million as against Wal-Mart experiencing 150 million customer visits each week would favor the company’s strategy to explore the adjacent spaces and help the company achieve its ambitious goal of becoming the number one healthcare provider in the country shortly.
References
Abrams, R. (2014). In Ambitious Bid, Walmart Seeks Foothold in Primary Care Services. New York Times. Retrieved from http://www.nytimes.com/2014/08/08/business/in-ambitious-bid-walmart-seeks-foothold-in-primary-care-services.html?_r=0
How Walmart Makes Money? Understanding Walmart Business Model. (2015). Revenues & Profits. Retrieved from http://revenuesandprofits.com/how-walmart-makes-money-understanding-walmart-business-model/
