Responds
moall
comment09.docxI already choose three question and I have to respond my classmate comments.
Here is the link:
https://www.cnbc.com/2019/06/27/rite-aid-shares-swing-on-earnings-miss.html
First comment
1- What was the major reason behind the partnership of Rite aid and Amazon? The main reason for their partnership was to open about 1500 pickup counters by the end of the year with much-added options, which would enable the customers to receive their respective packages.
3- what are the disadvantages of the contract? The disadvantage is that the company lost up to 99.3 million shares in the first quarter ended on June 1. Rite Aid also missed on its revenue estimates recording $5.37 billion in the first quarter less $5.38 billion that was anticipated. There was also pressure to rein in the drug prices for the prescription that was weighed in the first quarter.
Second comment:
1- What was the major reason behind the partnership of Rite aid and Amazon?
The primary reason behind the partnership of Rite aid and Amazon was because it said it would open Amazon pickup counters in 1,500 of Rite Aids stores by the end of the year. This was giving the investors hope for a turnaround. As a result of the Rite aid company incurring a lot if losses of 99.3 million or $1.88 a share during the fiscal first quarter that ended June 1. This loss was more extensive than expected, and the company officials knew that the only way for it to get to its operating base was by partnering with the Amazon.
2- How will the partnership between these two companies help Rite Aid to bounce back into the market? The partnership between these two companies will help Rite aid to bounce back into the market by supporting it to acquire customer base and capital for moving its activities at the next level. Since the Rite aid has incurred a lot of loss, it was unable to support itself and hence the need for partnership. As results of the problem, the pressure to rein prescription drug prices weighted on Rite Aid, and this could have crippled the operations of the Rite Aid.
3- What are the disadvantages of the contract?
The contract may have some disadvantages like loss of control in the company or any activity assigned, loss of flexibility, loss of shares and investors. Also, that could affect the Rite Aid market value over time.
Third comment:
1- What was the major reason behind the partnership of Rite aid and Amazon?
The main reason why the partnership begin with rite aid (walgreens) and Amazon was that amazon does not want to spend money and brick and mortor and thus partnered with a company who has thousands of stores across the country. With rite aid's potential merger with Walgreens this will just increase the number of places for people to return products to Amazon.
2- How will the partnership between these two companies help Rite Aid to bounce back into the market?
The simple answer is foot traffic. People come in drop their product off and at the very least buy a stick of gum and a coke. At the very best they will time the visit with a trip to the pharmacy and they will see they also need toilet paper or sun screen for something coming up.
3- what are the disadvantages of the contract?
Storage space for those Walgreens that get to much traffic and what happens if the partnership doesnt work out and sales dont come with the increased traffic. Rite aid then just becomes a storage area for Amazon and no cost to Amazon. The other aspect is the risk the Rite aid takes in accepting amazon product. who is responsible for damaged product and who determines what product is acceptable to be returned.
