Industry Effects and Strategic Convergence: A Study of the Strategies of Independent Pharmacists
The pharmacy industry is experiencing significant change. With the increasing presence of regional discounters, the appearance of mail service and internet pharmacies, the continuing ascendancy of managed care (including HMOs and PPOs), third party reimbursement plans, and pharmacy benefit managers (PBMs), the strategic options for independent pharmacies are dwindling. This exploratory study examines the relationships among generic business level strategies of independent pharmacies, industry effects -- in terms of consequences of third party reimbursement plans -- and performance outcomes. It seems that the impact of managed care reimbursements more than off sets the various strategic efforts by pharmacies. The evidence indicates that different generic strategy approaches are not producing significant differences in performance. The findings suggest that industry effects may he creating a situation of strategic convergence. The practical implications for the independent pharmacists and future research are addressed.
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