Walgreens Corporation Essay Sample

I. Walgreens Corporation’s History and Mission Statement
Established over a century ago. Walgreens has since grown into a national corporation with over 8. 489 shops ( Walgreens Corporation. 2013 ) . Today. they are the first largest apothecary’s shop concatenation in the state before CVS. Rite Aid. and Wal-Mart. Walgreens serves more than 6. 3 million clients day-to-day and fills 784 million prescriptions every twelvemonth ( Walgreens Corporation. 2013 ) . Priding itself on invention and engineering. Walgreens was the first drug shop concatenation to utilize kid immune prescription containers and the first apothecary’s shop concatenation to utilize satellite engineering to link its pharmaceutics systems ( Walgreens Corporation. 2013 ) . Walgreens first began in Chicago in 1901 when druggist Charles R. Walgreen purchased a apothecary’s shop where he had one time worked. A 2nd shop opened in 1909. and seven old ages subsequently nine shops were incorporated to organize Walgreens Corporation. Walgreens Co. became a public corporation in 1927. and by 1953 it was the country’s taking self-service retail merchant ( Walgreens Corporation. 2013 ) . Walgreens now operates in 50 provinces. the District of Columbia and Puerto Rico. The company has long been committed to client convenience.

To advance their policy of convenience. Walgreens Pharmacies are located in high traffic countries. Walgreens offers points and services beyond those of a typical apothecary’s shop. These services include drive-thru pharmaceuticss and one-hour exposure services. and many shops are unfastened 24 hours a twenty-four hours. The company’s continual growing has resulted in systematically increasing gross revenues and net incomes. Walgreen averages a 19 % addition in their gross revenues from twelvemonth to twelvemonth. and it looks like this statistic will stay changeless for the old ages to come. The 2012 4th one-fourth gross revenues increase 9. 4 per centum to enter $ 15. 9 billion ; financial 2012 gross revenues reach record $ 73. 4 billion. Gross net income border for one-fourth improves 70 footing points versus 2012 4th one-fourth. Cash flow from operations for the one-fourth entire $ 925 million ; $ 3. 7 billion for financial 2012. ( Walgreens Corporation. 2013 ) Walgreens Co. mission statement is “To be the most sure. convenient multichannel supplier and adviser of advanced pharmaceutics. wellness and wellness solutions. and consumer goods and services in communities across America. A finish where wellness and felicity come together to assist people acquire good. remain good and unrecorded well” ( Walgreens Corporation. 2013 ) .

II. Organizational Strengths and Weaknesses

Strength
1. Harmonizing to Tran ( 2011 ) . as the nation’s taking apothecary’s shop in gross revenues. net incomes growing. same-store gross revenues additions. prescription drug market portion. and prescription gross revenues per shop. and first on the list of Global Most Admired Companies in the nutrient and apothecary’s shop class. Walgreens’ place as the market leader is possibly its greatest strength. A national presence. Walgreens has established itself as a known and trusted trade name name across the state. Consequently. the Walgreens name carries considerable trade name equity as a countrywide retail merchant known for quality and convenience. In fact. Walgreens has positioned itself as the apothecary’s shop offering the most convenience. As such. Walgreens offers drive-thru pharmaceuticss in over 80 % of its shops. and about 30 % of shops are unfastened 24 hours a twenty-four hours ( Walgreens Corporation. 2013 ) . Furthermore. while other competitory schemes can normally be copied over clip. location advantages can non. These superior locations offer Walgreens long-run sustainable competitory advantage.

The company strives to offer a ware mix in line with this focal point. supplying clients with one-stop shopping for non lone prescription drugs. but besides over-the-counter-drugs. wellness attention merchandises. food market choices. gifts. vacation and seasonal points. and one-hour exposure developing. 2. As a market leader Walgreens is besides committed to taking the manner in invention and engineering. In 1968 Walgreens was the first to utilize child-resistant prescription containers. In 1981 Walgreens began taking stairss to go the first apothecary’s shop concatenation to hold its pharmaceuticss linked by orbiter. The successful execution of engineering in both the shop and supply concatenation is a existent strength for the Walgreens Company. They have successfully implemented the usage of wireless frequence designation ( RFID ) throughout its concatenation of shops. RFID allows Walgreens to supervise the impact of gross revenues from specific shows. Besides. with the execution of Snapfish. a client can upload exposures at their place computing machine and so hold them printed at a Walgreens location ( Demery. 2010 ) .

Soon. 80 per centum of their shops have been equipped with digital labs to suit this service. Adding to that. Walgreens besides offers the service of in-store medical clinics. Harmonizing to Walgreens Corporation ( 2013 ) . as of 2009. in a partnership with Take Care Health Systems. the company has opened more than twenty in-store clinics in Kansas City and St Louis with more jutting to open one time subsequent partnerships are finalized with InterFit Health’s RediClinic and Pinnacle Health system in other countries across the state. These in-store clinics are handily located across from the Walgreens pharmaceutics offering clients a diagnosings and intervention inside the shop. These services allow Walgreens to advance a strong trade name image of both service and personal attending within the health care industry. WEAKNESS

1. While Walgreens is the current market leader. the company’s greatest failing may be its inability to put itself apart from rivals based upon monetary value. Wal-Mart’s supply of many generic prescription drugs for merely $ 4. subsequently matched by Target. exemplifies the impact of big discount houses. While a big company. Walgreens is non the low-priced leader in the industry and faces serious competition from discount houses. who are willing to accept lower borders on prescription drugs because they can do up for lost net income in other classs. Walgreens likely will non fit these monetary values. intending that Walgreens has chosen non to vie on monetary value in its most of import class. Since. Walgreens can non vie against discount houses on monetary value. the company has failed to to the full work its chief advantage over these retail merchants. its ability to supply convenience to its clients. 2. While the company is increasing the presence of 24-hour locations and drive-thru installations. the interior layout of a Walgreens shop does non ever reflect its committedness to convenience.

For illustration. Walgreens shops in Salem. Oregon. look crowded with ware. an ambiance that is contrary to the clean image of fast service that Walgreens would wish to portray. There. upon come ining a Walgreens shop. one encounters aisles of ware stacked to the ceiling. The first points apparent are seasonal ware and freshness goods. Health attention points are non readily seeable and are located toward the rear of the shop. The existent pharmaceutics may be located in the farthest corner from the door. without distinguishable design or clear signage ( Tran. 2011 ) . As a company that attempts to put itself apart from rivals by being the apothecary’s shop of convenience. this shop layout and design straight contradict these ends.

In shops such as the 1s described Walgreens efforts to promote impulse purchasing by making a deep cringle to its nucleus pharmaceutics and wellness attention points. similar to the manner food market shops frequently place milk and other staple goods at the rear of the shop. This layout is particularly surprising given that about “64 % of Walgreens’ gross revenues are generated by prescription drugs” ( Walgreens Corporation. 2013 ) . While this layout does promote clients to shop other ware on their manner to the pharmaceutics. it does non supply the most convenience for pharmaceutics clients who would wish to acquire in and out of the shop rapidly. On the mean trip to a apothecary’s shop a client will pass merely 10 proceedingss in the shop. merely eight proceedingss if the trip does non include a prescription purchase. Furthermore. paradigm Wal-Mart shops are making a shallow cringle by puting the pharmaceutics counter closer to the entryway. Wal-Mart is besides presenting 24-hour pharmaceuticss in some locations. If Wal-Mart becomes better able to supply its clients with convenient pharmaceutics services. Walgreens may lose its chief competitory advantage over the discount house.

III. Opportunities and Menaces
OPPORTUNTIES
1. Possibly Walgreens greatest chances for additions in gross revenues lie in the altering composing of the American population. On the brink of a important demographic displacement. the ripening of the Baby Boomer coevals will impact no industry more than the pharmaceutical industry. In fact. Walgreens expects a 30 % addition in demand for prescriptions from clients 65 and older in the following few old ages ( Kraft. 2011 ) . Harmonizing to The Wall Street Journal. 30 % of prescriptions and 42 % of prescription gross revenues gross came from older Americans in 2002. and the population over 50 old ages of age is expected to turn to 95 million by 2010 ( Demery. 2010 ) . Furthermore. alterations in Medicare programs have benefited Walgreens by doing the monetary values Medicare participants pay the same no affair where they shop ( Kraft. 2011 ) . This dramatic addition in the figure of older Americans will supply Walgreens with an increased demand for prescriptions and the possible to increase gross revenues and gross in that class. 2. Further chances for Walgreens prevarication in international markets. Currently merely a domestic concern. as the United States market becomes saturated. Walgreens will be forced to look internationally for enlargement.

While authorities ordinances and cultural differences will probably turn out disputing given the nature of Walgreens’ concern. international markets provide important chances for market enlargement. Harmonizing to Tran ( 2011 ) . rivals. such as CVS and Rite Aid. have yet to come in international markets. Beating these rivals into international markets could guarantee that Walgreens remains the market leader. Furthermore. this would besides assist Walgreens remain competitory against big price reduction ironss. such as Wal-Mart. many of which already have a important international presence. Harmonizing to the Wall Street Journal ( 2011 ) . the greatest growing chance for shops like Walgreens is increasing non-pharmacy purchases that bing shoppers make.

This is particularly of import given that the figure of clients shopping at drug shops is worsening. but those clients are sing drug shops more often. Trips to the drug shop are typically prompted by demands related to prescriptions. beauty points. nonprescription drugs. and photo processing. and these classs comprise over 80 % of purchases on these trips. However. merely 30 % of these shoppers make impulse purchases. This leaves tremendous potency for Walgreens to increase impulse purchasing in its shops. The mean non-pharmacy drug shop purchase in 2001 was $ 19. 38. Therefore. adding merely $ 2. 00 to each purchase increases the mean sale by about 10 % ( Ausick. 2009 ) . Menace

1. In the extremely competitory prescription drug market. Walgreens’ biggest menaces come from intertype rivals. No longer viing merely against local pharmaceuticss and other drug shops. retail merchants such as grocers and discount houses are progressively turn outing to be formidable rivals. Discount houses prove a alone menace. particularly when it comes to monetary value. The low cost accent and economic systems of graduated table possible through big companies such as Wal-Mart mean that Walgreens can non vie against these discount houses on monetary value. Furthermore. Walgreens’ trust on prescription drugs. a extremely regulated and controlled entity. makes it vulnerable to alterations in Torahs and ordinance. This is exemplified by recent alterations to Medicare prescription drug programs which. while on one manus made prescription drugs the same monetary value to consumers no affair where they shop. besides farther regulated distributing fees thereby diminishing net income borders for retail merchants like Walgreens.

While Walgreens has so far non been adversely impacted by such alterations. the ripening of the Baby Boomer coevals and concerns over the hereafter of Medicare intend that farther reform will be a subject of uninterrupted argument. Under these fortunes extra alterations and reforms which may potentially cut down the profitableness of prescription drugs are non unexpected. Walgreens relies to a great extent on prescription drug gross revenues. and dependance on a class whose ordinance is chiefly beyond its control leaves it vulnerable. 2. The lifting wellness attention costs in general another general menace to the company. The push for wellness attention reform is doing patients to look for low cost options outside of traditional retail mercantile establishments. These options include prescription drug gross revenues over the cyberspace and particularly the purchase of prescription drugs from other states where ordinance has made prescription drugs less expensive.

For illustration. of the top 100 branded prescription drugs in Canada and the United States. 93 % were less expensive in Canada. and in Canada the norm branded prescription drug costs 43 % less than in the United States ( Kraft. 2011 ) . In a 2003 study 7 % of those polled have purchased prescription drugs from another state. but 48 % indicated that they would purchase prescription drugs from another state ( Demery. 2010 ) . An extra challenge comes from the chronic deficit of druggists. While historically the deficit now is non every bit critical as it one time was. experts predict that future deficits will happen. Factors include the of all time increasing demand for prescription drugs and the tendency for druggists to pass more clip on patient guidance ( Wall Street Journal. 2011 ) . Experts estimate there are presently 8. 000 unfilled druggist places and predict that there will be a deficit of 150. 000 druggists by 2020. Such a drastic deficit of professionals who are critical to the company’s nucleus class may potentially do Walgreens shops understaffed. which would increase the clip that clients must wait for prescriptions and be damaging to the company’s accent on client convenience.

IV. Summary
Based on Walgreens strengths. failings. chances. and menaces there are several countries on which Walgreens can concentrate in order to retain its place of market leader and guarantee superior company public presentation and continued growing. Walgreens must farther concentrate on that which distinguishes it from rivals. client convenience. This is particularly of import in puting Walgreens apart from big discount houses and supermarkets. Convenience is why clients choose Walgreens. and Walgreens must make its best to work this advantage. The company can heighten client convenience several ways. Store design is one manner Walgreens can provide to clients who wish to acquire in and out of the shop rapidly. By making shallow cringles within its shops. particularly for its of all time of import pharmaceutics clients. Walgreens can break service clients who want their trip to be every bit speedy as possible.

Additionally a narrower merchandise mixture would enable clients to turn up points in nucleus classs more easy without the distraction of inordinate stock list. Modifying shop design would besides suit Walgreens’ turning section of older clients. Reducing herding by revising stock list choice. along with improved signage and lighting. would do Walgreens shops easier to shop for all clients. Supplying a comfy waiting country would besides be an added characteristic for pharmaceutics clients. Additionally. this would make an chance to increase impulse purchases by strategically puting promotional stuffs and exposing impulse points near this country. In order to farther focal point on convenience and keep its figure one market place. Walgreens must besides concentrate on spread outing its online services. Online services add convenience and contribute to Walgreens’ trade name image while leting the company to accomplish the benefits of a multichannel scheme.

Mentions

Ausick. P. ( 2009 ) . Walgreen Vs. CVS Caremark: When Partnerships Turn South. 24/7 Wall Street. Retrieved on January 19. 2013 from hypertext transfer protocol: //247wallst. com/2010/06/08/walgreen-vs-cvs-caremark-when-partnerships-turn-south-wag-cvs/ Demery. P. ( 2010 ) . Future-Focused. Internet Retailer. Retrieved on January 19. 2013 from hypertext transfer protocol: //www. internetretailer. com/2010/11/01/future-focused Kraft. S. ( 2011 ) . Walgreens Set To Make Move Into Health Insurance Market. Medical News Today. Retrieved on January 19. 2013 from hypertext transfer protocol: //www. medicalnewstoday. com/articles/232500. php

Tran. D. ( 2011 ) . Walgreens. CVS. and Rite Aid – What RE Investors Should Know. Enzine Articles. Retrieved on January 19. 2013 from hypertext transfer protocol: //ezinearticles. com/ ? Walgreens. -CVS. -and-Rite-Aid—What-RE-Investors-Should-Know-in-2011 & A ; id=471657 Walgreen’s Profit Slides 55 % . ( 2011 ) . The