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History • Founded in 1901 by Charles R. Walgreen, Sr. • Original store measured only 50 ft. by 20 ft in size in Chicago’s south side. • Was known for getting people their prescriptions before hanging up the phone. • By 1929 there were 525 stores and they were continually growing. • Milkshakes and Cookies for 20 cents gave Walgreens huge amounts of publicity • By 1984 Walgreens opened its 1,000th Store.
News • Did not quit the selling of cigarettes, regardless of CVS’s choice to stop. • Including Hepatitis-C treatment as an option for care. • Pharmacist who refused to sell Plan B got fired and sues Walgreens. • Partnership with Inovalon brings big data analytics to Walgreens.
Strategy Change • Shift from location emphasis • Focus on differentiation • Customer Satisfaction/engagement • Shift to single point of patient care • Maximize human capital
Was It Successful? • Yes! • 2014 saw a 66.1% increase from 2013 earnings • Sales up 5.9% • Prescription sales up 7.3 % • Customer engagement went from 25th percentile to 95th!
Relation to Class • Reframing retail strategy • Adjust to changing environment • Economy, competition, government
Strengths • Market position • Brand equity for quality and convenience • Superior locations • Leader in innovation and technology
Weaknesses • Inability to set itself apart from competitor prices • Stores are often cluttered and don’t feel convenient • Pharmacy is inconvenient to get to
Opportunities • Aging of the baby boomer population • Demand for prescription drugs is increasing • International expansion • Pushing non-pharmacy merchandise
Threats • Intertype competition • Bigger competitors have much more SKUs • Vulnerable to laws and regulations due to their heavy reliance on prescription drugs • Shortages of pharmacists in the future is predicted
Sources • http://www.zacks.com/stock/news/117623/Q1-Earnings-In-Line-at-Walgreens • http://www.ey.com/GL/en/Industries/Life-Sciences/Walgreens-strategic-transformation • http://www.strategy-business.com/article/00195?pg=all • http://www.mayaavi.com/2013/10/changing-structures-and-behaviors-at.html • http://acraretail.org/documents/Katy_Mullis_-_Walgreens_SWOT_Analysis.pdf • http://www.geekosystem.com/walgreens-stills-sells-cigarettes/ • http://online.wsj.com/article/PR-CO-20140217-905109.html • http://www.twst.com/update/38141-walgreen-company-walgreens-brings-big-data-analytics-to-healthcare-clinics-through-expanded-relationship-with-inovalon • http://articles.chicagotribune.com/2014-02-05/business/chi-walgreen-cigarettes-20140205_1_tobacco-sales-cvs-caremark-walgreen-co • http://www.walgreens.com/marketing/about/history/default.jsp