Key Strategies of Walgreen

Key strategies of Walgreen

A retail and wholesale business with a focus on health and wellness items, Walgreens Boots Alliance Inc. The business provides mail-order and central specialized pharmacy services, as well as pharmacy products such prescription and over-the-counter medications, cosmetics, toiletries, and health and wellness services, through pharmacies and online. Walgreens, Duane Reade, Boots, and Alliance Healthcare are some of its commercial and retail brands. No7, NICE!, Finest Nutrition, YourGoodSkin, Soap & Glory, Liz Earle, Sleek MakeUP, and Botanics are just a few of the company’s international health and beauty brands. It operates in the Americas and Europe through its subsidiaries. The US city of Deerfield, Illinois, is home to the Walgreens Boots Alliance’s headquarters.

Non-prescription and prescription medications, confectionery, fresh foods, beauty care, convenience foods, personal care, household goods, home medical equipment, and other health and wellness products are some of the goods the company trades in. By providing speciality pharmaceutical services, the company also specializes in addressing chronic and severe health issues. In addition, Walgreen runs a variety of “take care” clinics, which offer medical services such vaccines, patient care, and medication prescriptions. The company had 176,000 people in its human resource base as of the end of 2012.

Walgreen’s Key Strategies

In order to maximize profit, firms must develop a successful business plan (Mouncey, 2007). Walgreen is using varied business strategies. The company has done this by recognizing the various customer needs. Key strategies of Walgreen involve drawing in a variety of customers by diversifying the items and services it offers.

Walgreen is dedicated to developing a devoted consumer base. The company has used the physical aspect of customer value proposition to achieve this. By making sure that its products are of the highest caliber and are reasonably priced, the company optimizes its profit. Additionally, the business understands how crucial it is to make sure clients receive their products more conveniently. As a result, the company has opened a lot of pharmacies throughout the US.

Regarding the profit offer, the company wants to increase profitability through aggressive marketing. Customers will be well informed about the company’s goods and services thanks to this. Consequently, there is a strong chance that the company will have an impact on how the customers decide. Additionally, the company will build up enough of a competitive advantage to handle competition from handy retailers like Wal-Mart.

The company is concentrated on three primary strategic goals, which are:

• Establishing “a powerful and exceptional worldwide platform via which it can enhance its strategic cooperation with Alliance Boot GmbH” (Walgreens, 2013, Para.3). According to the firm, the alliance will greatly advance its strategic goal.
• To provide clients with health care that is unmatched, inexpensive, cutting-edge, and of the highest caliber.
• The short-term goals of Walgreens include preserving its liquidity and increasing after-tax yields. The company is also committed to reducing the risk involved as the company wants to grow over the long run in order to meet the investment needs of the shareholders.

According to Michael Porter, an effective company’s strategy is a crucial component. Effective competitive strategies are necessary for an organization to achieve sufficient competitive advantage. Differentiation has become Walgreen Company’s primary competitive strategy.

The distinctiveness of the company’s products and services is the foundation of its differentiation strategy. In addition, the company has distinguished itself by positioning itself as a one-stop shop where customers can purchase a variety of goods, including groceries, over-the-counter medications, prescription medications, and health care products. The company’s dedication to transforming the drugstore is to blame for its success in terms of differentiation.

The fact that the company has implemented a customer-centric retailing initiative in order to enhance the customer experience is another factor that contributes to the company’s success in terms of differentiation. The company’s efforts to create a one-of-a-kind customer experience are also shown by the fact that it has adopted cutting-edge e-commerce technologies to move from a traditional to a modern business model. As a result, the company has succeeded in elevating the level of customer experience. The store offers a variety of products for online purchase (Mouncey, 2007).

One of the key strategies of Walgreen is its growth strategy. Walgreen has made a commitment to expanding its market penetration. The company has implemented a variety of growth tactics, including organic expansion and strategic alliances. The company’s success with organic expansion is a result of careful site selection for new retail locations. The company has also done an excellent job of creating and setting up appealing freestanding retail formats. The company’s dedication to innovation and continual improvement enhances its capacity to create efficient stores. Walgreen has established a number of outlets in the neighborhood according to its organic expansion strategy.

The company’s primary growth strategies in terms of strategic partnership include acquisition, joint venture, and strategic alliance. The company has bought several businesses in recent years. Walgreen successfully completed its acquisition of some BioScrip Incorporation assets in May 2012. The acquisition increased Walgreen’s intangible assets by $50 million and its goodwill by a margin of $ 92 million.

In February of 2012, the company purchased Crescent Pharmacy Holdings, LLC. The goal of the acquisition was to expand the company’s services portfolio into California markets. In a similar vein, drugstore.com was purchased by the company in 2011. The ability of Walgreen to market online was significantly enhanced by the acquisition. According to Stock Analysis on Net (2013), Drugstore.com Incorporation’s American online shopping network was well-established.

Walgreen intends to increase its growth by making a number of strategic investments, such as acquiring drugstore chains and independent health and wellness businesses. Alliance Boots GmbH, in which it is a partner, holds a 45 percent stake. One of the world’s leading pharmacy-led beauty and health organizations is Alliance Boots GmbH. Alliance Boots GmbH and Walgreen made the announcement in March 2013 that they would enter into a long-term, innovative partnership agreement with AmerisourceBergen, the leading North American pharmaceutical company. Due to the fact that Walgreen will market its products in the Euro Zone, the partnership will expand the company’s market scope and improve economies of scale.Net synergies have emerged as a result of the partnership with other businesses. According to Chain Drug Review (2013), the company’s partnership with Alliance Boots GmbH increased its net synergy to $ 154 million.

The industry’s suppliers have little negotiating strength. The pharmaceutical behemoth that has the patent on the majority of prescription medications in the US is the only source. The giant therefore holds a monopoly. Small pharmaceutical companies have less negotiation strength and are unable to compete with Walgreens’ pricing model.

Individual customers have little purchasing power. On the other hand, institutional consumers with large purchasing power include PBMs and insurance firms. Because institutional customers are included in drug administration, there is a disparity in bargaining power. Walgreens has a moderate level of purchasing power.

The US drugstore industry is changing as a result of various factors. Below are some of the factors:

• Market and product innovation: Businesses in the drugstore sector are utilizing telemarketing and the internet. Software robotics advancements are also speeding up the delivery of goods from pharmacies to customers.
• Technological advancement: Businesses face a significant difficulty when it comes to product and service duplication due to the rapid pace of technological advancement.
• Globalization: At the moment, there is no foreign competition in the US drugstore market. However, the rapid rate of globalization can draw outside participants.
• Consumer preferences are evolving: Customers are gravitating more and more toward distinctive offerings. Additionally, changes in the economy may have a detrimental impact on consumer purchasing power and, consequently, the profitability of the company.
• The industry is consolidating quickly due to competition. In an effort to increase their bargaining power, businesses are using the franchising concept.
• Regulatory influences: Different municipal, state, and federal laws and regulations apply to the US drugstore industry. The industry is becoming more and more impacted by various government initiatives, such as the Medicare plan.

These factors might make Walgreens less competitive. Walgreen should make ongoing investments in product and market innovation to combat the aforementioned forces. The two tactics will raise the company’s level of competition.

Because it has positioned itself as an easy-to-access store since its inception, Walgreen has been effective in drawing customers. As a result, people can shop at the store for a variety of goods. The company’s efficient distribution and interaction system, which was built through e-commerce and the phone system, is another factor in its success.

Recommended Key Strategies for Walgreen

The Walgreens management team should think about the following tactics to deal with the market changes.

• The company has to improve its approach to product differentiation. It can accomplish this purpose, among other things, by funding ongoing product enhancement. As a result, the business will be able to satisfy the consumers’ product requirements. The company should also invest in market innovation to set itself apart.
• The company ought to think about using the focus competitive strategy. The company will be more successful in gaining market dominance as a result of this action.
• The company ought to think about entering the international market. The company should, however, assess the best globalization strategy to implement in order to boost its competitive advantage.

In order for any company to grow it needs a competent strategy or strategies and Walgreen being a fast growing company was no exception.