Walgreen - Growth Strategy_1

Walgreen Growth - Walgreens Growth Strategy Walgreen Co thrived for decades by opening stores faster than its competitors(a new store every 16 hrs

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Walgreen’s Growth Strategy Walgreen Co. thrived for decades by opening stores faster than its competitors (a new store every 16 hrs.) and by filling more prescriptions each year than any other chain. But the company is now changing its strategy and is becoming a broad health-care provider. They have acquired two companies that run a total of 350 health centers at corporate offices. They are expecting to open more pharmacies at work sites, and they will operate 136 clinics inside Walgreen’s stores. It is also opening pharmacies in hospitals and assisted-living centers, and greatly increasing the number of its pharmacists certified to give flu shots and other immunizations. But its stock is dropping, and its competitors are pursuing a strategy of managing employer drug-benefit programs. Both Wal-Mart and CVS are focusing on helping employers lower costs association with prescription drugs for their employees. PBMs, or pharmacy- benefit managers, are not playing a major role in Walgreen’s new strategy, however. Instead, they’re focusing on connecting the dots between health care delivery and prescriptions. They have expanded into specialty pharmacy, a business that is expanding 15-20% per year and is highly profitable. Walgreen executives envision bringing together its Take Care clinics, specialty operations, and workplace centers, using electronic prescriptions and medical records, to cover a range of needs. 1. Based on Michael Porter’s discussion of the characteristics of an effective strategy, does Walgreen’s have a good growth strategy? Explain. Porter enunciated three principles underlying strategic positioning, as follows. 1) Strategy is the creation of a unique and valuable position. Walgreen’s strategy is oriented toward serving the broad needs of many customers (rather than the few needs of many customers or the broad needs of a few customers). They are betting on consumer preferences for easy, integrated access for most
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This note was uploaded on 12/14/2010 for the course BUS 3003 taught by Professor Jerryjames during the Spring '10 term at Texas Woman's University.

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Walgreen Growth - Walgreens Growth Strategy Walgreen Co thrived for decades by opening stores faster than its competitors(a new store every 16 hrs

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