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Walgreens, innovation, strategy

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  • Walgreens chain began in 1901, Chicago, by Charles R. Walgreen, Sr
    1913, there were five Walgreen drugstores
    also began to make his own line of drug products and was then able to control the quality of the items and sell them at lower prices
    1923, the company opened stores outside of residential areas and also introduced the malted milk shake in 1922.
    1920s, there were about 44 stores with an annual sale of 1.2 million dollars.
    1930, there were 397 stores in 87 cities with annual sales of 4 million dollars.
    The company did not really suffer from the Stock Market Crash and Great Depression. By 1934, Walgreens was operating in 30 states with over 601 stores.
    1939, his son Charles R. Walgreen Jr. took over and ran the chain until his retirement
    1950s, and brought the company through many modern initiatives, including the switch to a computer inventory based system (bar code scanning).
    1986, it acquired the MediMart chain from Stop & Shop.[8]
    2010 - is the largest drugstore chain in the United States.[4] The company operates 7,541 drugstores across all 50 states, the District of Columbia and Puerto Rico
  • SeniorMed -
  • first drug store chain to use child resistant prescription
    consumer goods and services
    health and wellness services in America through its retail drugstores,
    Walgreens Health Services division and Walgreens Health and Wellness division.
    Walgreens Health Services - prescription drug and medical plans through Walgreens Health Initiatives Inc. (a pharmacy benefit manager)
    Walgreens Mail Service Inc.,
    Walgreens Home Care Inc.,
    Walgreens Specialty Pharmacy LLC
    SeniorMed LLC (a pharmacy provider to long-term care facilities).
    Walgreens Health and Wellness division includes Take Care Health Systems.
    Walgreens has 7,507 drugstores as of April 30, 2010.[5] Walgreens was founded in Chicago, Illinois in 1901, and has since expanded throughout the United States. Its headquarters is located in the nearby suburb of Deerfield, Illinois.
  • Substitute – Medium – walgrees also has strong online presence.
  • Walgreens

    1. 1. Author: Badal Garg
    2. 2.  1901 – Charles R. Walgreen opened first Walgreens store in Chicago  1913 – 5 Walgreen drugstores. Introduced line of drug products  1920 - 44 stores with an annual sale of 1.2 million dollars.  1950 – Invested in computer inventory based system and bar code scanning  2010 – With 7541 store, Walgreens is the largest drugstore chain in the United States with drugstores across 50 states, the District of Columbia and Puerto Rico
    3. 3.  Specialty Pharmacy - McKesson’s, Cardinal Health’s, SpecialtyScripts subsidiary, Medmark, Schraft’s  Home Health Care - OptionCare, CuraScript Infusion from Express Scripts, IVPCARE, Home Pharmacy of California  Work Site pharmacies - I-trax - Whole Health Management (BMW, Lowes, Toyota)  Long Term Care – SeniorMed  Retail Clinics - Take Care clinics – 358 locations
    4. 4.  First drug store chain to use – ◦ Child resistant prescription ◦ Satellite technology to connect pharmacy systems ◦ Non-English prescription drug labels  Innovative contracting and network models – ◦ July 2010 - Challenge established PBM business model ◦ Direct-to-payer Strategy ◦ Prescription solution for Caterpillar, Delta  Organic growth vs. acquisition ◦ Superior standalone locations ◦ Easy to add 24 hr/drive thru, 30% more revenue.  Emphasis on technology to improve efficiencies and customer service.
    5. 5.  Disrupt traditional PBM business model ◦ Eliminate Intermediary ◦ Key players - CVS Caremark (CVS), Express Scripts (ESRX), and Medco Health Solutions (MHS))  Caterpillar deal ◦ Caterpillar expects to see double-digit savings in its pharmacy costs for year 2010  Walgreens-Delta deal ◦ This deal to add further momentum to more innovative contracting and network models  Walgreen to sell its PBM business (Oct, 2010)
    6. 6.  Rival – Strong ◦ CVS Caremark, Rite Aid, Wal-mart and online rival Drugstore.com pose a strong pressure  Substitute – Medium ◦ Alternate therapy, surgery, online pharmacy  Buyers – Strong ◦ Large-volume government and managed care organization pose strong pressure  Suppliers – Low ◦ As a dominating player, Walgreens has a strong buying power  New Entrants – Low ◦ Established network of 7000+ stores pose a barrier for new entrants
    7. 7.  Revenue/Net sales – $63.3 BN (7.3% increase) ◦ Prescription Drugs - 65% of revenue ◦ Non-prescription Drugs- 10% of revenue ◦ General Merchandise - 25% of revenue  Net Earnings - $2.01 BN (7.0% decrease)  Net Earnings / Common Share – $2 (6.9% decrease)