Strategic Management Case Study Walgreens

Whereas its competitor CVS Pharmacy chose to expand via aggressive acquisitions of hundreds of smaller companies, in the 2000’s Walgreens decided to instead focus simply on rapid store growth. Additionally, the company realized that it was time to change its mission to become “the most convenient drugstore in the world.” In short, Walgreens’ simple, focused strategy gave the company the competitive edge against CVS’ frantic, disorganized acquisitions. As the following chart indicates, Walgreens’ “hedgehog concept” proved to be much more effective than CVS’ more complicated approach. Although CVS had more store locations by 2004, their sales/square ft. actually decreased, whereas Walgreens saw steady growth across the board (Babson College,
Most notably, it has had several changes in leadership since Good to Great was published; the company has seen 4 new CEOs since 2001. Some of these new leaders, such as Gregory Wasson, worked towards completely shifting the company’s priorities and goals. However, not all of Walgreens’ leaders have been total successes. Jeff Rein, who was CEO from 2006 until 2008, abruptly stepped down following the dramatic failure to acquire Longs Drug Stores Corp (Japson & Jones, 2008). This has been considered a major failure of the company in recent years, considering how the acquisition failure lead to CVS gaining a huge competitive advantage in California (Babson College,
As was mentioned earlier in the Performance portion of the paper, it is currently seeing its highest increase in stock prices ever, especially after its merger with Alliance-Boots (the largest pharmacy chain in Europe) in 2012 (Historic Stock Lookup, 2016). The merger proved to be a huge change for Walgreens. The company was also able to become an international competitor for the first time, at the time controlling over 11,000 stores in both the United States and Europe. Walgreens’ CEO prior to the merger, Gregory Wasson, retired after the merger was complete and the company is now being led by Stefano Pessina (Walgreens President, 2016). The company, as of November of 2016, is a portion of a larger holding company known as Walgreens-Boots Alliance, and its stock market ticker even officially changed from WAG to WBA to reflect this new transition. Walgreens’ growth has proven consistent since then. In 2016, Walgreens is still growing and looking for new opportunities for expansion, both domestically and globally. Most recently, Walgreens-Boots Alliance has announced a $9.4 Billion dollar buyout of the American pharmaceutical giant Rite Aid. However, Pessina has stated “...To be honest, if we’d had the opportunity to buy something somewhere else instead of buying Rite Aid, we’d have done it. But the U.S. market is just so important, so dynamic, so irrational and expensive. The need for consolidation, and the need