A Swot Analysis of Walgreens in the Competitive Pharmacy Marketplace

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A SWOT Analysis of Walgreens in the Competitive Pharmacy Marketplace

Katy Mullis

Table of Contents
Page Contact Information .............................................................................................................3 I. Walgreens Overview ........................................................................................................4 II. Strengths..........................................................................................................................5 III. Weaknesses ....................................................................................................................7 IV. Opportunities .................................................................................................................9 V. Threats...........................................................................................................................11 VI. Recommendations........................................................................................................13 VII. Sources .......................................................................................................................14

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Contact Information
Katy Mullis 29724 Main St. Shedd, OR 97377 Phone: 541-231-4392 mullisk@onid.orst.edu

Dr. Minjeong Kim College of Health and Human Sciences Oregon State University 219 Milam Hall Corvallis, OR 97331-5101 Phone: 541-737-3468 Minjeong.Kim@oregonstate.edu

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I. Overview Established over a century ago, Walgreens has since grown into a national corporation with over 5,000 stores (Walgreens Corporation, 2006d). America's top selling drugstore, ahead of competitors CVS and Rite Aid, Walgreens serves 4 million customers daily and fills 490 million prescriptions every year (Walgreens Corporation, 2006a). Priding itself on innovation and technology, Walgreens was the first drug store chain to use child resistant prescription containers and the first drugstore chain to use satellite technology to connect its pharmacy systems (Walgreens Corporation, 2006b). Walgreens first began in Chicago in 1901 when pharmacist Charles R. Walgreen purchased a drugstore where he had once worked. A second store opened in 1909, and seven years later nine stores were incorporated to form Walgreens Corporation. Walgreens Co. became a public corporation in 1927, and by 1953 it was the country's leading self-service retailer (Walgreens Corporation, 2006b). Walgreens now operates in 47 states and Puerto Rico. The company has long been committed to customer convenience, and in doing so Walgreens offers items and services beyond those of a typical drugstore. These services include drive-thru pharmacies and one-hour photo services, and many stores are open 24 hours a day. Walgreens has traditionally followed an organic growth strategy in order to expand. More recently, however, it has grown through the acquisition of companies such as the northeast chain Happy Harry's and Mermark, a specialty pharmacy (Walgreens Corporation, 2006a; "Walgreen Co. reports...", 2006). The company's continual growth has resulted in consistently increasing sales and earnings. In 2005 Walgreens had sales of $47.4 billion and the company generated over $1.5 billion in earnings (Walgreens Corporation, 2006a).

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II. Strengths As the nation’s leading drugstore in sales, earnings growth, same-store sales increases, prescription drug market share, and prescription sales per store, and first on the list of Global Most Admired Companies in the food and drugstore category, Walgreens' position as the market leader is perhaps its greatest strength (Walgreens Corporation, 2006c; Carpenter, 2004). Its next closest rival, CVS, trailed Walgreens in sales by nearly $7 billion annually and Walgreens outsells number three Rite Aid by over $30 billion (Walgreens Corporation, 2006c). The average Walgreens store fills about 256 prescriptions daily, compared to the average 100 prescriptions filled by independent...
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