Walgreens Company
Walgreens Company is a pharmaceutical-led health organization. The company operates in more than 11 countries and has close to 18,500 stores. It has pharmaceutical distribution and wholesale network with over 400 centers for distribution and delivery to thousands of pharmacies, health facilities, doctors, and hospitals in over 20 countries (Greenwood & Hilary, 859). Nonetheless, Walgreens is run through three major divisions which are Retail Pharmacy International, Pharmaceutical Wholesale, and Retail Pharmacy USA. The purpose of this paper is to look at Walgreens marketing segments and the factors behind their successful operation in the over 100 years of establishment as well as recommendations. Despite pharmaceutical retail concerns, Walgreens continues to thrive due to the effective management of the company workforce, resources, and consumers.
The Retail Pharmacy USA operates in 50 states to offer beauty and pharmacy-led health products. It specializes in the provision of pharmacy services as well as managing in-store clinics in 400 locations within the US (Schorsch & Sweeney, 189). Besides, Walgreens has a US loyalty program, Balanced Rewards, and is designed to reward loyal consumers to enhance their shopping activities in the stores and online platforms. The components of its operations are based on retail, which is the sale of health, beauty, non-prescriptions drugs, and toiletries. Also, there is a pharma sector which sells prescription drugs and other related pharmacy services.
On the other hand, the Retail Pharmacy International sector is based on eight countries. This division of Walgreens has established approximately 4,700 retail stores in these countries. The company retail brands are recognized as Boots. Some of the countries include the UK, Norway, the Netherlands, and Mexico (Schorsch & Sweeney, 193). The Walgreens international sector is strengthened by online stores, which has enabled it to compete effectively in the growing pharma-market. This Walgreens division has the Boots Advantage Card Loyalty program, just like the Balanced Rewards for US customers.
Also, Walgreens has a pharmaceutical wholesale segment that functions underneath the Alliance Healthcare Brand and supplies drugs as well as other products and services. The pharmaceutical wholesale is based on 111 countries and primarily based in Europe (Greenwood & Hilary, 861). Walgreens through this division offers pharmacists value-added services to assist them to improve their business through Alphega Pharmacy membership. Besides, Walgreens offers pharmaceutical manufacturers seeking more control in health product distribution. By considering the well being of manufactures and pharmacists, Walgreens remains superior in the market.
SWOT Analysis
Strengths of Walgreens
As a leading company in the pharma industry, Walgreens has several strengths which assist it to thrive in its place. These factors not only assist Walgreens to maintain its market share in the current global market but also assist in gaining entry into new markets. A major strength is that Walgreens has reliable suppliers which give a strong base on the consistent supply of pharma raw materials. It enables Walgreens to overcome all the supply chain barriers. Besides, Walgreens has a stronger brand portfolio. A popular brand includes the Walgreens Boots (Greenwood & Hilary, 859). In the over 100 years of establishment, the company has invested in creating a solid brand portfolio.
This makes it easy for them to always expand their new product. Also, Walgreens has a strong distribution network. With many years in the market, the company has built a strong and reliable distribution network that reaches most of its possible market (Robbins, 45). Another leading strength is that Walgreens is innovative, as they regularly come up with new products. Importantly, the company has succeeded in the integration of complementary firms by acquisition and merger. Walgreens integrates technological companies to smoothen their operations and the dependable supply chain.
Weakness of Walgreens
The weaknesses resulting from the company are based can be solved through strategic positions and competitive advantages. Currently, Walgreens cannot handle all the concerns that are brought by new entrants in its marketing and to an extent has lost some ports of its market in the divisions. The organizational structure is not effective as such since it is simply compatible with the existing business model hence is a limiting element to the adjoining product sections (Canady, 6). It also leaves no rooms for the establishment of other Walgreens divisions since the three major segments have lasted for years.
Moreover, there are higher abrasion rates among the workforce. As opposed to other pharmaceutical organizations, Walgreens experiences the highest attrition rates which make it spend more resources to train and develop new employees (Canady, 6). Equally, Walgreens is still not successful in the integration of companies with various work cultures. Even though it has been successful in the merging of smaller companies, it has failures in the integration of larger firms having, unlike work culture.
Opportunities for Walgreens
Walgreens has various opportunities which start with the new markets opened due to collaboration with the government. Walgreens has adopted new technology policies as well as the federal free trade agreement that offers the company opportunities to enter any new market (Greenwood & Hilary, 857). Besides, technology presents Walgreens with a chance to practice different pricing techniques in its latest market. This enables Walgreens to retain loyal customers through improved services while drawing others based on value-based propositions.
Besides, new consumers are originating from online platforms. Walgreens has invested heavily in the online channel. It is the existing technique that has created a new sales conduit for the company. Importantly, consumer data will be useful in the future to enhance services as well as meet consumer demands through big data analytics. Notably, there is a stable cash flow that gives Walgreens a chance to invest in other related pharma products (Greenwood & Hilary, 864). With its reliable cash flow system, the firm can invest in other products segments and new technologies.
Threats Walgreens Faces
Walgreens faces threat from the increasing pay level from the labor unions that want employee’s salaries by $15 an hour, based on the union, and increases the pressure that has resulted in high attrition rates (Murphy, 98). Besides, there is a shortage of an experienced and skilled workforce in some international markets. It presents the threat to the constant growth of revenue by the company in such markets.
On the other hand, there is an increase in the costs of raw materials which can be a threat to profitability. Besides, there are challenges from the regional economic integrations, especially the isolation of US-based companies which can affect its international sales. Nonetheless, there are no steady supplies of innovative products which results in the low and high swings in the product's sales over time (Murphy, 112). Walgreens only develop new products as a response to other competitors.
Stakeholder Engagement in Walgreens
Walgreens success is majorly based on the stakeholder engagements by collaborating and engaging with stakeholders. They address the significant sustainability issues for the firm. The stakeholders are always consulted to receive their feedback on the company performance in the areas perceived to pose social, environmental, and economic effects (Greenwood & Hilary, 867). Walgreens engages the stakeholders actively on the issues that affect their supply chain, entrance to new markets, and consumer retention.
Significantly, the stakeholders are important in the establishment of company networks. For example, the Walgreens Bots Alliances collaborate with other organizations in the industry with the major agenda of integration (Greenwood & Hilary, 859). The stakeholder group recognizes that the company can thrive with effective integration. Some of the companies it collaborates with include International Federation of Pharmaceuticals Wholesalers. Through the integration, they can make a deep analysis of the market which ensures that Walgreens remains at the top of the competitive market.
Equally, Walgreens stakeholders ensure effectiveness in the company through the creation of consumer goods Forum (CGF). This refers to a more prominent international association of manufacturers and retailers that aims to enhance positive changes as well as efficiency globally (Lenell et al., 579). The initiative is to benefit consumers, business, and Walgreens members. The CGF group members must pledge to follow the commitments and resolutions of the Walgreens group to create wellness and health. Other factor the company considers and has gained popularity among people is based on their campaigns for deforestations, food wastes, and refrigerants as well as other concerns. One of these CGE initiatives is the Collaboration for Healthier Lives by Walgreens Boots Alliance. The program explores the various ways to help consumers acquire improved products through several actions in global cities.
Walgreens Organizational Structure and Culture
Walgreens organizational structure is based on the hierarchical model. This creates a more supportive environment for company operations. Walgreens has district managers who are still offered additional support to focus on enhancing the commitment with consumers and employees. Each district manager is tasked with overseeing 1,000 employees by managing, operating, and developing the business (Greenwood & Hilary, 865). The managers are usually the intermediary between retail locations and the corporate offices.
Therefore, Walgreens has based on their organization with the centralization of the company operations through functions like IT, HR, fiancé, and employee relations, to enable the corporate level to have information at the lowest company level. Since the company is a large corporation, it does not utilize the one-size-fits-all leadership policies. Hence, the decision-making processes have been increased by the company to include even subordinates (Greenwood & Hilary, 860). As such, with many responsibilities, the managers would be at the corporate level for a longer period trying to make comprehensive reports. Including employees decreases the manager’s roles to enable them to remain productive.
Besides, Walgreens has introduced other organizational positions. For all the 30 based US markets, the company has created a top position (vice president for markets), which is based on the location of the market stores. This strategy has helped the company to be the corporate leadership close to the employees and consumers (Greenwood & Hilary, 861). The vice presidents are representatives of the major link in field operations and corporate headquarters. Therefore, even accountability in the company is at the lowest levels of its structure by creating the department like IT and finance in each local store.
Importantly, Walgreens has added community leaders to their local retail stores. The significance of this group is to offer mentorship to the less experienced managers. They have to offer help and training to implement new changes based on consumer behavior (Clark, 234). Community leaders drive change to Walgreens success and sustainability from recognizing the need of the local communities and suggesting the best potential solutions.
Additionally, Walgreens culture is based on employee behavior. The company thus relies on the use of incentives to shape employee behavior. For instance, they have set up an actual pay for performance initiative that drives employees to needed behaviors. With this system, employees and leaders are assessed and the bonuses are given according to these three elements: financial results, customer service, and member engagement. Also, more bonuses are given due to employee community interactions and engagements. Corporate level management takes building stronger ties with the local market seriously (Lenell et al., 579). For instance, the company participates in thousands of community events, which can total millions of volunteer hours.
Recommendations for the Company
Even though the company remains successful in executing strategies and management, there is a need for improvement in certain company sectors. The major change should begin with driving network change, by establishing a stronger network that makes changes from lower levels of the company to the top level (Robinson, 76). Daily collaboration is essential for the business. Therefore, Walgreens need to have networked enhanced strategies to share best practices, make changes to the consumer market, and strengthen the communal ties. For example, Walgreens can create daily meetings in the store after or before the day. It acts as an opportunity to enable the staff to present all the day’s challenges and enable the generation of winning ideas. These can be the major ideas by employees and their expectations of a day.
Similarly, Walgreens need to implement the surprise visits measure by the corporate managers to visit the local retail at any time. A visit to these local markets will enable the company to determine the working practices as well as barriers in their operations (Robinson, 83). Besides, they can share with the employees the ideas that work from other markets. There are other formal elements like monthly meetings where the employees can get together and share issues as well as working policies and practices in their respective market segments.
Conclusion
Walgreens is a 100-year-old company that understands its market deeply, a factor that has enabled it to succeed in the pharmaceutical company. The current pharma retail business has been influenced by technology like the internet. Walgreens has used this opportunity to adopt online platforms for their retail business. Also, success is based on new opportunities like new markets that have resulted from the collaboration with the government. Besides, the management through the intervention of the stakeholders plays a crucial role in the well being of the company. They coordinate all the available resources through stronger networks.
Equally, Walgreens success is based on organizational culture and structure. The organization is based hierarchical model that consists of positions like vice presidents and community leaders. They help bring corporate-level management close to the local stores. Besides, employee’s behavior is always evaluated through the provision of incentives. Therefore, despite the threats and weaknesses, the company continues to thrive due to the proper structure. Nevertheless, despite the effective and streamlined Walgreens operations, the company needs to improve on network change, and actual visit of the local markets by the executives. Driving network change ensures that there is effective integration of other organizations towards Walgreens achievements.
Work Cited
Canady, Valerie A. "National Council, Walgreens join forces to train pharmacists." Mental Health Weekly 29.18 (2019): 6-6.
Clark, N. J. "Chronic Liver Disease Foundation and Walgreens to launch Hepatitis C testing campaign (05/19/15). PR Newswire Web site." (2015).
DuChane, Janeen, Bobby Clark, Francis Staskon, Rick Miller, Kathleen Love, and Ian Duncan. "Walgreens Connected Care." International Journal of MS Care 17.2 (2015).
Greenwood, Anna, and Hilary Ingram. "Sources and Resources ‘The People’s Chemists’: The Walgreens Boots Alliance Archive." Social History of Medicine 31.4 (2018): 857-869.
Lenell, Amy, Carol A. Friesen, and Laura Hormuth. "Breastfeeding support in a community pharmacy: Improving access through the Well Babies at Walgreens program." Journal of Human Lactation 31.4 (2015): 577-581.
Murphy, Tom. "Walgreens, insurers push expansion of virtual doctor visits." St. Louis Post-Dispatch (2015).
Robbins, R. "At Walgreens and CVS, a push to collect customer health data by dangling discounts. STAT." (2018).
Robinson, Madeleine. Walgreens: Financial Analysis and Recommendations. Diss. The University of Mississippi, 2016.
Schorsch, K., and B. Sweeney. "Walgreens is outsourcing its metro Chicago clinics to advocate." Crain’s Chicago Business(2016).
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