Strategic Plan: Walgreens

Executive Summary

Walgreen Company is a reputable organization with a brand name that is associated with the highly-qualitative services in the sphere of drug retailing. The unique ability of this company is evident from its wide experience in the market, successful products, and distribution strategies. The company’s history proves that it is ready to move forward implementing new products and incorporating innovative marketing practices. The popularity of services and the number of customers reinforce its approach and ensure that its operations reveal new opportunities. The vision and mission of Walgreen Company coincide with the modern tendencies in drug retailing business. Its corporate values and culture are exemplary. Consequently, this organization is ready to develop and grow even in the conditions of high competition in the market.

Company Overview

Walgreen Company is the U.S organization that specializes in drug retailing. The peculiarity of this company is that it provides access to wellness and health services, photo and pharmacy services to consumers. Walgreen Company uses its Walgreen’ Health and Wellness division, Walgreens’ Health Service division and retail drugstores to distribute its products and services. The company operates in 8, 229 locations and has 8, 206 drugstores. Moreover, Walgreen Company has its stores in all 50 states (Walgreens, n.d.). It means that this organization targets only the U.S consumers. One should add that Walgreen Company has 248, 000 employees who sell products for $74, 19 billion (Walgreens, n.d.). Being the premier American pharmacy, the company continues to remain one of the leading companies in the contemporary market.

Walgreens: Company History

Walgreen Company was founded in 1901. At first, it was a drug store in Chicago owned by Charles Walgreen. From 1913 to 1920, Walgreen Company continued to open new stores (Walgreens, n.d.). Moreover, one should say that the organization had become popular because of the prescription of whiskey as at that time alcohol was prohibited. Finally, in 1922, Walgreen Company introduced a new product, which is a malted milkshake that was a driving force for the implementation of ice cream manufacturing plans (Walgreens, n.d.). At that time, the company began its expansion in Wisconsin, Missouri, and Minnesota. The formula for the success of Charles Walgreen was based on the high quality of products and services and offering them at lower prices than competitors.

One should mention that even in 1893 there was a high competition among drugstores in Chicago (Walgreens, n.d.). Consequently, one can say that Walgreen’s achievements are remarkable as he managed to demonstrate the competitive advantage of his company. Another driving force of Walgreens Company was the hard work of its leader and staff. Moreover, Walgreen understood the necessity of innovations and the implementation of new practices and operations. Consequently, Charles Walgreen had created a cheerful and warm atmosphere in his stores, greeted every consumer personally, and made the interior of the drugstores spacious and airy. It is evident that he wanted to create a company that will be different from the competitors.

The characteristic feature of Walgreen Company was the fact that it was registered. Its prices were reasonable and fair. Moreover, the highest standards for freshness and purity made the company more superior compared to other pharmacists. The strength of Walgreen Company was that it was not greatly affected by the Great Depression in 1929. It means that that organization had the necessary physical, financial, and human resources that were very helpful, reliable, and supportive.

Charles Walgreen died in 1939. After his death, his son Charles Walgreen continued his life affair (Walgreens, n.d.). However, he was not so prosperous and famous as his father. But it was not very crucial as the company had been already a brand company whose name stood for high quality. Walgreen Company was in superb condition and ready for future challenges. Their key slogan was ‘The heart of the store – the primary source of profit’. It means that Charles Walgreen was proud of the affair started by his father. From 1940 to the present time, the history of Walgreen Company remains a history full of innovations, changes, and commitment to the customers (Walgreens, n.d.). Growth, brand name, positive reputation, and prosperity are the achievements of the company’s history. As a result, striving for success and finding a rightful place in the U.S market has resulted in a reputable business.

Products and Services

Products and services of Walgreen Company are divided into the following categories: Contact Lenses, Beauty, Personal Care, Medicines & Treatments, Vitamins and Supplements, Home Health Care Solutions, Household, Grocery, Baby, Kids & Toys, Sexual Wellness, Diet & Fitness, Seasonal, and Natural & Organic. Such a variety of products proves that the company’s strategy is based on the implementation of new goods and services (Walgreens, n.d.).

The category Beauty suggests skincare, haircare, makeup, and perfume. Moreover, it includes the season’s essentials, the most favorite products, and ways to remain beautiful. The season’s essentials are a nail, facial care devices, fragrances, and gift sets. Consequently, these products can be purchased by not only individual consumers but also companies specializing in beauty care and beauty salons. The category Beauty also includes bath and body products, sun care, clothing accessories, and products for men.

Another category is Personal Care that offers oral care, shaving & grooming, hair care, pregnancy and fertility products. This category has more medical and healthcare appointments. The products of Personal Care include sun care, deodorants and antiperspirants, bath and body products, massage and relaxation, lip care, ear, nose and throat care, eye care, food care, and feminine care.

The category of Contact Lenses includes shop lenses and reorder lenses. It is responsible for eye health and eye solutions. The consumer can buy such contact lenses as Acuvue, air Optix, focus/dailies, cooper vision, Bausch & Lomb, and CIBA Vision. Walgreen’s brand products are medicines and treatments, home medical supplies, baby toys, and vitamins and supplements. It means that consumers associate Walgreens with these goods.

The category of Vitamins & Supplements include multivitamins, letter vitamins A-K, and herbs. Consequently, it is evident that Walgreen Company pays attention to both traditional and non-traditional ways of treatment. This category also provides sexual wellness supplements, probiotics, fish oils, omega, calcium and minerals, and multivitamins.

The category of Medicines & Treatments is responsible for providing products to treat cough, cold, flu, and allergy. Moreover, it provides pain relief and products for digestive health. This category also provides treatment for children. One should mention that consumers can find solutions to stop smoking in this category. The category Medicines & Treatments offers sleep and snoring aids, skin ailments, foot care, first aid, and homeopathic remedies.

Baby, Kids & Toys segment is intended for children’s health. Consequently, it implies baby foods and feeding essentials. Moreover, parents can find toys for their kids as well. This means that this category provides not only healthcare products but also entertainment goods. Natural and organic foods for kids will benefit their health. Party supplies will help to organize holidays for children and entertain them.

It should be mentioned that Walgreens offers home health care solutions providing walkers & rollators, wheelchairs, scooters, transport chairs, canes, crutches, mobility equipment accessories and lift chairs. Walgreen Company also provides bathroom safety products, daily living aids, bedding accessories, and medical nutrition. The household products are intended for pet care, laundry and cleaning, kitchen, party supplies, travel, outdoor living, and electronics. It means that the company not only provides the necessary drugs but also encourages leading a healthy lifestyle and promotes healthy decisions. Walgreens Company also offers household products such as candles and fragrance, pet, school supplies, paper, and plastic. It is evident that the organization deals with different areas providing high-quality products for a reasonable price.

The category Grocery includes giftable foods, beverages, snacks, candies, specialty diets, pantry, refrigerated foods, frozen foods, fresh and ready food, and gums. It means that the company is still experimenting in this segment. However, it is obvious that soon the assortment of products will grow.

The strength of Walgreen Company is that it provides the training equipment, sports nutrition, and products for weight management. It is evident that all product strategies of the organization intend to encourage leading a healthy lifestyle and keeping a balanced weight. There are also seasonal goods that include giftable foods, holiday d?cor, party supplies, and costumes. Consumers can buy them for special occasions. These products are must-have items for any holiday. The objective of the company is to provide products for customers’ sexual wellness as well. Consequently, Walgreens offers mood setters, vibrators & adult toys, lubricants & moisturizes, condoms & contraceptives. The category Natural & Organic provides such products as cleansing cloths, pads, scrubs, sprays, and moisturizes.

The advantage of the product strategy of Walgreens Company is that it is based on constant reductions. For example, at present, the organization offers reductions to 15% on hair care, 50% on vitamins & supplements, 20% on contact lenses, and 30% on fragrances (Walgreens, n.d.). Moreover, the consumers can buy them not only in the stores of Walgreens Company but via the Internet. Consequently, the company provides goods even to those customers who do not live in the USA. An individual approach to every consumer is realized with the help of customer service that provides such operations as product recalling, returns, shipping, and help.

The majority of products and services are controlled by the U.S government. As a result, all of them are licensed. Moreover, the growth in products proves that Walgreens is in high demand. The key objective of Walgreen Company is to make consumers look good and feel good. It means that the product strategy is innovative, strategic, and benefits the company’s reputation in the market. The consumers can find information about products and services on the website, paperless coupons, and weekly ads in stores and healthcare clinics. A large number of categories and subcategories demonstrate a proper segmentation of products and services and their adaptation to customers’ needs and preferences. At present, online shopping is the most popular option. Consequently, Walgreen Company tries to sell the biggest part of products via the Internet.

Vision / Mission Statements

The vision and mission of Walgreen Company are to make people feel good and look good. The organization has chosen the slogan ‘At the Corner of Happy and Healthy’ not accidentally. It means that Walgreen Company builds its policy according to customers’ needs and demands. It should be mentioned that the vision and mission of the organization are based on social responsibility towards the community. It is evident that the company does not care about its profits but is rather concerned about the promotion of a healthy lifestyle among people. Their policy demonstrates that the company is socially responsible for society, its environmental sustainability, supplier diversity, and disability inclusion. It is obvious that the vision and mission of Walgreens are noble and serve the community. “We live those values every day, as we try to reflect the vision of Charles R. Walgreen by doing what is fair and beneficial to others,” state the employees of Walgreen Company (Walgreens, n.d.). It is evident that every employee knows his/her position in the organization and society. Such consciousness will promote a healthy lifestyle and benefit other people.

Corporate Values and Culture

One should say that the level of corporate values and culture is high in Walgreens being based on social responsibility and ethical principles. The tolerant and respectful attitude to every consumer only reinforces the strengths of their corporate values. As a result, one can distinguish the following core cultural beliefs of Walgreens: live it, own it, love customers, build trust, be bold, be real, and be one. It is evident that the company helps people stay healthy and live well. Their employees use innovations to satisfy customers’ needs and demands. Moreover, employees, as well as customers, have an opportunity to find support and understanding.

Due to the fact that Walgreen Company has a good reputation and a strong brand image, there are many people who wish to work for this organization. Walgreens’ approach to culture and human resources is compelling. Hiring, rewarding and tolerating are the principles of their organizational culture. The corporate values and cultures are seen in HR policy: freedom of making decisions, ethical principles, tolerance, and respect. Encouraging consumers to get what they need and stay healthy is a noble objective that cannot be practiced without corporate values and culture. One of the most crucial corporate values of Walgreens is courage that is revealed through the constant innovations, changes, and implementation of new products.

The products of Walgreens are natural and organic. It is proved by the ethical policy of the company and its desire to be eco-friendly and respond to the needs of society. Openness, honesty, and respect in their decisions only reinforce their positive image and reputation in the market. Supporting work culture Walgreens employs reliable staff that will not betray or reveal corporate secrets. Consequently, the corporate values and culture coincide with the vision and mission statements that encourage leading a healthy lifestyle and promote the commitment to the consumers.

SWOT-Analysis

SWOT-analysis is a necessary and effective technique for revealing the peculiarities of the organizational environment. Such a marketing tool presupposes the analysis of the strengths, weaknesses, threats, and opportunities of the company (Armstrong & Kotler, 2012).

Strengths

1. Market leader.

2. Implementation of new products and services.

3. An individual approach to every customer.

4. Expansion of the target audience.

5. Superior locations of drugstores.

6. Competitive advantage.

7. Brand equity (Walgreens, n.d.).

The strength of Walgreen Company is that it is a market leader because of its rich historical background, experience, and innovations. Moreover, it implements new products and services not only in pharmaceutics but also in other areas related to a healthy lifestyle. Walgreens has become the first pharmaceutical organization that applies an individual approach to every customer, which leads to the expansion of the target audience. The superior locations of drugstores that can be found in all 50 states of the USA prove that the distribution strategy is well-organized. These locations are advantageous to the company as free-standing stores generate more than 30% in sales (Walgreens, n.d.). Moreover, these superior locations reinforce the competitive advantage of the Walgreens Company. Brand equity of this organization is also evident. First, the company has achieved it by ensuring convenience and quality. Such strengths help Walgreen Company to achieve its objectives and fulfill its mission. They prove that the organization takes into consideration customers’ preferences and follows its marketing objectives to full extent. Based on Walgreens’ strengths, it is recommended to further ensure continued growth and superior company performance to retain its position as a market leader. Customer convenience is a feature that distinguishes Walgreens from its competitors. Consequently, the company should continue to follow it as the consumers have chosen Walgreens exactly for this reason.

Weaknesses

1. Expensiveness.

2. Inability to set itself apart from competitors.

3. Enormous growth.

4. Dependence on many suppliers.

5. Cannibalizing the market.

6. High demand for financial, human, and physical resources.

7. Lack of parking.

8. Operating in the domestic market.

The weaknesses of Walgreen Company prove that there are changes in the market, and it is a must to take them into consideration. Some products and services are expensive and not available to consumers. Another weakness of the company is that it is unable to set itself apart from competitors especially when it comes to pricing policy. Enormous growth can also prevent the company from sustainable development and acquisition. Moreover, Walgreen Company depends on many suppliers. It means that the organization should always consult with them when it comes to changes in the marketing strategy. The increase of stores can lead to cannibalizing their market as there is at least one Walgreens within two miles. It should be mentioned that the increase in stores also requires additional financial, human, and physical resources. Another weakness of Walgreen Company is the lack of parking places near the drugstores. Consequently, the organization should look for locations that are more spacious and comfortable for consumers. Another weakness of Walgreen Company is that operates only in the domestic market. Walgreens’ brand is limited only to America. However, the company should move forward to occupy a leading place in the global market.

Opportunities

1. Increasing the suppliers’ number.

2. Human resources development.

3. Expansion in the international market.

4. Improvement of image and reputation in the market.

5. Increase in sales.

6. Collaboration with other pharmaceutical companies.

7. Innovation.

Such opportunities prove that Walgreen Company should move forward expanding its business and improving human and physical resources. Moreover, the company has the opportunity to increase its sales. First of all, it is related to the growth of the American population. The aging population is also crucial for Walgreens. Secondly, the overall demand for drugs is also increasing. Consequently, it encourages the Walgreen Company to expand its manufacturing. The opportunities of the organization are endless, proving that the company has a chance to conquer the international market. The need for innovation is another opportunity for the company. Collaboration with other pharmaceutical companies is necessary to strengthen brand awareness and find new partners. It should be mentioned that Walgreen Company has all perspectives for the implementation of new products and services as healthcare products are in high demand. The company has an opportunity to increase the number of suppliers as they are the basis for a reliable product strategy. As a result, Walgreen Company has many possibilities for growth and development. It means that the company’s future is very prosperous and perspective. However, the domestic market is already known for it. Consequently, expansion globally is a key objective that should be fulfilled.

Threats

1. The decrease in customers.

2. The reputation damage.

3. The customers’ complaints.

4. The loss of sponsors and suppliers.

5. Possible lawsuits.

6. High competition.

7. Medicaid cuts.

It is evident that such threats are related to the customer perspective that is a driving force of the company. Moreover, the threats are also related to competitors’ perspective as their success and failure are the main determinants leading to innovations. Wal-Mart is a key competitor of Walgreen Company. Moreover, the organization competes not only against other drug stores and local pharmaceutical companies but also grocers and discounters. Walgreens can deal with different lawsuits due to the low quality, imperfection of services, and high prices. It means that Walgreen Company should do everything possible to avoid lawsuits to save its brand and reputation in the domestic market. Another threat that is dangerous for the Walgreen Company is Medicaid cuts. Consequently, this can lead to the loss of employees and a decrease in sales. Another threat that could have an impact on the company is prescription privacy violations. It is forbidden by law. It is evident that customers’ rights violations can result in a compromised reputation. Therefore, Walgreens should prioritize the interests of customers and improve its quality to save its reputation. Another threat that can be dangerous for the company is competition with superstores and grocery stores. It means that Walgreen Company should achieve its competitive advantage to be different from its rivals.

Competition

The competitive advantage of Walgreen Company is evidently being related to its unique services and individual approach to every customer. However, Walgreen Company has such competitors as Wal-Mart Stores, Inc., Raid Aid Corporation, and CVS Health Corporation. The most competitive industries for Walgreen Company are the retail sector, grocery stores, supermarkets, and drug stores. However, the organization uses them as a driving force for further development. First, the company puts its customers at the center of its policy, making them feel unique and special.

Walgreens differs from its competitors in terms of its concentration on capital investments and retail growth. This organization has more stores (8200) than its rivals. Walgreens provides a loyalty program that has 90 million members. The competitive advantage of the company also concerns its collaboration with suppliers. It means that it has a positive reputation that attracts not only customers but also suppliers. It is evident that Walgreen Company creates its competitive advantage with the help of a special approach to health management. This approach presupposes the improvement of the individual patient experience, reduction of costs for health care, and improvement of the population’s health in general. As a result, one should say that Walgreen Company is a highly competitive business that is able to compete against many industries. However, it does not mean that the organization has achieved perfection. Consequently, it should develop further.

Management Team / Leadership

The management team and leadership of Walgreen Company are successful due to the number of remarkable strengths and opportunities. Alex Gourlay is the president of the company. Richard Ashworth is the president responsible for pharmacy and retail operations. Sona Chawla is a president and chief marketing officer. Abhi Dhar is a senior vice president and chief information officer. Linda Filler is a president and chief merchandising officer. Mark Wagner is a president responsible for business operations. One should say that all leaders of Walgreen Company are exemplary. Consequently, their leadership style continues to benefit the company’s growth and development (Walgreens, n.d.).

Financial Outlook

Analyzing the financial success of Walgreen Company, one should say that it is a remarkable one. The sales of the organization reach $72, 19 billion. Such a figure is really outstanding and proves that product and promotion strategies are appropriate. Moreover, according to Forbes (2015), Walgreen Company occupies 72 places among the world’s most powerful brands (Forbes, 2015). The operating income of Walgreen Company is $ 3, 94 billion. The net income is $2, 45 billion. The total assets equal to $35, 481 billion. Total equity is $20, 457 billion (Forbes, 2015). It means that the financial success of Walgreens Company is really incredible. A large number of consumers and a high demand for products and services only reinforce it.

The financial success of Walgreen Company is determined by its sales and profits. Consequently, a marketing plan should include long-term and short-term goals for this company. The long-term financial goals of this company presuppose expanding manufacturing volumes and attracting more customers. Moreover, the long-term goals include increasing the revenue earned from the provision of services and sales of products.

Strategies

Marketing goals and objectives of Walgreen Company refer to the increase of the number of markets in which the company operates. The marketing strategy of the company presupposes needs-based segmentation into the following groups: demographics (age, gender), socio-cultural (ethnic aspects), psychographic (quality sensitivity and price sensitivity) and geographic (orientation towards the national preferences of consumers). The key strategies of Walgreens Company are the following:

Product Strategy

Analyzing the product strategy of Walgreen Company, one should say that it is well-developed. Product strategy shows that the company adapts to its customers’ needs and demands. Consequently, the total product conception is right. Walgreen Company has a strong brand name as this organization is known worldwide. The company offers products in eco-friendly packaging mentioning their brand name on it. For the development of new products, the organization should use the additional costs on colorful packaging and exciting advertisement.

Price Strategy

The pricing strategy of Walgreen Company depends on the competitors and situation in the market. Consequently, the prices for the products vary from $2 to a thousand dollars. It means that Walgreens uses different pricing policies in order to be reasonable and objective in their prices. Moreover, the pricing strategy is influenced by the performance and productivity of employees, sales, and profits of the company. World economic processes, currency rates, and demand on the products in the market are the external factors determining the price.

Distribution Strategy

The distribution strategy of Walgreens is related to the locations where their products are manufactured and sold. The customer can buy the goods directly through retail stores, and online. The stores of sweeties are worldwide. It means that Walgreen Company has a successful distribution strategy. The company constantly improves its marketing strategies with the help of online selling. Moreover, using e-commerce is more comfortable and faster for customers. Online shops of Walgreen Company give more opportunities for customers and help them to save time.

Promotion Strategy

Walgreens Company uses direct as well as indirect ways of promotion. It is considered to be more effective. They place their advertisement on TV, the Internet, and radio. Moreover, their packaging also includes their brand name and logo as the ways of promotion. Additionally, Walgreen Company uses public relations as a kind of indirect promotion. The promotion strategy of this organization is intended for the creation of a bright image of its strengths and reaches its target audience (Armstrong & Kotler, 2012). Bright advertisements can attract new clients; increase incomes, and promote the company’s image. The optimistic, bright, and cheerful pictures on packaging improve customer awareness of this brand.

These strategies rely upon the following: (1) studying the market, (2) finding the target customers, (3) exploring customers’ tastes and preferences, and (4) presenting new products and services to them (Barney, 2012). Walgreen Company also improves the image of the company with the help of a successful promotion strategy. The organization responds to the needs of the customers with the help of the pricing and product strategies. Consequently, the unity of these elements demonstrates how the company operates in the market. Product strategy is related to all services and products offered by the organization. Price strategy presupposes methods of determining the cost of the products depending on the situation in the market and competitors (Scott, 2011). Promotion strategy has such kinds of advertisements as direct and indirect ones. Direct promotion can be done through the Internet, TV, billboards, and radio. Indirect promotion can be conducted through charity organizations and public relations (Certo & Certo, 2011). The place strategy refers to the locations of manufacturing, selling, and promotion of products and services of Walgreen Company.

Conclusion

In conclusion, one should say that Walgreen Company is a reputable and prosperous pharmaceutical organization that demonstrates a perfect model of leadership, strategic marketing, and innovative ways of running a business. The variety of products and services of Walgreens proves that the organization has a successful product strategy that presupposes changes, innovation, and implementation of new goods. The vision and mission of Walgreen Company are noble and serve the community ensuring their health and wellness. The corporate values and organizational culture prove that Walgreen Company cares about its image and reputation in the market. SWOT-analysis of the organization shows that it needs to improve its marketing strategy and expand globally as the increase of stores in the domestic market can lead to self-cannibalism. Walgreen Company should use its opportunities to save its competitive advantage. It has to use a flexible discount system for its regular customers. Moreover, Walgreens should be sensitive to market changes.

To ensure successful growth and development, Walgreen Company should improve the brand image in the global market. However, it is a long-term objective that demands time and effort. To improve the brand image, Walgreen Company should use various interviews to determine the rate of customers’ satisfaction. Such a measure will help to reinforce the company’s interest in the high quality of products and services and customers’ satisfaction.

The third step refers to finding new locations. Since Walgreen Company operates in the US, it has to look for new places in other countries. It is related to finding new clients and increasing the opportunity for international growth and the capacity of the company. One recommends making these steps more strategic and corresponding to the market demand. Moreover, the company should follow ethical principles in their attitude to customers and employees. Team-related conflicts and issues can be solved only with the help of moral and ethical decision-making processes.