C-Suite Final Presentation

C-Suite Final PresentationChalita Uvimolchai | Dongwei Sun | Shengjie Wu

Zhenchao Liu | Ziyi Xue

Meet the Team

Chalita Uvimolchai

Dongwei Sun

Zhenchao Liu

Shengjie Wu

Ziyi Xue

Key Agenda

1Company’s Background

2Business & Products

3Product

Divisions

4Positioning

5Target Market

6Competitor

Analysis

7SWOT

8Current Issues

9Solutions

10Evaluation

Alex GourlayCo-Chief Operating

Officer

Walgreens: C-suite

Richard AshworthPresident, Pharmacy and Retail Operations

Steve TurnerChief Information

Officer

Joe HartsigChief Merchandising

Officer

Alan NielsenChief Financial Officer

Stevens Sainte-RoseChief Human Resources

Officer

Brad FluegelChief Healthcare Commercial Market Development Officer

Adam HolykChief Marketing

Officer

SMART

History & Background

Foundedllinois by Charles Walgreen �

397 stores nationwideWith annual sales of $4M�

Personnel ChangeFounder passed away,

his son took over�

AcquisitionAcquired DR,

now working on acquiring Rite-Aid

�

1901

1930

1939

2010

Business & Products

Drugs 67% Retail products 33%

● Provide general merchandise, prescription & non prescription drugs

● Have omnichannel access to consumer goods, services, pharmacy, health & wellness services

● Offer products through in-store & online● Provide respiratory services & operate

retail clinics● Loyalty program (Balance Rewards)

Walgreens: 3 Product Divisions

● Operate 8,176 drugstores

● 50 states

● Operate 4,674 retail stores● Pharmacy-led health & beauty retail

businesses in 8 countries ● Major retail brands are Boots (eg:

UK, Thailand, Norway, Mexico, Netherlands, Ireland, Chile and Lithuania)

● Operate under Alliance healthcare brand

● Supplies medicines and healthcare products to more than 110,000 pharmacies, doctors, hospital and health centers

Pharmaceutical WholesaleRetail Pharmacy InternationalRetail Pharmacy USA

Positioning

One stop shopping destination & health care provider for consumers

Well positioned to serve the growing demand for pharmacy-led health and well-being services by advancing community pharmacy through

3 main goals1) Delivering comprehensive care2) Providing a differentiated experience3) Building strategic partnerships

Target Market

● Primary Target Market:○ Woman○ 25-54 years old ○ Two children○ Primary caretaker or one

elderly parent or relative○ High school educated○ Average income of

$48,000● Secondary Target Market:

○ Senior population

$1.1 Billion (Y2010)

Competitor Analysis

(Y2016)

Competitor Analysis Prescription sales in the U.S. (2015)

● Biggest competitor - CVS Health

● Big market share also goes to cost leader supermarket - Walmart

Competitor Analysis Walgreens CVS Health

Market share 32.6% + (10.7% Rite Aid) 21.7%

# of stores 8,176 + (4,561 Rite Aid) 9,600

Revenue segments

(Pharmacy : Retail)

67 : 33 78 : 22

Loyalty membership

Balance Rewards (85 million) ExtraCare (70 million)

Big-city dominance LA & Chicago New York City

Recent developments Rite Aid Target

SMART

S

W

SWOT Analysis

Strengths● Radio Frequency Identification (RFID) monitoring display impacts● Strong, huge management/employees team (237,000)● Drugstores over 50 states with 8,169 stores providing excellence of

services● The in-store medical clinics are insuring the provision of best health

care facilities

Weaknesses● Inconsistent store formats and services● Can’t keep pace with the growing private label brands popularity● The company has high marginal pressure, which is given on profits

due to different factors● Offers enhanced discounters and it has strong effect on the Walgreen

on the prescription of drugs

SMART

SWOT Analysis

O

T

Opportunities● Convenient and accessible services are available at the outlets for

aging population of United States● Global presence and expansion in growing markets● Focus on integrating the healthcare division of Walgreens, add

licensed doctors

Threats● The medical lines have been cutting off especially for the generic and

organic drugs● Negative cases have been reported against the company(disclosing

the privacy of prescriptions)● Direct/Indirect increased competition (eg: Wal-Mart that has

incorporated the pharmacy section to its stores)● Various factors are present in pharmaceutical and has same products

Current Issues

Solutions - Merger Acquisition

● Proceed with the merger acquisition○ Merging with Rite aid will increase Walgreen’s market share○ Walgreens will become a monopolistic company○ Have elasticity in determining the prices charged for goods and services.

● Post approval strategy○ Maintain Rite-Aid brand positioning ○ Add Walgreens name next to Rite-Aid (eg: Duane Reade)○ 63.2% of Walgreen stores were more than 3 miles away from nearest Rite Aid location

● Clear messages across all brands○ Differentiate 3 brands to target different markets○ Release PR news to inform customers about USP of each brand

Solutions - Management & Operation● Offer Staff Training

○ Staff Rotation to monitor the stocks and labels● Offer in-store service

○ If the product is out of stock in store, customers will get free delivery at front door

● Consistent Pricing○ Keep the price consistent in all of the branches

■ Eg: Time Square & Williamsburg etc.

Solutions - Cigarettes Banned

● Launch an advertising campaign through OOH and Online media○ Educational program eg: health issues & substitute products○ One on one consultation with professional doctors ($49/section)○ Walgreens put emphasis on freedom of choice

● Offer discount and promotion for substitute products○ Nicotine gum, patches, electronic cigarettes ○ Buy 1 get 1 free○ Offer loyalty program - if purchase substitute products continuously for six months, smokers

will receive 10% discount on everything else for a month

THANK YOUQ&A

Sourceshttp://marketrealist.com/2016/01/comparing-pharmacy-giants-walgreens-versus-cvs-health/

http://www.wthr.com/article/walgreens-pharmacists-now-turning-away-some-customers-who-need-pain-meds

http://nreionline.com/retail/what-will-rite-aid-divestitures-mean-net-lease-investors

https://www.bloomberg.com/news/articles/2017-01-20/walgreens-said-to-face-u-s-antitrust-concerns-over-rite-aid-fix

http://nypost.com/2017/02/15/walgreens-rite-aid-deal-may-finally-be-a-go/

http://www.walgreensgonewrong.org/out-of-stock

http://www.walgreensgonewrong.org/resources/off-balance

http://www.walgreensgonewrong.org/wp-content/uploads/2013/05/OffBalance.pdf

http://www.walgreensgonewrong.org/latest-updates/balance-rewards-shoppers

http://www.walgreensgonewrong.org/fair-and-transparent-pricing

https://www.forbes.com/sites/brucejapsen/2017/02/20/after-cvs-stopped-cigarette-sales-smokers-stopped-buying-elsewhere-too/#c2b2f59c8f51

http://www.nreionline.com/retail/what-will-rite-aid-divestitures-mean-net-lease-investors

Merger Acquisition:

- If get approval, Walgreens would become a monopolistic company which would strengthen the brand positioning. Likely to draw higher traffic due to strong brand presence.

Recommendation 1: Be more aware not to take full control of the market because it might lead to negative customer experience. Have elasticity in determining the prices charged for goods and services.

Evaluation

Key Findings

● Rite Aid tends to draw an older consumer base than CVS and Walgreens.

● Walgreens is 33% more likely to attract the preference of parents than Rite Aid, whereas Rite Aid is 41% more likely

to attract grandparents than Walgreens.

● CVS is more preferred by those currently employed and making a middle class annual income of $50K-$125K.

● Walgreens is favored more by urban dwellers, and Rite Aid by rural residents.