Walgreen SWOT Analysis

Walgreen Co., enlisted in NYSE as WAG, is one of the largest drug store chains that specializes in prescribed drugs and also has products like Malted Milk and beauty products. It holds its edge as being the most convenient and the most innovated drug store chain. Its branch WHS division assists pharmacy patients regarding initiative of health plans.


• The firm has strong brand recognition and is renowned as a trusted brand.

• Ranked as 32 in Fortune 500 (2010).

• Ranked as 6 in Fortune ‘World’s Most Admired Companies’ (2010).

• Ranked among ‘40 Best Stocks to Retire On’ regarding Fortune (2010).

• Ranked as 106 globally in terms of revenue (2010).

• Ranked as 163 globally as the largest companies as per Forbes Global 2000 (2010).

• ‘Business Week’ ranked the firm as 52 in best company to start a career in (2009).

• Ranked as 6th most innovative health care company in Fast 50 of Fast Company magazine (2010).

• Best Diversity Company in ‘Reader’s Choice Survey’ (2010).

• Ranked 12 in Top 50 Employers for people with disabilities (2010).

• Moody’s rating for the firm is A2.

• Standard and Poor’s rating for the firm is A.

• Strong and flexible information system that contributes to the overall flow regarding merchandizing decisions.

• Strong distribution network.

• Diversified customer base.

• Walgreen Alumni Association, made for the Walgreen retirees (serving atleast 10 years), to keep in touch with the latest happenings. This platform provides room for building good relationship with current employees.

• The firm has about 7,100 stores in total (2010).

• The stores are linked by a satellite system fro refilling the prescriptions at any retail site.

• The firm offers prescription labels in more than 10 different languages.

• The website also provides information regarding the pharmaceutical products.

• The firm holds credit for making the malted milkshake popular, which coincided with the invention of the electric blender in the year 1922.

• The firm has successfully implemented Radio Frequency Identification (RFID) throughout its supply chain to monitor the sales and track the record of distributed supplies.

• Partnering with HP, the firm has successfully used technology to make room for convenience for the customer base. Snapfish helps the customer upload pictures and have them printed at any Walgreens store location.

• The firm stores enjoy the benefit of having a smaller format as compared to super centers, hence the ability to focus more on the convenience and service regarding the customer.

• Medmark Specialty Solution, tat offers the customers prescriptions which are not always available in any pharmacy.

• In-store clinics add to the convenience of the customer who seek professional advice regarding the medicine or they can seek help in case of injuries.

• The firm has also increased the use of fresh items like milk and bread in their stores to increase traffic.

• The firm is gears up for the year in order to tackle with the year’s flu season. The firm intends in delivering 15 million shots (priced $30) compared to 7 million last year. (2011)

• The firm has increased its certified pharmacists (immunizing) and nurse practitioners to 26,000.

• The firm has the record of providing more flu shots than any single entity.

• The firm also promotes its executives well that also make sure that the loyalty factor evolves in them.

• The firm also seeks entrance in the grocery business with fresh produce and has added up to 500 food items.


• The small spacing along with the grid view of the stores makes it difficult for the customers to easily search for their desired product.

• Some of the stores have problems regarding parking lots that are mostly around the building, they are both a nuisance for the ones who park their cars, and the ones who are speeding away.

• Most of the stores are being concentrated in fewer locations.

• Large discounters like Wal-Mart have drastic affect on Walgreen if they provide prescription drugs in a lower amount (2006).

• Even though the firm has commended its edge to be convenience, it still lacks many disciplines that follow the customer code for providing convenience.

• Instead of acquiring stores that are already running in the market, Walgreen prefers to make stores of its own from the ground level that takes more time and energy and that will greatly affect the firm in such a competitive market.

• With the increasing number of drug stores, there is a chance that such firms like Walgreen and CVS will surely cannibalize their market. There is at least one Walgreen store within a two mile radius. It might end up so that the market can’t sustain anymore of such stores.


• The aging population is a natural factor that benefits such prescription stores like Walgreen.

• Acquisitions will provide more room for the firm to upgrade them after acquisitions.

• Flourishing photo shop market.

• Growing trend of in-store clinics.

• Growing market for the prescription drugs.

• Insurance companies being the third-party are also a ready demand in the prescription business.

• Expansion in the international markets will provide large scale profitability for the firm, and U.S. market will become saturated eventually.

• Even though that the number of customers that shop in drug stores like Walgreen are declining, there is a positive aspect to it due to the loyalty figure that helps the firm because the loyal customer make frequent visits to the stores for holding a reliable image for the stores.

• Impulse buying can be increased regarding beauty items, photo processing, and over the counter drugs (POS items).

• The aging Baby Boomer population which is the largest market segment in the U.S. that holds 2/3rd of the nation’s income, such customers prefer convenience and good service rather than the quantity of the products available.

• The population is more active, especially regarding health care services and products.

• The firm has the opportunity to actualize on their customers demand which is more technology savvy ad provide online help regarding the needs of such customers.

• Walgreen Health Services provides mail order prescriptions that add to the convenience, the firm can increase the number of pharmacists and computer programmers to cash in on the convenience of their customers.

• The WHS also runs specialty programs that are for specific target market (Advantage90).


• The number of stores that are increasing rapidly will saturate the market and the drug store firms might experience cannibalization regarding the drug market in U.S.

• Increased competition from direct and indirect competitors.

• Discounters especially like Wal-Mart will pose a direct threat regarding the prescription drug business.

• Walgreen is also at a disadvantage compared to competitors like Wal-Mart due to the very broad assortment of products and significantly more SKUs and a larger customer base that shops frequently.

• Regulations on the prescriptions and the volume make the firm prone to losing market share, and that have also decreased the margin over drugs. Walgreen depends a lot on the prescription drugs and such regulations make the firm more vulnerable.

• The health care reform has caused the patients to look for low-cost products.

• The shortage of pharmacists is a major challenge that the firm as well as he direct competitors in the drug prescription business will have to face.

• U.S. Dept of Health and Human Services have initiated investigations regarding the privacy of patient information; Walgreen has to take extra precautions on proper disposal regarding the patient information.

• Worker strikes will surely strike hard on the firm if such an event happened. (2006)


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