Recessive Effects On The Walgreens Company

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As the United States continues to struggle with the current recession, inflation, stock market and interest rates crisis, healthcare has become a since of urgency as well. These economic variables are a large part of the financial struggles that continually face our government. These economic variables are having an astounding effect on the retail drug store chains such as the Walgreens Company.

Background/History of Walgreen's (CM)

The Walgreens Company has been in the retail drug industry business since 1901. Walgreens was founded by a pharmacist named Charles R. Walgreen in Chicago, Illinois. The Walgreens Company had a vision to be the number one healthcare contributor in the United States. The Walgreens Company has had their share of success and also tough times as well. Walgreens suffered through the great depression and too much avail remained steady in the following years (Walgreen Company). The drug store industry is growing rapidly, and sales have increased at an average rate of $10 billion annually since the turn of the 21st century. By the 2010, total annual sales should surpass $200 billion, with most of this growth claimed by chain pharmacies (Industry Library Grocery, 2006).

Walgreens objective is become the nation's number one healthcare provider. To maintain a steady performance of the retail drug chains. The retail chains represent thirty five percent of the drugs in the United States and fill forty percent of the prescriptions in the United States. Walgreens plans to improve their healthcare image, upgrade the service levels and lower cost structure (Chain Leaders focuses on goals for the 90's).

Walgreen Company is the crown jewel of chain drug store retailing. It is struggling with a scary economic outlook, an anemic flu season, margin pressures in generic prescription drugs and high labor costs. Despite these challenges, Walgreens remains the fastest-growing pharmacy retailer in construction of new stores, adding 536 new units in fiscal 2007 and pushing past the 6,000-store mark (Walgreen Company Industry Sector).

Mission Statement (LY)

"We will provide the most convenient access to consumer goods and services…and pharmacy, health and wellness services…in America. We will earn the trust of our customers and build shareholder value. We will treat each other with respect and dignity and do the same for all we serve. We will offer employees of all backgrounds a place to build careers." (Walgreens Co.)


The mission statement outline the company's focus today, it establishes the identity of its customers, and it recognizes the organization's philosophy behind the level of performance. It also pinpoints the value of their employees and shareholders.

Walgreens mission is to offer customers the best drugstore service in America. Walgreens is guided by a century-old tradition of fairness, trust and honesty they continue to expand their store base, offer career opportunities to a fast-growing and diverse group of men and women. The goal of Walgreens is to develop people who treat customers and each other with respect and dignity. Walgreens supports these efforts with the most innovative retail thinking, services and technology. With the success that we achieve it will allow us to reinvest in our future and build long-term financial security for our employees and our shareholders (Walgreen Company).

Major Goals

Walgreens commitment is to provide eminent customer service and make their goods and services easily accessible to its consumers. They have made reference to the relative importance of all their employees in the workplace, mentioning the opportunity for them to progress career wise internally from within the company's organization. Walgreens is engaged in promoting a diverse environment and is dedicated in strengthening shareholders value.

Corporate Philosophy

Walgreens' aims to be loyal and make every consumer, employee, and shareholder pleased. And according to the director of corporate communications, Carol Hively, Walgreens philosophy is "We don't acquire drugstores," she says. "Typically, we build new freestanding stores on the corners of busy intersections. Many of our older stores, which are often located in strip shopping centers, are in the process of being relocated to freestanding buildings with drive-thru pharmacies." (Heaton, David)

Strategic Evolution (CA)

Intended Strategies

Typical stores in 1901 did not focus their attention to satisfy customers. At this time Charles Walgreen intended his strategy to deliver excellent customer service by addressing each customer with a friendly greeting, improving merchandise, and offering pharmaceuticals that were pure and fresh. It was to everyone's advantage that Walgreen's was a registered pharmacist in 1897 and therefore his vision to serve the customers well, worked. The initial strategy announced by Charles R. Walgreen to provide excellent customer satisfaction was so successful that today it is the leading drug store

Emergent Strategies

The emerging result to Walgreen's vision resulted to enhance the shopping experience of customers as well as to deliver a satisfactory product whether it be merchandise or pharmaceuticals. Walgreen's goes by a well known slogan referred to "the pharmacy America trust." Their emerging strategy today is to continue being the number one drug store to initially serve customers with the intention to bring various ways to implement pharmacy care. The pharmacy industry accounts for $60 billion sales yearly, increasing 15% to 20% yearly. Optional Care became Walgreen's' new strategy focusing the pharmacy's attention on infusion drugs such as acetaminophen or arthritis medication amongst others.

Stakeholders (KH)

As defined by Charles Hill/Gareth Jones (Strategic Management) page 367, stakeholders are individuals or groups with an interest, claim ore stake in the company, in what it does, and how well it performs. Stakeholders are composed of internal and external individuals with a stake in the company. As for Walgreen's, they have a large variety of internal and external stakeholders.


Internally, the stakeholders are composed of board members, managers, executive officers, employees and stockholders. This specific composition of stakeholders relies specifically on individuals that reside inside of the company. Under the board members sector of internal stakeholders, the board of directors is imperative and pertinent section of the company that greatly affects the success of Walgreen's.

Board members possess the very important task of ensuring that the company complies with government laws and maintaining the best interest of the stakeholders by, reviewing decisions, tactics and strategies within this area. Within the company, the lists of executive officers that oversee the establishment are:

Wade D. Miquelon- Executive Vice President- Chief Financial Officer

Stanley Blaylock- Senior Vice President of Health Services

Sonja Chawla- Senior Vice President- E Commerce

Kermit R Crawford- Senior Vice President of Pharmacy 2007

Dana Green- Senior Vice President-General Counsel, Corporate Secretary 2005

Donald C. Huonker- Senior Vice President-Health Care Innovation as of 2007

J. Randolph Lewis- Senior Vice President- Supply Chain Management as of 1999


As defined by Charles Hill/Gareth Jones (Strategic Management) page 367, external stakeholders are individuals not within the company that exists outside of the establishment that has some type of claim within the company. Basically, this group is composed of governments, unions, local communities, suppliers, creditors and customers. Quite naturally, external stakeholders are the intricate reason that the company stays afloat, even when there is no other form of support for the company. While adopting the "Kantian Ethics", Walgreen's has accepted the philosophy that people are human and not machines or instruments and should be treated accordingly.


On a consistent basis, Walgreen's continues looking for new and innovative ways to satisfy and meet their customer needs through the advancement of technology, competitive pricing and the lowering of prices. The basic structure of Walgreen's offers a great feel of convenience to their customers. In this structure as a convenience store, customers are able to purchase a variety of products, differing from:

Personal Hygiene products

Red box DVD rentals

Over 2,000 low cost "W" (Walgreen's) product lines

Variety of gift cards

Furthering in customer convenience, Walgreen's wants their customer to acquire their own favorite store in different communities. In acquiring their own, Walgreen's mission is to make a customer develop their own favorites, which creates an attachment to the business and results in loyal customers. In order to be more convenient for the customers, Walgreen's has extended their hours at over 1,600 stores to operate for 24 hours. In such locations, there are detailed exterior display signs and employees that can communicate with the customers in their native languages. With such convenience, Walgreen's has provided the customers with the convenience of picking up their prescription at any Walgreen's location. With many locations, many of them have over 80% of drive through pharmacies.


As Walgreen's build new stores, they constantly aid in rebuilding impoverished communities by adding value to low income areas. Once these new stores are built, it provides residents opportunities of employment. In these stores are free health programs, counseling, educational material and tutorial services for youth. While conducting these programs, Walgreen's has joined other organizations in aiding different problem such as:

Abraham Lincoln Center


Orchard Village

National Urban League

American Red Cross

American Cancer Society

Juvenile Diabetes Research Foundation International


Presently, Walgreen's has been working diligently with their suppliers. As with any establishment vendors are a significant part of their business. Vendors that could provide medical products at an affordable price possess a stake within the company. As Walgreen's work along with their vendors at reasonable rates, they are able to provide affordable prices and other services that could assist not only the community but the economy. Some of the suppliers that Walgreen's work with are Pfizer Teva Pharmaceuticals, Watson Pharmaceuticals, GlaxoSmithKline, Merck, Amerisource Bergen.

Company's Organization and Structure (MG)


Board of Directors

Chairman: Alan McNally

Chairman Emeritus: Charles R. Walgreen III

William Foote Nancy Schilcting James Skinner

Mark Frissora David Schwartz Marilou von Ferstel

Cordell Reed Alejandro Silva


Alan McNally

President/Chief Executive Officer

Greg Wasson

E-Commerce Division

Sona Chawla SR. V.P.

Drug Store Operations Division

Mark Wagner Exec. V.P

Regional Operations

Tom Connolly • V.P.

Charles Bernard Ops. V.P.

Bruce Bryant • Ops. V.P.

Lisa Ehlers • Ops. V.P.

John Foley • Ops. V.P.

Dave Lovejoy • Ops. V.P.

Supply Chain and

Logistics Division

Randy Lewis. Sr. V.P

Health and Wellness


Hal Rosenbluth. Sr. V.P

Pharmacy Services


Kermit Crawford. Sr. V.P

Drug Store Merchandising Division

Bryan Pugh V.P

Legal Division

Dana Green Sr. V.P

General Counsel/Secretary

Administration and

Finance Division

Wade Miquelon

Corporate Development


Bob Zimmerman V.P

Human Resources Division

Accounting Division

Mia Scholz V.P./ Controller

Purpose of Report (FR)

The purpose of this report is to give the reader in depth knowledge about Walgreen's Company and the Pharmaceutical industry. We will attempt to give you basic information about the industry growths, profits, and segments. We will conduct an industry analysis examining Porter's Five Forces and discussing the entry barriers and the threat of substitutes. We will analyze Walgreen's rivalries and assess whether the rivalry is high or low. Finally, we will determine how attractive and profitable the industry is.

Works Cited Page

"Chain Leaders Focuses on goals for the 90's." Healthcare Industry. Web. 11 Dec. 2009. <;col1>.

Gottlieb, Mark S. "Industry Library Grocery." 2006. Web. 11 Dec. 2009. <>.

Heaton, David. "Walgreens: Busy building" Aug 1, 2001, accessed Dec 11, 2009

Jones, G. R. & W.L.Hill, C. (2009). Strategic Management Theory. Mason, OH: Cengage.

"Walgreen Company." Web. 11 Dec. 2009. <>.

"Walgreen Company." Industry Sector. Web. 11 Dec. 2009. <>.

Walgreens Co. "Mission Statement" accessed Dec 11, 2009

Walgreens Company." Our Past.Web.12 Dec.2009.

Walgreens enlarges scope of its business model. 8 Dec. 2008. Web. 12 Dec. 2009.