A firm’s strategic business plan should consist of its mission, future direction, performance targets and strategy. Walgreens’ corporate strategy, as reflected in its mission statement1, is to provide the most convenient access to healthcare services and consumer goods in America15. To help facilitate this, the company employs such things as online sales, online prescription refill capabilities, offers community health care clinics and monitors the effectiveness of in-store displays to improve customer’s shopping experiences. 12 million people visit its website monthly 15.
Example of Walgreens Website Capabilities Walgreens is the nation’s largest drugstore chain and 70% of the population lives within 5 miles of a store. As illustrated below, Walgreens saturates many neighborhoods throughout the country with its stores. The company is making the Walgreens experience the most convenient option for most people. Map of all Walgreens stores near Durham NC 27703 By continuing to build new stores, monitoring comparable store sales increases, purchase pharmacy prescription files and making strategic acquisitions, Walgreens is solidifying its future.
Examples include the acquisition of smaller retail drugstore chains such as Drug Fair in Fiscal Year 2009 15 and Duane Reade in 2010. With the three biggest specialty pharmacies owned by competitors CVS, Medco Health and Express Scripts10, Walgreens also acquired McKesson Specialty and IVPCARE in Fiscal Year 2009 to increase its market share15. While the company is still not ranked in the top 25 of specialty pharmacies, the company continues its organic growth in this sector of the operations. Also, a new regional distribution center was opened in Fiscal year 2009 15.
The company thinks this will further improve its productivity. The company feels strongly about continuing to build its retail pharmacy business because of an aging population and the advent of drugs that improve the quality of life, control health costs and prolong life 15. Hoping to increase shareholder value, in October 2008, the firm announced a set of initiatives designed to reduce cost and improve productivity through strategic sourcing of indirect spend, reducing corporate overhead and work throughout its stores, rationalization of
inventory categories, realignment of pharmacy operations and transforming the community pharmacy 15. Walgreens expects that following these strategies will enable it to improve its revenue. II. Information Systems Assessment Technical Resources •Walgreens currently employs Business Objects Enterprise business intelligence software for all of its HR-related activities12. Prior to this, Walgreens unsuccessfully tried to use an ERP system and then a subsequent database for its human resources reporting needs.
Neither of these systems met the company’s needs. The company chose Business Objects because it was already being used by several other divisions. •The company has an agreement with GOLIATH Solutions to electronically capture when, how long and approximately where displays are placed in Walgreens stores. When combined with Walgreens point-of-sale information, the GOLIATH data will allow the drugstore chain to design and implement displays that are proven to drive sales5. Technical Resources – Assumption
It can be assumed that Walgreens may still use, but not support legacy mainframe system for its Human Resources function. Also, given the nature of its retail pharmacy business, the IT infrastructure has to be centralized. Customers are able to have prescriptions refilled at any Walgreens store, if they’ve previously had a new prescription filled at a store. Data and Information Resources •For a fee, Walgreens allows its suppliers access to near real-time to near real-time point-of-sale data by store/item, as well as store-level inven¬tory data.
This new program provides the suppliers with greater visibility into consumer demand, enabling better collaboration with Walgreens in achieving business goals and providing customers with the highest service levels16. •Thru use of the Business Objects software, the company feeds data from multiple sources through an extraction, transform and load process into a central employee data warehouse. Business Objects then runs reports against this data, which allows human resources to create timely, accurate reports regarding employee population and staffing requirements12.
Data Information Resources – Assumptions Given the nature of its core business, retail pharmacy, I believe the company assigns the task of protecting patient data to the IT function. The IT function is also probably responsible for ensuring the accuracy of patient data and prescriptions. Granted pharmacy technicians and pharmacists are responsible for validating insurance and identity information, but the IT function is overall responsible for ensuring that once patient information is entered, the patient records do not get lost or rearranged. Human Resources •Senior Vice President and CIO, Timothy J.
Theriault is a member of the senior management decision-making committee15. Mr. Theriault has prior experience in institutional services at Northern Trust and was the director of end user computing and advanced technologies for S. C. Johnson and Sons8. He holds a bachelor of science in business management. His ability to communicate to both IT teams as well as operational teams has probably aided in his success as CIO. •The CIO reports directly to the CEO, Gregg Wasson. Surprisingly, Denise Wong (former CIO) heads the Retail and Customer Solutions Division and this division reports directly to Mr.
Theriault, the current CIO9. •CVS, Wal-Mart, Medco Health and Rite Aid are Walgreens’ major competitors. Wal-Mart aggressively competes by its use of the $4 generic prescriptions promotion. CVS employs a similar strategy by offering a 90-day supply of generic medications for $9. 99. Medco Health also competes with CVS by offering a 90-day supply of medications for a cheaper price than a customer would pay in-store. As of 2008, Walgreens and its major competitors were measured as follows10: Retail Pharmacy Industry — Competitive Operating Metrics (2008)