Walgreens Strategic Plans, Research Paper Example

Walgreens has a professional history that spans over a century. The company was founded by Charles Walgreen in 1901 when he opened the very first store on the south side of Chicago in Barrett’s Hotel. The goal of Walgreens’ mission statement is to provide customers with the best drugstore service possible throughout America. The mission statement claims trust, honesty, and fairness as the century old guiding principals of the company. Their statment also proclaims that store expansion is a signature objective they want to continuously work towards, in addition to providing jobs for a diverse range of men and women (“Company Overview,” 2003).

The company built a reputation for being highly experimental and innovative. “Walgreens continued to come up with new, important ways to service customers and – just as importantly – employ thousands of people during this period of extreme economic distress” (“Company Overview,” 2003). Walgreen’s business strategy has always been simple. Starting in 2003 the company incorporated a basic website to promote and sell merchandise and continued to build over 500 new stores a year. Walgreens currently has a total of 8,116 stores.

Walgreens referred to the business strategy of expanding to 500 stores a year their ‘Seven by 10,’ strategy. The goal was to have 7,000 stores by 2010. Between 2003 and 2009, Walgreens actually exceeded the goal when they expanded from 4,250 stores in 2003 to 7,000 in 2009. At the peak of the company’s expansion strategy, Walgreens opened a store every 17 hours.  The capabilities Walgreens had to implement and refine in order to support the seven-by-10 strategy entailed managing real-estate, site construction and analytic. To support the seven-by-10 strategy, we had some well-refined capabilities. For example, we were very good at managing real estate, including construction and analytics. We could tell you almost anything about any  street corner in the United States. We could predict, within 3 percent, the volume for a potential new location in various categories, including pharmacy and front-end sales.

In a recent 2013 business article titled “Changing Structures and Behaviors at Walgreens” Mark Wagner, the president of operations and community management at Walgreens,  and Wayne Orvis, the vice president of customer and employee initiatives, assess the change in business strategy Walgreens has undergone to adjust to the drastic shifts that have been occurring in the healthcare industry, specifically in regards to the Affordable Care Act. The action steps setup by Walgreens entailed 1)A More Supportive Structure, 2) Elevated Decision Rights, 3) Norms of Engagement,  4) Motivators for Accountability , 5) Networks to Drive Change, 6) The Roster of Results .

The authors note that  the act of establishing a more supportive  structure refers to providing support for district managers, specifically extra support that would enable managers to spend more time focusing on employees and customers. They note that , “Given that each district manager oversees almost 1,000 people, managing, developing, and operating the business can be a challenge. Those managers were the main intermediary between the corporate office and our retail locations.” (Wagner & Orvis 2013)  For Elevated Decision Rights, the authors note that the new strategy requires managers to focus less on operational activities. For example, HR and vendor relationships are replaced with employee engagement. Employees coach their people and help them engage with customers (Wagner & Orvis, 2013). This means that Walgreens can move over the handling of merchandising from a store by store level,to handling it at headquarters. This new strategy allows for stores that see a large customer base and a lot of business to focus primarily on business.

For the Norms of Engagement step, the authors not that, “in the past, the company had strict  policies and procedures. This was a business model that did not allow for innovation. The model also had limitations in customer service innitiatives. Store employees focused solely on the tasks they had at hand. Now, Walgreens has a new strategy that is very different from their past method at the store level. The company no longer wants  employees to just exectute taks. Now they incorporate customer service as a critical part of the the training and instructing other staff on duties and procedures is also a strategy (Wagner & Orvis, 2013). This means Walgreens wants to shift from hiring managers who are expansion oriented to team management oriented. They are looking for people who can engage employees and customers alike, but especially those that can instil strong business sense in employees. For the Motivators for Accountability action, the authors note that, A big part of the redesign was to help employees understand how this was different from what they did before, what they would be expected to do going forward, and how they would be evaluated and rewarded. In the past, everything was simple (Wagner & Orvis, 2013).  The major change with this new system was how employees would be held accountable and rewarded for good performance.  The authors note that they credit workers for their community  engagement, customers service, team members management and financial results. Another aspect of this new strategy the company seeks to implement is how to manage under performers. The goal is to make HR more efficient at identifying these members and removing them from employment.

The fifth action, Network Drive Change involves utilizing new strong networks to drive change in Walgreens from the ground level. They state that, the company constructed  network-enhancing practices to motivate team interaction. This action step also seeks to build community ties. For example, the company implemented five-minute meetings every day, across each store. These meetings create  opportunities for the staff to talk about where the store is winning and areas that might need improvement. This time also allows the company to identify the big ideas and expectations of the day (Wagner & Orvis, 2013)? The networks involve having network Vice Presidents tour the store branches, or involving other external stakeholders in the process of the inner workings of the business. These are team orietnted activities which will ultimately enhance employee morale and store functionality. Roster Results entails identifying the minor performance inhibitors that can be removed to enhance performance rate that and increase profitability.

In sum, Walgreens has evolved from a small chain to a major franchise over the past decade. With new innovations in technology and healthcare legislation, it is going to be necessary for Walgreens to either make a drastic change in strategy or lose relevance within their market. These business strategies identified by Wagner and Orvis will play an essential role in moving Walgreens to the next level in business as they transition into a bigger broader market space.

References

“Company Overview” (2003). Walgreens Co. 2003. http://www.walgreens.com/about/press/facts/fact2html#expansion> (12 September 2003)

Executive Education Information. (2012). How to Develop an Effective Marketing Plan. NotreDameOnline.com. Retrieved from http://www.notredameonline.com/effective-marketing-plan/

Occupational Outlook Handbook. (2012). Personal Financial Advisors. Bureau of Labor  Statistics. Retrieved from http://www.bls.gov/ooh/business-and-financial/personal-financial-advisors.htm

Wagner M. & Orvis M. (2013). “Changing structures and behaviors at walgreens.” Strategy+Business. Retrieved from http://www.strategy-business.com/article/00195?pg=all