SWOT Analysis of Walgreens - Strengths, weaknesses, etc.

Today we are going to do a SWOT analysis of Walgreens. This analysis will consist of two parts. The first of these will address the themes of the strengths and opportunities of the Walgreens company. The second of them will, in turn, analyse the weaknesses and threats of Walgreens.

            We will now begin our first part, addressing the theme of the strengths and weaknesses of the Walgreens company, resulting from the SWOT matrix.

I. The strengths and weaknesses of the Walgreens company

            First, we can highlight the diversity of services offered by the Walgreens company. Indeed, and as we can clearly see, Walgreens is not limited to the sale of prescription drugs in pharmacies. The company also offers wholesale prices to hospitals and doctors, as mentioned in the introduction. However, Walgreens ranks second in the US pharmacy market in the retail care and beauty sectors.

             Walgreens business came into being as a joint-stock company, the founder of which is Charles Walgreen. The head office is located in Deerfield, USA, and has various subsidiaries such as Boots, Alliance Healthcare, and Boots Opticians. The diversity of Walgreens Boots Alliance subsidiaries reinforces its image as a pioneer in the medical landscape in the United States.

             Walgreens Boots Alliance is a major employer in the United States. Indeed, the last employee census counted around 342,000 people at the end of 2018. The turnover, which has constantly grown for years, leads to hopes of increased hiring by the company.

             Stefano Pessina is the main shareholder of the company. Accounting as of December 31, 2019, for approximately 16.2% of the company's shares. Several major shareholders are also present alongside Stefano Pessina, such as Capital Research and Management, up to 11.4%, The Vanguard Group, up to 7.63%, SSgA Funds Management, up to 5.23%, Kohlberg Kravis Roberts, up to 2.45%, BlackRock Fund Advisors, up to 2.08%, Caisse de dépôt et placement du Québec, up to 1.59%, Walter Scott and Partners, up to 1.36%, etc. We can highlight the diversity of the shareholders present at the head of the Walgreens company, making it possible to represent a certain diversity of opinions and population.

             Furthermore, Walgreens is a company widely established in the American sector and beyond, thanks to its various acquisitions. In 2012, Walgreens bought 45% of the shares of Alliance Boots, a chain of pharmacies present in the United Kingdom. Two years later, Walgreens acquired the last available shares of this same company. The following year, in 2015, Walgreens acquired Rite Aid, a second company in the pharmaceutical sector specialising in distribution in the United States. Walgreens also established itself in China, in 2017, through the acquisition of 40% of GuoDa, still in the pharmaceutical field.

             Walgreens is part of a modern image that lives with the times. Indeed, in January 2021, Roz Belinda Brewer was appointed CEO of the company. She was the first black woman appointed CEO in a company from the S and P500.

             Through this first part, we have just highlighted the various strengths and opportunities of the pharmaceutical company Walgreens, now established throughout the world. The various acquisitions and pharmaceutical areas handled have made the company a major figure in the pharmacy landscape.

             We are going to present the second part of our analysis, based on the SWOT matrix, as mentioned in the introduction. Here we aim to analyse the weaknesses and threats of the Walgreens company.

 

II. The weaknesses and threats of the Walgreens company

First, the company is not alone in the pharmaceutical market in the United States. Walgreens' biggest competitor is none other than CVS Caremark Corporation. Originally founded in 1963 and 1979 through CVS and Caremark, the company merged in 2007. The company distributes cosmetics and various care products, in addition, to its pharmaceutical activity. CVS Caremark Corporation was ranked as the 18th American company by revenue according to Fortune in 2010.

            CVS Caremark Corporation then entered the field of drug injections through the acquisition of Blackstone in 2013. Then CVS Caremark Corporation became involved with retirement homes, a sector not covered by Walgreens, through the acquisition of Target, in 2015.

            Then, like Walgreens, CVS Caremark Corporation was keeping up with the times through its advertising activities. Indeed, the company is one of the first in the sector to announce that it will no longer retouch the photographs used in its advertising. Indeed, the various promulgations of perfect female bodies have proven to be harmful for women and young girls, prompting the company from the medical field to remedy this from the end of 2020.

            However, Walgreens, although considered a modern company, has very little presence on social networks, which are nevertheless at the centre of the new ultra-connected generation. They have a website, thus making online selling of various Walgreens products viable.

            Walgreens has so far had almost no presence in Europe, a continent that still has several billion inhabitants. The company's only existing base in Europe is in the United Kingdom, the impact is still limited. Thus, an expansion in countries such as France, Germany, Spain, or even Switzerland, could be considered. Having a more widely established base in Europe could also make it easier to develop the online pharmaceutical business.

            To conclude, we can say that Walgreens group currently dominates the pharmaceutical market in the United States and more widely in America. In the United States, however, the Walgreens company has been closely followed since 2007 by CVS Caremark Corporation, a company resulting from a link between two existing companies from the end of the 20th century. Walgreens is thus establishing itself in the pharmaceutical field through thousands of pharmacies spread all over the world, but also in wholesale sales to hospitals and professionals from the health field, such as doctors. However, CVS, Caremark Corporation, and Walgreens are not involved with retirement homes, a market that is nevertheless largely dynamic.

            Several sectors can, however, receive improvements in order to accentuate the readability of the company, and in order to develop it further. Indeed, and as mentioned in our second part, Walgreens is only weakly established in Europe, apart from the United Kingdom, where it has a few pharmacies. Europe is a relatively large consumer hub, especially in online shopping, which could be an area for Walgreens to dig into.

 

Sources: Walgreens, ABC Bourse, Federal trade commission