Walgreens Boots Alliance Case Study : Best Case Study Help

Background of the company

Name of company: Walgreens Boots Alliance

Year of Formation: December 31, 2014

CEO: Larry Page

Products: Drug store, pharmacy

Annual revenue: US$136.9 billion (2018)

Countries in which it operate: Worldwide.

Net operating cost: US$123.74 billion

Ad Expenditure: US$67 billion

Net Sales volume: US$127.40 billion

Main competitors: Rite Aid, Target, Walmart and CVS Health

Background of the company’s Product

BCG Matrix of the products  

Stars · financial services strategic business unit · supply chain · brand Strategic business unit	Question Marks · market development
Cash Cow · supplier management service · innovative product · research and development	Dogs · horizontal integration strategies

Figure: BCG matrix for Boots Alliance  

Background of the task force environment and their interplay

SWOT  Analysis

Strengths

Distribution and Reach: Walgreens Boots Alliance has a large number of outlets in almost every state, supported by a strong distribution network that makes sure that its products are available easily to a large number of customers in a timely manner.

Cost Structure: Walgreens Boots Alliance’s low cost structure helps it produce at a low cost and sell its products at a low price, making it affordable for its customers.

Dealer Community: Walgreens Boots Alliance has a strong relationship with its dealers that not only provide them with supplies but also focus on promoting the company's products and training.

Financial Position: Walgreens Boots Alliance has a strong financial position with consecutive profits in the past 5 years, along with accumulated profit reserves that can be used to finance future capital expenditures.

Walgreens Boots Alliance has a large asset base, which provides it with better solvency.

Return on Capital Expenditure: Walgreens Boots Alliance has been successfully able to generate.

Weaknesses

Research and Development: Even though Walgreens Boots Alliance is spending more than the average research and development expenditure within the industry, it is spending way less than a few players within the industry that have had a significant advantage as a result of their innovative products.

High Day Sales Inventory: The time it takes for products to be purchased and sold are higher than the industry average, meaning that Walgreens Boots Alliance builds up on inventory adding unnecessary costs to the business.

Rented Property: A significant proportion of the property that Walgreens Boots Alliance owns is rented rather than purchased. It has to pay large amounts of rent on these adding to its costs.

Low current ratio: The current ratio that shows the company’s ability to meet its short term financial obligations, is lower than the industry average. This could mean that the company could have liquidity problems in the future.

The company has low levels of current assets compared to current liabilities, and this can create liquidity problems for it in operations.

Cash flow problems: There is a lack of proper financial planning at Walgreens Boots Alliance regarding cash flows, leading to certain circumstances where there isn’t enough cash flow as required leading to unnecessary unplanned borrowing.

Opportunities

Internet: there has been an increase in the number of internet users all over the world. This means that there is an opportunity for Walgreens Boots Alliance to expand their presence online; by using the internet to interact with its customers.

E-commerce: There has been a new trend and a growth in sales of the e-commerce industry. This means that a lot of people are now making purchases online. Walgreens Boots Alliance can earn revenue by opening online stores and making sales through these.

Social Media: there has been an increase in the number of social media users worldwide. The three social media platforms; Facebook, Twitter and Instagram, have shown the greatest number of increase in monthly active users. Walgreens Boots Alliance can use social media to promote its products, interact with customers and collect feedback from them.

Technological developments: technology comes with numerous benefits among many departments. Operations can be automated to reduce costs. Technology enables better data to be collected on customers and improves on marketing efforts.

Threats

Technological development has increased the entrance of the new companies in the market

The bargaining power of the suppliers are increasing as the number of companies are continuously enhancing in number.

PESTLE Analysis

Political

The political factors are the one that falls under the external factors for the company. This comprises the governmental policies, legal documentation and taxes. The political power in the countries are different in nature. As the company has international ventures, the political stability and policies influence the business endeavours of the company. In the European countries, the political issues are stabilised. But in the countries like China, political influence plays the pivotal role.

Economic

The factors in the economic sections that the company has to keep in mind while doing their business are- unemployment rate and policies, economic growth of the country, consumer confidence, interest rate, inflation and other necessary policies. For example, in the countries like Australia or USA, the economic growth is quite impressive. Here the company has the scope for both their daily and luxury products more than the developing countries.

Social

Social factors have influenced the business and performance of the company time and again. The main factors in the social impact are income destruction. Socio-economic status of the people, lifestyle changes, social and labour mobility, demographic changes. The products of the company are designed to cope with the needs of the internet people of all types and preferences.

Technological

The innovations in the technological sectors re always the positive part of the wholesale industry. The development in the industries could accentuate the business and its scope in each part. The innovation of the hybrid technologies and modern equipment have increased the sales of the company. Changes in the information technology has increased the communication factors.

Legal

The tax policies of the country and the employment laws are the main things that a company has to review before doing business of any kind. There are also competition regulations of the countries which are the part of legal contexts for the company. The company has filed some lawsuits against Uber for copying their technologies.

Environmental

Boots Allience has been trying to increase their involvement in the environment- friendly business. The company is trying to reduce the carbon emission of their productions and make the world green. This company is serious of their CSR and environmental protection regulation of the respective countries.

State the Problems

New companies are entering the market regularly and reducing the sales of the company. The new entrants are a great threat to its business.

Employee engagement of the company is less than others. The degradation in employee performance and turnover is a big issue for the company.

Suppliers are another problem in this business. The bargaining power of the suppliers has increased as the competitors are offering more to these suppliers.

Select one of this Problem

The company has shown some incredible technological advancements in their research and development. Yet there is increasing competition in the market with the known names. This company has to revise their research and development aspects to get more profits.

Overview of the Problem with Facts

Increasing competition and the bargaining power of the suppliers are increasing. This could affect the business of the company and its revenue could get down.

Solutions

The company reputation hugely depends on the technological ventures of the company experts. There should be more investments in the research and development departments. The evaluation of the process is necessary so that on can understand why the result shows this.

To overcome the obstacles in competitive advancement the company need to invest more in its promotional ventures. These promotions could be done in both online and offline media. There are scopes of developing their websites in a more practical way.

Another important aspect to increase the sale is the customer relation management. The services of the company is customer centric. If the consumer feedbacks are inserted in operations, the results would be more in favour of the company. The employees could be trained for better performance in their field.

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