WALGREENS BOOTS ALLIANCE’S 1

Walgreens Boots Alliance’s

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Walgreens Boots Alliance’s

Introduction

In the 21st Century, nations of the world have experienced rapid transformations in their

economic, social, education and political sectors as a result of globalization. This is the first time

in human history that the pace of structural change has been more pervasive, rapid and global.

The 21st century has introduced a new global economy which is composed of a trilogy of

interactive forces which include globalization, trade liberation and revolution in information and

communication technology. Globalization which is described as the international strategies that

have been put in place with the goal of expanding business operations on a global level has

melted national borders, enhanced free trade through economic integration and revolution in

information and communication technologies which have made geography and time irrelevant.

Complex structural realignment of investment streams, the rapid transformation of

production processes, and the adoption of niche marketing approach are some of the factors that

have influenced the rapid economic growth and development in the new global economy. Due to

globalization, companies have continued to change their competitive strategies. This is because

economic globalization has resulted in fading away from the boundaries between the forces of

competition. Economic globalization has been able to result to the introduction of new dynamics

in the competitive situation as the activities of the value chain of companies have continued to

emphasize the changes between forces and impacts of competitive strategies and the interaction

of these two. Companies continue to redefines their core and boundaries. As this evolves through

off-shoring, outsourcing and value chain fragmentation, the pressure of competition forces poses

a challenge to many companies. Therefore, in this paper, we are going to analyze the current
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competitive and corporate strategies for Walgreens Boot Alliance. We will also focus on looking

at how Walgreens Boot Alliance has been affected by the forward and backward forces of

globalization (Greenwood & Ingram, 2018).

Company profile

Walgreens Boot Alliance is an American based global pharmacy-led enterprise that deals

with the selling of health and wellbeing products. Walgreens Boots Alliance has been able to

establish itself as a trusted health care service provider through community pharmacy care and

pharmaceutical wholesaling. Walgreens Boots Alliance as a business has existed for more than

100 years. Currently, Walgreens Boots Alliance is the largest retail pharmacy across the United

States and Europe. Walgreens Boots Alliance has been able to establish its global presence and

now operates in more than 25 countries and with total employees being more than 415,000

people. It has one of the largest global pharmaceutical wholesaler and distribution networks,

more than 18,500 stores in 11 countries. Furthermore, it has over 389 distribution centers that

yearly, deliver more than 230,000** pharmacies, doctors, health centers and hospitals. In 2019

Fortune magazine, the company was listed as one of the World's Most Admired Companies and

was the first in the food and drugstore category.

Walgreens Boots Alliance's portfolio also has some of the highly regarded beauty product

brands. These brands include; Almus-a range of high-quality generic medicines; Botanics - a

range of natural skin care products; and No7-a leading skincare brand in the UK. Other brands

also include: Liz Earle - which is a premium skincare range; soap and glory-brand that deals with

makeup, accessories, skin care; Sleek MakeUpc-brand that deals with creating most impactful

color cosmetics; CYO - beauty product for versatile places for eye, lip and face; and lastly
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YourGoodSkin-a skincare brand specifically for women with unpredictable skin (Helpman,

2016).

Beauty Products Market

The beauty industry is an industry that deals with products associated with maintaining

the physical well-being of a user. This industry deals with products like cosmetics, skincare, hair

care, face care, and foot and hand care products. With globalization, the demand for these

products has changed due to consumer sensitivity towards the price. The global market size of

beauty and personal care products was valued at 572.3billion in 2018. The market size is

anticipated to grow at a rate of 5.9% per year. This is due to the growing preference for natural

and organic personal care products and the increasing demand and adoption of Augmented

Reality (Linton & Kask, 2017).

The global beauty industry has a vibrant market environment due to the complexity of the

competitive strategies, strengths, and weaknesses the participants of the industry. As the world

gets more globalized, one of the main challenges has been the increasing competition from many

international players entering the market. For instance, South Korea of late has been able to step

into the global stage and has continued to dominate the beauty market. With competitions getting

high, a range of new beauty products and concepts have been developed which have continued to

pose greater challenges to the competitive status quo. Players in the industry have also continued

to embrace technological advancements which have helped in improving their brands. Due to

this competitive market environment, Walgreen has been able to come up with new competitive

strategies (Lloret, 2016).

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Walgreens’ current competitive strategy

Walgreens’ current competitive strategy focuses on its two core objectives. The main

business objectives of the company are to lead in pharmacy health and beauty retailing and

distribution. It also aims to increasingly develop and internationalize its product brands to create

a third dimension (Nadkarni et al., 2016). To do this, it has drawn clear strategies which are;

i. Growing its core businesses in the existing markets by improving its services, value

as well as innovation.

ii. It delivers productivity improvements and other cost savings.

iii. The company pursues growth opportunities in selective high growth markets

iv. The company has a strategy to launch its product brands in new markets.

v. The company focuses on delivering synergies through its transformational strategic

partnerships.

Walgreens Boots Alliance's is among the largest pharmacy and beauty products chain in the US

and Europe. This means that it has an excellent reputation for differential health and beauty

products as well as outstanding customer care service. The strategy, therefore, is to make

Walgreen the world's beauty retail brand. The company has the following steps that it follows in

order to achieve the dream of becoming the world's leading brand in beauty products. They

include;

i. Continuous differentiation of its products

Walgreen is one of the world's companies with a leading brand in beauty products. In the

competitive beauty industry with active players, Walgreen has been able to sell its beauty

products and compete effectively over the years. This is due to its strategy of differentiation.
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Differentiation has been a strategy that has seen the company releases multiple brands with some

of the brands being recognized among the fastest growing cosmetic brands not just in the US but

all over the world. A better scenario is when the company introduced a new brand into the

market in 2017, the Sleek MakeUp brand which was well accepted internationally. The company

also uses differentiation strategy so as to diversify its products and provide customers a better

quality experience (Acquaah & Agyapong, 2015).

Differentiation is a strategy that aims to provide a company with unique aspects making it

different from its key competitors in the given industry. The company identifies that product

features that customers’ value and the products that their competitors have and then positions its

products in a unique manner that serves the needs of its customers. Usually, the company focuses

on producing products with additional elements with a better value to the customers. The price of

a product, however, is maintained. In 2018, Walgreen did a market research of its stores and

identified the elements found to be important to its beauty shoppers and integrated these

elements to produce one new design. In its latest concept, customers were provided with the

privilege of enjoying an updated beauty shipping experience which had some of the most useful

aspects valued by the customers, e.g., testers and beauty consultants. With this new store

concept, customers are allowed to access the stores and test their preferences and play around

with cosmetics. This attracts a larger customer base (Aithal & Kumar, 2015).

ii. Provision of excellent value to customers.

In any business, customer service plays a critical role. Customer service determines the

reputation of a business, defines the customer base and identifies the sales made. Walgreen

employs several methods to ensure that its customers receive the best services. The company
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invests in developing its employees to be at their very best so that customers can get the best

services. Because the company understands that businesses grow by customer referrals, it

focuses on involving its customers and then making them brand ambassadors. The company is

looking forward to using celebrities in endorsing its new beauty care products in efforts to attract

many customers (Hernández-Perlines et al., 2016).

iii. Formation of Partnerships

In attempts to remain relevant and leading in this competitive industry, Walgreen also

uses partnerships so as to reach to a broad customer base. Its strong brand reputation allows it to

form partnerships with some of the most recognized organizations. Walgreen has been able to

create a partnership with Microsoft with the goal of transforming health care delivery. Microsoft

brand is ranked as number 7 brand all over the world. Forming a partnership with Microsoft

directly exposes you to the entire world. Walgreen has partnered with Microsoft so as to be

committed to carrying out multiyear research and development. This is one way that will enable

Walgreen to build health care solutions, improve health outcomes as well as lower costs of care.

It will also be able to develop new products aiming to make people's wellbeing better. Microsoft

is committed to transforming and expanding Walgreen's stores into modern health and beauty

destination. In the efforts to achieve this, the two companies look forward to attaining;

a. A platform that connects the consumers to health care delivery and management

services

Walgreen and Microsoft will focus on connecting people to web-based applications and

health information systems through digital devices. This will provide an opportunity for people

to access health care services virtually. Microsoft will ensure that Walgreen's information is
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integrated. Based on data science and artificial intelligence, Walgreen will be able to have

valuable insights that will allow for fundamental improvements that will make the delivery of

health and beauty services easy.

b. Walgreen Boot Alliance to transition its IT platform to Microsoft

Microsoft is the strategic cloud provider of WBA. Company's IT infrastructure will be

migrated into Microsoft Azure. This migration will also include new transformational platforms

in retail, pharmacy and business services. There will also e new capability in data and analytics.

With Microsoft 365, more than 380,000 employees of the Walgreen will be empowered with

tools that will see increased productivity through employee internal corporation and

collaboration as well as customer engagement. The transition of WBA to Microsoft platform will

provide an effective opportunity for WBA to accelerate its marketing speed, gain a deeper

understanding and insights of its customers thus there will be the provision of better and more

personalized care, products and services to all its customers (Robinson, 2016).

c. Forming other collaborations with payors, providers, and manufacturers

This aims to see that solutions are implemented at lower costs. Walgreen and Microsoft

will work to build a seamless ecosystem with the goal of connecting consumers and providers.

Microsoft and Walgreen will ensure that they leverage each other's market research so as to

identify the right partners that will help them to develop solutions. For example, with a major

health care delivery network, people will have the opportunity to seamlessly engage in

Walgreen's care and beauty solutions within a single platform.

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iv. Making Walgreen more convenient and accessible for its target customers

The company has put in place strategies to help it in making its products easily available to its

customers. It has been able to establish enough distribution centers and retail stores. Eleven out

of 25 countries in which it operates has 18,500 stores which are equivalent to each country

having 1680 retail stores. This is an incredible factor that its competitors cannot manage. The

company has also employed enough number of employees in the 45 countries of its operation.

The workforce in these 25 countries is a 415, 000 people workforce (equivalent to 16,600 per

country); this enables its customers all over the world to receive fast and best services (Todd,

2018).

v. Consistently polishing its brands

A brand basically refers to a name, symbol or a design or the combination of name,

symbol, and design that makes customers to identify and differentiate goods or services provided

by a particular company. Branding gives a business a sense of identity. Brand tells customers

what to expect from given product and services and what factors differentiates these service from

competing entities. Creation of a strong brand involves in-depth market research to identify the

reasons as to why customers should be attracted to a particular product. With a strong brand, it

will always be easy for customers to remember your business and will always have confidence in

your services or products. Walgreen has been able to establish some of the strongest beauty

products. These brands include No7, Soltan and Botanics. To continuously polish and develop

the existing brands, the company adopts product innovation and development, improving its

methods of packaging and marketing. Walgreens Boots Alliance has' partnership with Microsoft
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has enabled it to participate in active research and innovation that makes it develop new products

and beauty solutions thus meeting the market demands of its customers.

vi. Corporate Social Responsibility

To position itself at a better place compared to its competitors, Walgreens Boots Alliance

has put effective strategies that makes it win the hearts of community members it serves.

Walgreens Boots Alliance is dedicated to improving the health and wellbeing of the communities

within which it operates (Turner & Holton, 2015). For instance, in the UK, it has been able to

participate in the following social activities;

a. Community

The community activities it has taken an active role include patient-led cancer care, supporting

young people through talent identification, and provide free workshops on health and cosmetics

awareness.

b. Environment

The company is dedicated to helping in reducing carbon emissions. Once in a while, it

participates in tree planting forums and calls for the creation of clean cities. It also calls for the

use of 40% more energy efficient system within its enterprises.

How Globalization might affect Walgreens Boots Alliance

Globalization has the primary goal of providing organizations with a superior competitive

position through the creation of an environment where businesses can operate at lower costs.

Through cross-border trades in goods and services as well as technology, investments, and
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people, companies are able to gain higher numbers of customers, products, and services.

Globalization opens up markets and provides easy ways of accessing new resources or materials.

Positive effects

Increased growth due to increased customer base and sales; Globalization has opened up

the boundaries of the countries of the world. Free trade means that a company can move into any

market that it feels there is potential. Because Walgreens Boots Alliance is placed in an industry

with tight competition, its only way of growth is by increasing its customer base. To do this, the

company needs to identify potential cities and towns in the world. It can choose to establish its

dominance in Africa since its brand is not much known in the region. Globalization, therefore,

offers the benefit of free trade to any part of the world.

High productivity; High productivity is influenced by advancements in technology. In a

global economy, technology is one factor that offers competitive advantages to businesses.

Technology can be exchanged between different countries or different company with the aim of

having a mutual benefit. Walgreens Boots Alliance has been able to form a partnership with

Microsoft, and this has impacted positively on the business. With efficient information

technology, Walgreens Boots Alliance is now to carry out its activities effectively and smoothly.

It is able to carry out analysis and research on customer data so as to come up with the best

services and products according to the need of customers.

Globalization has enabled Walgreens Boots Alliance to establish a global dominance;

The Company now operates in more than 25 countries with a total of 415,000 employees all over

the world. Globalization has turned the world into a global village without a boundary. Business

ventures with enough capital can venture into any market in any part of the world. This is one
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advantage that the company has been able to take. The company should, therefore, continue to

identify new markets where they can establish their dominance. Its excellent reputation and a

strong brand are factors essential enough to make it acquire customers at a faster rate (Weinstein

et al., 2016).

Low production costs; Low production costs as a result of increased availability of raw

materials and labor. Walgreens Boots Alliance has been able to increase its profits due to

available raw materials. With an effective supply chain in this globalized economy, a business

can identify an array of suppliers making suppliers not to have a higher bargaining voice.

Operating in countries like China is beneficial because of the readily available labor.

Negative Impacts

The only negative impact of globalization on Walgreens Boots Alliance has reduced

prices of goods and services due to the increased number of competitors. Globalization allows

for a free market. This means that each day, there are new entrants. Walgreens Boots Alliance

can only survive this competition by product differentiation. By making their product unique and

of high quality, Walgreen will be able to obtain customer loyalty despite other conditions.

Conclusion

The rapid tranfromation witnessed in the 21st Century on the economic, social, educational and

political landscape has been propelled by globalization. Each day, the world gets more connected

and so is the increase in the number of business enterprises across the globe. Due to

globalization, companies have continued to change their competitive strategies. The strategies
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used by Walgreens Boots Alliance are perhaps some of the best strategies that businesses can

adopt in order to survive in this competitive era of the global economy. Product differentiation,

innovation, and quality customer care are the keys to the success of any business. Businesses

must also embrace the use of modern technology and put their corporate social responsibility a

key factor so as to have the right brand image in the community.

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