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Industry Analysis: Walgreens

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by Lauren D'Ascanio on 17 October 2012

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Transcript of Industry Analysis: Walgreens

Drug Stores & Pharmacies Industry Analysis Walgreens Drugstore
Industry Concentration Major Trends Opportunities 3 Major Players make up 69% of industry revenue
2 Major Players make up 57.2% of industry revenue Walgreens: 30.9%
CVS Caremark: 26.3%
Rite Aid Corporation: 11.8% Threat of Rivalry: High

Threat of New Entrants: Low- Moderate

Threat of Buyers: High

Threat of Suppliers: High

Threat of Substitute Products: High



Threats Aging "baby boomers"

R&D of Pharmaceutical Companies

Healthcare Reform

Internet

Specialty Services Legislation
Labor Costs
Healthcare Reform
External Environment Economic Environment
&
Demographics Technology Political Environment Consumer Spending in Recession

Inelastic demand for prescription medications, high elasticity in regard to substitute generic medications

Greater elasticity for other stocked consumer goods

Aging population- baby boomer generation reaching retirement Medicare Reform

Medication Adherence
Revenue growth expected to remain at 0.7% due to slowly improving economy

Retail Specialty Pharmaceutical Networks on the Rise:
7 of the top 10 revenue earning drugs are projected to be specialty drugs by
2016, compared to the 3 in 2010.

The aging baby boomer population leads to increased demand for health services for those age 65+

Growing presence of Pharmacy Benefit Managers Patent Expiration and Generic Drugs
2009-2013: Pharmaceutical Industry to lose $137 billion in patents Revision to the cost calculation method may reduce reimbursement rates and resulting profit margin on some medication Internet Use Online Prescriptions Porters 5 Forces Conclusion: Unattractive
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