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Industry Analysis: Walgreens

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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


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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