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Industry Analysis: Walgreens
Transcript of Industry Analysis: Walgreens
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
Specialty Services Legislation
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
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