External and Internal Environment Essay

Walgreens in one of the largest drug repositing chains in the soak up got together States. Walgreens has always maintained a simple strategy. Although the strategy changed all over the geezerhood to mention newer innovations, the basic principles of the strategy have remained similar. It has be pay back more than ripe your ordinary pharmaceutics it invest intemperately in high tech store and distribution systems which drive service up and costs discomfit, and tenderise an on-line drugstore web site totally integrated with different sell stores. Walgreens also have three Pharmacy C be ejaculate Centers one in Alabama, Florida, and in Tuscan.Choose the ii (2) segments of the planetary purlieu that would rank highest in their influence on the connection you chose. assess how these segments involve the corporation you chose and the industriousness in which it operates.I believe that the both segments of the general environment that would rank highest in influence for Walgreens ar the two segments, demographic and technological. If I were to be honest, I believe that all of these segments are of the essence(predicate) to the success of a drugstore, but because the question asked for which ones I considered being the highest I chose these two. Let me go into details to explain my reasoning for choosing these two.The reason wherefore I choose the demographic segment is because demographics play an important federal agency in closely every(prenominal) corporation. Marketers can use the vari opens that make up demographics to create a demo graphic profile, which succors provide them enough information to create a mental picture of who the typical members of society are. in one case these profiles have been constructed, they can be used to develop a trade plan and strategy. The five types of demographics that corporations focus on for their marketing are age, gender, income level, race, and ethnicity.As humans, our bodies are prone to get si ck every at one time and wherefore, and when it does we intimately likely have to rely on taking medicine to get over the illness. It does not matter if it is over the counter or ethical drug medicine medicine, we comely need something to rid us of the illness. That is when we most likely acquire to the drugstores to purchase our medication, much(prenominal) as Walgreens. However, piece of music we are on that point to just go get our medicine, the store has much more merchandise to sally than just that. They have stuff that touch on almost every type of demographics, from having merchandise for different ages, having products for each gender, cheaper swords of prescription medicine for their set about income customers, and much more. Considering the five (5) forces of competition, choose the two (2) that you estimate are the most prodigious for the corporation you chose. Evaluate how well the company has addressed these two (2) forces in the recent past. Of the five fo rces of competition, the intensity of existing rivals within the industry.The retail drug industry contains many companies, but the most notable are Wal-Mart, CVS, and Rite Aid. These are just a few of Walgreenss competitors at that place are other stores like Kmart, Target, Publix and different market place store pharmacy chains. Pharmaceuticals are a high demand industry, with fairly high margins. The margins are decreasing, and competition constantly adapts to changing approaches. Many competitors now choose to like customer interaction on the web. Many people have started to do mail orders because it is cheaper for them. Also, insurance companies find it cheaper for the consumer to do mail orders then spillage into the actual store. The only thing is that some of the mail orders do not make it in time, which causes the consumer to still have to deal with an actual pharmacy. At Walgreens call center they have a mail order segment that assist the consumer with mail orders. Wa lgreens have these call center to be able to assist more consumers then their competitors.The second of the five forces that is the most significant for Walgreens would be the bargaining power of suppliers. The textbook states, The bargaining power of suppliers refers to the major power of suppliers to raise input prices, or raise the costs of the industry in other ways-for example, by providing poor quality inputs or poor service.(Hitt, Ireland, and Hoskisson p.54)The generic wine market has a lot more bargaining power. If a generic manufacturer decides not to sell to a particular retailer, then the stores could s crushedly pick another generic supplier. Generic drugs have less exclusivity than prescriptions, so suppliers must give-in to the chains demands. There are so many medications that you erstwhile had to have aprescription for that are over the counter drugs now will hurt the prices on the generic drugs. Walgreens and other pharmacies have come up with ways that custome r can save money on prescriptions by offering prescriptions savings cards for people that do not have insurance. Wal-Mart, CVS, and Target offer received medications at discounted prices. With the selfsame(prenominal) two (2) forces in mind, predict what the company might do to improve its great power to address these forces in the near future.In the future Walgreen needs to be able to sell their medication at a cheaper price then all of its competitors. The only thing about this is that some customers have knowing that some medication that are manufacturer by different companies do not work as well as others. Regardless if it is brand or generic customers will ask for medication by certain manufacturers. succession trying to lower prices for consumers the pharmaceutical have to make undisputable that the medication is working for the consumer. Not having the most requested manufacturers could cause a business to lose business therefore you have to make authoritative the stoc k is complete with medication that people need on demand. Assess the external threats affecting this corporation and the opportunities available to the corporation. Give your opinions on how the corporation should deal with the most serious threat and the superlative opportunity. Justify your answer.In the highly competitive prescription drug market, Walgreens biggest threats come from its intertype competitors. With them no longer competing just against other drug stores and pharmacies, retailers such as grocery stores and discounters are starting to increasingly proving to be quite the formidable competitors. Discounters especially, are proving an to be quite a threat when it comes to prices. The emphasis on low cost and economies of scale possible through large companies such as Wal-Mart, mean that Walgreens cannot make do against discounters and their prices.Walgreens is also at a disadvantage compared to their retail competitors, such as Target and Wal-Mart, because retailers carry a much broader miscellany with significantly more SKUs and that they also have more consumers who visit the store on a regular basis. It is estimated that 138million Americans shop at Wal-mart hebdomadal and that they find it more tempting to go and fill their prescriptions there as well, so that they can meet all their needs in one place (Lasnti, 2005). Although Walgreens itself does consist of more than just medicine, their assortment of products comes nowhere as close as Wal-Mart and other customary retailers, so they just cannot compete against them in that department.Furthermore, Walgreens reliance on prescription drugs, a highly adjust and controlled entity, makes it vulnerable to changes in laws and regulation. This is exemplified by recent changes to Medicare prescription drug plans which, while on one hand made the price of prescription drugs the same for consumers no matter where they chose to purchase it, also further regulated dispensing fees thereby decreasin g profit margins for shops, like Walgreens. While Walgreens has not been impacted similarly adversely by these changes, the aging of the Baby Boomer generation and concerns over the future of Medicare mean that further reform will be a topic of continuous debate. Under these circumstances additional modifications and reforms which may potentially 12 reduce the profitability of prescription drugs are not unexpected. Walgreens relies heavily on prescription drug sales, and dependence on a folk whose regulation is mainly beyond its control leaves it vulnerable.As for opportunities, it appears as if Walgreens greatest opportunities to cast up their sales lie in changing composition of American population. With the Baby Boomer generation on the verge of hitting a significant demographic shift, they will surely impact the pharmaceutical industry more than any other. In fact, Walgreens expected a 30% increase in demand from their senior customers prescriptions in years on down (Merrick, 2006). They had a good reason to think so since 30% of prescriptions and 42% of sales revenue from it came from seniors in 2002, and they were expected to expand up to 95 million by the time it was 2010 (SIC 5912, 2006). Increase for the demand of prescription drugs, which is Walgreens largest category and is most known for, potentially means an increase in sales and profit for the company.Further opportunities that Walgreen has is to benefit from lies in external markets. presently in the United States, only domestic businesses in the market have become saturated, and Walgreens will be forced to look internationalistly for expansion. While cultural differences and government regulations will likely prove challenging given over Walgreens nature of its business, international markets provide significant opportunities for expansion in the market. Furthermore, there other main competitors that falls into the same category as them, such as Rite Aid and CVS, have yet to enter the int ernational markets. Beating these competitors to reaching and entering into international markets could ensure that Walgreens stays a step ahead and remain the market leader of the three. This would also help Walgreens stay competitive against the larger chains, such as the ever popular Wal-Mart, with many of them already having a significant presence in the international market.REFERENCEMerrick, A. (2006, June 21). Walgreens found way to profit drug plan. The Wall course Journal. Retrieved February 2, 2014 from LexisNexis Academic database on the World Wide Webhttp0web.lexisnexis.com.oasis.oregonstate.edu/universe/ instrument?_m=402elf7d8438 SIC 5912 Drug Stores and Proprietary Stores. (2006). Referenceforbusiness.com.Retrieved February 2, 2014 from http//www.referenceforbusiness.com/industries/Retail- Trade/Drug-Stores-Proprietary-Store.Hitt, M., Ireland, R. D., & Hoskisson, R. (2013). Strategic Management Concepts and Cases. stonemason Cengage Learning.