Walgreen vs CVS: Growth Strategies of the US' Top Drugstore Chains



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Code : COM0093

Year :
2005

Industry : Retailing

Region : USA

Teaching Note:Not Available

Structured Assignment :Not Available

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Abstract: The US drugstore retail market is highly competitive, consisting of a number of big chain stores like Walgreen, CVS (Customer Value Store), Rite Aid, Wal-Mart, Target, etc. Together, Walgreen and CVS occupy about one-fifth of the total US pharmacy retail market. Ever since its inception in 1901, Walgreen had believed in growing organically and had opened more than 4,850 stores in the US. While Walgreen was building its new stores, CVS was increasing its store count by acquiring existing retail chains in the country. After opening its first store in 1963, CVS acquired other pharmaceutical chains like Peoples Drug, Big B, Revco, Arbor Drugs and Eckerd stores and by July 2005 it had grown to more than 5,400 stores. Walgreen's organic strategy of growth helped the company to make planned investments in new locations and save future expenditure on renovations. Whereas CVS' strategy of growth through acquisitions allowed the drugstore chain to improve its geographical reach and withstand competition from other retail giants. However, while expanding inorganically, CVS had to incur expenses to renew and relocate some of the existing stores to improve its sales figures.

Pedagogical Objectives:

  • To discuss the two different growth strategies, organic and inorganic, being followed by Walgreen and CVS
  • To analyse which one of the two growth strategies is more appropriate.

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    Keywords : Walgreen; CVS (Customer Value Store); Drug store chains; Competition; Growth strategies; Growth Strategies Case Study; Market share; Pharmacy stores; Acquisitions; Marketing

    Contents :
    Different Routes Towards Growth
    A Tough Race


    Case Introduction >>


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