Strategic Management Project: Module 1
1. Give a short account of the history of the company, and trace the evolution of its strategy. Try to determine whether the strategic evolution of your company is the product of intended strategies, emergent strategies, or some combination of the two.
Walgreens has a long history spanning over a century. Charles Walgreen founded his first store in 1901. His first store was in Barrett's Hotel in Chicago's south side. The early stores experimented with many entrepreneurial ideas. The Walgreens.com web site, under the Our Past section, states, "Walgreens continued to come up with new, important ways to service customers and - just as importantly - employ thousands of people during this period of extreme economic distress"(5). Walgreens had flourished during very hard economic times, and had 500 stores by the 1930s. Early Walgreens stores used soda fountains to increase revenue. Walgreens became a publicly traded company in 1927. They started radio advertising in 1931. Charles Walgreen died in 1939 at the age of 66. Walgreens is growing faster now than ever before. The Walgreens.com web site, under the Our Past section, explains, "Today, with 500 new stores opening each year and 7,000 planned by 2010, Walgreens continues to innovate"(7).
Walgreens has always maintained a simple strategy. Although the strategy changed over the years to mention newer innovations, the basic principles of the strategy have remained similar. The Walgreens.com web site explains, "It's not particularly fancy, but it's a rock solid approach: enter new markets, 'dense up' existing markets, relocate, remodel, invest heavily in high tech store and distribution systems which drive service up and costs down, and offer an on-line drugstore web site totally integrated with our retail stores"(Company Overview 2). Walgreens corner stores focus on convenience. The textbook, written by Hill and Jones, defines strategy as,"...an action that managers take to attain one or more of the organization's goals"(3). The first Walgreens, classified as a mom and pop store, focused on quality service. How did Charles Walgreen transform his management ability over one store into a capability to manage many? Each new store presented unique opportunities. The basic strategy of this manager was to gain profitability, one of the organization's goals, by
providing a competitive cost structure and friendly service. This strategy has worked for Walgreens, and it reached sales of $28.7 billion in 2002. Walgreen's strategy is a foundation for the industry. Many drug retailers try to copy its success.
What is strategic evolution? Strategy is the way managers attain one or more corporate goals. Evolution is a directional change. Strategic Evolution is the way managers attain one or more corporate goals through a directional change. Why did Walgreens first succeed, while many other drug competitors existed back in 1901? The Walgreens.com web site, under the Our Past section, explains, "New bright lights were installed...each customer was personally greeted...aisles were widened...and the selection of merchandise was improved..."(2). Apparently, these were not standard practices of the time. Walgreens focused on superior customer service, his directional change, and expanded his market share.
Were Walgreens strategies intended, emergent, or both? Walgreens strategic evolution consists of various intended and emergent strategies. Any successful business must use both intended and emergent strategies. Did Walgreens, in the early days, intend to be a soda fountain? The answer is no. While intended strategies are planned, emergent strategies occur, in Mintzberg's view, due to 'unforeseen circumstances'. A new change in the product environment allowed Walgreens to capitalize on unrealized revenue. Coulson released a product with two cookies. Coulson's product took off, and Walgreens made more money due to this newer...
Cited: Module 3
Company Overview". Walgreens Co. 2003. (12 September 2003).
"Financial and Other Numbers". Walgreens Co. 31 August 2003. (15 September 2003).
Hill, Charles W. L., and Gareth R. Jones. Strategic Management Theory: An Integrated Approach. 6th ed. Boston: Houghton Mifflin: 2004
United States. Securities and Exchange Commission. Annual Report Pursuant to Section 13 or 15(d) of the Securities and Exchange Act o 1934, Form 10-K: Commission file number 1-604, Walgreen Co. Washington; SEC 31, August 2002.
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