Risk Management in Walgreens: Ensuring Profitability

Walgreens over time has evolved into become America’s premier pharmacy. With a total of 8,309 stores nationwide Walgreens has lived up to its adopted slogan “At the Corner of Happy & Healthy.” In this summary I will focus on the risk of potential losses that Walgreens faces. In addition of identifying potential losses I will also introduce the frequency and severity of the potential losses. Through a trough evaluation and risk management process Walgreens will be able to meet customers demands while preventing/avoiding potential losses. Thus, resulting in higher profits for the company and its shareholders. In order to meet expectations and live up to its slogan, Walgreens must fully utilize its risk management program.

Through investigation

Many locations operate twenty-four hours seven days a week while some of its pharmacies also operate twenty-four hours seven days a week. Increasing pressures from industry competitors such as Rite-Aid and CVS has forced Walgreens to operate on a tight basis. In addition, tough regulations from the Food and Drug Administration (FDA) force the company to stay on top of its drug procedures. With over 8,000 stores all corporate owned, (retail exposure) Walgreens faces the challenge of ensuring each store is running smoothly. Because the stores are corporate owned, most if not all liability falls to them. Apart from pharmaceutical operations, Walgreens must also acknowledge the merchandise and services it offers. These concerns are key to recognize in order for Walgreens to maintain its reputation and

Walgreens faces intense competition from local, regional, and national drug stores along with independent drugstores. Recently WalMart has also made a push in its pharmacy, further increasing competition. In order to remain competitive Walgreens must evaluate its pricing structure to remain competitive. Failure to change prices will drive away customers and decrease revenue. This method is risk financing is key for their survival in the industry. Walgreens operates on seasonal nature, especially during the holiday and flu seasons. While the store bulks up on seasonal inventory adverse events such as weather, the economy, and gas prices could limit traffic into the store. In order to combat that Walgreens can implement a risk control system that routinely tracks foot traffic into the store to determine in the flow of customers and tracking their spending patterns. This method falls into the third potential loss, failure to meet customer needs, which can affect sales. For Walgreens to be successful its customers must be offered the best shopping experience. Which involves an assortment of merchandise that is attractive. While it is increasingly difficult to track spending patterns, Walgreens must use the risk control method of tracking patterns. Through industry research, Walgreens can determine purchasing habits and