* The two health care companies I chose were Walgreens and CVS, both have a long history in the pharmaceutical department and are in direct competition with one another for customers. Walgreens is America’s largest drugstore chain and as of January 31, 2014, it now has 8,678 stores in all 50 states and most districts. Walgreens issued more than 800 million prescriptions annually, which is about 20 percent of the United States market. (Walgreen Vs. CVS) As for online business, it has almost 17 million visitors per month. Walgreens’s strategy has evolved throughout the century it has been in business. As CVS, it is the second largest pharmacy chain in the United States. It has more 7600 stores, and it is ranked the 13 largest company in the world by Fortune 500 in 2013. (Walgreen Vs. CVS) This paper would examine the positioning and differentiation strategies between Walgreens and CVS. * The creation of remedies for illnesses and ailments have been discovered by people since the beginning of existence. The first organized apothecary had been credited to the Babylon. Later followed by the Roman, who discovered a system of pathology and therapy which became the standards for medicine for more than a 1,000 years. While pharmacy was consider as a shadowy and sketchy business of a long time, practiced by witch doctors. As the renaissance era entered in, medicine and treatments became more structured with a scientific approach. “In 1240, German Emperor Frederick II issued a proclamation establishing the practice of pharmacy along three tenets: (1) separation of the pharmaceutical profession from the medical profession; (2) official supervision (regulation) of pharmacy; and (3) “obligation to prepare drugs reliably, according to skilled art, and in a uniform, suitable quality.””( Walgreen Vs. CVS) * * CVS is using a value driven market with its logon “CVS quits for good,” which marks the announcement that it will stop selling tobacco products starting October 1st . This decision would cut off 2 billion in cigarette sales in revenue; the company decided to make this decision because they want to stay consistent with their brand as a health care provider. It was found that 26,000 pharmacists and nurse practitioners link problems such as high cholesterol, high blood pressure, and heart disease are linked to smoking according to CVS CEO Larry L. Merlo to the New York Times. (Walgreen Vs. CVS) The company decided that the selling of cigarettes and health care cannot mix. The move has earned them a lot of accolades, massive PR and social media exposure, though the revenue perspective says otherwise; it is a smart move for the company since it is the first major drugstore chain to go this route. It is a great move to enhance the brand by being the first, and thus a potential leader in the industry. This move can also make them more appeasing to doctors and insurers, and more importantly, the prescriptions for baby boomers has the potential to have far more earning than cigarettes. It also offers well-trained health care professions like pharmacists and health consultants which offers a major competitive advantage. CVS is trying to best ties itself to a person’s life and lifestyle changes, which is a great marketing strategy. It also offers like Walgreens a loyalty program and discounts based on how much individual workouts. In CVS stores, it has also added 650 in-store “Minute Clinics,” since the Affordable Care Act now will transfer millions of formerly uninsured Americans to primary care physicians rather than to emergency rooms over the years. CVS is taking the opportunity to expand for the significant customer grow in primary care business. It has a plan to accommodate the new business by opening 150 new clinics in this year, and hopes to increase the amount to 1,500 new clinics by 2017. (Walgreen Vs. CVS) It is also a major player in the pharmacy benefit management; CVS has a total revenue of 123.1 billion in fiscal, and the PBM business grew in about 20 percent. (Walgreen Vs. CVS) * * Walgreen’s marketing has changed over the years from the 1920s to current time. Walgreens has always used advertisement and firmly believes in its power. In the 1900s, it consistently spend 2-3 percent of sales on newspaper ads, this is twice as much as many other chain store at the time. These ads focused more on merchandise and prices rather than customer service. Walgreens was also the first store to advertise on the radio and sponsor popular shows on the radio. During the 1929-1945, Walgreens did something to similar to a cooperative when it allowed there pharmacies more access Walgreens products, and to its operation and merchandising support in exchange for rent. It provided incremental financial benefits to Walgreens while also extending brand awareness to smaller markets. It also benefited up and coming pharmacists and managers. As breakthroughs in medicine were changing the role and importance of the pharmacy, so more business and profits were being driven; thus, making the company which there emphasis from retail to pharmacy. Moreover after having discussions with the American Medical Association, it took out ads in more than 200 cities announcing that Walgreens were now “partners in health.” It also offered discounts to doctors and dentists on Walgreens merchandise. Thus it resulted in the number of prescriptions filled at Walgreens rose from 7.5 million in 1962 to 30 million by 1975. (Walgreen Vs. CVS) Also during that time offered self-serve pharmaceuticals, which customers spend more time and money for that option and giving Walgreens a higher in profit. During the 1970-1989, Walgreens focused more on the frame of the store, to make it less congested, and so made a major effort to remodel and refurnish the store making the aisles less clogged. It also caused them to correct merchandising problems which came from outdated distribution system. “Every store’s pharmacy records now were interconnected, so that customers could access their prescriptions through any Walgreens store mid 1980s, chain established during the 1980s. In addition, the company launched its Intercom system, which installed computers in every store so that the central systems were connected to each store.” (Walgreen Vs. CVS) Currently, Walgreens has nearly 8,100 retail pharmacies making it the largest chain in America. The company fiscal 2012 sales was more than 72 million. And now, the company has global ambitions in regards to pharmacy which can be seen since it acquired 45 percent stake in the European pharmacy giant Alliance Boots for $6.7 billion. It also plans to expand to the pharmacy market in China. “To that end, the companies last September bought a 12% stake in Nanjing Pharmaceuticals. All told, Walgreens stake in Alliance Boots should deliver synergies of $125 million to $150 million.” (Walgreen Vs. CVS) Although Walgreens is planning to expand their empire through international business, CVS is using the strategy to continue to reduce cost by taking advantage of the waves of insured customers. The marketing for Walgreens has not changed much, but there may be a need for change since in-store activity has slowed down.

Reference
Walgreens. (n.d.). . Retrieved May 27, 2014, from http://www.babson.edu/executive-education/thought-leadership/retailing/Documents/walgreens-strategic-evolution.pdf
Walgreen Vs. CVS. (n.d.). Forbes. Retrieved May 27, 2014, from http://www.forbes.com/2003/09/29/cx_lw_0929mondaymatch.html