Walgreens’ Mode(S) International Market Entry
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Walgreens Boots’ alliance entering the foreign market via alliance and later on the merger is an excellent example of a case study on international market entry. Walgreens is a massive drug chain retail store in the United States of America which has more than eight thousand stores distributed within fifty states (Greenwood & Ingram, 2018). The company associates itself with being the leading drug retailing store in America, serving more than four million customers daily. In this paper, I will examine Walgreens’ entry strategy, the reason for the strategy and offer recommendations on the necessary changes that the company should consider going forward.
Walgreens marketing strategy was designed to strengthen their already established business by expanding the company’s market position and acquire a high bargaining power with companies producing drugs (Greenwood & Ingram, 2018). Partnership with Alliance Boots had several advantages; First, the strategy gave the company a quick entry into foreign markets as well as complementary assets and expertise. Complementary assets offer protection to the company against other competitors. It also places the company in a better position to harvest innovation advantage, which is vital in the current changing technology. The strategy gave Walgreen access to the new markets beyond the U.S and offered a new revenue stream in wholesale selling of drugs. Alliance boots was a well-established European distributor of wholesale drugs sales, a condition which will allow Walgreen to quickly enter new foreign markets at a degree more swiftly than retail.
The Walgreen strategy to partner with Boots alliance makes sense for the company because it allows the two companies to expand their business in the existing market and also create many more opportunities for new markets. These new and unexacting markets will offer the company a strong foundation for a stable future (Chari, 2020). By partnering with Boots’ alliance is a better approach for the company in solving its problem. We have all heard of the famous phrase that two heads are better than one, creating an internal partnership between companies and harnessing abilities and strengths of others is one of the best strategic approaches for the company to scale up its innovation and solve complex challenges. In today’s completive market, a “do it alone” approach is not the best way to grow as a company (Chari, 2020). The already developed companies need also need to discover new ways to drive collaborative innovation that focus on daily changing needs of customers.
To improve on its entry strategy, Walgreens should consider incorporating a franchising strategy into its entry strategy. This is a good strategy in cases where a company want to gain customers in foreign markets and maintain them. It is a vital method for distributing products and services that perfectly meet the customer’s needs. Walgreens also needs to change its entry strategy from partnership to complete the buying of a company. In most foreign companies buying an already existing local company may be the most appropriate entry strategy (Watson et al. 2018). It is because these companies have a substantial share in the market, or due to the set government regulations, this may be the easy option for the Walgreens to enter new markets.
In conclusion, partnership with Alliance boots was an excellent strategy for Walgreens to enter new European markets. Incorporating company buying into the company entry strategy will immediately provide the company with a status of being a local company and will grand it benefit of local market knowledge and be treated by local governments as a local firm.
References
Greenwood, A., & Ingram, H. (2018). Sources and Resources ‘The People’s Chemists’: The Walgreens Boots Alliance Archive. Social History of Medicine, 31(4), 857-869.
Chari, A. (2020). The International Market for Corporate Control (No. w26843). National Bureau of Economic Research.
Watson IV, G. F., Weaven, S., Perkins, H., Sardana, D., & Palmatier, R. W. (2018). International market entry strategies: Relational, digital, and hybrid approaches. Journal of International Marketing, 26(1), 30-60.