Gm 591 final course project Essay

Walgreens is one of the fortune d companies and among the fastest gro clearg retailers in the country. Walgreens as of April 30 operated 8307 location in on the whole 50 solid grounds including the District of Columbia, Puerto Rico and Guam. This includes 7855 drug retentivitys, 146 more than a grade ago, including 21 stores acquired over the last 12 months. The caller in addition operates excerption and respiratory services facilities, specialty pharmacy and mail service facilities. They also have a take c are wellness system foot soldier which manages more than 700 in-store convenient care clinics and worksite health and wellness privyters.This research is establish on the problem facing the company on how executive termination making in the company has ca utilise a negative impact and first-class honours degree productivity level among employees due to their decisiveness to discontinue having draw tabu ledger (ESI) as their third party provider. The result of this re search is to determine how incorporated decision has impacted employee team spirit and thus resulting in high employee overthrow. Which as a result led to several questions arising as to how to convey with the prove Script debacle, which are as the follows? 1) How do we make up for the ESI loss?2) How do we empower the employee by boosting their esprit de corps after taking forceful measures (Job elimination, reduction in hours, Extreme pay cut) to make up for the raise up profit? 3) How has corporate decision impacted the morale of employee productivity and personalised growth? Walgreens has al slipway provided good guest service, but changes in the agonistic environment and in consumer behavior and expectations have ca single-valued functiond them to intensify their focus. Walgreens mission is to win the hearts and pockets of their customers by providing that wow stick and delight score from customer appreciations.As a manager with the company, my role is to support t he strategy by focusing on the strategy to deliver an outstanding customer experience with enhanced employee engagement by promote actions that will take place the experience to extraordinary levels for all customers. Also, to help all team members borrow an extraordinary customer care by listening and acting out customers expectations for the care and commitment they want to experience.PROBLEM avowalWith the tremendous growth and opportunity to expand, Walgreens was hit by hard time due to a proposed rejection by Express script (ESI) a study pharmacy third party provider. This decision led to different changes indoors the organization called Rewiring growth and field transformation. Walgreens took a stand and made a tough decision not to attribute the 2012 contract with ESI. The result of this decision was a bewildered in the pharmacy sales with projected hail totalling al around six billions dollars worth of byplay mixed-up to their competitors. (Walgreens Company e quivalent on ESI Debacle)Even though, the company thought they made the right decisions on behalf of their customers, patients and employees by not agreeing to the proposed terms and agreement by the ESI, they made a huge mistake beca go for the bottom line of the whole debacle is that we lost totally. The board of directors and top executives wont admit they are wrong, they didnt think they will lose and after ESI told them what they want and Walgreens was still insistency that demands be met. They thought ESI was bluffing and after December 31st 2011, they dropped Walgreens from their vane services. belles-lettres REVIEWA Literature review was conducted to determine how alienating Walgreens from the ESI meshing has caused a major constraint on the payer, patients, and employees. Each party used different strategy to keep their patients in their network. Walgreens began putting signage out encouraging consumers to talk to their insurance plans well-nigh excluding them from the n etwork and for Medicare members to choose plans that arent swan by Express Scripts. Walgreens also gave out a pamphlet round what happens when you remove them from the network.It goes as follows Key Statement Excluding Walgreens from a pharmacy network will result in little to no savings for most sponsors and patients, and in some cases will raise constitutes, while causing probative patient disruption and risking gaps in care, and increasing administrative costs on plan sponsors. As part of this document, they are encouraging payers to consider directly contract with them and/or creating a custom network (if their PBM contracts allow for that). They state that their costs are comparable to other retailers or within 2% of their costs. They say that 90-day retail generates a 6-8% savings compared to 30-day retail based on the pricing that they offered to Express Scripts.However, since Walgreens decided not to comply by agreeing to sign the contract, ESI had no choice but to drop them from their network. This decision was a furthermost cry from what they anticipated because they thought a resolution will blow over forward the end of the year. While both parties are dug in, it is a lose-lose situation for this debacle to stay unresolved, but after Jan 31st 2012, it became a win-lose situation for both ESI and Walgreens respectively.That being said, a lot of changes happened at Walgreens in order to make up for the loss which is as follows This creates greater use of the Walgreens discount card and/or cash business at Walgreens oddly for lower cost generics. Alienating Walgreens creates a disruptive force in the FTC review of the proposed Medco acquisition. Another PBM jumps in to do a creative deal with Walgreens which limits their long-term ability to work with Express Scripts. Express Scripts ends up in a shotgun relationship with CVS.The terms of PBM contracts get changed going forward based on fresh terms regarding retailers. This validates the inte grated model of CVS and Caremark This creates a large number of limited networks. This creates a wave of direct contracting between payers and pharmacies. Walgreens becomes a much more vocal voice in the retail world through NCPA and other organizations. Between this and the merger of Express Scripts acquisition of Medco, the landscape in the PBM market was drastically different by early 2012. (http//georgevanantwerp.com/2011/09/08/walgreens-and-express-scripts-the-plot-thickens)ANALYSISWalgreens has lost millions of dollars in prescription drug sales this year, and aphorism its second-quarter profit decline almost 8 percent because of its departure in January from Express Scripts the nations largest network for filling drug prescriptions. (El Paso times, whitethorn 19, 2012)Walgreens executives give no signs they will try to negotiate a new deal with Express Scripts and said Walgreens will weather the storm with cost cutting and going after new business. (El Paso times, May 19, 2 012)As a result of this decline, a lot of changes have taken immediate solution to affect the store level employees, like, extreme pay cuts, reduction in hours, hiring freeze, position eliminations etc. In return, this has left a lot of employee actually unhappy and disgruntled about their jobs, which brings out a low morale and unsatisfactory job results. Most employees are very upset about the decisions the top management had made because in the end, it only affects the employee because obviously, thechairman of the company wasnt affected based on the bonus he trustworthy in the amount of 10.6 million dollars in cash last year.This is a 36% growing in his salary, a lot of employees were very upset when they read the report on Google and demanded an explanation why our President and chief executive officer is getting a raise when the company is losing almost 6 billion dollars in sales. Here is an excerpt from the associated press An Associated Press analysis of a regulatory fi ling shows Gregory Wasson received compensation worth $10.9 million in fiscal 2011, up from $8 million the previous year. Walgreen Co. is the largest drugstore image in the U.S., with more than 7,700 stores.Wasson, 53, has been Walgreens president and CEO since February 2009. All portions of Wassons compensation grew. His salary rose 12 percent to $1.2 million. His stock awards climbed 67 percent to $5.6 million, the value of his options increased 30 percent to $2.2 million and his non-equity writ of execution bonus went from $1.7 million to $2.7 million. His perks in 2011 were worth $339,977, up from $194,577. (http//townhall.com/news/business/2011/11/18)The negative consequences brought on by the decision made by Walgreens executives include lower employee morale, disgruntled employee, high turnover rate, excessive tardiness and intractable behavior. Ultimately, management will think twice in the future before making a huge decision like this, so employee performances and moral e will not suffer. Acknowledging managements responsibility for morale and turnover opens the door to creative solutions. (Hacker, 2000, preface p.xvii)SUGGESTIVE SOLUTIONS TO THE PROBLEMWalgreens has decided to use different strategies to increase tax income to make up for the ESI loss by implementing the following strategies a) Filling in more prescription volume by attracting at least 18 new patients per store, they could replace the business lost in their dispute with ESI. b) Suggestive selling this is a tool can use in the store every team member to increase profit c) Promoting private stain by upsell more private brands, the merchandise team is providing updated product guides and fresh package graphics.d) Incorporating the well experience into their fooling living to be known for providing a new selection of health services that create value for both consumers and healthcare systems. e) Prescription savings club They have signed up more than 700,000 new patients for the prescription savings club (PSC) since January. The PSC card offers savings on more than 8,000 brand name and all generic medications. f) Reinvent their cost structure through continuous improvement and innovation g) Expand across new impart and marketsh) Delivering outstanding customer experience through enhanced employee engagement i) Transforming the tralatitious drugstore to a retail health and daily living store j) Transforming community pharmacy to play a greater role in healthcare through integration and expanded services. These are some of the ways Walgreens has planned to help fill the potential $6 billion revenue gap created when their negotiations with express scripts was unsuccessful. (Walgreens World clipping January, 2012)REFLECTIONDespite all this key strategies, Walgreens is still in the hole with their stock price cumulus to $31.02 from $44, the hiring freeze, field transformation, rewiring growth and job elimination. I will recommend, at this foretell that W algreens needs to put their ego aside and renegotiate their contracts with ESI because the worst is thus far to happen. Since Express Script and Medco merged in March more patients are leaving the network, what happens then when CVS Caremark decided to pull the plug on us?Work cited1) (Hacker, 2000, preface p.xvii)2) (http//townhall.com/news/business/2011/11/18)3) (http//georgevanantwerp.com/2011/09/08/walgreens-and-express-scripts-the-plot-thickens) 4) Walgreens World clip5) Walgreens Company Correspondent on ESI Debacle6) El Paso Times Magazine