'Gm 591 final course project Essay\r'

'Walgreens is one of the fortune calciferol companies and among the fastest growing sellers in the country. Walgreens as of April 30 operated 8307 location in e very last(predicate) 50 states including the District of Columbia, Puerto Rico and Guam. This let ins 7855 medicinestores, 146 more(prenominal) than than a year ago, including 21 stores acquired all over the last 12 months. The club similarly operates infusion and respiratory services facilities, pickicularity pharmacy and mail service facilities. They likewise have a take headache health system subsidiary which manages more than 700 in-store convenient aid clinics and worksite health and health canters.\r\nThis inquiry is establish on the difficulty facing the political party on how administrator determi kingdom making in the association has ca apply a negative impact and miserable productivity aim among employees due to their close to discontinue having express mail Script (ESI) as their third shi ps company provider. The result of this research is to determine how corporate decision has squeeze employee team spirit and thus resulting in soaring employee overturn. Which as a result guide to several questions arising as to how to deal with the line of credit Script flogging, which are as the follows? 1) How do we make up for the ESI pass?\r\n2) How do we empower the employee by boosting their morale later on taking drastic measures (Job elimination, reduction in hours, Extreme pay cut) to make up for the mazed remuneration? 3) How has corporate decision impacted the morale of employee productivity and individualised festering? Walgreens has always provided good wonter service, but changes in the competitive surroundings and in consumer behavior and expectations have caused them to step forward their focus. Walgreens’ mission is to win the hearts and pockets of their customers by providing that â€Å"wow” stupefy and delight pass water from cus tomer appreciations.\r\nAs a handler with the company, my role is to support the strategy by focusing on the strategy to wear an unwrapstanding customer experience finished enhanced employee engagement by promote actions that leave behind advance the experience to frightful levels for all customers. Also, to help all police squad members adopt an extraordinary customer care by listening and acting out customer’s expectations for the care and dedication they want to experience.\r\n paradox STATEMENT\r\nWith the horrifying growth and opportunity to expand, Walgreens was hit by hard times due to a proposed rejection by point script (ESI) a major pharmacy third party provider. This decision led to different changes at bottom the organization called â€Å"Rewiring growth” and field transformation. Walgreens took a stand and make a kindling decision not to signboard the 2012 iron out with ESI. The result of this decision was a lost in the pharmacy sales with project amount totalling almost six billions dollars’ expense of short letter lost to their competitors. (Walgreens Company synonymic on ESI Debacle)\r\nEven though, the company opinion 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 colossal slew because the bottom line of the whole debacle is that we lost totally. The board of directors and top executives win’t admit they are wrong, they didn’t think they give lose and after(prenominal) ESI told them what they want and Walgreens was still insisting that demands be met. They thought ESI was bluffing and after December thirty-first 2011, they useped Walgreens from their earnings services. LITERATURE REVIEW\r\nA Literature review was conducted to determine how disaffect Walgreens from the ESI network has caused a major restraint 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 take to task to their insurance plans about excluding them from the network and for Medicare members to use up plans that aren’t run by Express Scripts. Walgreens also gave out a nerve tract about what happens when you remove them from the network.\r\nIt goes as follows: underlying Statement: Excluding Walgreens from a pharmacy network provide result in smaller to no nest egg for most sponsors and patients, and in almost cases will raise make up, darn causing significant patient rupture and risking gaps in care, and increasing administrative cost on plan sponsors. As part of this document, they are encouraging payers to consider straightaway contracting 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 r etail generates a 6-8% savings compared to 30-day retail based on the pricing that they offered to Express Scripts.\r\nHowever, 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 far shout from what they anticipated because they thought a liquidation will occur before the exterminate of the year. While both parties are turn over in, it is a lose-lose situation for this debacle to quench unresolved, but after Jan 31st 2012, it became a win-lose situation for both ESI and Walgreens respectively.\r\nThat being said, a lot of changes happened at Walgreens in pose to make up for the loss which is as follows: This fixs greater use of the Walgreens discount placard and/or cash business at Walgreens especially for lower cost generics. change 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-run ability to work with Express Scripts. Express Scripts ends up in a scattergun relationship with CVS.\r\nThe terms of PBM contracts get changed discharge forward based on modernistic terms regarding retailers. This validates the integrated model of CVS and Caremark This creates a large number of limited networks. This creates a wave of direct contracting mingled with payers and pharmacies. Walgreens becomes a much more straight-from-the-shoulder voice in the retail institution through NCPA and other organizations. Between this and the conjugation 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)\r\nANALYSIS\r\nWalgreens has lost zillions of dollars in ethical drug sales this year, and saw its second-quarter profit decline almost 8 portion because of its departure in January from Express Scripts †the nation’s largest network for gourmandizeing drug prescriptions. (El Paso times, whitethorn 19, 2012)\r\nâ€Å"Walgreens executives give no signs they will try to n self-importancetiate a clean deal with Express Scripts and said Walgreens will weather the storm with cost clipping and going after freshly business.” (El Paso times, May 19, 2012)\r\nAs a result of this decline, a lot of changes have taken agile effect to affect the store level employees, like, extreme pay cuts, reduction in hours, hiring freeze, position eliminations etc. In return, this has go away a lot of employee very uncheerful and disgruntled about their airs, which brings out a low morale and unsatisfactory job results. Most employees are very tump over about the decisions the top management had made because in the end, it only affects the employee because obviously, the\r\nchairman of the company wasn’t affected based on the bonus he received in the amount of 10.6 meg dol lars in cash last year.\r\nThis is a 36% extend 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 operating officer is getting a raise when the company is losing almost 6 billion dollars in sales. Here is an excerpt from the associated press: â€Å"An Associated straighten out analysis of a regulatory register shows Gregory Wasson received hire worth $10.9 million in fiscal 2011, up from $8 million the previous year. Walgreen Co. is the largest drugstore set up in the U.S., with more than 7,700 stores.\r\nWasson, 53, has been Walgreen’s hot seat and CEO since February 2009. All portions of Wasson’s compensation grew. His salary rose 12 percent to $1.2 million. His stock awards climbed 67 percent to $5.6 million, the rate of his options add-ond 30 percent to $2.2 million and his non-equity performance bonus went from $1.7 million to $2.7 million. His perks in 2011 were w orth $339,977, up from $194,577.” (http://townhall.com/ upstarts/business/2011/11/18)\r\nThe negative consequences brought on by the decision made by Walgreens executives include lower employee morale, disgruntled employee, high turnover rate, excessive tardiness and insubordinate behavior. Ultimately, management will think twice in the future(a) before making a huge decision like this, so employee performances and morale will not suffer. â€Å"Acknowledging management’s responsibility for morale and turnover opens the admittance to creative solutions”. (Hacker, 2000, warm-up p.xvii)\r\nSUGGESTIVE SOLUTIONS TO THE PROBLEM\r\nWalgreens has decided to use different strategies to increase revenue to make up for the ESI loss by implementing the following strategies: a) Filling in more prescription volume †by attracting at least 18 overbold 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 sword †by upsell more private brands, the merchandising team is providing updated product guides and fresh incase graphics.\r\nd) Incorporating the well experience into their daily alimentation †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 sign 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 hit and all generic medications. f) Reinvent their cost structure through continuous service and innovation g) Expand across new channels and markets\r\nh) Delivering outstanding customer experience through enhanced employee engagement i) Transforming the tralatitious drugstore to a â€Å"retail health and daily living” store j) Transforming confederacy pharmacy to play a g reater 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 instauration powder magazine January, 2012)\r\nREFLECTION\r\nDespite all this hear strategies, Walgreens is still in the hole with their stock price down to $31.02 from $44, the hiring freeze, field transformation, rewiring growth and job elimination. I will recommend, at this point that Walgreens needs to put their ego aside and renegotiate their contracts with ESI because the worst is provided to happen. Since Express Script and Medco merged in March more patients are expiration the network, what happens then when CVS Caremark decided to pull the taxicab on us?\r\nWork cited\r\n1) (Hacker, 2000, preface p.xvii)\r\n2) (http://townhall.com/news/business/2011/11/18)\r\n3) (http://georgevanantwerp.com/2011/09/08/walgreens-and-express -scripts-the-plot-thickens) 4) Walgreens World magazine publisher\r\n5) Walgreens Company Correspondent on ESI Debacle\r\n6) El Paso Times Magazine\r\n'