Walgreen Company

Walgreen is the largest American drug store chain in terms of revenues with more than 2100 drug stores in operation in 34 states and Puerto Rico. The company's largest concentration of stores is in Florida (370 stores), Illinois (318 stores) and Texas (213 stores). More than two-thirds of the company's stores were opened or renovated since 1992 (Carini 2408). In addition to its retail operations, Walgreen also operates two mail service facilities. Healthcare Plus is the company's mail-order subsidiary which offers services to third-party retail operations and mail-order prescriptions. In addition, Walgreen has formed a pharmacy benefits management organization, WHP Health Initiatives, which targets small and medium sized employers and health maintenance organizations.

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s and thus offer more competitive pricing to managed healthcare plans, which is a key factor in which stores are chosen to participate in plans. As Walgreen's has also demonstrated, large operations are able to implement technology pharmaceutical services which increase efficiency and improve customer satisfaction, again a way that companies can control costs. Recognizing the efficiency that such technology can bring, Longs and Thrifty/PayLess have also implemented automated inventory management systems similar to Walgreen's. Recent Financial Performance In recent years, Walgreen's has successfully reduced its long-term debt from $191.2 million in 1988 to under $10 million in 1996. This gives the company the ability to use internally generated funds for capital expenditures which increases its ability to respond to changes in the marketplace. Its current position is also strong, with current ratio of 1.7:1 for 1995 and 1996. This measure indicates the ability of the company to meet its current obligations using only current assets ("Walgreens Annual Report" 23). Over the past ten years, revenues have increased at an average annual rate of 12.5 percent while earnings increased at 13.5 percent. The higher rate of growth for
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