Before deciding to invest in a particular company, individuals are well advised to consider that company's recent financial performance, its competition, its strategic direction and the way the company is perceived by the stock market. Sometimes, companies which are well-managed and which have posted strong revenues and profits are undervalued in the market while certain companies remain market favorites even when their financial performance suffers a downturn. This research considers the investment potential of the nation's largest retail drug store chain, Walgreen Company, in light of its operations, financial performance and stock performance.
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.
Walgreen has focused its recent operations on improving its internal efficiency and expanding its market through additional stores. The company is linked via satellite to all stores and facilities, and has implemented point-of-sale scanning and a strategic inventory management system. This combination integrates all facets of the purchasing, distribution and sales cycle to reduce inventory and provide greater flexibility in reacting to sales trends. In addition, Walgreen has invested more than $1 billion since 1992...