International Expansion

Presented by:
Preston Barr, Madison Hess, Jordan Rothschiller, Tasha Liberman,
River Scott, Akilah Cohen, Charlie Arbuckle
Agenda
History:
o France
o Walgreens
International Strategies
Risk Assessment
Cultural Profile
Competition:
o Foreign
o Domestic
Company Strengths and Weaknesses
Country Opportunities and Threats
Business Strategy
Market Entry
Organizational Design
Marketing Strategies (Four Ps)
Financial Management
Supply Chain
Human Resources
Government Relations

Recent History of France
Trend is up & relatively flat.
Unionization has been on the decline in France.
Franois Hollande was elected president in 2012.
Political party changed from Union for a Popular
Movement to Socialist Party.
French nationals generally believe that there are too
many immigrants.
Recent History of Walgreens
Sales
o Increased 0.8% to
$72.2B in 2013

Financial Health
o $1B in dividends

Growth
o 2,000+ Net Store Openings/Year

Cash On Hand
$2.1 Billion
International Strategies
Goal: Create 1st global pharmacy-led health & well-being enterprise
Strategy: Joint Venture
o Alliance Boots
o AmerisourceBergen
Benefits:
o Synergies with Economies of Scale
Purchasing & product procurement
Product Distribution
o Expanding Geographic Range
Risk Assessment - not significant
Political Risks: Lots of reform going on, increased min. wage. Current
president promised stable tax code.
Social Risks: Anti-business, anti-market attitudes, thriving stock market, 1
in 6 considered underemployed or living in poverty
Legal System: Civil law
o Risks include The French Ministry of Social Affairs and National
Solidarity Office of Pharmaceuticals and Medicines. Varying legality of
drugs.
Pharmacy branding is a green plus in Walgreens. You must be certified by the government.
The European Medicines Agency (EMEA) legal entity equivalent
France has a high uncertainty avoidance and a high power distance.

Cultural Profile of France compared to USA
Foreign Competition
Aldi
Founded: 1913 Germany
Stores: 5 suburban locations outside of Paris beginning in 1990
Products: Grocery, sanitary articles, beauty products, household
items, wine and beer, and electronics
Revenue: $3.6 B
Strategy: Cost leadership
Hours of operation: 9:00 am - 7:00 pm Monday - Saturday
Risks: Only allowing cash purchases
Domestic Competition
Monoprix
Founded: 1932 Clichy, France
Stores: 300
o 51 in Paris locations
Products: Grocery, household items, sanitary articles, beauty products and
clothing
Revenue: 3.3
Strategy: Differentiation
Hours of operations: M-Sat 9:00 am - 10 pm closed Sunday
Risk: Availability
Company Strengths
Established Drugstore retail network
Customer service
Wide portfolio of pharmacy & health care
services
Strategic acquisitions & expansion into
global markets
Company Weaknesses

Failure to push more private-labeled brands
Limited experience in European markets
Inconsistent in-store execution
Country Opportunity
Labor (job opportunities)
Foreign Investments
Aging population with high income level
International Diversification
Open longer hours than competitors

Country Threats
Terrorism
Human Rights groups
Legal Issues, Labor Laws
o Restrictions on employee working hours, 35 hours a week
o Costs of having to hire more employees for extended hours
o Government restrictions on store hours
Business Strategy
Goal: Create 1st global pharmacy-led health & well-
being enterprise through market entry in France.
Strategic Alternative - Transnational
Business Strategy - Differentiation
o Use of business hours
Distinctive competence- customer service
Measurable Objective in 3 Years
Year 1- Paris, Year 2- Paris, Year 3- Paris & Versailles
3-5% market share
Market Entry
Joint Venture: Boots-Walgreens
Walgreen Advantages
Shared risk & costs
Easier entry to market
Alliance is a well known brand in France/Name Recognition
Market know how
Local knowledge of prescriptions
Access to Alliances exclusive product brands
Joint Venture
Alliance Boots
Past Success
Brand Recognition
"It's transformational for us.
We're taking two of the best,
most-respected and powerful
brands in the world and
putting them together to
create something new." -
Gregory Wasson

o Advantages to Boots
Re-entry into retail
Risk diffusion
Retail expertise
o Advantages to Walgreens
Supply chain expertise
Access to pharmacy
products
Organization Design & Control Structure
Board of Directors
o 3 - Walgreens, 3 - Alliance Boots, 1 - General
Counsel (outside hire)
Ownership is 50/50
Management for the first store
o General manager from Walgreens. Pharmacy
manager from alliance boots.
Decentralized
Marketing Strategies
Target Consumers:
o Middle/High Income Families
o Focused on high income, high-traffic areas and
tourists.
29 M tourists yearly in Paris
2.2 M Population
1.65 M Middle to High income


Product Offering
Pharmacy
Hygiene products
Food
Walgreens brand
Minute clinic

Price Positioning v Local Competition
Market pricing
Prescription &
nonprescription drug prices
are competitively similar to
French pharmacies like
British-American
Other product prices are 15%
higher than Aldi & 5% higher
than Monoprix


Promotions/ Advertising
Message:
o Open Early & Late
o Whenever the unexpected happens, expect us to
be there!
o Brochures at Hotels & Tours
o Billboards with Directions
o Posters
Place
YEAR 1 YEAR 2 YEAR 3
1 new location
Le Chesnay
Medium/High
income suburb
Near L'Hpital
Andr Mignot
Build
1 new location
Paris
Downtown
Take over at
existing location
2 new locations
Le Pecq
Low/Medium
income suburb
Take-over
Versailles
Build
Touristy
Financial Projections
Financial Management & Issues:
Funded Internally
o $2.1B Cash

Economic Exposure
Transaction Exposure
o Balance Sheet Hedge

Date USD EUR
April 2014 1 0.72
April 2013 1 0.76
April 2012 1 0.76
Exchange Rate History
Supply Chain Issues

Food and consumable goods
o Acquired through local vendors
such as Relais dOr and Brake
Bros Ltd.
Pharmaceuticals and prescriptions
o Acquired through Alliance Boots
current suppliers.
Carbotage (see map).
Human Resource Management
Two managers at each store location
o 1 French manager and 1 current Walgreens manager
Main labor force local employees
Training
o Customer relationship management
Benefits
o Higher pay for early or late shift
o Overtime for more than 35 hours a week, break every 3.5 hours
o Part Time: Discount, stock options, wellness program, paid time off
o Full Time: Life insurance, holidays, prescription coverage
o Employees get Christmas, Easter Monday & All Saints Day
o Employees get 5 weeks paid vacation yearly

Local Population & Government Relations
Paris: ~2.3 million in city, surrounding suburbs ~10.5m
Environmentally friendly
o Supply Chain
o Environmental assistance volunteering events
Annual free flu shots

Summary
Cultural Differences
human resources, supply chain, social responsibility
Joint Venture with Alliance Boots
Open 4 store locations within 3 years
Business strategy: Differentiation
Whenever the unexpected happens, expect us to be there!

Questions?