Before you left CMK, did you find out much about how CVS operates? I'm interested in comparisons such as work flow, technology, convenience, etc.
Let's start with technology. Are their stores connected nationwide, like Walgreens? Have they incorporated imaging and dynamic workload balancing? Or are they like they rest of the competition with out-dated computer systems, paper-faxing MDs and calling their own stores for transfers? I'm trying to get a sense of how they'll compete, when they move out west.
I compared the two before I left.
I speculate that tech, work flow, quality and convenience to favor WAG.
However, WAG is stuck because they are resistant to change. This may be a good thing for them or not, only time will tell.
Purchasing and strategy will strongly favor CVS.
I do believe CVS will kill CMX in time, especially with MAC and others gone.
<However, WAG is stuck because they are resistant to change.>
I respectfully disagree. Walgreens was the first big player to pioneer large freestanding corner stores, drive-thrus, a satelite system linking all stores, multi-language scrips, 24-hour stores, imaging, E-scrips, dynamic workload balancing, etc. All of our competitors are playing catch-up. I remember the competition laughing and mocking us for having drive-thrus. "RPhs will quit in droves, the drive-thru will kill front-end business." Now it seems they've all (even Walmart) have seen the light. In other areas, Walgreens may not be the first, but we usually end up being the best (e.g. internet pharmacy).
Impulsive change just for the sake of change, or just to copy your competitor, is a foolish waste of resources.
Thanks, but I don't think senior management will take the leverage approach. Their "no debt" mantra is a point of pride and a sudden reversal may be interpreted as just playing copycat to CVS. I'm not convinced that the CVS/CMX deal will be as successful as it has been sold. According to cmxsux, some ugly news may be awaiting investors next quarter. We'll see.
Regarding dividends. Over the last couple of years, Walgreens has been accelerating the dividend increase dramatically.
You keep reiterating by your comments that they used to have a great strategy. I agree. I made a lot of money in the 90's. We are in 2008. I simply do not live in that past.
So you may not like my lack of specificity, but you are getting weary saying that everything is AOK, and management does everything right.
Great point cmxsux. All IT issues are fixed expediently and remotely ... and that goes for ANY problem - computer, phone, fax, register, scales, scanner, etc. A colleague of mine at kroger told me his fax machine recently broke down and it took the assigned contractor 3 days to address the problem, during which time their operation was extremely hampered.
Also, the computer system is great for recruiting and for keeping RPhs at Walgreens.
You must have missed my direct answer to you yesterday at 4:54 pm in this thread. And I have previously stated my opinions on a PBM etc. I'll give you the benefit of the doubt that you just missed it, or else you are intentionally baiting me. I decided months ago not to play that game.
As far as rapid store growth, what I have stated for many months is that the market, not me, has said it is not a good strategy, by itself. You just can't go 8 years and keep saying that the market it wrong. Even with all the "incremental innovations" that you keep talking about, WAG has had to be reactive in the marketplace to Big Box, Caremark and other strategies nipping at the heels. WAG has to manage the right side of the balance sheet, recognize the importance of shareholders and settle the nonsense with Caremark.
The most important thesis of the strategy is an aging population and therefore WAG should be positioned to deal with the health care needs of the baby boomers, with lots of convenient store locations. The rest is window dressing. Well if that thesis if wrong, and baby boomers don't fully get on board (for all the reasons that have been hashed out before) the company has no fall back except for good real estate.
Now wouldn't you admit that you have a self interest in rapid store growth? Forgetting that you are an employee, rapid pharmacy growth is good for, let me guess, pharmacists! The need for pharmacists is growing faster than schools can turn out and therefore supply/demand fundamentals for you are excellent. So what is good for you is not necessarily good for the shareholder. The cost of high priced talent is bad for business. I do not resent your salary any more than I resent A-Rod making $30 million. It's what the market will bear. It doesn't mean that I can better afford a seat at new Yankee Stadium.
As far as your not wanting to read my posts, please put me on ignore.
But it really doesn't matter what I think.
I truly believe that the store growth strategy is ultimately driven by the incentive system in place. I have written on this in many posts. Ignoring the shareholder in compensation and using ROCE as the key measure it is easy to conclude that the Board (as elected by shareholders) wants management to achieve this measure. It is OK for middle management to be driven by ROCE, that is what they do on a daily basis. But the most senior people need a more balanced approach.
I want ROE. Leverage the balance sheet, make a diversification acquisiton, pay higher dividends, yada yada yada.