nt of Human Services due to the fact that they failed to follow federal laws and regulations and acted arbitrarily in developing their new policy towards drugstores (http://www.walgreens.com/about/press/othernews/051100b.jhtr). Arkansas pays chain pharmacies less than independent pharmacies for providing the same services. The state appears to be trying to balance the state’s Medicaid budget through discriminatory pricing. With this discrimination in play, Walgreen receives less than three cents per dollar of sales in the pharmacy department. This large chain store incurs tremendous costs to provide the latest technology and convenient service with the drive through window. Three cents is not enough to cover all of the amenities offered by the chain store. If the court system does not remedy the situation, Walgreens’ pharmacies in Arkansas may be forced to drop out of the state’s Medicaid program. This example of adverse government policies can cause large problems for the Walgreen stores in Arkansas (http://www.walgreens.com/about/press/othernews/051100b.jhtr). As mentioned earlier, growing competitive pressure can cause a significant external threat that must be watched carefully. An analyst at Cleveland’s Midwest Research, Eric Bosshard, claims, “Rite Aid is getting a little more aggressive about cleaning up and upgrading the acquired stores. Up to that point, the company has under performed.” In 1999, Rite Aid has built 578 new or relocated stores nationwide. The growth plan for this competitor is to construct 250 new stores each year (Roush 1). As Rite Aid fights for market share, Walgreens will become more aggressive to sustain its top position.Although competitive, Rite Aid is not as much of a threat as Consumer Value Store (CVS). Nationally, CVS is close to overtaking Walgreen. CVS’s 4,100 stores nation- wide outnumber Walgreens’ 3,000 (Cohen 1). Even so, Walgree...
