establish. With the competition hot on their heels, Walgreens can not afford to take this chance. There are many areas of diversification from which Walgreens could choose. For example, they could purchase a drug manufacturing company, and begin production of drugs sold at Walgreens. The new growth plan to increase store count could be aided by the purchase of a construction company to begin building new stores. Another area of interest is the creation of a complete superstore, like Wal-Mart. Walgreens could begin selling a complete line of food items, as well as apparel and household items. There are numerous areas that present possibilities for the diversification strategy, but as stated before, Walgreens chooses to remain concentrated. For the many disadvantages listed above, this decision is wise. RetrenchmentA retrenchment strategy indicates that a company is in trouble, and needs a turnaround strategy, divestment strategy or a company liquidation. Poor performance is a possible result of tremendous losses that that have pulled the corporation’s overall financial performance down. Retrenchment strategies involve reducing the company to a smaller number of stores. At this time, Walgreens is flourishing and does not need a retrenchment or turnaround strategy. Since Walgreens is in the growth mode and has no financial strains, this strategy is not applicable.Stability StrategyA stability strategy indicates that a company’s position may be one or several of the following: The company is not able to keep pace with current business operations There is a need to improve profitability The business is experiencing serious internal and external problems of various sorts Walgreens is stable and profitable, thus there is no need to implement this strategy.As previously explained, neither the retrenchment nor the stability strategy would provide the most benefit for Walgreens. After analyzing ...
