Walgreens selling its Pharmacy Benefit Management arm

Walgreens selling its Pharmacy Benefit Management arm

Opinion Article from Reuters

Walgreens, president and CEO Greg Wasson made clear the reason behind the sale of Walgreens Health Initiatives. "With nearly 7,700 drugstores as our center of gravity, we are focused more than ever on delivering convenient, affordable, high quality pharmacy, health and wellness solutions, and on enhancing our full scope of services to become America's first choice for health and daily living needs,"

Random Acts of Kindness

I read a copy of a report about how companies (mostly CPG and Durables) should (and are) consciously engaging in “Random Acts of Kindness” to enhance their brand image. Interesting part of this is that this is different from just companies wanting to engage (with a lot of Branding) into CSR activities. This is again a great use of the social media power or rather making that vicious circle work for you. I suggest that the report is itself worth reading, but then here are some key “random” thoughts from the same (in kindness). The file is 2 MB so will share it with only people who want more than this “random act of my kindness”




• RANDOM ACTS OF KINDNESS
For consumers long used to (and annoyed by) distant, inflexible and self-serving corporations, any acts of kindness by brands will be gratefully received. For brands, increasingly open communications both with and between consumers (especially online), means that it's never been easier to surprise and delight audiences with R.A.K.: whether sending gifts, responding to publicly expressed moods or just showing that they care*. * Just to be absolutely clear: R.A.K. are not about rewarding customers for tweeting / liking your product, and not about giving away lots of free samples (that would be FREE LOVE), but about selected, random acts of kindness (hence the name ;-)

• 87% of UK consumers expect companies to consider societal interests equal to business interests, while 78% of Indian, 77% of Chinese and 80% of Brazilian consumers prefer brands that support good causes

• Meaning R.A.K. reach out to those consumers craving ‘human’ brands who show not generosity, but acts of compassion, humanity, or even just some personality

• Japan and Germany were the only countries out of 22 surveyed where a majority of online users did not use social networking. (Source: Pew, December 2010.)

• Some Examples

o Case in point: UK based cosmetic retailer BioTherm Beauty offering free products to selected people who happened to be tweeting about being tired.

o In October 2010, flower delivery service Interflora launched a social media campaign in the UK designed to brighten up the lives of Twitter users by sending them flowers. Interflora monitored Twitter looking for users that needed cheering up. Once found, the users were contacted and sent a bouquet of flowers as a surprise

o MY FAVORITE FOR OBVIOUS REASONS: In June 2010, US cracker brand Wheat Thins (owned by Kraft Foods/Nabisco) launched their 'The Crunch is Calling" campaign, featuring a Wheat Thins van tracking down and surprising tweeters who had indicated their attachment to the crackers. Each selected tweeter was filmed being unwittingly greeted by a whole pallet of the product. The videos were a success, with the campaign’s YouTube channel receiving nearly 1,500,000 views.

• FINAL Thought – How can we do this? Can we for example do a random kind of kindness for our stakeholders? Any ideas?

Should Cell Phones be allowed on Retail Floors (for employees !!! )

An interesting debate – not a great read, but very interesting from a Customer Service perspective. An ignored customer is the most dangerous signal that a Retailer can send


The note ends with an interesting thought “Yes, we live in connected world, but the most important connection we can make is with our customer, at every opportunity. The rest can, and will have to, wait.

A note on Whole Foods

An interesting note on Whole Foods

The “healthiest diet in the world,” he pointed out, could cost around $200 per month and consist largely of whole grains, beans and fresh produce.


When a conference attendee noted that he often chooses shopping at privately held Trader Joe’s over Whole Foods because it’s cheaper, Mackey disagreed with the comparison.

“They’re a limited-assortment store,” he commented, saying that Whole Foods is able to match Trader Joe’s prices on thousands of items. “Everything you find at Trader Joe’s is a low price, where Whole Foods is a spectrum of prices. That creates the image of Whole Foods being more expensive.”



This is an interview in retaliation of Whole foods being branded as an expensive store



John Mackey, the co-chief executive of Whole Foods Market, is upset with the press for referring to the chain as "Whole Paycheck."



A very telling note on this topic “Who said that all groceries are supposed to be inexpensive? A BMW costs more than a KIA for good reason. All the more power to Whole Foods for being able to differentiate themselves from the pack of "more-of-the-sames."

SKU Rationalization – Learn it from the Girl Scouts

http://online.wsj.com/article/SB10001424052748704881304576093691253234896.html

The age old problem of how many SKUs or Brands should a company sells is very well captured in this article. Those who have been in the US would know about the Girl Scouts and the cookies that they sell. This article speaks about how they are rationalizing the number of different varieties that they will now offer. What I did not know until I read this article was

- that these cookies are manufactured by a subsidiary of Kellogs

- the amount of $ sales that these cookies generate

- these are now advertised

- and how they instill the sense of business amongst the girl scouts

I am sure that SKU performance is a major analytic need of the CPG and even the Retail sector. For P&G it surely was, because it had thousands of skus for its multi brand portfolio and it was very interesting to see how each of these brands performed and also how the SKUs did as well. It was also very interesting to see how someone would use the concept of bundling to combine (shrink wrap or just co sell) two different SKUs. How the price points were used in the developing economies and the hundreds of skus that would result into.

Forecast for Best Buy - Worst is yet to come

If you have a WSJ online subscription then this is worth reading – Forecast for Best Buy – Worst is yet to come

Though I read a part of this because of a temp subscription – basically the article says that since Circuit City shut down couple of years back everyone thought that Best Buy was the most to Gain. Later when the tangible growth commensurate with this was not seen coming through, it was assumed that it was the Wal Mart Category Killer effect. However this article also brings in the fact that online stores are the threat that retailers face with Amazon etc scoring high.

“Best Buy is hindered by two basic facts:

1) The products it sells are available in many other places and;

2) Prices on those items are easily compared online and through mobile apps. Best Buy itself offers one of those price comparison apps”

To Be or not To Be on the Social network

A Case for and a case against the social media

Investing tips from none other than Warren Buffet

When the master speaks everyone listens (well he is not right always - like the Kraft and Cadburys integration) - but essentially he speaks sense in this article

Don’t Count out America.
Embrace uncertainty
Dividends Are Your Friend
Keep Cash Handy
Price Out Flights at Nearby Airports

 

Five Forces Shaping the World - Report by McKinsey

McKinsey has released a very nice report on : Five forces reshaping the global economy

The Report is very interesting but confirms that the priorities have not changed a lot

Can you get even Oatmeal wrong?

Obesity is an issue (at least for me and I am not even American?) in the US and then all the Brands are in a rat race to prove their mettle.

How to make Oatmeal....wrong?

What makes great companies?

One Report I read on "Does Middle of the Road Strategy work for companies?"

A very interesting article b y Bill Taylor given in full below:

These days, the news is pretty bleak for some of the biggest and best-known companies around. Wal-Mart reports results that don’t only disappoint in the short term, but also raise doubts about the wisdom of its long-term strategy. Hewlett-Packard begins to bounce back from the soap opera in its leadership only to discover that its growth plans need a thorough cleansing as well. Meanwhile, Microsoft has struggled for the better part of a decade trying to devise a formula that allows it to keep up with Google, Facebook, and the darlings of the Internet.

And yet…amidst all these dark clouds and ominous forecasts, there are patches of bright sun and clear skies. IBM recently reported eye-popping results and reached its all-time high in terms of stock price. Netflix, the online-movie pioneer whose fortunes skeptics have loved to question, has become a business juggernaut of the first order. And Southwest, everybody’s favorite airline, just goes about its business of adding cities, adding people, and making money.

How is it that IBM, Netflix, and Southwest manage to thrive, when so many of their peers struggle to break out of their ruts? The answers don’t just speak to these three competitors, but to the new logic of competition itself.

1. Its not enough to be “pretty good” at everything anymore.

As a company, you have to be the most of something–the most exclusive, the most affordable, the most responsive, and the most friendly. Companies used to want to be in the middle of the road–that’s where all the customers were. But now, in an age of hyper-competition and non-stop innovation, the middle of the road is the road to ruin. What do they say in Texas? “The only things in the middle of the road are yellow lines and dead armadillos.” To which we might now add: “And once-great companies that are slowly going out of business.”

There’s no doubt that IBM, Netflix, and Southwest have always understood what they are the most of. IBM is legendary for its focus on the mission-critical needs of its customers and on its “complexsystems” mindset. Netflix understands that it doesn’t just offer customers the widest variety of movies to rent, but that it helps customers make smarter choices about the movies they watch And Southwest has always managed to combine low fares with great service-anything else is a distraction.

2. In an era of great turmoil, the best strategy is to stick with what you believe in.

Business thinkers love to excoriate big companies and their leaders because they don’t have the guts to change. In fact, the problem with many big companies is that all they do is change. They lurch from one consulting firm to the next, from one management fad to another, from one target customer base to a different set of customers.

Even in a business environment filled with dramatic change, IBM, Southwest, and Netflix stick to their guns. Sure, they tweak things at the margins:

• Southwest has fine-tuned its boarding procedures to appeal to business travelers and has made a big acquisition.

• Netflix is pushing hard on digital downloads as opposed to DVDs-by-mail.

• IBM captures the public imagination with the appearance of “Watson” on Jeopardy, but it will never be confused with Apple.

These three winners have made big, consistent strategic bets for the long term-and they don’t hedge their bets based on fads or fashions.
3. Each of these companies connects with its customers based not just on price and features, but on identity and emotion.

They have become virtually irreplaceable in the eyes of their customers. The researchers at Gallup have identified an escalating hierarchy of connections between companies and their customers–from confidence to integrity to pride to passion. To test for passion, Gallup asks customers a simple question: “Can you imagine a world without this product or brand?”

It’s a lofty goal, but great companies (like IBM, Netflix, and Southwest) get there.

Ask yourself, honestly: Can your customers live without you? Because if they can, they probably will

Walmart losing Sales !!!

Seventh consecutive quarter of declining Sales for Walmart as per this report from New York Times

Interesting comment from the article – “In addition, while consumers are still using Wal-Mart for big shopping trips, they are visiting drugstores and dollar stores for in-between purchases.”

Also the whole concept of consumers choosing a lower price point buy (because they have limited budget) though it may be in totality costly is very telling. Reminds me of the concept of Giffen goods that we learnt in economics. Maybe Bharti Walmart division will be able to teach them the same.