wRatings names the most competitive healthcare companies in the U.S. for 2009
HERNDON, Va. —Johnson & Johnson’s pharmaceutical portfolio, Alcon, GlaxoSmithKline Consumer Healthcare and Walgreens all have one thing in common: They were each identified as the most competitive companies in their respective fields (pharmaceuticals, healthcare devices, over-the-counter medicines and retail pharmacy) earlier this month as part of the wRatings Corp.’s “Most Competitive Companies in America: Health Care 2009” report, which the company pulled together in collaboration with Strategos.
The report often is used as a tool for investors, as it identifies the companies that are building or extending their competitive strength over rivals, and are best positioned for earnings growth in 2009. And those rankings aren’t based solely on earnings. “Competitive strength is 50% economic profit and 50% [the company’s] ability to meet customer expectations,” wRatings CEO Gary Williams explained to Drug Store News.
For example, even though GSK’s consumer division generated less than 20% of the company’s overall sales, such venerable brands as Tums and Nicorette still resonate with consumers. wRatings identified three key sources around GSK’s advantages: identifying unique needs that are unmet in the OTC arena, the safety of the brands on shelf and a capacity to be first-to-market in addressing those needs. The switch of the weight-loss drug Alli to OTC is a perfect example of these capabilities, the report noted.
For a retailer such as Walgreens, that competitive strength has been augmented by the chain’s real estate savvy, securing prime retail locations along Main and Main. “This availability … gave [Walgreens] an economies-of-scale advantage,” wRatings noted. “Over time though, Walgreens lost its competitive edge. Today, [Walgreens] is regaining its power by reducing costs and innovating its supply chain.… This focus on cost should help increase economic profit.”
Walgreens also is making headway with its “Power” project, a workload-balancing program that offloads dispensing duties from individual Walgreens pharmacists to centralized processing centers, which Williams likened to a Henry Ford innovation: the assembly line. “The Power project, we do believe, could be a huge winner for [Walgreens],” Williams said, in that the initiative has the potential to save significant overhead and improve customer service in one broad stroke.
Overall, health care remains a solid investment, Williams noted. “We’re projecting through 2009 for healthcare [companies] and drug stores to actually emerge stronger from [the recession economy].”
A similar report released last month that measured competitiveness across the consumer packaged goods landscape identified Colgate toothpaste, Mountain Dew and Budweiser as the three most competitive products on the market.
Top 10 most competitive CPG products
|PRODUCT||PARENT COMPANY||TTM REV*||W SCORE**|
|MOUNTAIN DEW/DIET MD||PEPSICO INC.||43.3||92.0|
|SAM ADAMS/SA LIGHT||BOSTON BEER||0.4||90.5|
|WEIGHT WATCHERS||WEIGHT WATCHERS||1.6||90.4|
|GILDAN ACTIVEWEAR||GILDAN ACTIVEWEAR||1.2||87.7|
|Economies of Scale|
|Economies of Skill|
To arrive at the rankings, wRatings asked consumers how well companies met their expectations every quarter. The consumer ratings are categorized by nine competitive “moats,” or barriers to entry companies create to protect against rivals taking their customers and, ultimately, their profits. Each W Score blends a company’s historical economic profit with its competitive consumer-driven moat scores.
Kroger declares quarterly dividend
CINCINNATI The Kroger Co. announced that its board of directors declared a quarterly dividend of 9 cents per share to be paid on Sept. 1 to shareholders of record at of the close of business on Aug. 14.
Kroger, one of the nation’s largest retail grocery chains, employs more than 326,000 associates, who serve customers in 2,475 supermarkets and multi-department stores in 31 states.
On Thursday, the company announced that its president and COO Don McGeorge was retiring. McGeorge has been replaced by W. Rodney McMullen.
Walgreens to test diabetes care model
NEW YORK Walgreens continues to flesh out its revamped strategy to be the nation’s most convenient and accessible provider of pharmacy and health-and-wellness services.
The latest plank in that platform is its plan to test a pharmacy-driven outreach and support program for patients with diabetes.
Diabetic-care services and product presentations are nothing new in the nation’s chain and independent drug stores; every pharmacy leader knows that diabetes is a major, (often undiagnosed) health challenge and a “gateway” disease that usually subjects its sufferers to a slew of other related conditions involving the circulatory system, the skin and other organs. It’s also no secret that diabetics generate far more in annual drug store sales to treat these related conditions.
What makes Walgreens’ pilot program worthy of notice are two things.
First, with some 6,800 retail pharmacies, 350 in-store and worksite clinics and a network of specialty pharmacies across the United States, the company wields enormous potential power in the healthcare marketplace. If it expands its fledgling diabetes pilot beyond the test stage, it has thousands of “points of care” through which it could offer diabetes support programs and other disease management offerings. It’s a huge potential resource to offer diabetic patients and their employer-based or government-sponsored health plans, not to mention those patients’ overburdened, time-constrained primary care doctors.
Second, Walgreens is very deliberately positioning its diabetes care offering as a part of a much broader, integrated healthcare platform that links patients in the program to all the company’s health-and-wellness capabilities, said Walgreens CEO Greg Wasson. And it dovetails neatly with the Obama administration’s call for “more preventive care and better access,” in the words of Walgreens’ top manager.