Consumers Value Stores and Walgreens are the World leading Stores especially in the USA, as they are the largest drugstores out there. These Two stores are always put together, even to the extent that people think they are owned by the same owner because approximately for a year they have even shared a block in New York. However, CVS works under CVS Health and Walgreens is being controlled by the Walgreens Boots Alliance.
Why Are CVS And Walgreens Always Together?
As everyone knows that these names (CVS and Walgreens) are always put together, same is the case with their location, and they are mostly located in the same place near; near each other and like we say there is a reason behind everything, same is the case here. Walgreens has approximately 18,750 on the surface of earth, with more than 9,200 stores in the USA alone. While CVS has 9,900 stores out there.
These well-known stores are located together because each store already knows the existence or location of its competitor in that place; therefore they do not have to put extra effort in locating them.
By being side by side, they tend to take advantage of each other’s advertisements of goods and seek to obtain higher market share. Even though the Walgreens was founded almost one hundred and twenty years ago and CVS about 57 years ago but looking at the reports in 2019 the net worth of CVS ($1.5 billion) was a lot higher from that of the Walgreens ($677 million).
CVS has been taking a huge advantage of being located near the Walgreens, just by observing the customers, their behavior and their feedback to the Walgreens; because the reason of them being together is to keep an eye on the customers, as most of the times the customers are not happy with the service of a store, so they choose an alternative and sometimes the customers are in mood for an experiment, and for that purpose they tend to choose an emerging store.
If one gives a careful look to the strategy, the CVS has earned a huge favor by making an outstanding pharmacy and attracting people to make them trust their service so that they could go ahead of Walgreens and that’s the exact reason of why they have earned that much of a net worth.
Be setting up a store close to that of competitor’s ones, Business can quickly pace up because most of the times the customers are not satisfied and are curious about what the other has to offer and that thing makes up a point in market share for another competitor.
Laws for Staying Up Close
As per the research there are two laws on the basis of which, these stores stay together because if they do not do so, they might not survive the market at all. Those laws are
Hostelling’s law
Nash equilibrium
Hostelling’s law
Harold Hostelling introduced the Hostelling’s law which theorizes that most of the stores or companies tend to stay up close; when they are selling similar products so when a customer is not happy with one’s services; he could easily walk into another store.
That’s why CVS and Walgreens are always around each other so that when Walgreen lacks a service, the CVS can easily gain customers by covering up that respective service.
Nash Equilibrium
Nash Equilibrium simply refers to no change of strategy. It is also known as the game theory because even though one knows the strategy of his opponents but sticks to his own strategy, he has been implementing from the very start because he clearly knows this change of strategy will do him no good and will not get him anything. However, he might be at risk of losing its interest.
For instance; CVS and Walgreens have been spotted next to each other so now if they change their location they might end up their shares in market because people are used to seeing them together and are habitual of fulfilling their needs by going to another drugstore if the previous one does not satisfy their needs.
Conclusion
It is the matter of business, where the main goal of the sellers is not to lose the loyalty and the trust of customers. We all know that like every other traits of ours, we are never truly satisfied with our single retailer and just like we say curiosity may kill the cat so just because of this curiosity we often tend to take alternative because a human always wants change and this change always benefit either one of the retailers. Therefore, the best option left for these nation-leading drugstores to ,locate right next to each other.
Frequently Asked Questions
1 What is the story behind the locations of these stores?
Although we have already talked about how their close location can benefit each of them; Nevertheless, there is fun story behind it as well, some articles have mentioned that the owner of Walgreens divorced his wife and to seek revenge his wife opened CVS right next to Walgreens.
2 Are CVS and Walgreens owned by the same person?
No, they are not owned by the same person. Walgreens is under the Walgreens Boots Alliance while CVS comes under CVS Health.