Is it going to be Cigna, or is it going to be Amazon that eats WBA?

On March 18th, 2024 I wrote the article "WBA - How long before it is purchased? And by who?" In the more traditional vertical integration scenario, The Cigna Group seemed to have the edge, given that Tim Wentworth is the current CEO of Walgreens Boots Alliance and has a history with Cigna. Here is a LINK to the original article.

However, some of the feedback given from the initial article was to not forget about Amazon as a potential suitor. And it does feel like Amazon is uniquely positioned to benefit from the purchase of WBA.

For instance Amazon understands that the future is going to be won by "bricks AND clicks", not by "bricks OR clicks". And now that the stock price of WBA is at historic lows, from Amazon's point of view, the potential benefits of purchasing WBA are becoming even more attractive. Benefits such as . . .

1. Brand Synergies: As Amazon continues to push into both the pharmacy and the healthcare spaces, the addition of the Walgreens brand may make it easier for Amazon make inroads more quickly with older demographic groups. Older demographic groups that also typically require greater amounts of both pharmacy and healthcare services.
2. Customer Data: Amazon is great at making smart defensible decisions, based upon rich insights gained by having access to data, and most importantly knowing how all of the data fits together. Here is something to think about . . . you can have the best people, processes, data and even the best systems and still run the company into the ground if you don't know how all of the data fits together. Amazon does know how data fits together. And Amazon could use the access to this additional data to generate even richer insights that then support superior decision making across both companies. For those that want to be more like Amazon this way, here is an easy way to think about how to do it, and the benefits that can be had in doing it. You can see a listing of some of the benefits starting on slide number 39. https://bit.ly/DrivingProfitableGrowth
3. Pharmacy services: Purchasing Walgreens would also give Amazon better access to a larger pharmacy network. This access may allow them to more quickly expand their own pharmaceutical offerings.
4. Supply Chain Optimization: Amazon is an expert when it comes to supply chain optimization, and purchasing Walgreens may give it opportunities to improve efficiencies and reduce total costs overall, across both companies.
5. Healthcare Integration: As Amazon pushes more deeply into the healthcare space, having a number of Walgreens locations across the country may make it easier for Amazon to quickly offer more comprehensive healthcare services.
6. Expanded Retail Presence: Walgreens also has a national retail footprint. And with the addition of this physical retail space, Amazon may be able to more easily increase the public's access to additional products.

While only time will tell, it is interesting to look at the potential storylines that may emerge. Please comment down below to tell us about the potential storylines that you see. Or what you think about the storylines above. And please share this with others. We all need to get to better places more quickly. Thanks!

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