Porter's Five Forces In The Pharmacy Industry

Threat of New entrants (low): Although Walgreens and CVS are the giants in the retail pharmacy industry, there is a plenty of
chances to small competitors. Entry into the brick-and-mortar prescription drug business is feasible even on a small scale.
Logistically, creating an independent pharmacy is relatively simple: requirements include only a professional who dispenses
prescription drugs, a small store which faces the street, and a license. The scale of Walgreens and CVS that many consumers choose
their pharmacy based on positional convenience, however, the existence of these smaller local pharmacies is unlikely to become a
competitive threat.

Rivalry among existing firms (High): The retail pharmacy industry has two 800-pound gorillas: Walgreens and CVS. Both
companies have over 7,000 pharmacy stores and both count on prescription drugs for about 65 percent of their revenue. Competition
between Walgreens and CVS pharmacies is direct and aggressive. For ex: CVS recently ran an advertisement in millions of circulars
instructing Walgreens customers how to transition their accounts to CVS, and this behavior has continued as Express Scripts
customers can no longer use Walgreens as their prescription drug provider and CVS works to acquire this market share.