This was a proposal my team and I wrote for Wall Drug.

1. Strategic Plan
Strategic Management
March 31, 2011
Brandon Luong
Blair Crawley
Whitney Washington
Tyler Weaver
Carter Whitelow

2. Table of Contents
Executive Summary………………….........................................3
Opportunities and Threats………………………………….….4
Marketing …………………..……………………………..........5
a. Revitalizing the Wall Drug Brand
b. Target Market Analysis
c. Increasing the Amount of Customer Touch Points
d. Advertising
e. Sales Promotion Strategies
f. Branding
g. Social Media Campaign
h. Measurement of Effectiveness of Different Social Media Vehicles
i. Key Partnerships/Community Involvement
j. Marketing Overseas
Operations…………………..……………………………………15
a. Activities
b. Construction
c. Strategy
Finance…………………..……………………………………….22
a. Revenue Growth over the Years
b. Threats From Rising Commodities
c. Taking Market Share From Deadwood
d. Western Art Gallery Expansion
e. Leveraging
f. The Cost of Land
g. Feasibility of the Marketing Plan
h. Balance Sheet Examination
i. Expansion
Human Resources…………………..……………………………32
a. The People
b. Internal Alignment
c. The Management
d. Customer Loyalty
e. Key Values of Wall Drug
Closing…………………..………………………………………..41
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3. Mission Statement
Wall Drug specializes in Western themed attractions and apparel and bringing fun,
educational, and “once in a lifetime” type of experiences to every member of the family. The
focus remains in bringing together the community of South Dakota, developing our youth, and
giving those interested in America‟s Old West history an experience that they will never forget.
Vision
To become a part of the fabric of America‟s history and becoming the ultimate “must-
see” tourist attraction.
Slogan
“The experience you have yet to experience.”
Executive Summary
Wall Drug, Inc. has been established since the 30‟s, and has gone through major changes
throughout the course of history in order to stay in the market. It was first known as a
pharmaceutical store, and eventually branching into a small theme park beloved by the residents
of Wall, South Dakota. This report contains recommendations provided by the Wall Drug
Consulting Group in terms of the marketing, operational, financial, and human resource aspects
for the company to strive for in the long run in the United States as well as in its global
expansion into Germany. The marketing portion will discuss rebranding, target market analysis,
and other marketing techniques. Operations will deal with enhancing the experience at the park,
construction of new buildings, and reasons for the chosen strategy to enter the international
market. Finance will address the 3 year plan of allocating the money at home and in the
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4. international market. Finally, human resources will discuss on ways of restricting the
organization, detailed job descriptions, and investment in employees.
Key Opportunity and Threat
One key opportunity for Wall Drug would be to expand into an international market,
specifically Germany in order to extend their brand scope, increase brand awareness, and
increase net profits. The key threat that prevents Wall Drug from reaching its full potential as a
tourist destination site is its brand awareness. Although Wall Drug attracts over two million
visitors a year, the actual brand recognition and potential for growth could remain stagnant if
certain measures and precautions are made. In order to overcome this threat, Wall Drug needs to
position itself as a niche market and invest time in redoing its marketing and operations
activities, so as to set themselves apart from their competitors
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5. Marketing
Revitalizing the Wall Drug Brand
This drugstore was not prosperous at all until the founder‟s wife, Dorothy, came up with
the idea of putting signs along the interstate, instructing people to stop in for free ice water. The
next innovative advertising blitz came when South Dakota servicemen and other friends had the
idea to put up Wall Drug signs overseas. Eventually, Wall Drug signs were placed all over the
world. These signs led to news stories and publicity that further increased the store‟s visibility.
Even though money has not really been spent on other forms of advertising, their original efforts
in creating awareness will serve as the backbone to this new advertising campaign which will
focus on increasing awareness of the Wall Drug brand, as Wall Drug is unknown to many due to
its geographic location as well as its lack of a web presence.
Current marketing and advertising efforts have been limited to mostly signage displays
placed in different geographic areas, billboards placed along Interstate Highway 90 in the city of
Wall, their company website, and word of mouth. Depending on these outlets alone will not
bring about more customers, will not help bolster Wall Drug‟s competitive advantage against
other competitors, will not help in creating top of mind awareness, and will thus keep Wall Drug
the well-kept secret that it already is to most people. With this is mind, our marketing objectives
are to create a better web presence by increasing the amount of traffic accessing and viewing the
Wall Drug page and other related social media sites by 20%, to better search engine optimization
to establish key associations with tourism and Old-West related websites, to establish key
partnerships with cause-related programs and initiatives, to further develop an attractive student
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6. recruiting marketing plan in order to increase the amount of student workers, and to expand into
a foreign market to extend the realm and scope of our brand presence by 2014.
Target Market Analysis
Wall Drug was founded as a “family institution,” with three generations of family
Exhibit 1
members involved in running and managing the
daily operations of the attraction site. With this
foundation of family being at the forefront, Bill
Hustead, the current CEO and President, would
like to create an experience that makes Wall
Drug a part of the “entertainment business,” in
which the attraction can cater to the entire
family, as well as adults who have a more refined taste for Western-themed art and memorabilia.
As seen above in Exhibit 1, according to a site traffic analysis conducted by Quantcast, the
visitors who visit the Wall Drug website are predominantly Caucasian, have a college education,
and range from the ages of 35-50+.1 Based on this information, Wall Drug‟s target market as
defined by both the founder of the company as well as the actual visitors who are interested in
the attraction include families with either no kids or at least one child, adults aged from 30-50
years old who are traveling through the Badlands area, who are looking for new and exciting
experiences that are both educational and entertaining, and who are also interested in nostalgia,
history, and memorabilia pertaining to the Old West. This Old West segment of Wall Drug‟s
clientele will be turned into a market niche, where those people interested in Western-American
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7. and Indian-American culture and art will serve as the prime target of who Wall Drug wants to
attract to the part of the company that sells Western clothing and art.
Increasing the Amount of Customer Touch Points
Our first plan of action is to focus on increasing awareness and reaching the target
audience that Wall Drug caters most of its attractions to. This will be done by first investing in
the research of the products and services that are offered and making sure that they are what our
customers want, are being updated to reflect current trends, and are consistent with the overall
image and style that Wall Drug wishes to portray. To find out what our customers are interested
in, we have to engage in social listening, where we can learn what our customers are saying
online about the company and the goods and services that are being offered. There are many
different blogs and Web pages pertaining to the Old West, traveling, and tourist destination
spots. One way to begin is by observing customer reviews and ratings. One particular blog, “The
New West Blog,” would be an ideal starting point to gather customer opinions, regarding trips
made to Wall Drugs and items purchased there. By engaging in conversation with the consumer
and encouraging responses and feedback on anything dealing with Wall Drug, Wall Drug will
continue to be talked about and that is what is to be desired.Investing into our social media
campaign will come afterwards, as we need to make sure that what our brand has to offer and
how it is being offered are up to customer standards and are the best allocations of money. In
order to make these changes, the most effective tool to use in this process would be to collect
customer information to form a database. Information will be taken from online store purchases,
the number of different coupons and promotions that are used, the frequency of their usage, the
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8. buying habits of customers during the peak season and off season, and how to tailor messages
and promotions to the specified target groups. Over 40% of the business conducted at Wall Drug
deals with repeat customers so by using this database, we will not only get a better look at the
target audience and better refine who we send our messages to, but will also help to stimulate
repeat purchases, create customer loyalty programs, and allow for cross-selling of numerous
items.
By increasing the number of touch points where customers and non-customers receive
information and the ways in which customers receive information, Wall Drug will be able to
infiltrate their target market and tailor specific information to each segment with more relevant
content and will be able to understand their customer types. A mobile coupon strategy will be
implemented, where customers will be able to receive mobile coupons and information on events
and specials that Wall Drug may be hosting on either their cell phones or the website. An Itunes
application will also be created to further engage the customer or tourist who is looking for key
information regarding Wall Drug on the go. The application will include interesting facts,
regarding Old West history, a pharmacy section with a barcode reader for prescriptions, games,
and ringtones available for play and purchase.
Advertising
The company’s signage is a symbol of its traditional advertising efforts; it is
recommended that it be used on the Internet in the same form of display ads. Display ads are
advertisements consisting of mainly text, logos, photographs and maps. We could take
photographs of intriguing items in the store, and use them in display ads to attract customers.We
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9. could also display the map of our store to show that we have a complex offering of items.
Google, Yahoo,Shepler’s, and Cavender’s are a few websites that we would like to advertise on
to display our advertisements. Google and Yahoo are popular search engines actively used by
the Internet community. We think that these sites would be beneficial to advertise on because of
the heavy amount of internet traffic they possess. We would also use display ads to attract
people to Wall Drug as a tourist destination. We also believe that since search engines are the
most widely used internet tool among Internet users, both experienced and novice Internet users
will be targeted.Shepler’s and Cavender’s are two popular websites that sell western apparel.
Since the current theme of Wall Drug is primarily “Old Western,” we could attract families,
kids, and old-west enthusiasts to merchandise held within our store and online store as well as
attracting them to Wall Drug as a tourist destination.
Sales Promotion Strategies
Another recommendation is to offer on-line and traditional promotions, coupons, and
Groupons. Promotions could be geared toward tourists en route through South Dakota to Black
Hills-Mt. Rushmore, Badlands National Park, and Wind Cave National Park. Along rest stops
would be a prime area to utilize this marketing strategy. We could bring in clientele by offering
discounts on a variety of items that we sell in house and discounts at our restaurant in further
attempts to get people to stop at our attraction. Wall Drug needs to be looked at more as a tourist
attraction rather than a rest stop. On-line promotions through the use of display ads could
welcome tourists to stop at Wall Drug inform them that we are more than just a drug store and
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10. that we offer multiple selections to our company with an extensive assortment of wacky western
gear, an art gallery, guest house, museum, and more to keep our guests entertained.Groupons
could be used to increase traffic flow to Wall Drug by offering a discount incentive when a
minimum number of users is met to rent a room at our proposed franchised hotel, Best Western.
This would be geared toward groups traveling and looking for tourist destinations in the Mid-
West.
Wall Drug should also attempt to get an in-person radio interview or ad spot on a
culturally similar show such as the John Boy and Billy show. We should further attempt for the
show to be broadcasted in South Dakota. This would be a crucial opportunity for our company to
get the publicity it needs from stable radio-listeners. This would be a low cost method of
advertising with high appeal.
Branding
In order to effectively convey the image of Wall Drug while also maintaining the
humorous appeal that has been made known in so many of its billboards and signage displays,
Wall Drug should implement the help of a third party advertising agency to take on the creative
marketing responsibilities, as Wall Drug has not really invested in any other advertising efforts
other than the billboards and signage displays. “Gerardot& Co. is a boutique creative agency for
branding and marketing cities, hospitality and tourism destinations.”2 Their clients include
LynxAir International in Florida, Nature Vacations in Costa Rica, and the Indianapolis Zoo in
Indiana. This creative agency will provide professional help in creating a brand identity design
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11. (logo) and will help in creating an advertising campaign that will target Wall Drug‟s specific
target market.
One of the other plans in branding is to use an individual to endorse the attraction. This
individual will be able to speak to the history and Old West attractions while consistently
maintaining the entertaining aspect of the Wall Drug brand. Bob Barker was born in South
Dakota and “has also had the second-longest run as the host of a single broadcast show, as well
as the oldest man ever to host a television game show, and the oldest man ever to host a weekday
television program since the inception of American network television.” Mr. Barker is able to be
booked for this type of endorsement deal. This individual will also serve as the association
between the brand of Wall Drug and the tourists that visit Wall Drug. This individual will be
used on the Facebook page, the Wall Drug website, and the Itunes application so that every
single aspect of the marketing campaign will remain integrated and consistent. There are also
plans to create a new and improved logo, where the customer will be able to see and experience
a new physical difference that they can associate with the attraction site. This new logo, in
conjunction with the improved website that has increased functionality, physical appeal, and an
interactive user interface will give website visitors ease of use in accessing the website and
graphic appeal that will keep visitors engaged and interested.
Social Media Campaign
Before Wall Drug begins their social media campaign, every effort has to be made to
ensure that whatever is being offered as far as food, products for sale, and attractions are up to
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12. customer standards; if not, the social media campaign will be ineffective in communicating the
value of our attraction‟s experience over other competitors‟ experiences. After all of this
information has been compiled, then we can proceed with the social media aspect and further
engage our audience through a variety of different marketing tools. The original intent of the
advertising efforts was to remain light-hearted and comical in its delivery. With the use of an
individual to endorse the brand to recreate the humor that Wall Drug boasted of in its prime, we
hope to create a viral campaign that will spurn excitement and interest in what Wall Drug has to
offer. Wall Drug currently has a Facebook page but does not have any features that aggregate
information together to make it easier for the visitor to access, such as family history or what
attractions are available. Adding information about the family history and employees would be
beneficial so that people visiting their Facebook page would be informed that the business has
been family owned and operated since 1931.
Measuring the Effectiveness of Different Social Media Vehicles
On-line advertising on news/informational/ media sites and search engines such as
Google or Yahoo using display or banner ads will be used with multiple ad formats. The
effectiveness of these ads could be measured with pay-per-click (PPC) or through search engine
optimization (SEO). Our advertising agency will be focusing on helping us with search engine
optimization, as the words that are most associated with finding out about Wall Drug need to be
used in such a manner to optimize our search results.There are a number of different search
queries that are used quite often that automatically are associated with Wall Drug, with “cowboy
boot spurs” having the biggest QCI (Query Competitive Index) out of these relevant search
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13. Exhibit 2
terms, which shows the number of
advertisements that are typically displayed
when this search term is entered into a search
engine, with higher numbers meaning more
competition for advertisements,as seen in
Exhibit 2 to the right,4 In using this
information alone, Wall Drug needs to position their brand to the search terms that are entered in
most often as well as advertise where the most people will see their brand.
One of the internet advertising models we would like to use is a flat-rate pay per click
model. This allows our company to advertise on various websites while only paying the host
company a flat-rate when a Wall Drug ad is clicked on. This efficient way of advertising will
allow a cost to be incurred for our company only for interested customers and clientele.
In advertising with Facebook, “if you choose a CPM model, you will bid on how much
you are willing to pay for every thousand impressions (views) of your ad. In both cases,
Facebook will display your ad in the right-hand Ad Space. The amount you are charged will
never exceed your daily budget.” In order to effectively reach our target market, we will use a
cost per thousand model. “CPM advertising is usually more effective for advertisers who want to
raise awareness of their brand or company,” 5 with a budget set at $10/day with $1.20 USD CPM
for Facebook ads. We will continue to monitor changing bid prices, so that the advertisements
will be able to reach and capture our specified target audience on an ongoing basis.
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14. Key Partnerships/Community Involvement
Recruiting students has presented itself as a difficult task, as students are not familiar
with the existing area surrounding Wall Drug. Wall Drug‟s foundation lies in its family roots and
heritage. This company prides themselves on the people that work behind the scenes in order to
keep providing the experience of both educating while also entertaining. With the clear focus
being on the people that are employed and the people that are being served, Wall Drug needs to
continue that lasting impression of family and values by stressing the importance of youth. The
Boys and Girls Club of America strives to develop youth into productive adults by focusing on
providing the following: “A safe place to learn and grow...Ongoing relationships with caring,
adult professionals... [and] Life-enhancing programs and character development experiences...”
Hope and opportunity.6 With over fifteen Boys and Girls clubs in South Dakota, Wall Drug can
become a part of the cause by starting out with market promotions, by making certain events
youth-related and slowly working their way up to becoming a strategic partner with the Boys and
Girls clubs. In doing this, Wall Drug will be able to show to the surrounding areas as well as to
the general public their interest in further developing and helping the youth who come to work at
Wall Drug. Another key partnership that would be beneficial to the growth of Wall Drug would
be the Expedia Affiliate Partner Program. Expedia.com is rated as the top online travel agency
and when compared to other major travel destination planning websites, such as Orbitz,
Travelocity, Hotwire, and Priceline on Alexa.com, a web information company that supplies
facts, statistics, and rankings on different web sites ranks Expedia as number one in both the
number of page views on a daily basis, the amount of people that are reached, and the amount of
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15. daily traffic to the website.7 Partnership is free of charge; links, banner ads,etc are sent via email
and commissions are received on a monthly basis based on the amount of actual transactions
made.8 By partnering with Expedia, Wall Drug will be able to offer a coordinated solution for
the traveling consumer that will be made available on the website, making Wall Drug the one-
stop shop for all of its traveling consumers‟ needs. This opportunity will also create more word
associations between Expedia and Wall Drug, thus increasing the amount of people that may be
exposed to Wall Drug‟s website and any another related sites. Along with the proposed
partnership with Expedia, Wall Drug should be able to offer lodging arrangements and this will
be done through a franchising opportunity through Best Western hotel, based off of their
demographics and price ranges. This will also be offered on Wall Drug‟s websites to customers
who wish to make travel arrangements online.
Marketing Wall Drug Overseas
The second key opportunity that Wall Drug should take advantage of is in entering a
foreign market. Wall Drug has been witnessing increased sales but in order to gain increased
profits, Wall Drug needs to establish themselves in another country to gain both national and
international interest in the brand and fulfill the need for an attraction of this kind “…From 2009
to 2010, spending on personal travel & tourism is expected to have recovered somewhat, with an
increase of 1.6 percent. This increase still, however, lags significantly behind global GDP
recovery which is 4.7 percent, according to the International Monetary Fund (IMF) October
2010 World Economic Outlook.” 9 With the tourism industry rebounding back with increasing
numbers in spending, Wall Drug should take advantage of this key opportunity and expand to
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16. further legitimize their brand in the eyes of America as well as internationally. Another key trend
that characterizes the tourism industry is that there is “no growth in western hemisphere markets:
Western Europe and North America represented 70 percent of total global personal spending on
Travel & Tourism in 2000, but this share decreased to 62 percent by 2010, an average annual
decline of 1 percent (North America) and 0.7 percent (Western Europe) based on real terms. This
trend has been accelerated by the greater price sensitivity of travelers who get used to seeking the
best bargain when it comes to private consumption of any kind.” 10According to the Travel and
Tourism Competitiveness Index Report, the two highest ranked countries in the tourism industry
are Switzerland and Germany. Between the two countries, Germany exhibits the best potential
for international expansion, due to the nature of both its infrastructure and interests in World
Cultural sites, specifically Old West history. “The country is characterized by abundant cultural
resources, ranked 6th worldwide for its 32 World Heritage cultural sites, 2nd for the number of
international fairs and exhibitions held in the country, and 3rd for its creative industries. The
country‟s infrastructure is among the best in the world, ranked 3rd for the quality of its ground
transport infrastructure and 7th for its air transport infrastructure.” 11 With over fifty theme parks
located in Germany alone, it can be deduced that Germany is among one of the top tourist
destinations that prides itself on remaining innovative with the number and type of attractions
that are offered in its country.
Germany‟s history also serves as the qualifying factor in why Wall Drug chooses to
expand there. “Germans were among the largest ethnic groups to migrate to Texas in the 1800s,
and their influence remains pervasive in places such as Fredericksburg. Each fall, the town of
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17. New Braunfels hosts Wurstfest, a tamer and scaled-down version of Oktoberfest… Karl May, an
author little-known in the U.S. but famous in Germany for a series of Westerns he wrote in the
1800s, also deserves some credit. Though he never visited the U.S., his books sold millions and
created perceptions that persist today.”12 Michael Kimmelman of the New York Times stated the
following as it pertains to Germany and its interest in the Old West:
There are clubs, magazines, trading cards, school curriculums, stupendously popular
German-made Wild West films and outdoor theaters, including one high in the sandstone
cliffs above the tiny medieval fortress town of Rathen, in Saxony, where cowboys fight
Indians on horseback. A fake Wild West village, Eldorado, recently shot up on the
outskirts of Templin, the city where Angela Merkel, the chancellor, grew up.13
As far as our advertising campaign is concerned, it will be adjusted accordingly, as it pertains to
Germanic tastes and cultural preferences. Wall Drugs wishes to maintain its original appeal, so
the signage displays that displayed “____miles from Wall Drug” will be implemented in
advertising. The Itunes Application will be modified to include more languages and more
activities that are culturally specific to the people who reside there. Strategic alliances and the
feasibility of this international expansion will be later explained in the financial portion.
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18. Operations
Operations Overview
Pushing the envelope is one of the founding principles Americans have always preached.
To take Wall Drug to the next level, it must continue to evolve its operations, better its
organizational structure, re-analyze its financial track, and improve its advertisement techniques.
In this particular section, the main focus will be on how Wall Drug can enhance its activities
with the construction of new buildings and ways to cut its costs in the manufacturing of its
products.
Activities
One highly effective strategy for driving traffic to theme parks is special celebrations
centered on holidays. For example, when amusement parks either market their Halloween theme
specials, announce the Oktoberfest, or advertise about St Patrick‟s Day, people from all over the
states travel to their destinations in order to take part in the festivities. If Wall Drug wants to lure
in more tourists, then celebrating holidays and holding festivals will be a good step in acquiring
more revenue.
An example of how Wall Drug could accomplish this is if the company celebrated
Halloween by redecorating the entire park. The park would be decorated with cobwebs, jack-o-
lanterns, roads filled with blood and scary paintings throughout the streets. Another attraction
that is entertaining for both customers and employees would be if employees dressed up as
ghouls, monsters and demons, and scare the unsuspected pedestrians while hiding in hidden
areas. Mazes could also be constructed to attract the audience, and the employees could repeat
the mayhem as they did outside. The stores will be filled with special Halloween goods, like
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19. gummy eyeballs, chocolate newts, witches broom, and masks, and special theme cuisines in the
restaurants.
People love the holidays, so planning special events for those days would be prosperous
to Wall Drug if it capitalized on the holidays with extended time frames. Halloween could last
for a month while St. Patrick‟s Day would last for a week, and high-profile events like the Super
Bowl could last for two weeks in Wall Drug. The theme park could hold a special festival
celebrating its anniversary hiring a vendor for carnival rides, serving special foods, and hosting
reenactments of key events in Old West American history.
Holding festivals and celebrating holidays would entice consumers to come and
experience the creativity of how Wall Drug can be diverse and offer a array of entertainment and
goods. The target market would flock to Wall Drug, not only during normal operations, but for
the exciting holiday attractions. Conducting festivals draws in a big crowd, which could lead to
customer loyalty since the consumers would want to come back throughout the year to witness
more festivals.
Construction
To continue on with the improvements in entertainment for Wall Drug, Inc., the
construction of several buildings would help obtain this goal. These new buildings will assist in
the tremendous task of gathering the entire family by making specific areas more attractive and
diverse for all the ages to enjoy.
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20. 1) Stage
Wall Drug, Inc. would benefit from the construction of a stage that would serve two
purposes: special staged shows and for private rentals. One of the many things that attract people
to theme parks are when parks hold shows, such as SeaWorld, Universal Studios, King‟s
Dominion, and Disney World. Since Wall Drug has a western, cowboy theme atmosphere, the
plays can be based on various ideas: cowboys versus samurais, cowboys against Native
Americans, old shootouts and even newer concepts of cowboys and aliens. The entertainment
value of this structure would entice the audience to come and watch the spectacular
performances produced by the entertainment department. The added bonus to having the stage
would be if people would like to hold a particular festival or fundraiser, they would have the
eligibility of renting out the stage and employees for the setup. When organizations look for a
new venue to hold fundraisers or a different idea to collect money, Wall Drug would be at the
forefront of their minds. There are many ways for Wall Drug to assist, such as allowing
organizations to conduct an event on stage or hold their own show. Also, there could be other
holidays Wall Drug are not familiar with, missed on the calendar, or conflicts with another
holiday, and that is when the organization can rent the stage and other parts of the park for their
festivities. For instance, let‟s assume Wall Drug does not celebrate Lunar New Year due to lack
of information and conflicting with Valentine‟s Day. That then that gives the opportunity for the
Chinese community to rent the space and hold the festival. It is even possible for us to market
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21. this event as to attract more people, and would assist in helping to rebrand Wall Drug and
allowing the customers to see that Wall Drug is culturally sensitive.
2) Casino
Another entertainment value to add on the long list of activities would be to construct a
casino and attract any person between the young adults and the elderly. Sticking with the Wild
West theme, it would be most fitting to have the casino‟s appearance to be a saloon with old
style craps table, western theme slot machines, and old roulette tables. There will be different
slots machines and tables aimed towards people who want to spend different amounts of money.
Casinos are unique businesses that draw in various ages to participate in the fun, and for the
chance to win a large sum of money.
3) Bars
Whether it is after a person lost his life savings or while the person is rolling for the lucky
seven, a drink comes to many people‟s mind in order to loosen up or a getaway. Casinos and
bars are excellent complements because they complete one another and cannot have a full
experience with only one of the asset. To complement the Wild West style, the bar will have
wooden tables, countertops, chairs and swinging gates.
4) Hotel
As Wall Drug expands into new areas with more amusement and attractions, it will get to
the point where people will need to spend a night at the hotel so they can spend more time at the
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22. park. Since there is a bar and casino at the park, the hotel would be a nice addition to the place
for those people who need a place to lay their head after a thrilling night at the tables and saloon.
The hotel will be part of the Best Western franchise due to the fact it has a well developed name
brand ensuring patrons the quality of Holiday Inn.
5) Pool
When staying at the hotel, a pool is always one of the perks tourists love when on
vacation especially during those hot summer days. Imagine a large pool where one can swim up
to a side bar and order whatever adult drink they desire, kids making cannonballs, and parents
relaxing with their favorite book. This small construction would simply give more style to Wall
Drug.
6) Laser Quest
With the old west theme as ourdelivery attraction, having a laser quest at the park would
be a necessity for the consumers to feel they are in the old west with laser guns. Not only would
the people be wearing the laser suits, but they will have the option to wear cowboy hats, boots
and chaps if desired. Laser Quest by itself is extremely fun for all ages, and adding that into the
activities can increase the excitement of attending the one-of-a-kind Wall Drug.
With all these added activities and events, Wall Drug will be made into a successful park
attracting people of multiple ages. Creating a magical place where anyone can have fun is a
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23. challenge, but it is worthwhile to bring in the smiling faces. These buildings will bring on a new
side of fun Wall, South Dakota that has never been seen before.
International Expansion
As discussed in the marketing portion of the paper, Wall Drug, Inc. will be expanding
into Germany as part of gaining a new source of revenue, and expanding the name abroad. This
section will discuss the strategy Wall Drug will implement when conducting overseas business
through strategic alliances and a transnational program.
Strategy
The safest international expansion strategy for Wall Drug based on their financial
position and brand reputation would be a strategic alliance with a host country in Germany.
There are many advantages for choosing this over creating a wholly subsidiary,
franchising,exporting and acquisition. Alliances are a great way to enter another country without
going in head first or placing all the capital into an unknown foreign investment. The alliance
with another country would enable Wall Drug to understand the target market better without
having to conduct a mass research, similar to how an acquisition or new wholly subsidiary would
need. Another added bonus would be that Wall Drug and the German company can split the
resources needed to establish the new park, and split the work equally so that both groups place
in the same amount of work. It also lessens the amount of expatriates needed compared to the
green field factories or mergers, and would not require extensive interviews to find many
appropriate PCNs. Even though integration of PCNs and HCNs along with USA mentality will
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24. be difficult,having a solid plan and strong negotiation skills will assist the company to push
further with American ideals at little resistance from the partner or its workers. Lastly, the
partner company should have an understanding of the general market better than Wall Drug since
they are headquartered there. The host country would know if there are permits and documents
needed, and be able to receive the permits more easily than the parent country. There would be
no need of translation or miscommunication between Wall Drug‟s employees and the
government officials since the German partner will be the ones conducting this matter.
The way Wall Drug will operate its new park is by using a transnational strategy rather
than multi-domestic or global strategy. One reason for not choosing a global strategy would be
that those companies would be ethnocentric and would want every company to operate exactly
how it does in its own country. The problem with applying this to Wall Drug is that the service
and attraction might not be too attractive in the eyes of the Germans, and would only appeal to a
very low number. Being centralized and using the current theme in Germany would be asking for
failure and waste of resources. Next, multi-domestic would be too broad in terms of how the
subsidiary would operate, and decentralized to where Wall Drug, Inc. would not be able to
control it. This leads the company to use a transnational approach since it is a mixture of both,
bringing in the good parts of each. A trans-national strategy has all of the elements necessary for
the new park to succeed while giving headquarters the same power and position it experiences in
the USA. For one, the approach allows Wall Drug to use the same job description,
organizational structure, and other aspects of human resources to ensure the same career path as
its sister park. Although holidays are different in Germany, the operations and activities in its
24

25. core would still be the same, but with a twist to cater to the Germany population. For example,
the Germany park would support popular holidays, create festivals for the occasions, do the
same kind of work as if they were in South Dakota and operate according to the standards set by
Wall Drug. One perk of this strategy is this would allow the Germans to decorate the park to
appeal to the overseas market, use their German philosophy to influence the target audience and
set their own standards while abiding to our international rules and regulations. The standards
will be specific, but allow enough “wiggle room” for the partner to conduct business efficiently.
Examples of how these two ideas are implemented are as follows:
The new park will greet the visitors the same way one would expect when entering its
sister park in South Dakota, yet the scenery would be catered to the taste of the Germans
according to what the partner sees fit. The restaurants, activities and shops would still follow the
same format it would in USA, but be specific to what Germans would tend to purchase, its tax
system, and the style of the building. The organizational chart would be the same as in America,
but the marketing would mostly likely be altered to German appeal while reducing any
translation problems.
25

26. Finance
Financial Overview
Currently Wall Drug, located in Wall, South Dakota, has an interesting financial plan.
Their original revenue draw was free ice water and 5 cent coffee. Although it was feasible in
1936, their current strategy is to attract tourists heading to Mount Rushmore and the black hills
in the spring. Revenues have increased steadily in the small town establishment, growing from
$350 in the first month of business to a multi million-dollar firm by the 1970‟s.
Revenue Growth over the Years
The revenue growth in Wall Drug over the years is partially due to their cost leadership
and their niche product line. However, the Hustead‟s rely on superior marketing tactics to attract
tourists. Their first foray into signage came in the summer of 1936, and a trend was established.
The opportunistic signage drew tourists heading to Rushmore, as well as those heading for the
Black Hills. Signs were also posted in several unique locations around the world hoping to
branch the brand out in an international way. Although markups and margins were miniscule,
Wall Drug has seen a steady increase in revenue since this period. Free publicity in publications
such as Time and Village Voice made Wall Drug a household name and tourist Mecca. Their
ingenious marketing strategy took a hit when the Highway Beautification Act of 1965 was
passed, and their Income Statement took a minor hit. The signs that they were famous for had to
be moved back 660 feet from the highway. Although the Hustead‟s won a major victory in
Federal court, signage that was removed during the initial stages of the law being passed had to
be reinstalled. By 1990, only 300 Wall Drug signs were still standing, most of them located in
26

27. South Dakota. This sign decrease seemed to not hurt sales much, as profits have still increased
since the legislation was passed.
Threats From Rising Commodities
Although the Highway Beautification Act did not affect the revenue to a great degree, the
Gas Shortage of 1979 did. The price of oil doubled, leaving Wall Drug‟s tourists at home. Wall
drugs revenue decreased by 13% during this period. This is a very troubling sign for a „Rest
Stop‟ business model. There is no way to predict a doubling in gas prices, so hedging was not an
option at that point. They were forced to incur a decrease in revenue. These factors lead us to
believe that Wall Drug needs to become more of a tourist attraction in and of itself, not just an
attractive rest stop.
Before the gas shortage, in 1971, Ted and Bill borrowed 250,000 over ten years in an
attempt to leverage for the first time. The project was the Wall Drug Mall, which resembled old
Western living. This was their first foray into the amusement business model. Capitalizing on
their Western niche and devotees to the culture, Wall Drug created a town that could draw
potentially more customers than ever before. However, the added debt cut into profits during the
down years of Wall Drug. This is one of the fears that come with leveraging; when times are
hard, you still have to pay the interest payments. This strategy of leverage worked well for the
firm until 1979, when Wall drug saw a decrease in Net Income of a shocking 83%. This could
have crippled more cash strapped firms, however Wall Drug was still able to survive. Our
recommendations entail Wall Drug maintain a constant cash balance of at least $100,000. This
27

28. would allow Wall Drug enough liquid assets to maintain their business without collapsing due to
interest expense.
Taking Market Share From Deadwood
When looking at the competitors and analyzing the dining and lodging establishments,
Wall Drug has a potential opportunity to capitalize on the tourists going to Deadwood.
According to the map of South Dakota, most of the traffic heading west to Mount Rushmore
must pass the Wall Drug location. Eating and lodging revenues are much higher in Deadwood.
This may be due to the limited betting casino that is located in Deadwood. During the winter
months, Deadwood is able to attract 10 times the revenue for lodging and two times the revenue
for eating. This is a disparaging number, especially since tourists must pass through Wall to get
to Deadwood from the east. During the winter months, Wall Drug must utilize their Christmas
in the West paintings to draw more tourists to the site during the winter months. The plan that
the Hustead‟s have for the expansion, including the mansion, is well conceived. The cornerstone
of their financial stability for the first five years will depend on the success or failure of the
Christmas Art Gallery. Wall Drug must spend advertising dollars in travel magazines to alert the
public to the new Christmas attraction.
Western Art Gallery Expansion
Wall Drug is the quintessential year round destination for those looking for a Western
destination. The notoriety of the store reaches across the world, however their profits need to
reflect this. Our first key to stability is the construction of the Wall Drug Western Art Gallery
and guesthouse. This is going to be a plantation style three-story mansion draped in the
28

29. Hustead‟s art collection. Not only is the art collection good for business in the winter months,
but it could also serve as a source of capital if there are problems with expansion costs. There
are several threats that come with investing in art, however. Artwork is not very liquid, which
could present a problem if immediate funds are needed to support expansion. Although pieces
can range in the tens of thousands of dollars, the beauty is subjective. It is very hard to
adequately value artwork. On the balance sheet, how is art appreciated and depreciated. Since
the proceeds from the mansion are proposed to go directly to the purchase of new art, Wall Drug
must devise a plan to always have 35 to 40 pieces of art.
According to Bill‟s assessment, 40% of the business (approx.) is from repeat customers.
The repeat customers will not want to see the same pieces displayed year after year. I believe
that the artwork should be retained for a year, maximum two years, and rotated out. Market
research will be done to observe which works resonate with the consumer, and those pieces
should be retained. With the daily traffic in November through March averaging 2359, we
should assume conservatively that 1100 people could stop through the Art gallery during these
months. If Wall Drug charges $10 per person to enter the Art Gallery and take a guided tour of
the facility, they could generate an average of $11000 a month just from the tour alone. This is
an assessment just from traffic alone, so once more people know about the luxurious art in South
Dakota, the more revenue that could be generated. Some Western Fine Art has been known to
fetch as much as $120,000 at the Dallas Fine Arts auction. Wall Drug must use some pieces that
may become outdated, and auction them in Fine Art Auctions. They can also go to these
29

30. auctions and purchases pieces, with the assistance of a curator. The collection could not only
become the tourist destination for the winter, but also a valuable asset financially.
Western Art Gallery Expansion
One suggestion that our team would raise is to capitalize on the tourists going to the
Mount and the Badlands by offering lodging to the guests. Whether we want to build upon the
mansion style Art gallery that has guest rooms, or franchise the hotel is a key concern of the
team.Exhibit 3 shows a list of probable franchise opportunities and their costs.
Exhibit 3:
% of
Total Total
Total Total Total Total
Reservatio Frequent Total 10-
Economy Initial Royalty Marketin
n Traveler Yr Cost Room
Cost Cost g Cost Revenu
Cost Cost
e
Budget US$5,000 US$71,25 US$93,15
US$12,000 --- --- 0.6 %
Host 0 0
Best Value
5,000 93,000 --- 36,000 --- 136,400 0.9
Inn
Select Inn 10,000 383,086 17,053 153,234 7,994 721,752 4.7
Super 8 25,000 766,172 229,852 229,852 61,294 1,568,268 10.2
Travelodg
36,000 689,555 315,594 315,594 61,294 1,625,390 10.6
e
Days Inn 36,000 766,172 291,145 291,145 61,294 1,688,985 11.0
Mid-Rate
Brands --- --- $1,388,33
$61,000 $545,680 $292,000 2.8 %
Best 3
30

31. Western
ClubHouse
30,000 1,961,401 164,666 --- 69,943 2,226,010 4.5
Inn
Master
6,000 1,961,401 --- 1,225,876 - 3,213,027 6.6
Host Inns
Baymont 50,000 2,189,056 980,701 1,225,876 196,140 5,199,436 10.6
Hampton
95,000 2,451,752 --- 1,961,401 196,140 5,213,485 10.6
Inn
Comfort
100,000 2,574,339 858,113 1,029,736 196,140 5,252,313 10.7
Inn
First-
Class
Brands
$3,034,04 $1,152,936 $1,152,93 $1,152,93 $7,065,85
Omni $50,000 7.0 %
3 6 6 1
Luxury
120,000 4,045,390 954,931 1,011,348 404,539 7,232,252 7.2
Collection
Woodfin
120,000 5,056,738 --- 2,528,369 90,000 7,795,107 7.7
Suites
10,957,58
Radisson 150,000 6,068,085 2,022,695 2,022,695 454,306 10.8
7
11,192,68
Hilton 92,500 5,056,738 2,022,695 2,022,695 1,376,681 11.1
1
11,231,04
Marriott 90,000 7,888,511 648,320 1,011,348 1,010,329 11.1
3
Since one of Wall Drug‟s new markets will include catering to the Sturgis Biker Market,
I would suggest franchising instead of having mass lodging for consumers in the pristine art
31

32. mansion. The Husteads should look into acquiring new land near the Wall Drug compound and
develop a franchise with a mid sized brand such as Best Western. Although rather cliché, a Best
Western in Wall would allow for the Husteads to form a new capital stream and capitalize on the
familiar name. They could also create a specialized Best Western complete with Wild West
themes. Best Western appeals to both the motorcycle crowd that they so desperately need to
attract in August, as well as the families coming to see the Christmas decorations and Art in the
winter. Best Western‟s don‟t elicit a „low-budget‟-type response to the ritzy customer base. It
also doesn‟t scare away some bikers who may think that an Omni, for example, is too high
priced for them. From a cost standpoint the Best Western makes the most sense. The 10-year
total cost of the project is only 1,388,333, which is only 138,000 USD a year. This project
will cost less than the proposed plan to build the new stores or the upgrade and repairs to the
existing building. The notoriety from a Best Western in a plain state, could draw well more
than $138,000 in sales. The breakeven point for customers to stay for $100 a night is 13,800
guests per year. This is absolutely attainable considering the average traffic in one year is
42758. If half of the traffic stays in the Best Western (21379), the Wall Drug can generate
$2,137,900 in revenue per year. This equals a net profit of $1999900. This would be a boom
and an increase in revenue 11 fold per year from lodging. You could essentially payback the
ten-year costs in one year.
Leveraging
Although the revenue exceeds the cost tremendously, I would still suggest Wall Drug
take out a loan for USD 1,000,000 for 10 years starting next fiscal year (1991). This initial
32

33. capital will help pay for the cost of any restoration or upgrades to any existing buildings on the
property. Assuming a cost of capital at 8 percent, Wall drug would have to pay $80,000 a year in
interest payments, a very achievable number. I strongly encourage the Husteads to take out a
loan with a favorable bank in the area to get an even better interest rate. The goodwill built up
over the years with their local bank should give them leeway.
The Cost of Land
Since the backyard area will be removed once new construction is made and some of the
Hustead‟s property will be used for this project, cost of land will not be an issue. Since Bill
Hustead is acting as a general contractor, we will not have to hire outside contractors. Day
laborers are usually very cheap, sometimes only $50, per worker per day. This can cut down on
costs tremendously, and cut into some of the unskilled workers that have been attracted to
Deadwood, instead of the unskilled workers being paid in checks from Deadwood. This only
leaves the costs of raw materials to be dealt with. We suggest that Wall Drug invest in futures to
hedge their risk on the rise in metal and gas prices.
Feasibility of the Marketing Plan
The proposed marketing plans are all extremely low cost solutions to our marketing
problems. The first suggestion was a customer relationship database. This is completely feasible
and would also increase our revenue by keying on the most likely visitors to Wall Drug. This
will analyze the key consumer base, and help cut down on excess inventory by being able to
discard waste and unsuccessful products. Another suggestion that has worked wonders is
acquiring an ITunes Application. This would allow consumers one button access to all of the
33

34. wonders of Wall Drug. The average web application costs $5,000, so the upside to developing a
web application is limitless. Mobile alerts/Groupon coupons are the wave of the future, so we
know that many consumers don‟t have time to look through a catalog to find bargains. Offering
trip packages to Wall including a stay at the hotel and deals on the attractions will bring in
clientele that Wall Drug never knew they had. Also,Expedia.com‟s affiliate program will be
free, but will charge a commission based on how many click throughs there are to the website.
This is the most cost effective and revenue-generating marketing plans that we have developed.
With no surcharges, we only have costs if we incur revenues. Expedia‟s commissions are much
less than Hotwire.com, which charges an initial fee to post rooms and trips on the site. The
most exciting but most costly venture in the marketing aspect will be hiring Bob Barker from
Price is Right. The iconic figure could help drive our older segment to South Dakota, and he‟s a
local celebrity. This may cost us in the $100,000 range, but this is a liberal and negotiable
figure. Partnering with the Boys and Girls club will be inexpensive, but allow us a more stable
root in the local and international community. One of the most valuable things in a firm is
goodwill, and we will establish that in the community at little to no cost. Stressing family values
can also attract families from all over the country. We plan on funding the marketing aspect of
the plan by using the funds generated from the Best Western, as well as dabbling in some asset
management with our new marketable securities if we need extra funding.
Balance Sheet Examination
When examining the balance sheet, the rapid increase in Cash was first noticed. Although
cash holdings are always positive for the liquidity of a firm, too much cash can hinder
34

35. growth.Knowing that the construction of a Best Western in Wall will be a boom for the firm, the
Cash can be converted to cash equivalents, such as Marketable securities, short-term bonds,
commercial paper, and treasury bills. These liquid assets can also accumulate interest and can
be traded very easily. Wall Drug should have a healthy balance and mixture between asset
classes. Wall Drug should convert at least 100K of cash into current marketable securities. That
would leave them with 167,000 in liquid cash and 100 in marketable securities. The large
merchandise inventory intimidates me, but according to the case, peak inventory levels have
reached 2.5 million. Currently, there have been no ways of decreasing the inventory levels other
than to decrease growth. Once the international business comes to fruition, we will then see a
stabilization in inventory levels relative to sales.
Expansion
Our final and most bold plan of all is our expansion into a foreign market. Germany was
ranked 2nd in travel and tourism, and also has a Wild West interest. Germany is one of the most
financially stable countries in Europe, and we would not have to spend a lot of money bringing
in culture consultants. We considered other countries (Japan, China, France, etc.) but there was
a larger cultural gap in these countries. Wall Drug‟s original business model would have been
compromised. However, there is a tremendous opportunity for franchising/strategic partnership
with a preexisting Wild West theme park called Silver Lake City. Located in eastern Germany,
Silver Lake City follows the same business model that Wall Drug does. A Wild West museum
was also opened. The close proximity to Berlin (60 miles) makes this an ideal candidate for a
35

36. strategic alliance or expansion. From a cost perspective, waiting two years to pay off some of
the new interest payments before expanding would be best. There also needs to be revenue
generated from the new Best Western before another expansion is made. Right now, the charge
for the Wild West is EUR8 for children and EUR 15 for adults. This is extremely encouraging
from a financial standpoint, because the consumer is willing to pay more in Germany for the
same attraction in America. The Husteads could charge initial admission into Wall Drug, and
also capitalize on revenue from the stores inside the German Wall Drug. The notoriety in the
U.S. would be gained from international expansion. The Husteads should examine their
expansion into a stable foreign market if it wants to increase its financial growth and health.
36

37. Human Resources
Human Resource Overview
Within the Human resource department, Wall Drug‟s three year plan will consist of
reconstructing the Internal Alignment of Wall Drug. This entails creating an effective and highly
organized management team that will properly lead the company in carrying out tasks and
responsibilities. There are three areas that Wall Drug will primarily focus on. We want not only
the managers, but the employees as well to know that the people of Wall Drug are our core
focus. The employer and employees are the most important people of the company and making
these people feel valued, respected and highly appreciated is key. The second area we will focus
on is the transition of Wall Drug, from an Egalitarian structure to more of a Hierarchical
Structure. As Wall Drug is being divided into clear cut divisions,It is essential that we make sure
each division is being led by a well-experienced and personable manager who will effectively
train and manage their team within that division. Organization is necessary. The third area we
will focus on is increasing customer loyalty. In doing this we have to make sure the entire Wall
Drug staff is well-educated on how to provide excellent and extraordinary customer service. We
strongly feel that if we can significantly improve in these three key areas; Wall Drug will be the
number one place to go for years to come.
The People
37

38. Before Wall Drug can make any internal changes to its management team and staff, we
would like to take time to recognize them for their dedication, hard work and passion in building
Wall Drug Store from the bottom up. Wall Drug has reached great success from where it used to
be years ago, and it would not have been possible without these employers and employees. We
would like to make it very clear, that the people who work here are highly appreciated and
valued for their services and everything they bring to the table. The employees, including
managers, supervisors and staff, are the most important part of the business. The employers and
employees are the heart of Wall Drug, and it is in their hands to assist in contributing to the
company‟s growth and success for many years to come. It is up to them as Wall Drug‟s
backbone to provide an extraordinary experience to customers, and maintain a positive,
respectful and attractive image for Wall Drug Company as a whole.
Effective communication is the one of the few ways in making Wall Drug‟s staff feel
special and appreciated. The managers of Wall drug will work toward building strong
interpersonal relationships with employees so that a level of trust and reliance is created among
employers and staff. As Wall Drug expands and makes internal changes within this three year
plan, it is important that employees feel confident and comfortable in being able to turn to their
managers for anything regarding their work schedule or the environment they work in. Effective
communication will have a positive impact on the organization as a whole, and lead to
improvement within the environment while carrying out tasks and duties.
38

39. Employers and staff will also be acknowledged through rewards and incentives which
will be directly related to job performance of the individual and change each pay period.
Certificates recognizing improvement and hard work will be given out monthly, along with
exciting coupons and treats. This will encourage employees to stay motivated in performing to
the best of their abilities on a consistent basis. A small level of competition will create
excitement and power among the staff and actually have them wanting to come into work.
Internal Alignment
Before any services or production of Wall Drug can be improved, we need to focus on
the internal alignment of the company itself. As of now, Wall drug is more so made up of an
Egalitarian Structure, where teamwork is highly valued and tasks are carried out in groups rather
than individually. The organization has a great deal of leeway and flexibility when it comes to
the jobs that are performed on a daily basis. This is not a bad thing, however employees are
unable to really focus on being detailed in effectively carrying out essential responsibilities
because they are too busy multitasking. This can lead to a negative impact on providing
customer service in not being able to really provide that extraordinary experience. This also
leaves the employee with a disadvantage of not having the opportunity to fully-educate
themselves on proper guidelines in performing their job. To eliminate this, Wall Drug will be
transitioning into a Hierarchical Structure, where individual performance is better acknowledged
and a variety of jobs exist. Duties and responsibilities will be based on job description, and
employees will be paid based on individual performance, experience, skills and ability. Pay
39

40. differentials will be larger, simply because each division will entail different jobs and the level of
experience needed and possessed will vary depending on the job.
The Management Team
After analyzing the case we came to the conclusion that when looking at the management
of the staff and store itself, illustrating an organization chart will be the best way to physically
show who possesses what position, and what essential responsibilities that position entails. Each
manager will be in charge of their own division of the store. This means that within each
division, there will be different but similar duties for both the manager and employees working
in that division.
Ted Hustead, owner of Wall Drug Store since 1931 with his wife Dorothy, bought the
drugstore in Wall, South Dakota for $2500. Retired at the delicate age of 82, Ted has decided to
pass down the prosperous and successful business to his only son Bill and his wife Marjorie,
who have brought great contribution to the store as well. Dorothy Hustead, wife of Ted, was in
Ted‟s eyes the backbone of Wall Drug Store. Wall Drug store would not have evolved in to the
well-known loved store if it weren‟t for Dorothy‟s dedication and aspiration for the business.
Dorothy‟s creative idea to set up signs along the highway has led Wall Drug to much great
40

41. success, and has opened many doors. Retired at age 81, Dorothy too has decided to pass down
her position to Bill‟s wife Marjorie who has already embraced the title as her own.
Bill Hustead, CEO and president of Wall Drug, has spent most of his life working with
his parents to build and expand Wall drug from the bottom up. He is Responsible for the success
or failure of Wall Drug. He will ensure that Wall Drug is operating in a positive environment and
that employees are providing the best customer service to clients and customers, will oversee all
Departments of Wall Drug Store including Operations, marketing, strategic planning, financing,
the company‟s culture and makes sure the store is in compliance with safety regulations, sales
and public relations. Bill also makes sure revenues are in coordination with Wall Drug‟s balance
sheets and income statements, enforces the rules and regulations which are in compliance with
those of the state and federal laws and also makes sure managers, supervisors and employees are
carrying out their duties effectively and efficiently within their own departments.
Marjorie Hustead, Wife of Bill Hustead and Vice President of Production will be in
charge of estimating costs for merchandise and needed products. More specifically she will be in
charge of Wall Drug‟s jewelry store. Marjorie will manage production processes and is in charge
of purchasing cost-effective equipment and products, will work with other managers in enforcing
important laws including OSHA, HIPPA and COBRA among entire staff, enforces the “5 key
Behaviors” and the core values so that employees are consistently providing excellent customer
service in all departments and directs supervisor of the jewelry store as well
41

42. Rick Hustead, son of Bill and Marjorie and Vice President of Sales, In charge of new
hires and firing for all departments of Wall Drug, with the exception of the restaurant which will
run by Mike. He also makes sure employee schedules are up-to-date and in conjunction with
entire staff‟s work schedules and Plans and develops and implements successful strategies for
increasing revenues
Karen Hustead, wife of Teddy and Vice President of Marketing, is In charge of tourism
related business with Badlands and Black Hills Association, Manages public relations and
government issues, coordinates with global countries in advertising Wall Drug worldwide,
Works very close with Wall Drug‟s Marketing Team and Makes sure signs are properly and
evenly distributed along the highway.
Karen Poppe serves as the corporation‟s accountant. She Directs all accounting functions
of the store so that adequate financial records and fiscal controls are maintained, makes sure
financial operations are in compliance with state and federal laws and regulations and makes sure
financial matters are properly coordinated with state and federal agencies pertaining to policies,
procedures and programs within Wall Drug‟s financial department
Kathy Hustead, wife of Rick and Wall Drug‟s Pharmacist manages the store‟s
prescription drug business, organizes prescriptions according to date and time they are ordered,
makes sure shelves are properly stocked with the right labels and prescription and manages
inventory and orders related to pharmaceutical department
42

43. Mike Hustead is a loyal and good friend to the company.As restaurant Manager, Mike is
in charge of employee schedules within the restaurants, manages day-to-day operations within
the restaurant and café, ensures that chefs and employees are following rules and regulations in
correspondence with state and federal laws and regulations, enforces safety guidelines and
procedures and makes sure all staff including servers, hosts, supervisors and chefs are well-
trained and knowledgeable on menu selections and Business code of conduct.
Teddy Hustead, husband of Kathy and wall Drug Manager, is In charge of all shops
within the Mall, Oversees all managers and employees in each shop, making sure they are
carrying out duties prompt and efficiently, Enforces that extraordinary customer service is being
delivered on a consistent basis. Teddy will make sure all shops are in compliance with state and
federal rules and regulations and is In charge of custodians and janitors as well in making sure
Wall Drug Mall is properly cleaned and organized on a daily basis.
The positions listed above are just the main positions of upper management that will be
assigned. Wall Drug will also be undergoing extensive recruiting because it is clear that as we
separate into sections Wall Drug will need more employees within each section. More
specifically we will be focusing on student recruitment. We strongly feel that having student
employees will bring a nice college crowd to Wall Drug Stores, and eventually parents will have
to stop by as well.
Customer Loyalty
43

44. The company‟s updated and more extensive training package will cover many areas
including health and safety, job tasks and responsibilities pertaining to each job description, and
a key area called building customer loyalty. Organizing and improving the company‟s internal
alignment is important just as much as providing excellent customer service to our Wall Drug‟s
customers. It does not matter how much experience or skills our employees have, regardless of
their work history they must be full-educated on how to greet a customer and make them feel
like they are in a home away from home. Outstanding customer service will bring a sense of trust
and loyalty to our customers and will have them wanting to come back again and again. A
customer will not remember what they ate or bought, but they will always remember how they
were greeted and treated. With this in mind, Wall drug‟s training package will address what is
known at the “5 key Behaviors” that will promote positive and effective customer service. These
key behaviors include (1)Greeting Customer with a warm smile while exchanging names,
(2)Giving customer your undivided attention, (3) Having a positive attitude, (4)Using the
customer‟s name and (5) Giving a friendly Goodbye with a warm smile. Employees will also be
prompted to undergo role playing and taking turns participating in realistic scenarios that will
better assist them in learning how to deal with different kinds of customers whether it is the irate,
happy, confused or sad customer. Each section will carry out these five key behaviors.
Employees will be trained to use winning phrases such as “Welcome to Wall Drug,” “Yes!” “I
Can Help You with that,” “It Would Be My Pleasure” and “thank You.” A few more but
important things that will be included in the training package include knowledge on HIPPA,
COBRA, OSHA and confidentiality of Wall Drug.
44

45. HIPPA
It is essential that employees are aware of their rights if they do choose to leave Wall
Drug for any reason. The Health Insurance Portability and Accountability Act (HIPAA) forbids
insurers from imposing preexisting-condition exclusions when an eligible individual transfers
from one plan to another. After you have been covered in a health plan for twelve months,
preexisting-condition exclusions are no longer in effect. Prior coverage would not qualify if there
is a break in health insurance coverage for more than sixty-three days.
Cobra
The Consolidated Omnibus Budget Reconciliation Act (COBRA) extends coverage for
18-36 months. The employer does not have to pay the premium, and the premium may be
increased to a maximum of 102% of the group rate. The employee may elect COBRA within
sixty days of the qualifying event.
COBRA does not protect an employee who is fired for cause.
OSHA
Employees need to be aware of the environment and the surroundings they work in. The
Occupational Health and Safety Act is a Federal law which enforces occupational health and
safety. It is up to the employers to enforce the rules and regulations regarding the safety, health
and welfare not only of themselves but their employees and everyone engaged in the work
45

46. environment. Key issues such as hazards, health and safety risks, suitable safety controls, and
recommendations on avoiding accidents to management and employees in an organization.
Expats
Expats will be trained not only on Wall Drug‟s updated training package discussed
above, but also on the customs, rules and regulations of Germany. It is important that expats
understand the norms and customs of Germany when it comes to little things such as shaking a
business man‟s hand, or how to speak when carrying on a conversation. We need to make sure
we maintain a positive and attractive reputation if we are going to be doing business in Germany
and other international countries.
German Customs
The way you greet a person in Germany is important. A simple “guten tag”,meaning
“good day,” is greatly respected. When you enter a small place of business it is important to say
they, regardless if the business person is busy or not. This also is the same case for say goodbye,
or “Auf Wiedersehen.” When you first meet or are introduced to someone, just like in the U.S.
it is essential to shake their right hand with your right. If the German person is a young person, it
is proper to greet them with a nice personal “Du.” The older they look, you change your greeting
to a formal “Sie.” Meeting Germans might come off as challenge, but it is recommended to take
a basic German course at the education center. Also if you are inviting a German coworker or
friend out, you should make it clear that you are treating them. Expats will also have to be
educated on the importance of Sundays and Holidays. Germans take these days very
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47. seriously.No one is seen outside washing their cars or doing laundry, it is a day where no noise is
made. All of these are just a few little but important things expats have to be educated on.
Key Values of Wall Drug
Whether it is in South Dakota or Germany, with these improvement and expansion plans
in mind, we expect that wall Drug‟s core values will be carried out effectively and efficiently by
both the employers and employees. These values include supporting an environment that
encourages advancement and retention of employers and staff through effective training and
development, collaborating with all departments of Wall Drug to support each other‟s successes
in achieving the division‟s goals and objectives and creating a positive atmosphere that respects
diversity, trust, confidentiality and encourages professional interpersonal relationships among
employers and employees.
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48. Closing Remarks
We estimate that all of these improvements, transitions and expansion ideas will develop
and go into effect within the next three years. Wall Drug company has come a long way from
selling free water to setting up signs along the highway with hopes of increasing clientele. We
are proud to say that the company has developed into a prosperous and booming organization.
However, that is not where it stops. Wall Drug‟s three year plan consist of working day and
night toward these goals in better organizing the management of the company and strengthening
its internal alignment so that we can make all of these adjustments even possible. Yes, Wall
Drug was prosperous when everyone worked together in making sure tasks and responsibilities
were carried out. However, as our society continues to prosper and as technology continues to
advance, it is essential that we are taking advantages of these opportunities that are being
presented to us. Expanding globally will also push Wall Drug into a direction we are unsure of,
but willing to take that risk if it means having the opportunity to expand internationally and
compete with existing companies within the market. No, this will not be easy, but we have faith
and strong belief that Wall Drug has the power to make this happen. Ted and Dorothy are the
reason Wall Drug even exists, so it is up to the people of Wall Drug to maintain an attractive
reputation consistent production and loyal customers to keep the booming business on its feet.
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49. Sources
1 http://www.quantcast.com/www.walldrug.com
2 http://www.gerardotandco.com/about-gerardot-and-co/areas-of-specialty/place-branding-
destinations/
3 http://athletes-celebrities.tseworld.com/entertainment/hosts/bob-barker.php
5 http://www.facebook.com/help/?page=864
6 http://www.bgca.org/whatwedo/Pages/WhatWeDo.aspx
7 http://www.alexa.com/siteinfo/expedia.com
8 http://www.expedia.com/daily/associates/affiliates.asp
9 The Travel and Tourism Competitiveness Report 2011: Beyond the Downturn pg. 35
10 The Travel and Tourism Competitiveness Report 2011: Beyond the Downturn pg. 37
http://www.weforum.org/issues/travel-and-tourism-competitiveness/
11 http://www.weforum.org/issues/travel-and-tourism-competitiveness/ pgs. Xiv, xvi
12 Mendoza, Moises. “Germans' love of the wild west is bigger than Texas.” The Houston Chronicle.
16 November 2009 http://www.usatoday.com/travel/destinations/2009-11-16-
germany-texas-influence_N.htm
13 Kimmelman, Michael. “In Germany, Wild for Winnetou.” The New York Times. 12
September 2007 http://www.nytimes.com/2007/09/12/arts/design/12karl.html
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