Cvs Case Study

Topics: CVS Caremark, Caremark Rx, CVS/pharmacy Pages: 22 (5056 words) Published: November 18, 2011
CVS: The Web Strategy

History, Development, and Growth
Established in 1963, Consumer Value Store (CVS) was founded by brothers Stanley and Sidney Goldstein and business partner Ralph Hoagland in Lowell, Massachusetts. CVS began the operation of its first stores with pharmacy departments in 1967, opening locations in Warwick and Cumberland, Rhode Island. In 1984, CVS/pharmacy became the 15th largest pharmacy chain in the U.S. with 408 stores and $414 million in sales. With growing success CVS decided to acquire a web based startup company,, the first major online pharmacy, for $30 million in stock. The web site, soon rebranded, enabled customers to order prescriptions and general merchandise for either in-store pickup or mail delivery.

In addition to pursuing acquisitions, CVS also was growing organically by aggressively opening new locations. Over the years, it has expanded its operation to 7,182 retail drugstores located in 41 states, Puerto Rico, and the District of Columbia. With the 2007 merger of CVS Corporation and Caremark Rx, Inc., they have become an integrated provider of prescriptions and related health services with an unmatched breadth of capabilities. CVS Caremark has the ability to provide payors and patients with solutions that no pharmacy retailer or pharmacy benefit manager on its own could offer. In 2010, revenues at CVS totaled $96.4 billion, while annual earnings equaled $2.69 per share. (Bloomberg Businessweek, 2011)

CVS SWOT Analysis

| | | |Strengths: |Weaknesses: | | | | |1. CVS pharmacy is one of the nation's largest retail pharmacy |1. CVS is not the market leader in the pharmaceutical industry. | |chains. | | | |2. CVS leveraged into the market by acquiring existing | |2. It has a diversified portfolio that includes three industries,|businesses. | |CVS pharmacy stores, Care Mark Pharmacy services, and | | |MinuteClinic, walk-in medical clinics. |3. Internal polices - Litigation for selling methamphetamine | | |ingredients. | |3. CVS acquired, the first major online pharmacy. | | | | | |4. CVS has strong brand awareness. | | | | | | |Threats | |Opportunities |1. Market competition with other pharmaceutical companies. | | |2. Lack of experienced pharmacists. | |1. CVS has an extensive assortment of various private labels and |3. Merck-Medco, a pharmacy benefit management company refused to | |proprietary brands...
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