Cvs - Web Strategy

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Running head: CASE ANALYSIS – CVS: THE WEB STRATEGY

Abstract
CVS decided to expand its services by opening a Web -based drugstore. Initially, there were many doubts concerning how to do it “right”; building it from start, or acquisition were the options on hand. After studying the possibilities CVS decided to acquire Soma.com and gradually (less than 3 months) turn it into CVS.com. There were many challenges during the process: coordinating a bicoastal organization (Soma.com headquarters were in Seattle and CVS headquarters were in Rhode Island), determining how the reimbursement were going to be handle for online purchases, building brand awareness and increasing traffi c and sales on the new channel (the Web). This paper intends to analyze CVS’ Web strategy and provide some recommendations on that area.

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CASE ANALYSIS – CVS: THE WEB STRATEGY

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CASE ANALYSIS – C VS: THE WEB STRATEGY
After carefully studying how to venture in a new distribution channel (the Web), CVS decided to acquire an established company (Soma.com). The goal was to re -launch Soma.com as
CVS.com, in just a few months. The pressure was high since the competition was fierce and constantly increasing. By the time CVS acquired Soma.com there were already strong competitors in the market: Drugstore.com and Planet Rx. Venturing on a Web-based drugstore was based on the fact that “the market for drugstore products was four times the combined sales of books and CD’s, two sectors that had flourished on the web” (Shah, 1999, p.1). Everyday more and more drugstores were thinking about the possibility of venturing with online presence, the Internet was flourishing and everyone wanted to take advantage of it.
According to Shah (1999), CVS decided to acquire Soma.com for several reasons: speed, human resource quality, fully automated warehouse, and similar health -care-focused beliefs.
Speed was crucial to respond to the fast -growing competition, “it would have taken

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