Running head: CVS PHARMACY: A SWOT ANALYSIS 1

CVS Pharmacy: A SWOT Analysis

Jaclyn Hurley

Southern New Hampshire University

7/10/2017
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No organization ever starts without a vision to succeed; the desire to thrive irrespective of

the industry remains a principal objective regardless of a company’s size or market niche. In the

world today, many organizations keep on emerging in different industries as others exit the same.

The strategies they use, the products they offer, market relationships, and the ability to adjust

have been key determinants of their success or failure. Indeed, this is a case that applies to all.

Regardless of the market that an organization explores, it is imperative for it to understand its

strengths, weaknesses, opportunities, and threats. This analysis covers the four different concepts

with CVS Pharmacy being the reference company.

The importance of carrying out a SWOT analysis emanates from the fact that it is vital

for every organization to understand its position; it gets to know where it is doing well, where it

needs to improve, and what to avoid (Helms & Nixon, 2010). Similarly, it offers a detailed

picture which can be applicable for projection purposes. As such, a company can predict its

prospects based on current performance. A SWOT analysis also serves as a risk analysis element.

If a company is well aware of the present and possible threats, it is possible to devise mitigation

strategies. Indeed, it is the most reliable presentation of an organization’s performance areas and

risk scenarios (Hollensen, 2015).

In reflection, CVS Pharmacy invests in a very critical area of today’s business. Dealing

with people’s health is never easy; there are many risks involved, regulations that lead to

numerous frustrations in the industry, ethical issues, and professional restrictions also make it

hard for many businesses to thrive especially sole proprietorships (Kotler, Shalowitz, & Stevens,

2011). Despite CVS Pharmacy being a top performer compared to its main competitors, the

market situation for any business has never been static. Issues keep on emerging hence the need

to understand its position as in the case of other companies. As a result, CVS Pharmacy can use
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such an analysis to know where its strengths are, current weaknesses, present and possible

opportunities and threats too. Indeed, it is a way to knowing how to remain competitive and

relevant regarding the demands of different situations.

SWOT Analysis

Strengths Weaknesses

 Strong market presence  Growth slows

 Competitive product mix  Many controversies

 Consistency and long service  Focus on retail

 Ability to adapt

Opportunities Threats

 Future technologies  Competition

 Emerging markets  Slowing growth in emerging markets

 Increasing population  Ethical issues

 Consumer health education needs  Market regulations/Internal policies

This presentation is an accurate scenario of CVS Pharmacy’s position about the critical

areas that influence business performance in the pharmacy industry. The most crucial thing to

note is that most of these issues happen simultaneously often leading to difficulties and

numerous complications in the industry. Considering the prevalence of these issues, it is evident

that the current performance in CVS Pharmacy is commendable considering that it has been able

to dominate a market with many regulations and changes each day.

As far as the strengths are concerned, one thing that is apparent in CVS Pharmacy is a

strong market performance. Although it has been in the industry for long, CVS has been able to
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capitalize on this advantage and keeps on growing, adapting to changes, and revolutionizing as

time advances as well as rebranding (Dan, 2014; Nathan, 2016). However, its main strength has

been in the product mix. Different from the case of its many competitors that specialize in drugs

and pharmacy services, CVS offers an assortment that even includes photo finishing services,

beauty products and cosmetics, convenience foods as well as greeting cards. Indeed, it is a

business aspect that goes beyond offering pharmaceutical products and services to providing the

consumers with a range of products as far as they can afford.

Due to this strong market performance, CVS continues to excel despite many competitors

rising. In fact, its main competitor, Walgreens Boots Alliance ranks 37th and CVS is 7th among

the leading corporations. Another advantage which adds to its strength as well is market’s

consistency. Indeed, it is an attribute that many companies should learn from CVS. Despite the

pressures of time, unexpected changes and unfavorable policies, CVS has been embracing

quality in its products and services. As a result, it has been able to build trust among its clients

and retaining them in return (Dan, 2014).

However, despite having such a strong market presence and ability to outdo its major

competitors, CVS has weaknesses which can affect its business prospects in the future. The most

obvious case includes controversies. Despite its capacity to overcome them, the company has in

the past been a victim of privacy cases, bribery accusations, prescription errors, and tax lawsuit

(Jesse, 2016). Such occurrences affect the business reputation and hamper customers’

confidence. In a nutshell, it has not been able to keep standards as the market requires. Other

issues include focusing too much on retail which can hinder expansion as well as growth slows.

In fact, having served the market for 54 years, the company should be operating worldwide

which is not the case.

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Every market presents several opportunities, and it is the same with the pharmaceutical

industry. One of the leading opportunities that CVS can take advantage of is technological

openings. Considering that consumers are increasingly making use of Apps to get information as

well as developing an increased urge for consumer health education, CVS should invest in health

literacy as a new service. In this regard, it should develop and make use of technological

applications which address its clients’ queries when in need. Another opportunity is the case of

emerging markets; they surface from increasing populations and changing market dynamics

(Kotler, Shalowitz, & Stevens, 2011). The case of the scenario above of consumer education is a

perfect example.

Despite such opportunities, numerous threats characterize the pharmaceutical industry.

One that is apparent is growing competition. As time advances, different companies keep on

investing in this industry while integrating new technologies. A perfect example includes the

Indian businesses that also have vast experience in the health sector. They include Sun Pharma,

Lupin, and Glenmark and no one should overlook their entry. Besides, competition, it is also

imperative to consider policy reforms and slowing growth in the emerging markets. The

economic growth is low in these markets and makes international entry, investment, and growth

a challenge.

Another significant threat to take into account in the pharmaceutical industry includes the

issue of ethics. The main reason for considering it as a threat emanates from the fact that there

are so many and high expectations for a pharmacist. In connection, a small error can lead to a

significant business collapse. Additionally, ethical standards in healthcare help in making right

decisions and informed consent. For instance, during inquiry and treatment procedures, doctors

and pharmacists often come across a lot of patient's information which even a patient may fail to
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understand. In such a case, informed consent ensures that physicians only give the ill the

necessary information and in the way that he or she understands (British Medical Association,

2012).

Regulation by medical ethics also ensures patients receive the best recovery procedures

and assess those who cannot make self-decisions about their care mostly the underage. It also

prevents the sale of drugs to the minors especially the teenagers and students. The complication,

in this case, is that ethical requirements are never static. With many regulations emerging often,

the possibility of being involved in an unethical issue is very high, and the consequences are far-

reaching. In other words, ethical traps prove to be a significant risk any day. Also, considering

the impact of their consequences such as in the case of a scandal, no business would like to

imagine them hence the need to be extremely careful when making health decisions with ethical

connections.

From the SWOT analysis, the different aspects that can influence CVS Pharmacy’s

business situation are evident. However, and as it applies to other scenarios, their impact is never

the same. For instance, the contribution of technology and product mix is very different from the

exploitation of emerging markets or embracing ethics. Regarding that, the essential thing to

factor is to ensure that there is a balance at all times. CVS should make creative use of every

emerging opportunity, capitalize on its strengths, be careful of threats, and devise measures to

mitigate its weaknesses. As a result, it will have a stable market situation where its business can

be responsive to any emerging change or unexpected market demand.

Prioritized List
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Just like it applies to the other industries, there are some factors that a company

prioritizes when making critical decisions. Apparently, the pharmaceutical industry is a highly

profitable one, but there are dangers ahead; many regulations are emerging, global spending on

medicine highly changing, and methods of doing business changing at a very high rate (DiMasi,

Grabowski, & Hansen, 2016). As a result, it is imperative for any company to be highly dynamic

and responsive to all scenarios. Creativity and accurate decision making must be precedence as

well. Above all, it must choose what to prioritize regarding its strengths and exploit as well as

understand its weakness and come up with creative and practical ways to mitigate them.

In response to that, a major strength for CVS Pharmacy is efficient product mix. In

reflection, an organization that offers varieties of products while embracing quality stands to

compete for long; it builds trust, and its customers can start new links. Apparently, this has been

the major strength for CVS. During its 54 years of service, the company keeps on offering a

variety of services and products as time changes. Its customers do not need to stick on a single

product line or trade with the company for a single product or service. Also, due to its

consistency, it has been able to attract and retain a large customer base which no doubt will play

a significant role in influencing its future business position.

In a way to exploit that necessary strength, there are several interventions that CVS

Pharmacy should apply. The first is to widen its assortment margin; it should continue giving

more variety to the existing product lines. Secondly, CVS should keep on studying the different

needs of its customers. Instead of imagining what they may require, it is worth to make periodic

assessments and come up with products or services that meet the noted demands. Thirdly and

most importantly, it should keep on studying future business prospects. It is likely that what is

working today will be irrelevant tomorrow. Making advance plans will ensure that it does not
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plan or establish services that will become redundant within a short time. As such, value for

money and time should remain a top consideration too.

Another significant strength that CVS should exploit is its strong market presence.

Considering that its main competitor ranks 30 positions below it is a great advantage, and it

should benefit from it. Strong market presence ensures doing business with ease; customers have

a high trust level with dominant businesses especially the ones with positive reviews (Wild,

Wild, & Han, 2014). However, in a way to preserve and exploit that opportunity, CVS should

consider several things. Firstly, it should keep on embracing quality as it brings new products to

the market. Secondly, it must utilize the various promotional methods for successful business to

maintain its current client base while attracting others. Thirdly, it needs to use its positive

reputation and strong business image to expand markets. In this regard, instead of targeting

nationwide control, CVS should establish a strong global presence particularly by making

efficient use of technology.

On the other hand, the most significant weakness to mitigate is recurrent controversies.

Like earlier mentioned, CVS Pharmacy has been a victim of several major controversies that

include deceptive business practices, tax lawsuits, patient’s information disclosure, and

prescription errors among others. It is vital to note that repeated cases of controversial business

cases affect customers’ trust; it depicts ignorance and can make them avoid the company too

(Jesse, 2016). In a way to avoid the possibilities of such scenarios, CVS should ensure

everything is up to the standard required. Above all, embrace ethical business as well as enhance

corporate social responsibility as a critical element of its core values.

Readiness Evaluation
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From the evaluation of the internal factors and analysis of the market domain, it is

justified to deduce that CVS Pharmacy is ready to compete in the ever-changing and critical

business situation in the pharmaceutical industry. As the analysis show, the healthcare industry is

an area that deals with critical issues each day and requires extensive understanding of the

market, dynamism, adaptability, and creativity before venturing into it. Ethical business is also

an elemental consideration and affects business success in great details. Evidently, different

companies seek entry into this market, but it is not all that survive; some exist after a short period

while others rise to become strong forces that outshine others.

Nevertheless, several factors justify a competing position and signify an ability to do

successful business today and in the future. The first factor involves the company’s advantage of

a strong market presence. Although it is not monopolistic, the ability of the company to compete

for long and diversifying its product and service lines is sufficient to affirm that it stands a better

chance to excel. Secondly, its ability to adapt or respond sufficiently to emerging challenges in

the market is another case that justifies readiness to compete. Above all, the company is an

extensive coverage while offering an assortment of products and services is another indication

that it understands what the market needs. In like manner, it shows readiness to compete.

In summation, although current success does not imply being the same in the future, the

SWOT analysis of CVS Pharmacy shows a business ready to compete. Despite the various

weaknesses, which are a typical case of many organizations, the company has a higher chance of

remaining competitive for long. Indeed, it has much strength that many companies lack. The

only thing that is required is to exploit them effectively to become competitive globally as well.
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References

1.) British Medical Association. (2012). Medical Ethics Today: The BMA's Handbook of

Ethics and Law. John Wiley & Sons.

2.) Dan, G. (2014). CVS Health and Target Sign Agreement for CVS Health to Acquire,

Rebrand and Operate Target’s Pharmacies and Clinics (Press release). CVS Health.

3.) DiMasi, J. A., Grabowski, H. G., & Hansen, R. W. (2016). Innovation in the

pharmaceutical industry: new estimates of R&D costs. Journal of health economics, 47,

20-33.

4.) Helms, M. M., & Nixon, J. (2010). Exploring SWOT analysis–where are we now? A

review of academic research from the last decade. Journal of strategy and

management, 3(3), 215- 251.

5.) Hollensen, S. (2015). Marketing Management: A Relationship Approach. Pearson

Education.

6.) Jesse, V. (2016). Pharmacy Fraud, Waste, and Abuse. U.S. Pharmacist. Jobson

Publication.

7.) Kotler, P., Shalowitz, J., & Stevens, R. J. (2011). Strategic marketing for health care

organizations: building a customer-driven health system. John Wiley & Sons.

8.) Nathan, B. (2016). CVS launch the rebranding of Target Pharmacy. N.p.: USA Today.

Wild, J. J., Wild, K. L., & Han, J. C. (2014). International business. Pearson Education

Limited.