Introduction
The given assessment will primarily focus on the opportunities section of the SWOT analysis of CVS Pharmacy. It is important to note that opportunities consider mainly external factors and forces, which can be utilized to improve the current state of a company, but they can be intertwined with changes that might take place within an organization. The opportunities are vertical integration, international expansion, and brand image enhancement.
Opportunity #1
The first major opportunity for CVS Pharmacy is to integrate vertically through mergers and acquisitions of other companies operating near its market. The recent acquisition of Aetna International by CVS Pharmacy is an outstanding example of how the company is moving in the right direction (“Together for you — Aetna and CVS Health,” 2021). In other words, CVS has enough resources and size to be able to acquire other well-established enterprises to enter the markets related to its main market. It is important to note that Aetna is a fairly large company, which showcases the purchasing ability of CVS, which can also aggressively target new and innovative start-ups and purchase them to boost its span of products and services.
Opportunity #2
CVS’s key strengths are rooted in its locational presence across the United States, but its international span can be considered weak. It is stated that “WBA has a strong international presence while CVS is mostly present in the US” (Bells, 2017, para. 2). In other words, its major competitor Walgreens is already utilizing this major opportunity of tapping into international markets, which is why CVS should consider expanding. The company should consider China as its first international market due to the nation’s strong economy, which is growing rapidly, and the close ties of the United States with China. The opportunity will require consumer base analysis and extensive marketing to the local population.
Opportunity #3
The third opportunity is mainly focused on brand image and identity and is related to major ongoing healthcare issues. The current COVID-19 pandemic, the opioid crisis, and the aging population are ideal public health problems, which can be utilized for the company’s reputation enhancement programs. CVS Pharmacy can effectively use its strong online presence to conduct charity programs and healthcare-related awareness campaigns by helping these groups with their conditions and concerns. For example, some of the company’s branches are already doing it, but on a smaller scale, such as York CVS launching an “online fundraising campaign to help raise vital funds to support York’s small charities and charitable organizations” (York CVS, 2020, para. 1).
In other words, the company should use its size and dominance in the US to advocate for and help communities in need, which will greatly improve the brand of CVS. The given opportunity will require an innovative, technological, and marketing-based approach since social media will play a major part in the process.
Business Concept #1
The first business theory is contingency management theory, which is highly applicable to the opportunity of international expansion, such as in China. The theory states that no single management approach can be suitable for every environment or situation, which is why an organization needs to constantly evaluate key influencing factors as well as its external and internal catalyzers for ensuring that the current management framework is plausible (Otley, 2016). It should be noted that the Chinese market of pharmacies and insurance has both major and minor differences compared to the US market, which is why CVS should not use its current approaches when expanding internationally but rather utilize proper evaluative techniques and awareness of the target specificities.
Business Concept #2
The second concept is servant leadership theory, which applies to the opportunity of improving brand image and identity. The theory mainly emphasizes that a leader should aim to serve their followers rather than commanding or simply collaborating with them (Heyler & Martin, 2018). In other words, CVS Pharmacy is a leader in the pharmaceuticals retail in the United States, which is why adopting such a measure can be effective at conducting nationwide fundraisings, charity works, and public health issue-related campaigns. For example, the company can serve a multitude of communities struggling with opioid abuse or address the problems of older adults, which is highly relevant since the United States population is gradually aging.
Dimensions of the General Environment
In the case of the dimensions of the general environment, it is important to note that the first opportunity for vertical integration stems from the external environment of market saturation. In other words, CVS is already the leader of the market and has a substantial market share, which is why it should consider targeting other related markets, such as insurance or drug manufacturing. For the second opportunity of international expansion, the dimension is manifested in the fact that the United States market is limited, whereas China and other countries are mostly untouched by CVS. The dimension for the third opportunity of brand image enhancement is rooted in the US’s major public health issues, such as COVID-19, the opioid crisis, and aging.
References
Bells, S. (2017). Walgreens versus CVS: Comparing international presence. Market Realist. Web.
Heyler, S. G., & Martin, J. A. (2018). The contingency theory of management accounting and control: 1980–2014. Journal of Managerial Issues, 30(2), 230–237. Web.
Otley, D. (2016). The contingency theory of management accounting and control: 1980–2014. Management Accounting Research, 31, 45–62. Web.
Together for you — Aetna and CVS Health. (2021). Web.
York CVS. (2020). Fundraising campaign launched to help York’s small charities. York CVS.