Strengths of CVS Pharmacy
The first strength is digital presence. Nearly 5.4 million people use the CVS Health app every month, and the number is growing by 8% annually. The company also uses the concept of Internet commerce, which leads to the positive results. Finally, online branches help to increase the number of clients.
The second strength lies in CSV Pharmacy’s location. Approximately 70% of the US population lives within a 3-mile radius of the nearest CVS pharmacy, making company more recognizable. The company chooses location of the new pharmacy very accurately, considering marketing and logistics aspects.
The third strength of the company is the variety of products and services. For instance, healthcare company provides customers with patented medicines, beauty products, cosmetics, photo printing services, convenience foods, seasonal products, greeting cards, and other products. Pharmacy’s specialists can also prescribe medication, get customers vaccinated, and offer recommendations for prescription, over-the-counter medicines, and supplements. All the variety in goods and services increase customer’s loyalty to the company.
Moreover, recently, the company announced the establishment of telemedicine service, which helps to provide healthcare in times of pandemics and social distancing. Finally, because of state’s support, CVS Pharmacy constantly works on innovations in providing goods and services.
Weaknesses of CVS Pharmacy
CVS Pharmacy has 10 000 drug stores in the USA; however, it is problematic for company to enter the international market because of high competition. One of the major competitors of the CVS Pharmacy is Walgreens Boots Alliance, which has a solid worldwide presence.
Another weaknesses lies in the company’s exposure to the legal regulation’s influence. In other words, CVS may face various liability claims when entering the international market, because the legal acts differ from country to country. Moreover, legislative changes regarding drug delivery standards can also provoke lawsuits against the company.
The third weakness of CVS Health Corporation includes the opportunity of repeating the business model by other companies. For instance, other healthcare firms may use successful CVS business strategies to increase their outcomes. Such strategies include providing low-cost medical services in order to maximize the number of active clients. This is a relatively unique business model among other pharmacies in the United States, because the development of drugs is a costly process, so everyone tries to make price on medication as high as possible. This chance of repeating is especially high during the COVID-19 pandemic, when clients are lack of money and need medication.
Opportunities of CVS Pharmacy
The first opportunity, revealed during SWOT analysis, claims that CVS Pharmacy can purchase new and innovative start-ups in order to boost its span of products and services. For instance, the company has recently acquired Aetna International, which is a fairly large company. This fact showcases the purchasing ability of CVS Health Corporation.
The next opportunity argues that the company might want to look toward China as its first international market. This is so because China has a strong economy, which is growing rapidly, and has close ties with the United States. For this, a thorough consumer base analysis and extensive marketing to the local population are required for the opportunity’s implementation.
The third company’s opportunity concerns reputation enhancement. The CVS Health Corporation can use the current COVID-19 pandemic and the opioid crisis in order to improve its reputation. For instance, using the aging population for reputation enhancement programs the image of CVS’s brand can be enhanced.
Moreover, CVS Pharmacy can use its wide online presence to conduct charity programs and healthcare-related awareness campaigns in order to gain more loyal clients. This opportunity for reputation’s improvement should be implemented accurately, because the usage of the current health issues which take place in the population, can be dangerous in terms of citizens’ approval.
Threats to CVS Pharmacy
The first threat to CVS Pharmacy lies in the growth of online retailers, which impact supply chains, retail formats, and the changes in purchasing behavior. For instance, during the pandemic, Americans started to rely heavily on ordering medication through Amazon Pharmacy.
The Food and Drug Administration (FDA) is in charge of market access procedures in the United States, ensuring that pharmaceutical companies are conducting a wide range of clinical trials. The total time of medication’s approval is approximately 8 years, which is another threat to the company.
The third threat to CVS Health corporation, according to SWOT analysis, concerns constantly rising prices of medication. In 2019, the US President Donald Trump presented a plan that could legitimize the import of certain prescription drugs from countries where they are sold much cheaper, which will harm local pharmacies. However, this will have a considerable effect on the pharmaceutical industry as high drug prices reflect the research and development costs the company has incurred in new drug launches. Many studies show that the cost of developing new drugs only grows every year, and at the moment, total sales of each new drug can cost several billion dollars. Thus, prices will rise, affecting customer loyalty.
Recommendations to CVS Pharmacy
Given the scope of the discussed factors, the CVS Pharmacy is recommended to maintain its online presence by conducting charity and healthcare-related awareness programs, to expand to Asian markets through cultural, legal, and market analysis. Moreover, it is necessary to monitor operational standards and engage in merge and acquisition of other companies. It is also recommended to enhance its innovation and supply chain and collaborate with start-ups and small businesses to strengthen its competitive advantage. Finally, the company insights retrieved in the result of the SWOT analysis allow for envisioning the current and probable future issues for their time and informed resolution.