SWOT Analysis of CVS Pharmacy


A SWOT analysis is a general method to understand, identify all strengths, weaknesses, opportunities, threats correlated to a company or an organization. The main aim of the SWOT analysis is to specify all positive and negative factors, risks, benefits. People conducting this analysis can drive all processes undertaken in a company structure to choose appropriate tools for resolving problems. According to Philips (2011), “participants are invited freely to express internal Strengths and Weaknesses covering the organization’s people, structures, processes and technology, and to identify external Opportunities and Threats” (p.928).

All participants can express their standpoints and suggestions to make a company a best-performing brand. To illustrate the clear idea of this strategy correctly, Evans and Wright (2009) stated that “a SWOT analysis remains one of the most helpful techniques for strategic planning, as it delivers a rich and strong statement of a business’s strategic position” (p.20). It is evident that this strategic technique dismantles all concerns related to a company’s politics so that it can help to reassess all approaches, tools, techniques used in an organization. Companies use a SWOT analysis to incorporate rational and practical approaches to augment a company’s performance to a great extent to get a profit-maximizing brand.

SWOT Analysis of CVS Pharmacy

CVS Pharmacy is the subsidiary of CVS Health Corporation, founded by Goldstein S.P. and Hoagland R. in 1963 in Lowell, Massachusetts. Actually, CVS Pharmacy used to be a subsidiary of Melville Corporation and was branded as Consumer Value Stores (1963-1969). After realizing all inactive bonds and shares, Melville changed its brand to CVS Corporation. in 1996. The Ex CEO, Tom Ryan, stated that CVS stands for “Convenience, Value, and Service.”

In 1997, CVS included 1 425 stores operating across the country, collaborated with the Revco Drug store chain that counted 2,600 stores in the Midwest and Southeast. In 2004, CVS acquired Eckerd stores with 1,260 stores in Texas and Florida. This expansion made CVS the largest retail pharmacy chain in America as Hourican (Executive Vice President and President – CVS Pharmacy) (2018) stated in the annual report that “CVS Health has nearly 10,000 stores that are an important part of their communities. We want to build upon that trust by enhancing the health care services we provide in our stores—making them more accessible and meaningfully improving patient health” (p.9).

This company is an American retail pharmacy specializing in diverse and multifunctional healthcare services. According to CVS Exclusive Offering Memorandum (2016), CVS Pharmacy is the most prosperous and abundant pharmacy chain in the USA, with its Head Office in Woonsocket, Rhode Island (p.5). The company employs approximately 250,000 people and has over 9,600 locations across the country. Its major sections include Pharmacy Services and Long-Term Care that are aligned with offering the upscale service and selling prescription drugs and medications. According to Faris et al. (2018), “in the CVS pharmacies, dispensing pharmacists provided drug use review, prescription counseling, refill reminders, and vaccinations” (p.71).

Besides, referring to the authors, all clients are satisfied with the service, as CVS Pharmacy’s politics is centered around maintaining the customer relationship and delivering high customer satisfaction relative to competitors (Faris et al., 2018). It is a growing and expanding company with annual revenue of $ 7.201 billion. CVS Pharmacy’s mission statement revolves around improving people’s lives and helping human beings enhance their well-being in all directions.

Factors Taken into Account When Determining the Company’s Strengths

Organization Resources

CVS Health Corporation operates a pharmacy network of more than 9600 pharmacies. It occupies about 26% of the total retail pharmacy market in the United States (Frakt & Garthwaite, 2018, p. 26). The pharmacy’s capitalization is $71.85 billion; in 2018, the company ranked seventh in the Fortune 500 list and 17th in the Fortune Global 500 list with annual revenue of $184 billion (Frakt & Garthwaite, 2018, p. 29). The number of employees in 2017 was 203,000 people; after the pandemic outbreak, this number increased by another 50,000 employees (Frakt & Garthwaite, 2018, p. 33).

Processes For Company Management

In cooperation with Comindware, CVS has launched a large-scale project to transform its IT management infrastructure. Comindware provides a modern platform for business management; the platform is based on process management (BPMS), Case Management (ACM), tasks, and social interaction. In addition, CVS has decided to integrate patient databases, which will allow doctors to monitor patients ‘ medication intake in real-time (Yap, 2018). According to the agreements reached, the medical records of all CVS pharmacies were combined.

Past Experiences

The negative experience of superimposing the 2008 crisis on outdated employee training technologies led to the beginning of automation of employee training. In cooperation with Comindware, CVS has started automating corporate training (Guo & Eschenbrenner, 2018). The overall structure of the company is both linear and functional (Evans & Wright, 2009).

Market Opportunities

Demographics create new opportunities in the market that the company can take advantage of. The share of the elderly in the United States and other countries is overgrowing. This creates a favorable long-term situation for those who produce medicines and for those who sell them.

Business Perception

The company’s CEO claims that the primary goal of pharmacies is “convenience, significance, and service”; the abbreviation “CVS” stands for it. The management is constantly striving to improve the work of its branches and make the shopping process even more pleasant for customers. Thus, various options for saving and enhancing the product range are constantly offered; customers appreciate it, and CVS pharmacies have an excellent reputation.

Market Changes

In recent years, due to the coronavirus pandemic and quarantine, the consumption of pharmacy products in the United States has increased. Sales in pharmacies were affected not only by the purchase of medicines for the future during isolation but also by the real epidemic of colds. CVS hired an additional 50,000 new employees to cope with the new load during the outbreak of the pandemic (Frakt & Garthwaite, 2018). The timing of the decisions taken play an essential role since the epidemic of coronavirus infection has caused changes in the pharmaceutical market. It increased the speed of transformation of processes in the market.

Advantages of the Company

The company actively participates in the country’s political life, which does not go unnoticed among customers. Thus, the CVS Corporation has its own political action committee (CVS Corporation Employees PAC), officially registered with the Federal Election Commission. This committee acts as a fund through which the election campaigns of various candidates are financed (Guo & Eschenbrenner, 2018). As an additional tool, CVS Corporation uses consulting firms that provide services for establishing relations with the government. This allows it to strengthen its position both among citizens and enlist the support of politicians.

Market Position

CVS is the largest retail pharmacy chain; it adequately responds to the modern challenges of global competition and successfully copes with them. CVS Pharmacy is the 7th largest corporation in the United States according to the Fortune 500. Its main competitor of the retail chain Walgreens Boots Alliance took 37th place in this list (Guo & Eschenbrenner, 2018). Thus, the company occupies a strong position in the market and has only one major competitor.

Strategic Direction

A clear strategic direction of the company is to expand further and increase patient orientation (Phillips, 2011). The pharmacy chain CVS acquired a large medical insurance company Aetna (Frakt & Garthwaite, 2018). The merger of CVS and Aetna is part of the trend towards consolidation, which is paramount among the company’s long-term goals. After the merger, the companies reduced administrative costs and medical care costs for patients.

Work Environment

The socio-psychological climate in CVS pharmacies is a manifestation of the effectiveness of pharmacy managers and has a positive impact on economic indicators. A comfortable workplace has a significant effect on the work of the pharmacist. An important place is occupied by communication in the team, the social atmosphere, and the psychological climate, which are favorable throughout the working day.


CVS takes the leading role in the pharmacy industry, so, obviously, that it has several strong points and strengths. As it is the largest drug dealer in the USA, its company revenue is growing annually. Due to the current pandemic situation, CVS has incorporated innovative approaches to satisfy customer needs regarding their protection and support. Graham (2021) claims that “CVS Health has built additional testing infrastructure in local communities, particularly those hit hardest by the pandemic, to bring testing resources to uninsured and underserved individuals” (p. 281). It proves that this organization is a customer-oriented corporation trying to achieve a high level of consumer satisfaction through new tools devised in the current situation.

Strength 1: Digital Presence

CVS Health has a notable digital presence: around 5.4 million people use the CVS Health app every month, which is growing by about 8% every year (Guo & Eschenbrenner, 2018, p. 25). The concept of Internet commerce used by the company, namely, statistical control of processes, leads to successful development and achievement of positive results (Evans & Wright, 2009). In the general environment, online branches are also opened, but rival companies started this process not so long ago and are not as actively promoting it as CVS.

Strength 2: Location

Approximately 70% of the US population lives within a 3-mile radius of the nearest CVS pharmacy (Frakt & Garthwaite, 2018, p. 25). In general environment, the network of pharmacies and stores with medical supplies is not so large and is located much less conveniently for the buyer. When choosing an effective store location, the marketing and logistics aspects of the theory of marketing efficiency are used (Frakt & Garthwaite, 2018). In this regard, CVS Health will be able to make money on both short-term and long-term trends.


CVS operates in the US and has a weak performance outside this country, so it manifests limited success and prosperity outside the primary and core business. Moreover, in 2010 “the CVS Pharmacy, Inc. (“CVS Pharmacy”) was fined $77.5 million for its unlawful sales of pseudoephedrine to organized crime” (Guo & Steinbrenner, 2017, p.1). This embroiled-in law case caused several difficulties, such as erosion of the brand, gaining a spotted reputation, and decreased cash flow.


High-tech digital innovations, inventions might stimulate CVS Pharmacy to devise renewable, biodegradable materials and unique packaging materials. The concept of sustainability is current nowadays; companies endeavor to tailor customer’s expectations. Furthermore, the online market development might help build up a more effective platform among consumers, thus obtaining offshore customers. Opening up new markets and refining them could enhance the possibility of entering the lucrative international market.


The constant government penetration, intervention could entail the possible law cases and investigation that could cause the escalating issue among consumers in the long run. Moreover, there might be a real threat for the organization to drive up its sales internationally, considering the current pandemic situation and the increasing desire to isolate the American economy from the outer world. Finally, low-income markets and new emerging markets as competitors could make CVS produce low-quality products.


Provided the clear-cut CVS SWOT analysis could demonstrate a tried-and-trusted image of this organization. Due to identifying strengths, weaknesses, opportunities, threats, participants of this organization can detect all foreseeable problems and find rational solutions to them. This strategic planning technique is a telling example of a tool that can enhance every company’s performance and productivity.


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