Business & Finance 2-1 Assignment: Project Outline Assignment

5

1-2 Blog: Project Analysis

Cole Staats

Southern New Hampshire University

BUS-400 Driving Business Opportunities

Alan Marley

May 7, 2023

1-2 Blog: Project Analysis

CVS Health Corporation is a healthcare company headquartered in Woonsocket, Rhode Island, United States. It is the leading pharmacy service provider in the country, with over 9,900 stores across different states. The company provides various products and services, including healthcare and wellness, personal care products, beauty products, and, most importantly, pharmacy services. But still, CVS faces tough competition from other companies (refer to Figure 1.0). To fight this competition, CVS Health should improve its pharmacy services to create a better customer experience.

Value Proposition

CVS specializes in healthcare services. It operates through retail segments, pharmacy services, and healthcare benefits. The organization delivers innovative solutions that meet customers’ unique needs and preferences and earn their loyalty (CVS Health, n.d.). This has created a strong differentiation between CVS Health and its competitors, including Cigna, MedImpact, UnitedHealth Group, and Rite Aid.

Profitability

CVS is profitable, though the company experienced a drastic decline in annual profit in 2022. According to reports, CVS generated over 322 billion U.S. dollars in revenue for the financial year ending December 31, 2022, a 10 percent increase from 2021 (Minemyer, 2023). Revenue also grew in the pharmacy services segment. CVS Pharmacy generated over 43 billion U.S. dollars in revenue in the fourth quarter of 2022, an 11 percent increase from the fourth quarter of 2021. However, profit declined from 7.9 billion U.S. dollars in 2021 to around 4 billion U.S. dollars in 2022.

SWOT analysis Strengths

The company’s main strengths are reliable suppliers, a reputable brand name, acquisitions, and strong distribution networks (refer to Figure 1.0). CVS Health is well-known for having a reliable and strong supplier network in the country. By having reliable suppliers, the company avoids shortages of raw materials and ensures superior quality. Besides, CVS Health has a strong brand name. Customers can easily memorize the brand while shopping for healthcare and pharmaceutical products. Additionally, CVS has been actively acquiring other companies over the years, strengthening its competitiveness and enriching its portfolio. Lastly, CVS Health has a strong distribution network. This ensures its products and services reach the target customers. CVS can leverage these strengths to improve its pharmacy services.

Product or Service Singularity

The company will use digital tools to improve its pharmacy services. This will help improve customer experience (both online and in-store), giving customers more choices and enhancing convenience while ensuring more time for meaningful pharmacist-patient interactions.

New Product or Service Projections

CVS Health will strengthen its profitability by improving its pharmacy services. According to reports, CVS Health dominates the pharmacies and drug stores market. The company accounts for over 30 percent of market revenue (IBISWorld, 2023). By improving its pharmacy services, CVS Health will increase its market share, as well as profit and revenue.

Figure 1.0: SWOT Analysis

Strengths 1. Reliable suppliers 2. Reputable brand name 3. Acquisitions 4. Strong distribution networks	Weaknesses 1. Inefficiencies in anticipating demand 2. High staff turnover 3. Generic products and services, 4. Limited success outside main business
Opportunities 1. Investment in new technologies 2. Online channels 3. International expansion 4. The new tax policy	Threats 1. Stiff competition 2. Regulation risks 3. High inflation 4. Local distributers

References

CVS Health. (n.d.). Our Purpose. CVS Health.

IBISWorld. (2023). CVS Health Corporation - Company Profile. IBISWorld.

Minemyer, P. (2023). CVS reports double-digit revenue growth in 2022, $4.1B in profit. Fierce Healthcare.