Week 3 Porter's Five Forces
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Week2AddingValue.pptxcvs David Leonard University of Phoenix MGT/576 17 September 2022
Description of the organization
The CVS pharmacy and CVS Caremark networks of retail pharmacies are among the health and pharmaceutical companies owned by CVS.
It has improved the health of whole communities through its services, and thousands of individuals have benefited from the firm's services.
In addition to helping consumers understand the health care system, the business also helps them use it.
The company's ultimate goal is to expand its reach and enhance the existing health care system.
Since it first opened, the firm has expanded because to its dedication to its clientele.
Health care solutions offered by CVS Health are unparalleled in the industry. Patients benefit from their assistance in navigating the health care system and their own treatment since it increases convenience, decreases expenses, and acts as a reliable companion. Every day, they give their hearts and souls to this work.
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Strengths
It is important to CVS that different parts of its organization work together to achieve synergy.
Guo et al. (2018) report that both the retail pharmacy sector and the healthcare business in the U.S. have deep penetration levels.
American healthcare and retail pharmacy sectors highly regard CVS as a quality brand.
Compared to its primary competitors, the brand is more competitive because of its strengths and core competencies.
The firm's extensive market reach gives it an advantage over its smaller rivals, which can't match its economies of scale in the present day United States
By delivering economies of scale, CVS delivers a high level of penetration through chain synergy across its interdependent divisions and subsidiaries (Guo et al., 2018).
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Weakness
It is difficult for retail healthcare and retail pharmacy operations to expand beyond their current boundaries.
(Hao et al., 2020) it is possible to replicate the retail pharmacy model used in the health care industry successfully.
A government regulation can have a significant impact on the pharmaceutical and healthcare industries.
Business risks have a particularly detrimental effect on the healthcare and retail industries in the US.
Stores selling the brand's products compete directly with the company.
Despite CVS's somewhat limited retail pharmacy business and its rather narrow retail breadth, its operations and business model for healthcare are easily replicable (Hao et al., 2020).
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External Environment
There are external factors that have led the organization to gaining some opportunities in the market.
The organization has not hesitated to learn the changes in the external environment which lead to opportunities.
These factors include changes in the demographics which lead to changes in the health care system.
There is demand of certain drugs which lead to increased demand in the organization when exploited it leads added value in the organization.
These include the demand for antiaging drugs in the market.
There are a lot of external factors which the company can exploit to get the best value in the market. These factors are caused by several things and this includes the changes in demographics. The company can exploit these opportunities to add value.
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The population has been using a lot of cosmetics to enhance and others change their appearances.
In the process there is a demand created for some drugs which CVS is able to provide.
This include anti aging drugs which the company can provide in the market to add value.
The aging population is also an external market factor that creates opportunities for the company.
The aging population has increased prescriptive needs which the company can take as an opportunity and exploit them for their advantage,.
The aging population comes with needs which can be exploited by the company for its advantage. Due to aging prescriptive drugs are demanded more and the company can consider this as an opportunity to add value.
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There is also other opportunities which are being brought by the demand in the market which leads to unsolved needs.
Trends in the society have changed. People are adopting new lifestyles.
While some are seeking to look certain way, others are looking for drugs to ensure they are living by certain standards.
Therefore there are unsolved problems in the market which create a good opportunity for the company.
These unsolved problems include drugs for slimming or adding weight depending on an individual.
There are unmet needs in the society which have created unsolved problems. Solving these problems creates opportunities in for the company which they can exploit hence adding value.
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Evaluation of opportunities to add economic value
Through raising prices or selling additional goods and services to increase its revenue.
Through decreasing capital cost by reducing operating expenses , liquidating capital that does not cover the cost of capital and increasing marginal expenses.
The company may reach economies of scale in order to improve its marginal productivity.
Ensuring that the capital invested is generating returns above the minimum required return therefore a positive economic value added generated.
Parts of costs invested by the company should include the cost associated with research and development
CVS raised the prices of goods and services to increase its revenue , it also decreased the capital cost by reducing operating expenses and ensured the capital invested is generating returns above the minimum required return.
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Evaluation of opportunities to add social value
Establishing a healthy business through promoting equality and business partners and customers ethnicity.
Creating a healthy community through increasing access to healthcare , colleague volunteerism and addressing the disparities that hold people back from better health
Creating a healthy and friendly environment through reducing environmental footprint to create a healthier world.
Buyers are asked to explicitly evaluate social value in exercises of procurement.
Partnership with trusted non profits which provides increased access to quality healthcare in the community.
CVS has established a healthy business by promoting equality , it has also created a healthy community through increasing access to healthcare , and also partnering with other non profits to provide increased access to healthcare.
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Evaluation of opportunities to add environmental value
Valuation method are developed to generate reasonable estimates of the environmental amenities by the environmentalists and natural resource economists.
An international effort was launched to identify strategies for conservation and sustainable use of the environment and evaluate the current state of earths ecosystems by the united nation
Dollar values is placed on the elements of the environment that might be considered priceless (Williams et al., 2020).
A wide range of ecosystem has been provided by scientists and police makers therefore they have been able to develop a new framework for thinking about how nature has value.
Fixing common pool resource problems and excessive rates of resource exploitation therefore giving environmental analyst an easy time to identify quantity measures,
CVS has made it easy to use valuation method in order to generate reasonable estimates of the environmental amenities , it has also launched an international effort to identify strategies for conservation and sustainability of the environment (Williams et al., 2020).
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Opportunity to pursue first
Management of diabetes. Virta, the virtual diabetes care company of CVS Health, entered into a strategic alliance with the insurance division of CVS Health known as Aetna at the beginning of this year. A joint venture between Banner Health and this partnership was formed. Virta's diabetic care management program is available to select Aetna members as a result of this agreement. Monitoring of diet along with remote monitoring is part of this program.
Clinical profiles of patients are complex. To provide home-based medical care, Aetna, a subsidiary of CVS Health, collaborates with Elemy, Landmark Health, and WellBe Senior Medical. With Elemy, people with mental health disorders can receive internet treatment at home. Among the Landmark Health patients with chronic diseases who receive home visits and virtual doctor visits may be those who suffer from chronic diseases. Patients with a variety of medical concerns receive home-based medical treatment from WellBe Senior Medical. This collaboration, which aims to save costs and improve patient outcomes, is most applicable to Aetna's Medicare Advantage plan members because they are clinically complicated patients.
The company should pursue opportunities with more demand in the market. The market is dynamic and so should the company. Understanding the market dynamics will help the company to meet their customers needs.
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Guo, K. H., & Eschenbrenner, B. L. (2018). CVS Pharmacy: An instructional case of internal controls for regulatory compliance and IT risks. Journal of Accounting Education, 42, 17-26.
Hao, T., Elith, J., Lahoz‐Monfort, J. J., & Guillera‐Arroita, G. (2020). Testing whether ensemble modelling is advantageous for maximising predictive performance of species distribution models. Ecography, 43(4), 549-558.
Williams, R. N., Wright, D., Crowther, A., & Denham, T. (2020). Multidisciplinary evidence for early banana (Musa cvs.) cultivation on Mabuyag Island, Torres Strait. Nature Ecology & Evolution, 4(10), 1342-1350.
