SWOT Analysis of CVS – A Health Care Provider in the US
CVS is a US-based health care solutions provider. The company has helped several health care systems. It is one of the most trusted health care solutions providers in the US. If you are interested in finding the success story of CVS, then this article would definitely help. This article will highlight the SWOT analysis of CVS, which stands for strengths, weaknesses, opportunities, and threats.
CVS (Consumer Value Stores) was founded in 1963. The founders of CVS are three brothers, Ralph Hoagland, Stanley Goldstein, and Sidney Goldstein. They started the business from a parent company named Mark Steven, Inc. The purpose of establishing CVS was to help merchants in organizing health and beauty. So, we can say that the company started its business as a health and beauty aid store. After a few years, they added pharmacy products to its store. CVS joined a famous corporation Melville for the purpose of expansion and the company’s development. The company ended the joint venture in 1996. As a result, it began as an independent company with the name CVS. The corporation got immense popularity and expansion during the period of the 80s and 90s.
Company Name: CVS Pharmacy, Inc.
Founders: Ralph Hoagland, Sidney Goldstein, Stanley Goldstein
Founded: May 8, 1963, Lowell, Massachusetts, US
Headquarters: Woonsocket, Rhode Island, US
Parent Company: CVS Health
CEO: Karen S. Lynch (Feb 01, 2021-)
Sector: Health Care and Beauty
Tagline: Health is Everything
Unique Selling Proposition: We can deliver health care solutions that no one else can.
Customers: People from the high class, middle, and lower class.
Target Consumers: People who want to get proper health care facilities.
Revenue: 292.1 billion dollars (2021)
Net Income: 7.91 billion dollars (2021)
Now, CVS is a giant American healthcare conglomerate. Currently, several subsidiaries and brands are working under CVS such as CVS Caremark, a pharmacy chain, CVS drugstore, Aetna, and more. It is headquartered in Woonsocket, Rhode Island. In terms of revenue, CVS is the 9th largest corporation in the world. According to the Fortune Global 500 List, CVS is the 4th largest company.
Services and Products by CVS:
- Virtual Care Services
- Cosmetics and beauty products
- Pharmacy Benefit Manager
- CVS Pharmacy and Drugs
- Health Care Provider
- Convenience Foods
Competitors of CVS:
- Rite Aid
- Avella Specialty Pharmacy
- Express Scripts
SWOT Analysis of CVS
SWOT is a practical strategic planning tool that marketers and managers widely use. Corporations like CVS can use this tool to identify their strengths, weaknesses, opportunities, and threats. It is a wonderful way of taking a competitive edge over competitors. Moreover, it is really easy to perform SWOT analysis and really helpful too. Below, we have discussed a SWOT analysis of CVS in detail.
Strengths of CVS | SWOT Analysis of CVS
- Trusted Suppliers:
The corporation has very good relations with dependable raw material suppliers. It allows the company to beat other companies in terms of revenues, products, and reach. They are the main strength of CVS.
- Strong Brand Portfolio:
Since its infancy, the company has established a wonderful brand portfolio. They have formed several new products and just of this, they have been continuously developing new products and expanding their brand portfolio.
- Digital Advancement:
CVS has invested a huge sum of money in the enhancement of digital transformation. This has enabled the corporation to become a leading digital health care solutions provider.
Its Virtual Care Services allows people to consult with doctors and health care professionals anytime and anywhere. This has revolutionized the working of CVS in the competitive market.
- Robust Distribution Network:
CVS has a strong distribution network in the US that allows them to deliver its services and products in major markets.
- Acquisitions and Mergers:
The company’s good track record and strong market position are because of the successful acquisitions and mergers throughout the years. It has collaborated with numerous tech companies so that it can further streamline its supply chain network and operations.
- Solid Profits:
Currently, CVS owns various projects and subsidiaries that make it a successful organization. It is continuously making good profits by developing new projects and services. As a result, they are getting a good return, creating additional revenue.
- Strong Association with Dealers:
One of the major reasons of CVS’s success is that it has formed good relations with dealers and distributors. These dealers or distributors are not only playing a huge role in its success but also promoting the company. As a result, its sales and reach are rising day by day. In short, CVS is getting the maximum advantage of dealers and distributors by establishing good relations with them.
Weaknesses of CVS | SWOT Analysis of CVS
- Limited Profits in Some Offers:
It is a fact that CVS is one of the leading corporations in the market, but it does not have an expanded brand portfolio as compared to others. It has been generating major revenues from its core business. But, its other businesses are less profitable and increasing weaknesses for the company.
- High Turnover Rate:
A high employee turnover rate indicates that the workers are unhappy with the organization. So, whenever they get a better job offer or opportunity from other companies, they do not hesitate to leave CVS. In order to come over with this problem, the company should invest more in employee betterment and training programs. It is the only useful method to retain their employees.
- Struggling in Fulfilling Demands:
When it comes to the competitors, CVS has been struggling to fulfill the market needs due to its weak product portfolio and limited reach. According to the experts, the corporation has enough products in its inventory, but it struggles to use them at the right place and at the right time. Its competitors are pre-empting market demands better than CVS. In short, the company has been missing its growth chances.
- Poor Market Share:
Unlike other companies, CVS could not meet the difficulties that came from the new players. So, its market share is depleting day by day. The corporation must develop an easy internal feedback mechanism that encompasses direct feedback from the leading suppliers and sales staff.
Opportunities for CVS | SWOT Analysis of CVS
- Latest Technologies:
Nowadays, many service provider companies can take a competitive edge over competitors by exploiting new technologies or enhancing existing technological infrastructure. They should work on value-oriented or customer-oriented services to attract new consumers. They can use varied pricing strategies in different markets. Thus, the company can provide better services to consumers at better prices.
- New Taxation Policy:
New tax rules or policies mostly influence the businesses and how they operate. They can be disastrous for companies, but at the same time, they can be beneficial for them in so many ways. New taxation policies can open the door of opportunities for CVS, and they can maximize their profit stream.
- Decreased Transportation Costs:
These days, many shipping services are offering affordable shipping options to companies. CVS can take advantage of this thing to ship its health care products. So, they can save money and increase their past savings or profits. It will help the company to gain a more significant market share. They can focus on the benefits to consumers as a result.
- Changing Customer Behavior Patterns:
Changing consumer behaviors or patterns can open up several opportunities for the corporation. CVS Health can expand its business operations outside of the US and offer new products to consumers. In short, they can increase new income resources.
- Emerging Markets:
CVS has a strong presence in the US, but it should expand its reach to other parts of the world. Several emerging and developing markets have the potential for CVS to multiply its revenue stream and reach. There are so many things that can help the company in this regard, such as the government’s free trade agreement and new technologies.
Threats to CVS | SWOT Analysis of CVS
- Local Dealers and Distributors:
Domestic or local distributors are one of the biggest threats to the company. In some areas, they pose particular dangers because the growing competition allows distributors and dealers to secure higher margins.
- Rising Cost of Raw Material:
The increasing cost of raw materials can jeopardize the profitability and stable financial position of CVS Health.
- Rising Wage Levels:
The rising wage levels and movements like 15 dollars an hour can also put the performance of CVS into trouble. Moreover, the rising cost in the Chinese market is also one of the biggest troubles for the company.
- Inconsistent Supply and Creative Products:
Over the years, CVS Health has developed and produced a variety of unique products, but it is still lagging in creating new products and supply chain systems. Its competitors are doing better in these areas, thus securing larger profits. On the other hand, the irregularity in the supply chain can also cause severe damage to the company in the future.
- Counterfeit Products:
Most of the company’s products are highly vulnerable to low quality and counterfeit products. It can hurt the company’s name globally, especially in emerging markets.
Final Thoughts | SWOT Analysis of CVS
In our opinion, CVS is one of the top health care solutions providers right now. They are working hard to achieve its mission and vision statement. They take steps to do their best to make people more health-conscious. Both vision and mission have played a significant role in the company’s success.
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