Tuesday, May 14, 2019
CVS Caremark Strategy
CVS is a health services company which operates drug stores, mail order pharmacy and health insurance for over 92 million plan members. They also operate walk-in medical clinics called MinuteClinics in about 1100 of their stores. They are the largest drugstore chain in the United States and also have operations in Puerto Rico and Brazil. CVS Caremark is headquartered in Woonsocket, RI and is #7 in the Fortune 500 company listing.
In the 2018 annual report, CVS indicates that they have stated that they have set objectives to transform health care, lower costs, making it simple, and improving engagement. Each of these are strategic to give CVS the competitive advantage. Transform Health Care: by diversifying the portfolio with the addition of Aetna, CVS can influence more of the customer experience. Their strategic imperatives are to be local, make health care simple and improve health. This will be accomplished by giving patients the care they need, when and how they need it. Another objective is to lower costs, they estimate that 25% of the total spend on chronic illness is avoidable. They believe that the tighter integration of services and a focus on prevention will help to reduce costs. Making it simple is another objective, use of the MinuteClinics and collaboration with Teladoc to reduce the number of doctor visits and in many cases can be done from your home with a video call. The fourth objective is to improve engagement. Though HealthHub additional services are brought together and available to patients. These services include preventative services as well as counseling and wellness support.
The CVS mission statement is “Above all else….our mission is to improve the lives of those we serve by making innovative and high-quality health and pharmacy services safe, affordable and easy to access.” The CVS Vision statement is: "We strive to improve the quality of human life. ". CVS publishes a Corporate Social Responsibility report each year that outlines their purpose, strategy and values as corporate citizens. They have taken the lead on several social topics one of them being tobacco use. With a focused commitment to health, CVS stopped selling cigarettes and tobacco products in October 2014, they were the first major pharmacy to stop selling tobacco products. They have also invested reducing smoking and tobacco use of our youth. They also encourage employees or colleagues as they call them to volunteer in the community. A 10% year over year increase of volunteer hours is their goal. CVS also has put efforts into protecting our planet, they have an active program to reduce waste, recycle and use responsible sourcing for their products. The CVS vision statement is very relatable and appropriate for a health care company. From the table 2.1 in our textbook, the only item that may be missing is “Make it memorable” the CVS vision statement is very understandable but is not very memorable.
Management is investing in their employees; they have a target o 100% of mid-level leaders receive in-person classroom training by 2019. Employees will collectively complete two million hours of compliance training each year and they will hire 5,000 registered apprentices by 2022. They also have targets to increase annual spending of $2.5 billion with tier I & II diverse and women owned suppliers.
CVS has a focus on making services available to customers easier and more complete as possible. They have diversified their service offerings and added programs that will deliver a superior experience to customers while being socially responsible. This continued focus with new products and services added will give them the competitive edge over their competitors.
Thompson. (2018). Crafting & Executing Strategy: The Quest for Competitive Advantage 21st ed. McGraw-Hill ISBN: 9781259732782.
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