Essay Cvs Marketing Development

Words: 1570
Pages: 7

Porter’s Five Forces
Forces Grade Note
Segment Rivalry Strong The current market is divided between a few powerful competitors that can relatively easily attract customers from one another as the switching costs are low and practical absence of product differentiation contributes to the easy loss of market share.
Threat of Mobility Weak While the new entrants only need a relatively simple GUI and a supplier in order to enter the market, the federal and local regulations will require significant investments prior to any positive cash flow. Again, the differentiation is practically non-existent and the new entrants will have to compete with financially established enterprises capitalizing on competitive advantage.
Supplier power
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CVS offers a combination of health care services such as pharmacy and medical equipment together with general merchandise ranging from beauty products to groceries via retail locations and on-line internet portal. The firms also provides consultative services such as medical plan designs, health management programs, and retail-based health clinics that are staffed primarily by nurse practitioners and physician's assistants treating limited number of common ailments and offering routine vaccinations.
The prices are lower than the major competitor such as Walgreen. The prescription prices are negotiated with PBMs and other insurance companies. The general merchandise is obtained at wholesale prices and the savings are passed onto the consumers aiding to sustain the cost-leadership strategy.

Channels of Distribution
Online sales via and over 4,000 retail locations. The firm offers automatic refills to be mailed to the consumers. The purchase and refills could be done via the telephone or on-line.
CVS was the first pharmacy retailer to offer both: online shopping and traditional store services. CVS maintains extensive database of customers' purchases from which it creates weekly individually tailored coupons for consumers. Also, CVS was the first retailer to offer money-back guarantees on beauty products
Key Issues
As the costs of healthcare increase proportionally to the aging population