Cvs Caremark Strategic Analysis
CVS Caremark: A Case Analysis
Current Situation
CVS Pharmacy is the retail division of CVS Caremark. It is also one of the largest Pharmacy Retail Chains in the country and operates more than 7,400 stores domestically. Although the retail pharmaceutical division of this corporation accounts for a significant amount of this company’s success, CVS Caremark focuses more on its corporate strategy to compete with other industry rivals such as Walgreens and Rite Aid. Considering CVS Caremark is the result of the 2007 merger of CVS and Caremark Rx, this analysis will begin with a brief history and the merger of these corporations, its current performance, strategic posture, and the strategic managers of this organization.
History
According to CVS’s website, CVS opened its first store in 1963 in Lowell, Massachusetts selling only health and beauty products. CVS did not expand into pharmaceuticals until 1967 when it opened its first stores with pharmacy departments. Two years later, CVS was sold to Melville Corporation. In 1972, CVS made its first acquisition, acquiring Clinton Drug and Discount, thus adding 84 more stores to its portfolio. This began a major trend for CVS, which continued acquiring both smaller and larger drug store chains well into the mid-2000s. Through these acquisitions, the construction of new locations, and the exploration of new opportunities in the pharmaceutical industry, CVS now owns and operates more than 7,400 stores in the United States (History, 2013).
Caremark originated as a part of the Baxter Healthcare Corporation in 1979, and did not become a separate entity until 1992. Caremark Rx began as Home Healthcare of America, providing home healthcare services to seriously ill patients. In 1985, Home Healthcare of America changed its name to Caremark and expanded its offerings to include prescription benefit management services and launched its mail service pharmacy. These prescription benefit management services allowed Caremark to work
Current Situation
CVS Pharmacy is the retail division of CVS Caremark. It is also one of the largest Pharmacy Retail Chains in the country and operates more than 7,400 stores domestically. Although the retail pharmaceutical division of this corporation accounts for a significant amount of this company’s success, CVS Caremark focuses more on its corporate strategy to compete with other industry rivals such as Walgreens and Rite Aid. Considering CVS Caremark is the result of the 2007 merger of CVS and Caremark Rx, this analysis will begin with a brief history and the merger of these corporations, its current performance, strategic posture, and the strategic managers of this organization.
History
According to CVS’s website, CVS opened its first store in 1963 in Lowell, Massachusetts selling only health and beauty products. CVS did not expand into pharmaceuticals until 1967 when it opened its first stores with pharmacy departments. Two years later, CVS was sold to Melville Corporation. In 1972, CVS made its first acquisition, acquiring Clinton Drug and Discount, thus adding 84 more stores to its portfolio. This began a major trend for CVS, which continued acquiring both smaller and larger drug store chains well into the mid-2000s. Through these acquisitions, the construction of new locations, and the exploration of new opportunities in the pharmaceutical industry, CVS now owns and operates more than 7,400 stores in the United States (History, 2013).
Caremark originated as a part of the Baxter Healthcare Corporation in 1979, and did not become a separate entity until 1992. Caremark Rx began as Home Healthcare of America, providing home healthcare services to seriously ill patients. In 1985, Home Healthcare of America changed its name to Caremark and expanded its offerings to include prescription benefit management services and launched its mail service pharmacy. These prescription benefit management services allowed Caremark to work