Company Strategy
CVS Pharmacy, Inc. is an American retail healthcare corporation that deals with the provision of healthcare services and pharmacy services. It is based in the United States (US) and headquartered in Woonsocket, Rhode Island. The company also deals in prescription medications, beauty products, health care products, cosmetics, and personal care products.
CVS ranks as the leading health solutions company that is known for its care delivery than other medical corporations in the US. It is significantly appraised for its ability to help individuals navigate the health care system and their personal needs. CVS promotes efficiency to its consumers by lowering costs, improving access, and maintaining trust amongst its partners and clients for every significant moment of health. The company is daily driven to achieve at-heart strategies that are customer-centered.
CSV’s strategy is to diversify growth through new health services through the expansion of capabilities into digital administration of healthcare services. The company’s stakeholders prioritize care coordination management, health information technology, and home health (Zincir & Tunç, 2017). This strategy is aimed at ensuring that people are scheduled to care and that they can easily connect with physicians to get the quality and affordable care they expect.
The growth strategy for CVS is market penetration, which aims to maximize the company’s expansion and increase the customer base in health care and pharmaceutical practices. CVS’s financial strategy focuses on a combination of new sources of incremental value and foundational business growth. CVS is a market leader in the provision of cushioning healthcare services and pharmaceutical products worldwide. The scope of this report is to analyze operation management challenges faced by CSV, supply chain, and risk and offer recommendations that will help the company overcome the challenges to achieve set strategies.
Business Challenges
McKinsey’s 7S framework helps to highlight the challenges faced by CVS Company in operation management. The 7s refers to shared values, structure, strategy, systems, styles, skills, and staff (Alam, 2017). This framework is, however, divided into soft elements and complex elements that help to mirror the challenges in the operation management of an organization.
The complex elements include structure, systems, and strategy, while soft elements include shared values, skills, styles, and staff (Alam, 2017). CVS faces various problems, such as photo manipulation of its brand images for beauty and makeup products (York et al., 2019). Other businesses have evolved to imitate its beauty and makeup services by manipulating photos such as Photoshop. This problem has created a significant opportunity that CVS needs to address to revert its revenue, customers, and market competitive advantage (Singh, 2018). The brand, thus, introduced the CVS Beauty mark to enhance a more positive public reputation among girls and women by promoting more realistic beauty imagery.
The CVS Beauty Mark has helped the company to highlight imagery that is not materially altered. The sales teams and marketers at CVS Company strive to redefine convenience for their customers to easily access their service online and test ways to personalize their purchasing processes in in-store messaging that addresses consumers’ micro-moment needs. CVS has had a successful market financial strategy that has facilitated affordable costing, which has helped the company to earn the goodwill of the people since they halted the sale of tobacco products. For this reason, CVS’s brand name and image have improved in establishing an accountable healthcare brand. The company should, therefore, enjoy and attempt to capitalize on the surge of attention due to seasonality. In this manner, they should ask Unilever about the lessons from the crash of the Dove Campaign for Real Beauty to understand how attention does not last for long, but capitalization becomes multiplicative.
CVS does not have gasoline and groceries to compete favorably with its competitors, such as Safeway and Kroger. The capability of individuals to complete a business’s weekly grocery shopping while they wait for prescriptions is an advantage sought by consumers and customers. CVS’s recent acquisition of target pharmacies should make it easy for the company to evaluate the utility of additional services fully.
Another challenge that faces CVS is ineffective communication within the company. Communication is the basal foundation and milestone that carries every activity of an organization. The absence of effective communication between CVS stakeholders is reportedly causing harm to patients. For instance, there is a high prevalence of cases of wrong drug prescriptions to patients. Ineffective communication will, therefore, impede the achievement of a strategy for CVS’s health growth due to delayed and compromised customer services.
There are hitches in the human resource sector of CVS Inc. that present the most significant fault in the employees’ working environment. An inappropriate approach in the human resource department has led to challenges with employees returning to work. CVS experiences human resource challenges that form a critical part of many organizations in the 21st century that aim to attain a sound competitive advantage in the market.
Additionally, CVS faces ethical challenges from stakeholders and employees. Business ethics calls for the dignified treatment of every individual, especially customers in companies and organizations. Prices are soaring at CVS, and the company has recently been alleged to overcharge customers when they purchase drugs.
Supply Chain Analysis
CVS’s flagship services are a wide assortment of general merchandise, such as cosmetics and beauty products, and the selling of prescription drugs, including over-the-counter drugs. Further, the company has expanded in the market and provides photo and film finishing services and convenience foods through CVS Pharmacy and online through CVS.com. However, CSV Health is the primary product that forms a considerable proportion of the company’s supply chain network. The main objective in CVS’s supply chain is to provide outstanding service to its customers while meeting healthcare needs and improving their overall health.
CVS has a care market that supports customers through collaboration with its partners to create a single and shared demand forecast. The company stakeholders protect their personal needs and customers’ products while interacting with the company’s services and employees. Successful attainment of robust supply chain diversity has been facilitated by strong support and commitment from CVS’s top leaders. CVS Caremark Monette Knapik, Director of Strategic Procurement, stated that leadership support at CVS Caremark resulted in a positive output in the supply chain evaluation.
CVS has, moreover, built a broader and more diverse supplier recruitment brand in international and local markets. For instance, CVS has aimed to achieve successful diversity in the supply chain through Caremark’s strong business process. There is highly advanced technology, installed equipment, and well-arranged reporting systems that monitor and manage the success rates of the business. In addition, the company has ensured effective supply chain performance by distributing vendor portals that significantly support supply chain effectiveness.
Employees at CVS are guided by ethical considerations while servicing customers. The skills and experience possessed by employees provide efficient labor that enhances productivity. Suppliers have also played a significant role by ensuring that raw materials, equipment, and drugs are readily supplied to different sectors. Leadership at CVS has been at the forefront of advocating for the welfare of every individual in the organization. Leaders have ensured equal recruitment during the hiring and training of employees. Thus, customer loyalty has been built to a large customer base for its services.
The company controls the forward (downstream) vertical integration of its healthcare services to the people. CVS is the central distributor of healthcare services and products in different stores across the globe. Even though CVS has a healthy supply chain and a favorable competitive advantage, there are areas in the supply chain network that the company needs to improve. The company should understand the capabilities of its competitors through benchmarking and invest in the data network and analysis (Zincir & Tunç, 2017). This approach is significant for forecasting the nature of new trends in the market (Gökdeniz et al., 2017). CVS should also invest in warehouse automation and consistently make hypothesis acceptance and rejection based on the data they feed into analysis tools.
Risk Register
Table 4: Risk Register
Improvement Recommendations
The primary activities of CVS Company have a common ground since they transfer inputs into outputs. The company must deploy different strategic approaches in operations management to ensure it offers the best services to customers and the community (Gökdeniz et al., 2017). To accomplish this change and a transformation in continuous quality improvement, CVS should adapt to the use of the four factors of volume: variety and visibility, variation in demand, and volume.
Based on the study’s review and assessment of CVS, the company enjoys market share and superiority in providing pharmaceutical and healthcare services and products. However, following the evolving and changing nature of the business world, the company needs strategic positioning to address arising and potential challenges (York et al., 2019). As a result, considering the study, CVS should promote an organizational culture that is friendly to every stakeholder and the surrounding community. The company should promote professional and workplace ethics principles to compensate for and reinstate the lost reputation over several lawsuits against patient negligence.
Further, for CVS to remain at the highest competitive advantage level, the study recommends that the organization benchmark its competitors’ marketing strategies (Singh, 2018). CVS relies on its financial advantages to improve the adaptability of the existing supply chain. Every stakeholder and player adjusts to this strategy with a positive attitude. Thus, the company should adopt logistic management in the segment of distribution and sales to align customers’ tastes and preferences that match with changing technology.
As key players of CVS, their output should evaluated based on the following indicators.
Table 2: Key performance indicators and metrics
CVS should use continuous quality improvement initiative frameworks such as DMAIC (define, measure, analyze, improve, and control) and SPOO (structure, process, output, and outcome) to enhance improvements in supply chain operations management. Structural improvement involves people and technology in promoting common goal achievement of the organization’s strategy.
The process incorporates activities and tasks’ workflow, while output refers to the immediate predecessor to changing patients’ statuses. On the other hand, outcomes are the final results that provide the desired impact in an organization. Further, defining entails a detailed approach to a problem in the organization, which helps to measure the degree of impact on a flagship service.
Moreover, analysis helps to create understanding among stakeholders, which creates room for improvement in certain circumstances. Control enhances the full enactment of strategies that will enable the company to navigate any forecasted future event. I suggest that CVS should employ the above recommendations and adhere to the operations management frameworks to continue enjoying an efficient and competitive advantage in the market share.
References
Alam, P. A. (2017). Measuring organizational effectiveness through the performance management system and McKinsey’s 7 S model. Asian Journal of Management, 8(4), 1280-1286.
Gökdeniz, İ., Kartal, C., & Kömürcü, K. (2017). Strategic assessment based on the 7S McKinsey model for a business by using analytic network process (ANP). International Journal of Academic Research in Business and Social Sciences, 7(6), 342-353.
Singh, R. (2018). Developing competitive strength: The biggest challenge for the organizations. Managing Editor, 65.
York, J., Lugo, K., Jarosz, L., & Toscani, M. (2021). CVS Health faces a new wave of disruption. International Journal of Pharmaceutical and Healthcare Marketing, 15(3), 333-353. Web.
Zincir, O., & Tunç, A. Ö. (2017). An imagination of organizations in the future: Rethinking McKinsey’s 7S model. In Strategic imperatives and core competencies in the era of robotics and artificial intelligence (pp. 101-125). IGI Global.