Cvs Audit Analysis

1188 Words5 Pages
CVS moved quickly to become one of the top players in the rapidly consolidating U.S. drugstore industry. In addition to pursuing acquisitions, CVS also was growing organically by aggressively opening new locations. In 1998, for example, the company announced plans to open as many as 200 stores in New York City over a three-year period. At the same time, some of the older locations, particularly those in strip malls, were being closed down in favor of freestanding sites, some of which began featuring drive-through pharmacies. CVS has grown its business into the largest retail pharmacy in the world through strong organic growth and a tradition of acquisitions. To maintain successful growth, CVS focuses on new store development, nourishing same store growth through product diversification and a low cost approach, and continuing an impressive track record of producing synergies from retail acquisitions. From the perspective of a potential competitor or investor, I think there are many advantages of owning a drugstore industry. Most importantly, you are not limited to selling specific items which is enabling you to be flexible and accommodate to the customer’s needs. The drugstore industry is comprised of providers of both prescription and non-prescription medicines in the form of retail pharmacies, mail order services, hospitals, and other third party distribution channels. Generally, prescription drugs account for the majority of revenue, with front store sales such as film development, cosmetics, and other consumer goods making up the remainder. The market is highly saturated with two companies, Walgreens and CVS, comprising nearly 60% of the entire industry. Increased competition from supermarkets, mail order service providers, and large retailers including Wal-Mart and Target, are further contributing to the saturation of the industry. Historically, growth
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