Cvs Case Study

1490 Words6 Pages
Executive Summary The strategic goal of CVS is to create competitive advantage for itself within the pharmaceutical industry. Pharmacy customers believe that customer service is poor at all pharmacies. If CVS creates an identity as a pharmacy with good customer service it can separate itself from its competitors and gain competitive advantage. Currently CVS has major problems with customer’s experiences at prescription Pickup. Many of the problems at Pickup stem from issues during Data Processing that lead to scripts not being ready on time or sometimes not being able to be filled at all. Improvements to its brick-and-mortar pharmacies and information technology (IT) infrastructure, inventory management system, and human resource practices will allow CVS to address these problems. Investment in the following proposed changes will lead to a decrease in customer surprises and wait times and an increase in customer satisfaction. CVS will gain an identity as providing better service to its customers and will gain a competitive advantage over its competitors as a result. Customer loyalty will increase as will market share, revenues, and profits. Background The first “Consumer Value Store” (CVS) opened in 1963, growing quickly both organically and by acquisition to become one of America’s largest retail drugstores with $20 billion in revenue in FY2000. Over two-thirds of that revenue came from CVS’s pharmacy operations. At the start of FY2000, CVS had 29.5 million pharmacy members and over the course of the year the company attracted 8.5 million new pharmacy members. However, over that same period the company also lost 7.2 million regular pharmacy customers who took with them an estimated 55 million annual prescriptions that would have contributed $2.5 billion to CVS revenue. While CVS was growing at the industry average, this only served to mask the problems with
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