SWOT Analysis: CVS Pharmacy Strengths:

SWOT Analysis: CVS pharmacy

Strengths: Has been continuously running since 1963. CVS stands for Consumer Value Stores and was first established in Lowell, MA. The company has grown constantly through mergers and acquisitions in different markets. Currently, it operates 5,375, retail and specialty pharmacy, stores in the United States. It is well recognized in all the markets it operates. Some of the strategic acquisitions that the company has made over the years have included, Peoples Drug, the Revco pharmacy chain, Arbor Drugs, Inc. And most recently Eckerd Stores and Eckerd's PBM/Mail-order pharmacy business. All mergers and acquisitions undertaken by the company were very successful. CVS operates in the Northeast, Mid-Atlantic, Midwest and Southeast regions of the U.S. The work-staff is trained and qualified. The pharmacy has been able to satisfy the customer base that it serves very effectively. The company is traded on the NYSE under ticker symbol of CVS. All financial reporting is done in accordance with SEC guidelines. (CVS, 2005)

Weaknesses: Constant mergers to increase market share have created a company of diversified cultures with the organization. While tremendous growth has been observed, its P/E ratio is lower than its close rival Walgreen Co. Walgreen has also been entering new markets at a much faster rate than CVS. With respect to long-term growth the company also lags behind significantly at six, with respect to nine similar companies that were investigated. (Yahoo-Finance, 2005) the store has had limited success in differentiating its services from its other major competitors. Periodic sales and promotions are required to draw in customers to the stores at different locations. While the pharmaceutical staff is generally long-term, the supporting staff for the store undergoes high turnover making employee management an important and critical issue for local managers. In the past, sales representatives were more knowledgeable about the products and the techniques for using any of these products. Currently, this knowledge is lacking among this level of staff. Sluggish growth could impact the image and the stock markets confidence in the company.

Opportunities: The needs of the consumer items that are sold by the company are increasing among the population that CVS serves. Identifying new markets and opportunities with range of products and services that are offered has helped the company grow. Online and 24-hour operations have also encouraged and drawn more customers. The cost and barriers to entry for the company are relatively lower when compared to other smaller chains. Being a large organization, CVS has better bargaining and negotiating power with its suppliers. Buying to satisfy economies to scale can help the company better manage its inventory. Better distribution and warehousing techniques can help increase the inventory turnover in the stores. Having a recognizable brand name can help the company manage the hurdles of entering new markets more effectively. Offering customers CVS cards and special offer discounts on the card has helped bring back many customers. Regular shoppers can also avail special discounts through use of this CVS card. CVS is also introducing electronic transaction terminals that can transmit consumer account information over radio waves. (bizjournals.com, 2005)