CVS Health SWOT Analysis [Update 2022] ❤️ (An Analysis)

CVS Health SWOT Analysis 2022

The SWOT analysis of CVS reveals large-scale operations that are able to maintain a strong competitive position against other players such as Walgreens, Rite Aid, and Walmart. CVS’s strengths (internal strategies factors) are sufficient to ensure a strong position in the industry.

However, the business must also consider external forces such as major retail competitors. 

The SWOT analysis model’s external analysis shows that the potential threats and opportunities for the enterprise are mostly related to business expansion and growth, regulation, and competition. Here we will take a look at CVS Health SWOT Analysis.

CVS’s strategies are influenced by competition from other major retail pharmacies, particularly when it expands its operations in the United States. 

These factors, known as the SWOT framework, are critical to ensure that the company maintains its competitive advantage in the healthcare and retail pharmacy sectors. 

These factors are crucial considerations when developing enhanced strategies based upon the SWOT analysis of CVS.

This SWOT analysis of CVS Health Corporation reflects CVS Pharmacy’s strengths and weaknesses, opportunities, and threats.

It is based on the SWOT framework. Both the internal and external factors that affect the retail pharmacy and healthcare enterprise are applicable to the parent company as well as its subsidiaries, CVS Caremark included. 

CVS Health’s corporate vision places consumers’ healthcare at the center of its mission and strategy statements. Therefore, strategic objectives must be based on a SWOT analysis.

They must also include aims to support consumers’ health and healthcare needs. This integration, according to Michael E. Porter’s framework, keeps the company’s competitive advantage, particularly in terms of using organizational core competencies to strengthen CVS’ brand relative to other brands like Rite Aid.

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About CVS

Consumer Value Stores was founded by three brothers, Sidney and Stanley Goldstein, and Ralph Hoagland in 1963.

The business was based on Mark Steven, Inc., a parent company that assisted merchants with managing their beauty and health products.

The company started as a network for beauty and health stores. After a few years, pharmacies were added to the company. 

To help develop and expand, the company joined Melville Corporation. After a period of expansion, CVS Corporation was able to separate from Melville Corporation in 1996 and became an independent trading company on the New York Stock Exchange under the name CVS.

CVS Health Corporation, also known as CVS Corporation or CVS Caremark Corporation, is an American healthcare conglomerate.

It owns CVS Drugstore, CVS Caremark, CVS Caremark, a pharmacy benefits manager, and Aetna. 

The company’s headquarters is located in Woonsocket (Rhode Island). CVS Health is the ninth-largest company in terms of revenue, and the fourth-largest on the Fortune Global 500.

CVS SWOT Analysis – CVS’s Strengths & Weaknesses (Internal Analysis)

STRENGTHS (Competencies):
1. CVS brand has high equity in the US healthcare and retail pharmacy industries
2. Value chain synergy of interdependent divisions/subsidiaries
3. High penetration in the US retail pharmacy market and the healthcare industry
1. A replicable business model for healthcare and retail pharmacy businesses
2. Retail pharmacy and healthcare operations have limited retail coverage
3. Vulnerability to regulatory pressures in the healthcare industry and pharmaceutical industry
  • The SWOT analysis table can be best viewed in an HTML5-compatible browser.

❤️ Strengths: The CVS brand is a key strength and core competency that helps the company compete with its main competitors. 

The CVS brand is strong strength and core competency that helps the company stand out from its main competitors. 

This internal strategic factor was identified as one of the organizational resources that strengthen the enterprise’s competitive advantage. 

This also refers to the value-chain synergy that was included in the SWOT analysis of healthcare and retail businesses. 

The company’s retail pharmacies provide convenience for customers to fill their prescriptions. Additionally, its healthcare operations complement these retail operations. 

CVS Health’s corporate environment can help maintain such synergy between the divisions and subsidiaries. 

The company’s strong market penetration in the United States provides a competitive advantage that small competitors cannot match. 

CVS can increase its competitive strength and decrease pressure on the market by improving its strategic planning and implementing internal factors that were examined in this SWOT analysis.

❤️ Weaknesses: CVS’s biggest weakness is its imitability in business models, which can be copied by competitors or new entrants. The company is, for example, a combination of a healthcare and retail pharmacy business. 

To create similar competitive advantages to CVS, new entrants could use the same model. The inclusion of the limited retail scope in this SWOT analysis as a weakness reflects the company’s dependence on the American market. Drogaria Onofre, the Brazilian subsidiary, has limited operations in Brazil. 

This internal strategic factor increases the impact of U.S.-based business risk on healthcare and retail enterprises. CVS is also vulnerable to regulatory pressures. 

The company’s dependence upon the U.S. healthcare and retail markets means that it is heavily affected by regulatory changes in America. 

It is, therefore, crucial to identify possible strategies for spreading risk and reducing U.S.-market dependence of the business, as determined by this SWOT analysis of CVS Health Corporation.

CVS SWOT Analysis – CVS’s Threats and Opportunities (External Analysis)

1. CVS Pharmacy Operations: E-commerce Growth
2. International expansion in retail pharmacy operations
3. Diversification by mergers and acquisitions in the healthcare and retail pharmacy industries
1. Direct competition with retailers
2. Imitation of business model and related strategies
3. Regulatory changes in healthcare and retail pharmacy
  • The SWOT analysis table can be best viewed in an HTML5-compatible browser.

❤️ Opportunities: This SWOT analysis by CVS Health Corporation highlights the potential for eCommerce growth. 

Continuous innovation in technologies is what the company can use to support its retail pharmacy operations. This external strategic factor is the result of constant innovation. 

Enhancing CVS Pharmacy’s online store and the related mobile apps can increase customer satisfaction and improve technology-based operational efficiency. 

This opportunity also comes from the current global trend in e-commerce growth. International expansion is also a great opportunity considering CVS only operates in the United States. 

The corporation can expect to grow its revenue through multinational expansion such as new Latin American retail pharmacy outlets. 

Diversification, in turn, is another potential opportunity that directly links to all internal and external factors as well as the SWOT analysis of CVS Health.

Mergers and acquisitions are a good way to diversify, especially if the corporation wants to expand its reach beyond the United States’ healthcare and retail pharmacy sectors. 

CVS can achieve both business growth and market-specific risk reduction through the use of this opportunity in other countries or regions. 

Streamlining the corporate structure of CVS Health will make it easier to take advantage of the SWOT analysis’s opportunities.

❤️ Threats: This SWOT analysis focuses on the threat of direct competition to CVS. Walgreens and Rite Aid, among others, are the major competitors. Walmart and other retailers also compete with the operations of the retail pharmacy. The threat of business imitation could also impact CVS’s competitive advantage. 

The business model that includes retail pharmacy operations, as well as healthcare service operations, can be copied by other business organizations. To reduce imitations of Jay B. Barney’s model, CVS must develop core competencies.

This is relevant to this SWOT analysis. However, regulations can pose a threat to the company’s operations due to the highly regulated U.S. Healthcare industry. CVS is able to build competencies to defend its business from the threats identified in this SWOT analysis.

Limitations of SWOT Analysis for CVS Health

While SWOT analysis is a popular tool for strategic planning, SWOT analysis is extensively used as a tool for strategic planning However, the analysis has its fair share of drawbacks.

  • Certain abilities or aspects of an organization could be both strengths and weaknesses at the same time. This is among the most important limitations in SWOT analyses. For instance, changing environmental regulations can be an issue for the company but however, it could also be an opportunity in the sense that it allows the company to compete on the same level or gain an advantage over its competitors if they are could develop its product more quickly than its competitors.
  • SWOT doesn’t provide a way to gain competitive advantages and therefore it shouldn’t be a complete solution.
  • The matrix is merely an idea to begin discussions on how the suggested strategies can be implemented. It also provided an evaluation window but did not provide an implementation plan based on CVS Health’s strategic competitiveness. CVS Health
  • The SWOT model is a static analysis that analyzes the current conditions with only a few potential modifications. As the environment, circumstances, as well as threats, and strategies, evolve, the dynamics of the competitive landscape cannot be analyzed in one matrix.
  • SWOT analysis could cause a company to focus too much on one external or internal aspect when formulating strategies. There are interrelations among the most important external and internal aspects that SWOT cannot reveal that could be crucial in determining strategies.

Weighted SWOT Analysis of CVS Health

Due to the previously identified shortcomings of the SWOT analysis/ matrix, the management of corporations has decided to assign an appropriate amount of weightage for each of the strengths and weaknesses of the company. 

They also consider the likeliness of happenings in the near future and the impact they will be on the company’s performance.

This technique is known as the Weighted SWOT analysis. It’s superior to a simple SWOT analysis since using a weighted SWOT analysis CVS Health managers can focus on the most important aspects and eliminate the less important ones. 

This also helps solve the long list issue which is when organizations make lengthy lists but not addressing any is considered to be crucial.

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Key Points On The SWOT Analysis For CVS Health Corporation

These points in the SWOT analysis of CVS provide strategic considerations about the company’s potential growth and limitations. 

The internal analysis part of the SWOT analysis reveals that the company’s business strengths are sufficient to ensure its competitive position as one of the major players in the U.S. healthcare and retail pharmacy markets. These business strengths can also be used to address CVS’s weaknesses. 

The company could use its brand to expand its business in certain markets or industries related to healthcare and retail pharmacy operations. 

The SWOT analysis’s external analysis section shows that CVS Health Corporation’s business model, generic strategy, and intensive strategies to grow are sufficient in maximizing the opportunities within the industry. 

The company’s brand and high market penetration can help increase barriers to entry for new firms and counter the effects of business imitation and direct competition. 

The SWOT framework shows that CVS Health Corporation, and its subsidiaries, including CVS Pharmacy, and CVS Caremark, can continue to be among the largest firms in the U.S. retail pharmacy and healthcare markets.

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