As the company to ever create an online pharmacy, cvs home office has taken a new flavor to the pharmaceutical industry. Currently, Consumer Value Store is #53 of fortune 500 companies. The company operates primarily from prescription medications sales which accounts for 70% of its total revenues. CVS is really probably the most pervasive drugstore chains in America; it operates nearly 4,100 facilities, placing it side by side with three of its major competitors, Eckerd, Rite Aid and Walgreens. In the Consumer Value Store lies PharmaCare, a subsidiary that is considered key to the company’s expansion and profit margin due to diverse managerial tactics it offers to the company.
Initially, the very first store opened its doors in 1963 selling health insurance and beauty aids. In the end of that same year, the chain grew to 17 stores averaging $3.3 million each year. Since then, the chain has become growing at a rather outstanding rate. Today CVS is successfully operating in well over 32 states in fact it is still expanding. During a lot of the 1990s, CVS has separated itself among the most well managed chains inside the national drug store industry, reaching the 4000 mark and still keeps growing. The company
CVS faces challenges from three major competitors. Specifically, Walgreens which holds 38% of market share is expanding at a rate of more than 400 new stores annually. Secondly, Eckerd typically the sixth largest U.S. market at 33% of market share is venturing the Phoenix market that provides long term growth. Finally, Rite Aid Corp with 30% of market share is intending to add around 300 private label SKUs including household chemicals, school supply and garden items just to name a few.
As a method of reevaluating marketing strategies, cvs address is closing some of their stores. Approximately 230 continues to be shut down so far as it is determined that disassociating off their chain of stores and malls to individual locations is going to be much more profitable as that not only target tourists, but in addition regular residents. According the 2004 agenda, CVS plans to start opening stores in Minneapolis, the 10th largest drugstore market in america, and high traffic areas like Chicago, Florida, Las Vegas, Phoenix and Texas for expansion.
CVS marketing strategies revolve mainly around expansion. Since the nations leading pharmacy with stores in additional than 32 states, CVS is gradually expanding its chain of stores in Florida. Currently, it provides opened two stores in Central Florida, nine inside the Tampa Bay area and eight in South Florida. In addition, CVS has several stores being built including two more in Central Florida, five in Tampa Bay and seven in South Florida. According to the Senior Legal Counsel, Michael B. Nulman, entry in to the Florida market continues to be profitable beyond normal expectations because not just has customer acceptance in the Florida stores been incredible, but sales figures during these new areas happen to be better than many previous locations.
Altering the format in the stores is another strategy that generates high profit margins. Moving from the convention 9600-square-feet prototype, CVS plan toward bigger and much better free-standing facilities resulted in 22 billion dollars in sales and ranked it second of top pharmacy in 2002 among its competitors. Instead of the smaller stores, the 10,885 and 12,150-square-feet prototypes allow drive-through pick up that simultaneously serve two cars and supply significant amounts of convenience which is what the CVS chain is seeking to achieve in accordance with Alfred J. Callegarri Regional Director of Property. Basically, the CVS chain attempts to succeed where its competitors have failed.
In addition to medicine, CVS sells a number of other items. As being a pharmacy, it sells the stuff that one would find in a convenient store. CVS in addition to a variety of supermarkets is responding to customer demands through providing one-stop-shopping and convenience to the shopping experience. According to the Food Marketing Institute, nearly all new stores and remodeled ones offer an ever-wider variety of products and services in one place including wine, ATM services and greeting cards just to mention a few.
Although CVS product line sells at selling price, it is able to get more customers than its competitors. As a pharmacy, CVS will be the only pharmacy that utilizes scannable consumer discount cards. Conversely, Rite Aid includes a reward program that provides a discount on specific markets, meaning only not many stores take part in that program which renders it largely ineffectual. On ffsdrp other hand, CVS card-scanning strategy helps it win even the finicky customers. Additionally, the pharmacy gives 2% off on non-prescription items and something dollar off every two prescriptions. Finally, the card enables call cvs to not only keep track of the buying habits of consumers, but to speak with them more intimately and advertise accordingly.