Essay on Swot Analysis in Drug Store Industry

955 Words May 19th, 2016 4 Pages
SWOT Analysis in Drug Store Industry
Treasure Womack
PHL/ 320
July 13, 2015
Howard Kersey

SWOT Analysis in Drug Store Industry The drugs store industry has several capabilities. Most consumers have at least the occasional need to shop at a retail drug store. The retail drug store industry consists of neighborhood pharmacies, large drug store chains and supermarkets or general retailers with drug store departments. Competition within the industry is strong as retailers adapt to changing trends in the market and seek to retain customers. Drug stores face several critical issues. Low margins on prescription drugs may push drug stores to expand front store merchandise sales where they compete with discount stores or into related
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PBMs are a huge threat to the drug store industry. PBMs offer lower drug costs for corporate clients by operating mail order pharmacies that bypass drug stores completely. CVS realized this great area of opportunity and capitalized upon it. CVS bought PBM from Caremark RX. PBMs handle about eighty percent of all prescription processes in the United States. Cost leadership strategies have driven many retail sectors in recent years (for example Walmart and Amazon). It is important to recognize that you cannot have a large number of cost leadership players, since a successful strategy requires volume and scale. This almost inevitably results in only a few players in the end. In pharmacy retail, each country/market is likely to have only one or two successful discount drugstores. Moreover, research suggests that pharmacy customers choose their pharmacy most often because of location/convenience and then brand/chain. Only 20 to 25 percent report that lowest prices are the reason they shop most often at a particular pharmacy. (It also is worth noting that knowledge/trust is not a primary driver of shopping behavior, but this appears to be due to the overall high level of trust in drugstores relative to other retail sectors.)Given the

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