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Situational Analysis: CVS And Walgreens

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Situational Analysis
In February 2014, CVS decided that the brand will cease all tobacco sales in their stores by October 1st. The company implemented this strategy to help CVS rebrand itself as a more health conscious. “The company implemented the change a month ahead of schedule and changed its name to CVS Health to align its brand and purpose of “helping people on their path to better health” (October 2014). CVS hopes this rebranding will help move them ahead of Walgreens as the largest drug retailer.
The move costs CVS a large amount of short term revenues. Tobacco sales usually accounted for $ 2 billion of CVS’s revenue. However, the leadership believes building long term sustainability outweighs the short term revenue that is being lost. The goal of rebranding as CVS Health is to become attractive to profitable new healthcare opportunities and partners. CVS Health is looking to increase its profit made through highly profitable areas such as prescription, health-related products and healthcare services. CVS also hopes the move will help attract those who are health conscious and looking to quit smoking. A large percentage of current smokers are looking to quit and CVS developed are developing cessation products and services. In addressing this large market, CVS …show more content…
However, it status as a market leader could change over the next few years. The problem CVS is facing is replacing lost revenue through eliminating the sale of tobacco. CVS is better aligning itself to health to build long-term sustainability, but is still giving up a large amount of short term revenue generated by tobacco sales. To replace lost revenue, CVS must focus on its MinuteClinics, which are small walk-in health clinics, which use nationally recognized protocol to diagnose and treat minor health conditions, monitor chronic conditions, perform health screenings, and provide vaccinations at much lower prices than a

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