Swot Analysis of "Pharmacy Service Improvement at CVS (B)" written by Andrew McAfee includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cvs Pharmacy facing as an external strategic factors. Some of the topics covered in Pharmacy Service Improvement at CVS (B) case study are - Strategic Management Strategies, Customer service, Customers, IT, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Pharmacy Service Improvement at CVS (B) casestudy better are - – supply chains are disrupted by pandemic , there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, challanges to central banks by blockchain based private currencies,
increasing household debt because of falling income levels, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Pharmacy Service Improvement at CVS (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Pharmacy Service Improvement at CVS (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cvs Pharmacy, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cvs Pharmacy operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Pharmacy Service Improvement at CVS (B) can be done for the following purposes –
1. Strategic planning using facts provided in Pharmacy Service Improvement at CVS (B) case study
2. Improving business portfolio management of Cvs Pharmacy
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cvs Pharmacy
Strengths Pharmacy Service Improvement at CVS (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cvs Pharmacy in Pharmacy Service Improvement at CVS (B) Harvard Business Review case study are -
High switching costs
– The high switching costs that Cvs Pharmacy has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Effective Research and Development (R&D)
– Cvs Pharmacy has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Pharmacy Service Improvement at CVS (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Technology & Operations field
– Cvs Pharmacy is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Cvs Pharmacy in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Technology & Operations industry
– Pharmacy Service Improvement at CVS (B) firm has clearly differentiated products in the market place. This has enabled Cvs Pharmacy to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Cvs Pharmacy to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Cvs Pharmacy in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Cvs Pharmacy has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cvs Pharmacy has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Cross disciplinary teams
– Horizontal connected teams at the Cvs Pharmacy are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Learning organization
- Cvs Pharmacy is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Cvs Pharmacy is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Pharmacy Service Improvement at CVS (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Cvs Pharmacy has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Pharmacy Service Improvement at CVS (B) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High brand equity
– Cvs Pharmacy has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cvs Pharmacy to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Cvs Pharmacy digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cvs Pharmacy has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Organizational Resilience of Cvs Pharmacy
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cvs Pharmacy does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Pharmacy Service Improvement at CVS (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Pharmacy Service Improvement at CVS (B) are -
Workers concerns about automation
– As automation is fast increasing in the segment, Cvs Pharmacy needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Cvs Pharmacy supply chain. Even after few cautionary changes mentioned in the HBR case study - Pharmacy Service Improvement at CVS (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cvs Pharmacy vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Cvs Pharmacy has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring
– The stress on hiring functional specialists at Cvs Pharmacy has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow to strategic competitive environment developments
– As Pharmacy Service Improvement at CVS (B) HBR case study mentions - Cvs Pharmacy takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Need for greater diversity
– Cvs Pharmacy has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High bargaining power of channel partners
– Because of the regulatory requirements, Andrew McAfee suggests that, Cvs Pharmacy is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Capital Spending Reduction
– Even during the low interest decade, Cvs Pharmacy has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High operating costs
– Compare to the competitors, firm in the HBR case study Pharmacy Service Improvement at CVS (B) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Cvs Pharmacy 's lucrative customers.
Products dominated business model
– Even though Cvs Pharmacy has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Pharmacy Service Improvement at CVS (B) should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Pharmacy Service Improvement at CVS (B) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Pharmacy Service Improvement at CVS (B) can leverage the sales team experience to cultivate customer relationships as Cvs Pharmacy is planning to shift buying processes online.
Opportunities Pharmacy Service Improvement at CVS (B) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Pharmacy Service Improvement at CVS (B) are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Cvs Pharmacy can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Cvs Pharmacy can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Cvs Pharmacy has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Pharmacy Service Improvement at CVS (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cvs Pharmacy to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Cvs Pharmacy to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Loyalty marketing
– Cvs Pharmacy has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Leveraging digital technologies
– Cvs Pharmacy can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Building a culture of innovation
– managers at Cvs Pharmacy can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Technology & Operations segment.
Creating value in data economy
– The success of analytics program of Cvs Pharmacy has opened avenues for new revenue streams for the organization in the industry. This can help Cvs Pharmacy to build a more holistic ecosystem as suggested in the Pharmacy Service Improvement at CVS (B) case study. Cvs Pharmacy can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cvs Pharmacy can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Cvs Pharmacy can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Cvs Pharmacy to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cvs Pharmacy in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Developing new processes and practices
– Cvs Pharmacy can develop new processes and procedures in Technology & Operations industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Manufacturing automation
– Cvs Pharmacy can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Threats Pharmacy Service Improvement at CVS (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Pharmacy Service Improvement at CVS (B) are -
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Cvs Pharmacy.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cvs Pharmacy in the Technology & Operations industry. The Technology & Operations industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Stagnating economy with rate increase
– Cvs Pharmacy can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Technology acceleration in Forth Industrial Revolution
– Cvs Pharmacy has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Cvs Pharmacy needs to keep up with the evolution of technology in the Technology & Operations sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Environmental challenges
– Cvs Pharmacy needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Cvs Pharmacy can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
High dependence on third party suppliers
– Cvs Pharmacy high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Pharmacy Service Improvement at CVS (B), Cvs Pharmacy may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Shortening product life cycle
– it is one of the major threat that Cvs Pharmacy is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Cvs Pharmacy business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cvs Pharmacy with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Cvs Pharmacy needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Technology & Operations industry regulations.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Cvs Pharmacy needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Pharmacy Service Improvement at CVS (B) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Pharmacy Service Improvement at CVS (B) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Pharmacy Service Improvement at CVS (B) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Pharmacy Service Improvement at CVS (B) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Pharmacy Service Improvement at CVS (B) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Cvs Pharmacy needs to make to build a sustainable competitive advantage.