CVS: NOW

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CVS NOW

• Roxanna Brandao

• Jim Ferrara

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• Vision
• We strive to improve the quality of human life.
• Mission
• We provide expect care and innovative solutions
  in pharmacy and health care that are effective
  and easy for our customers.
• Our Values
• Accountability, Respect, Integrity, Openness and
  Teamwork

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History

• First retail store opened in 1963 in Lowell,
  Mass. In 1967, CVS opened its first pharmacy
  store.
• Headquarters located in Woonsocket, RI
• Largest retail provider of prescriptions in the
  nation.
• June 1999 Acquired Soma.com, a web startup, for
  30 million in stock.
• August 1999 Launched CVS.com, first fully
  integrated online pharmacy in the U.S.

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CVS Today

• Largest provider of prescriptions and retail
  pharmacy in the nation.
• Operates more than 6,900 CVS/pharmacy. Comprised
  of its Caremark Pharmacy Services division-
  Pharmacy benefit management, mail order and
  specialty pharmacy division, its retail-based
  health clinic subsidiary, MinuteClinic and its
  online pharmacy- CVS.com.
• The company currently has approximately 190,000
  employees.
• CVS offers a range of general merchandise
  including over-the-counter drugs, beauty and
  personal care products, seasonal merchandise,
  greeting cards and convenience foods

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Major Competitors

• Walgreens
• Rite Aid
• Drugstore.com
• Walmart
• Kroger Co.
• Albertsons Inc.

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SWOT Analysis- NowStrengths

• Over 6,300 stores 1 billion prescriptions
• Acquired Eckerd Health Services in 2004
• Merge with Caremark Rx in 2007
• Convenience
• MinuteClinics

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Weaknesses

• High Prices
• Generic Drugs
• Acquisition Integration

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Opportunities

• Market to Hispanic Markets
• Prescription Refills in Spanish
• Market to Senior Citizens
• Health After 60
• Pack Your Bag

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Threats

• Increased Sales of Medco
• Medco is taking business from all the other
  PBMs, including health insurers' in-house
  drug-benefit operations and rivals CVS Caremark
• Mergers Partnerships of RiteAid
• Growth of Walgreens
• Poor Economy

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Problem Statement

• How can CVS strive and grow as the market leader
  in the healthcare industry during these economic
  downturns?

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Strategic Recommendation

• Offer a free prescription history to customers
  with any remaining funds from their Flexible
  Spending Account (FSA) that they are eligible to
  spend.
• Continue using ExtraCare program in rewarding
  shoppers with savings and coupons
• Expand stores that offer MinuteClinic services
• Reduce prices of Generic Drugs

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Investment RecommendationBUY
2005 2006 2007
Sales 37 B 43.8 B 73.6 B
Operating Profit 2.019B 2.441B 4.793 B
Net Income 1.2 B 1.3 B 2.6 B
Total Assets 15.283 B 20.574 B 54.721 B
Total Liabilities 6.952 B 10.656 B 23.4 B
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Investment RecommendationBUY

• Fortune 500 24th in 2008
• 2008 Same store sales increase 3.7 storewide
  (4.6 increase in pharmacy)
• 4th Quarter 2008
• 17 increase in sales
• 6.4 increase in stock price