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The Leader as a Strategist Report

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The Leader as a Strategist Report
Organization: CVS Caremark Pharmacy
CVS Caremark is a pharmacy innovation company that is reinventing pharmacy for better health. Company continuously developing new ways to improve access for patients, promote better health outcomes and control payor costs in a way that no pharmacy retailer or PBM could do separately. In 2007, CVS Corporation and Caremark Rx, Inc. merged; CVS Caremark became an integrated provider of prescriptions and related health services with an unmatched breadth of capabilities (www.cvscaremark.com). Today CVS Caremark is the market leader in the United States in multiple categories; such as in mail order pharmacy, retail pharmacy, specialty pharmacy, and retail clinics, and is a leading provider of Medicare Part D Prescription Drug Plans.

Purpose, vision, and values of CVS Caremark Pharmacy:

Purpose:
Helping people in their path to better health
Strategy:
Reinventing pharmacy
Values:
Innovation – Demonstrating openness, curiosity and creativity in the relentless pursuit of delivering excellence. Providing more relevant, caring, expert guidance, more cost-effective solutions and even more convenient access.
Collaboration – Sharing and partnering with people to explore and create things.
Caring – treating people with respect and compassion so they feel valued and appreciated.
Accountability – Taking personal ownership for the actions and their results

1. An analysis of the strategic cascade of the organization.

* What is the target market (target customer)? – General population of any community large or small * What is your organization's value proposition (How does it deliver value that satisfies the targets wants and needs?)? – CVS Caremark delivers drug prescriptions at an affordable price; an alternative to the traditional mini-mart it caters to those who need quick items including limited food and household items. Stores are typically open late and some are open 24-hours with pharmacy availability. * How is your product or service positioned in the market (What specific features and attributes define the product/service and how is its value reflected in its pricing, distribution, marketing communications, etc.?)? – 75% of U.S. population lives within a three-mile radius of a CVS Caremark (cvscaremark.com); CVS Caremark has acquired many smaller drug chains and has merged with Pharmacy Benefit Manager (PBM) Caremark Rx so that it can offer lower prescription costs to customers. * How is your organization sustainably different from your competitors (What is the source of uniqueness and how sustainable is it from being diminished by competitors?)? – Since its 2007 merger with the PBM Caremark Rx, CVS Caremark now uniquely positioned to help people on their path to better health and can best help customers control their drug costs.

2. A SWOT analysis: Strengths 1. Largest pharmacy health care provider 2. Strong market position/ Being a marketplace innovator 3. Merged with PBM Caremark Rx 4. Top provider of specialty prescriptions 5. Ability to adapt to the needs of their customers 6. Caremark generic step therapy programs 7. Innovative stores 8. Loyalty Card program (Extra care) 9. A well organized online website 10. Strong inventory management/ Heavy investments are made time to time on the current technology and its implementation

Weaknesses 1. Layouts of most stores are organized not very well, so finding the right product is difficult. 2. Low receivables turnover 3. In most locations, the store occupies a corner lot, with parking spaces surrounding the building; small parking lots. 4. Impolite sales people. 5. In some cases drugs are not up to date.
Company should know that a lot of its customers come to the CVS Caremark because they are sick, so they really can’t be waiting a long time for getting help.
Also, product quality and patient safety should be top priorities for the company. Opportunities 1. Providing free flu shots to children and elderly in impoverished neighborhoods 2. Growing market for generic drugs 3. Aging US population 4. Sponsoring local health fairs that provide information on staying healthy, including eating properly and giving away samples 5. MoneyGram station
Threats
1. Remaining premier pharmacy 2. Influx of “minute clinics” 3. Online counterfeiting 4. Staying in the forefront of changing pharmaceutical technology 5. Drug imports from Canada 6. Lack of experienced pharmacists 7. Market competition with other pharmaceutical stories like Walgreens
The Company faces a wide range of competitive challenges including, but not limited to, other retail drugstore chains, supermarkets, convenience stores, pharmacy benefit managers and other mail order prescription providers, Internet pharmacies and ambulatory care health providers.

3. Leadership * How might you and other leaders create new behaviors to support the strategy?
Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value.
Since the strategy is reinventing pharmacy, leaders must be always cognizant of new technologies and what the competitors are doing; this knowledge will allow them to focus on creating new products that will continuously “reinvent” the pharmaceutical products that keep the organization in the forefront as a top pharmacy provider. The root of the problem is the failure to distinguish between operational effectiveness and strategy. * What specific actions would you implement to communicate, motivate, model the way, coach, inspire the vision, challenge the process, and encourage the heart?
Today's dynamic markets and technologies have called into question the sustainability of competitive advantage. Companies must be flexible to respond rapidly to competitive and market changes. They must benchmark continuously to achieve best practice (Porter Michael, 1997). They must outsource aggressively to gain efficiencies. And they must nurture a few core competencies in the race to stay ahead of rivals.
CVS Caremark should have its training and development programs to deliver appropriate periodic training for all colleagues.

In order to implement a communication strategy, first we need to understand the benefits. It takes information, effort, time and money to implement a successful communication strategy. I would make sure to involve everyone in the planning process so employees feel involved and valued. I would use surveys and interviews to implement a plan that works for everyone, and would demonstrate the importance of the change.
Then organization should celebrate the progress that made toward the change. Employees can lose enthusiasm when the change effort is long-term, and if they feel as if nothing is happening.

Reference:

CVS Caremark Pharmacy website http://info.cvscaremark.com/

Porter Michael, (1997). What is Strategy? Harvard Business Review; Retrieved from http://web.ebscohost.com.libproxy.edmc.edu/ehost/detail?sid=2fcd543e-ba17-44ca-91c8-b2047e8a2801%40sessionmgr13&vid=1&hid=21&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=bsh&AN=9611187954

Zacks, 2012. Management Churn at CVS Caremark. Retrieved from http://www.zacks.com/stock/news/72293/management-churn-at-cvs-caremark

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