Path To Better Health

When was the last time you went to a CVS? Did you notice any products removed from the shelves within the past few months?

Over the past year, CVS made the decision to remove all tobacco products off of their shelves, which was implemented this past September. They changed their corporate name from CVS Pharmacy to CVS Health, and launched a new campaign to help millions of Americans quit smoking. Their purpose in their mission statement is to “help people on their path to better health”.

CVS Health Logo

Along with removing all tobacco products from their shelves to be a positive health influence to our society, CVS is also planning a co-pay on prescription medications when medications are purchased from stores that still sell tobacco.

As we learned in class, new services generate substantial revenue. CVS currently insures over 65 million people. This new campaign of promoting a healthy tobacco-free lifestyle can generate a substantial amount of new business for CVS.

Another topic we learned about in class is service design. A part of service design is improving the relationship with service providers and customers and to develop value and trust within a service. CVS is taking a stance for positive health, and that CVS cares about their customers health.

As a part of their new plan, CVS is also going to offer prescriptions at a better price if you purchase it from a tobacco free pharmacy.

With healthcare costs rising, companies and clients are often found looking to save some money. With CVS planning to offer lower costs to clients on prescription if bought at a tobacco free store, this could drive in more business.

Another idea demonstrated in class is goods and services selection. This is the basis for an organizations existence, and with new products coming out, it can bring in a lot of revenue. Since the company announced that they will be tobacco free, their shares of CVS healthcare have advanced about 25%. This new plan could create additional revenue by keeping existing clients and adding more clients who may want to save money on prescriptions. They are already the nations second largest drugstore chain, and when the tobacco free plan is fully implemented, it could drive additional revenue.

Based on the first step of their plan to remove all tobacco products from their stores, it increased their shares by about 25%. I believe this will increase their revenue when the full plan is executed. Especially with the discounts they are going to offer, I believe that it will increase their sales because people are always looking to save money.

Some questions to think about:

  1. Are you more likely to invest in this company after hearing about the new campaign they are launching?
  2. Do you think this will cause other pharmaceutical companies and drug store chains to go tobacco free and promote a healthy lifestyle?
  3. Are you more likely to purchase medications at CVS to save money on prescriptions?

 

 

http://www.myfoxchicago.com/story/26839572/cvs-tacks-tobacco-payment-to-prescription-network

http://www.cvshealth.com/about-us/our-purpose-building-bridge-better-health

http://www.mysuncoast.com/news/local/cvs-pulls-tobacco-products-off-the-shelves-one-month-early/article_2965e95e-33b0-11e4-a200-0017a43b2370.html

 

 

12 thoughts on “Path To Better Health

  1. Interesting post! I was actually at CVS and shocked that they were not selling any tobacco products. I personally would not consider investing in the CVS because people are always looking for convenience and for many, CVS may not be convenient anymore. I don’t think many companies will adopt this change. Tobacco products bring in a ton of money and there will always be smokers. For some companies I don’t think it’s worth the transition. Many people look for convenience, I’m sure smokers will continue to purchase at pharmacy stores where they can purchase cigarettes along with the other items they need. The only way I would purchase from CVS price differences were drastic and that’s because CVS is not a convenient store for me.

  2. Interesting post! I was actually at CVS and shocked that they were not selling any tobacco products. I personally would not consider investing in the CVS because people are always looking for convenience and for many, CVS may not be convenient anymore. I don’t think many companies will adopt this change. Tobacco products bring in a ton of money and there will always be smokers. For some companies I don’t think it’s worth the transition. Many people look for convenience, I’m sure smokers will continue to purchase at pharmacy stores where they can purchase cigarettes along with the other items they need. CVS is not a convenient store for me and the only way I would purchase from CVS was if the prices at CVS were drastically cheaper.

  3. I wonder whether this decision hurts or helps CVS. It definitely looks good to be called CVS Health, but I wonder how much money they are going to lose from this. My guess is that this wasnt very profitable to begin with, because I have a hard time believing that a major company like CVS gave up on a major seller just to be more healthy. But thats just my opinion, maybe they really are losing a lot of money but just want people to be more healthy.

  4. I have been going to CVS for years especially for their prices. However, I feel like this decision, although it might have seemed good at first, will not help them in the long run. By limiting customers, it will drive them to other competitors such as Walgreens or Rite Aid. I think companies can promote healthy lifestyles all they want, but again it comes down to the consumer. It would be like if these companies were promoting abstinence but got rid of birth control and condoms. Like I stated previously, I love going to CVS for lower prices so maybe the prescription side of the business will do well but other departments will just be lacking.

  5. I wouldn’t be surprised at all if this forced other stores within the industry to follow. If a company is trying to market itself as being health focused, it only makes sense that not selling tobacco products would be expected. While it may affect their revenues in the short term, I think it will be net positive as it helps build their reputation.

  6. Great post. Personally I wouldn’t invest in CVS at this time. Even though it might seem like the right thing to do to take tobacco products off the shelf the reality is there is still a lot of people that smoke. By taking these products off the shelves your pushing them towards their competitors. As for buying medications at CVS I think I would be more inclined to buy there if it meant I could save a little money.

  7. I’ll be honest, I was a little upset about CVS taking tobacco off their shelves considering I am a smoker that lives across the street from a CVS. However, my unbiased opinion that this was great move by CVS in regards to public relations, profits, and society as a whole. I’m sure CVS executives were hardly sleeping when the initiative started, but it sounds like they can rest easy now. I don’t think other chains will completely follow suit, but I can definitely see them increasing health and tobacco cessation awareness for PR purposes. Personally, CVS or any other company’s health initiatives won’t affect my willingness to invest in them. So I will have to get my cigarettes elsewhere, but I will definitely continue to go CVS for my prescription needs because of the fast and friendly service. Thanks for a great post!

  8. I truly think that this was such a great step that CVS took to help everyone live a healthier lifestyle and this one step can have a ripple step on people and can ultimately lead them to quit smoking. My sister is currently a pharmacist for CVS and I know that they are taking many steps to better the lives of the people that they serve. This is all together transforming the drugstore industry and is putting a better emphasis on health.

    Personally, I am more likely to invest in a company that supports their mission statement. CVS is a place where people go to mainly pick up their medications and better their health. Well, if they are selling medications in the back of their store and as customers walk back towards the front to exit the building they are surrounded by tobacco products. That concept defeated their purpose. With their new campaign they are actually caring for their customers.

  9. You picked an amazing topic! I personally think that CVS did a great job in removing their tobacco products from their shelves. There must have been a reason for their choice. Nowadays, more places are restricting people smoking and tobacco products are getting really expensive. CVS considered the well-being of the customers and removed the tobacco in replace of other needs. I don’t think I would buy shares of CVS as it is still something new in the market, which will make the shares unsteadily.

  10. Hi. Marci..I have been CVS all the time, and i always shop the stuff that is on sale, like buy one get one free. Also, CVS often send me the discount coupon to me to save more money and appeal me to shop there instead of Walgreen. In addition, they now offer prescriptions at a better price if you purchase it from a tobacco free pharmacy. CVS is taking a stance for positive health, and that CVS cares about their customers health. This establish a really healthy image to them. I believe this service design is improving the relationship with service providers and customers and to develop value and trust within a service.

  11. I think it’s great CVS has started to take cigarettes off their shelves. I believe sales will start to increase if people know they can save more money buying prescriptions when buying from a tobacco-free store. But, I’m not sure if this will drive other pharmaceutical companies will start a path to health. Walgreen just started to sell put alcohol back on their shelves after many years. As a result, their sales and market shares have increased.

  12. This is a fantastic post! I heavily applaud CVS for removing all tobacco products from its stores. As a company, I would definitely invest in CVS because of their healthy lifestyle promotion. I think that this will create a domino effect for other companies to stop selling tobacco products, especially now that the terrible side effects are public knowledge. I personally buy my prescriptions through CVS and have Caremark, so I usually don’t have to pay for prescriptions, which is great for a college student?

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