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