Capstone Paper 9 Chapter 2: Literature Search Overview: You will select appropriate research literature to review key theoretical concepts and discuss them in this section. The purpose is to explore i

Corporate

The first Consumer Value Store, abbreviated as the CVS, was founded in 1963. Two brothers identified as Sidney and Stanly Goldstein pioneered the firm in collaboration with Ralph Hoagland. The first CVS store operated in Lowell, Massachusetts. At the start, the firm dealt with beauty and health products.

History of the Company

In 1967, the company added pharmacies, and in 2006, CVS launched its first clinic with the help of the minute clinics. In 2007, there was a merger between CVS and the Pharmacy Benefit Management Company, and the company's name changed to CVS Care Corporation. In 2014, CVS Care Corporation decided to eliminate tobacco products from its stores, and the company changed its name to CVS Health. There was a merger between CVS Health Corporation, the largest retail pharmacy in the United States, and Aetna (Lugo et al., 2021). The merger, which concluded in 2018, was studied, and in the light of claims made by scholars, the two competitors joined forces to gain competitive advantages in the pharmaceutical market (Delrahim & General, 2018). Business elites, scholars, and professors castigated the shift.

Historical Products and Evolution to Current Products and Services

Historically, CVS Health dealt with beauty and health products. Currently, CVS Health can be connected with pharmaceuticals, beauty, cosmetic products, and health services (Lugo et al., 2021). CVS Health evolved and started to deal with pharmaceuticals in 1967, four years after its discovery. CVS Health launched the first-minute clinic in 2006, and in 2014 the firm decided to eradicate the production of tobacco products.

Entry into New Business Lines

CVS Health corporation began as a series of beauty and health retail stores. The company transitioned to pharmacies four years after its introduction. In 2006, the company transitioned from pharmacies and operated in minute clinics. Eight years later, they banished tobacco products from their stores, and the name changed to CVS Health (Liu, Li, & Opara, 2018); to adhere to its corporate social responsibility.

Industry Competitors

The competitors of CVS Health include UnitedHealth Group, Humana Inc., Express Scripts Holding Company, WellCare Health Plans, CIGNA, Rite Aid Corporation, Health Care Service Cooperation, Wellmark IA, and SD Anthem Inc (Scheffler, 2018). The competitors of CVS Health are the primary health insurers in the United States. As a result, the firm needs to reconsider its business strategies, especially in using technology.

Section II: Statement of the problem

In 2018 CVS and Aetna released a joint statement stating that they are one company, "the combined company would have 9,700 CVS Pharmacy stores, 1,100 MinuteClinic walk-in clinics, and about 4,000 CVS Health clinic and home care nurses”. (Herbert, 2018) The company's goal was to create 1,100 new (minute) walk-in clinic hubs within their stores by 2019. However, by 2022 the CVS currently only set up 135 Health Hubs. 

The study aims to identify why the two company mergers failed, starting with the company's structure, the expansion of the new markets, and the impact covid 19 had on creating and implementing the Health Hubs.

Section III: Research Question

Although the company is facing many challenges, the goal remains the same, the creation and implementation of its 1,100 new health hubs, to achieve the goal. How can CVS health restructure its position in the healthcare industry to remain profitable while providing accessible health care?

Section IV: Hypothesis

  CVS Health will come up with a strategic plan to focus on moving forward with the development of viable Health Hubs in affluent locations. The Hubs will be specifically designed to maintain current CVS Health customers and attract new patrons with it’s “One stop shop design”.

Section V: Research Significance

Investigating Health care associates and their affiliates has become increasingly crucial for the government, insurance providers, consumers, and many more (Steinwachs & Hughes, 2008). The information included in research projects such as this can provide several benefits that will lead to improvements in the availability of health services. Organizational structures, organizational processes, health technologies, and many other factors affect the quality of health care in addition to the cost and availability.

More specifically, CVS Health has innovations that have drastically affected the retail aspect of the HealthCare industry. As an ever-changing industry mogul like CVS becomes, CVS Health significantly impacts the organizational changes such as access to health care, efficiency, and quality. This research project is crucial because it needs to be determined if the business strategy to re-brand and merge was more beneficial than detrimental to the industry as a whole. While the pharmacy market is extremely competitive, CVS has continued to lead in innovation. They strive to be a one-stop-shop with health clinics and Pharmacy management benefits. It becomes easy and convenient for the consumers. This research will expose problems of the pharmacy giant becoming too big too fast.

With online/digital companies creating competition that threatened pharmacy sales and reduced forecasted revenue amounts, CVS Health had to plan for the disruption (CVS Health, 2017). There are five main sectors in the pharmacy industry:

•           Chain drug stores

•           independent pharmacies

•           supermarkets with pharmacies

•           mass merchants with pharmacies

•           Mail order specialty pharmacies

While CVS is a chain drug store and dominates the market, they have also seized the opportunity to provide consumers with built-in retail health clinics. That one-stop shop convenience the population desires (CVS Health, 2017). The recommendations offered in this presentation will provide a strategic plan to improve survivability through a massive merger that is creating Health problems internally for the staff while remaining consistent with the values, mission statement, and vision of CVS Health.

Section VI: Purpose

The purpose of conducting this research about CVS health is to provide a unique perspective on the intentions of CVS Health executives to convert 1,100 stores into Health hubs. Thorough research has been completed, and careful analysis has provided findings that support recommendations to proceed with opening hubs to meet original goals and advancing services offered to remain competitive.

Section VII: Data collection/Research Method

The data collection process will begin with researching resources found within the library database. Utilizing journals, scholarly articles, and financial statements located in the business and health & medicine section. Other resources will be retrieved from the corporate website. On the CVS/health website, information such as investor’s reports, official company statements and future endeavors the corporations are striving to achieve can be found. (CVS/Health, n.d.) Legal databases like Nexis Uni will be used to gather information related to legal issues or lawsuits CVS/Health has been involved in.

The first step in the research collection process will be to look at which market CVS/Health is occupying and how much of the sector they are dominating. From there the research will investigate the corporation’s opportunity for expansion within the market share.  It will be imperative to look at competitors within the industry such as Walgreens, Urgent Cares and Telehealth companies to obtain information on their strengths, weaknesses, and competitive costs of healthcare resources provided. Questionnaires for employees and customers will be created in order to help gather research about the corporation and general healthcare access.  Other methods to gain understanding will be through observation, by being a patient at the Minute Clinic. This will aid in taking an internal look at how the company operates and the quality of healthcare being offered. In addition, a portion of the research related to Human Resources, Labor Relations, and Marketing issues will come from textbooks used in previous classes to incorporate knowledge and show understanding gathered throughout the academic experience.

CVS/Health. (n.d.). CVS/Health. https://www.cvs.com/content/health-hub?icid=cvsheader:healthhub

Section VIII: Chapter Summary

CVS/Health has grown into a household name over the last 59 years, rapidly surpassing and absorbing  similar corporations within the healthcare market. Currently, CVS/Health operates in 43 states, District of Columbia, and Puerto Rico with plans to continue the company’s expansion within their market sector. (CVS Pharmacy Locations, n.d.) The focus of the company is clear, to “help people navigate the healthcare system — and their personal health care — by improving access, lowering costs and being a trusted partner for every meaningful moment of health” (Our Purpose, 2022) However, in order to provide the healthcare services that reflects their purpose, it is crucial that the company sets realistic goals. Then executes appropriate resources for the goals to be achieved. With the CVS and Aetna merger, CVS/Health strived to create over 1,000 new clinics but successfully opened less than 15% of their set goal. The research will comprehensively analyze the structure created within the company since the merger. By focusing on the healthcare sector, competitors and new company structure within management seeking to find innovative resolutions for the complications that hindered the growth of the HealthHubs in 2022.  

Our purpose. (2022). CVS Health. https://www.cvshealth.com/about-cvs-health/our-purpose

CVS Pharmacy Locations. (n.d.). CVS/Health. https://www.cvs.com/store-locator/cvs-pharmacy-locations