SWOT Analysis

CVS Pharmacy Market Domain

Pharmacy Market Domain

Jaclyn Hurley

Southern New Hampshire University

7/2/2017

Introduction

The healthcare industry is an area that deals with critical issues each day and requires extensive understanding of the market before venturing into it. Over the past years, different companies seek entry into this market, but it is not all that survive; some exist after a short period while others rise to become strong forces that outshine others. As covered herein, this analysis provides a detailed overview of the pharmacy market domain while reflecting on the different activities of CVS as a model company. Exclusively, it analyzes the various factors that promote or inhibit the rise of different companies in the same market as well as evaluating the impact of the identified factors on opportunities for change and innovation in the pharmacy market domain.

As an established service provider in the pharmacy industry, CVS deals primarily with the sale and distribution of prescribed drugs; it is committed to curing and the promotion of health. Also, it specializes in the sale of various merchandise, which include, over-the-counter drugs, different cosmetics, beauty products, and convenience foods. Other elements worth mentioning comprise health services through its clinics as well as film and photo finishing services. Evidently, CVS deals with a broad range of products and services while also occupying a critical area of the market. Considering that it ranks 7th among the largest corporations in the United States, it is worth to reflect and learn from it as a competitive retailer.

A. Factors Influencing Business in Pharmacy Market Domain

Before going deep into the specific cases, it is worth noting that the only closest competitor of CVS pharmacy is Walgreens Boots Alliance. However, different from the exceptional market’s performance of CVS, it ranks 37th among the leading corporations. In this regard, there are particular elements in this industry which have been very favorable for CVS but different with others. More so, although they may not apply universally to all traders, it is essential for every company to be aware of them in order to use them when appropriate.

A critical factor that enables a business to stand out in any market includes the promotional method. This strategy ensures that the market understands and embraces the products or services that the company offers. It is a case to do with knowing whether to apply product or marketing differentiation regarding the needs of a particular market. In reflection, product differentiation provides that a product or a service is distinguished from others; it possesses additional/unique elements that the other competitors cannot match. Eventually, it becomes more attractive to the particular target market. Indeed, exceptionality has been the defining factor as far as CVS business is concerned.

Another related approach is via market segmentation. Different from the case with product differentiation, this approach involves striving to make a strong market presence as opposes to making unique products. In fact, the primary way is through creating product variations under the same brand, which ensures a greater coverage and more sales. However, for any company to excel in a competitive market such as in the pharmacy industry, it is imperative to understand the structure of the market and know the appropriate time and place to use a particular method. As such, if there is a balance between what the clients want and what the company provides there is no doubt that a company will thrive.

Nevertheless, despite the features that a product or a service possesses, it must influence a sale; customers must see its benefit. In this regard, it is imperative to consider domain-specific market segmentation as a valuable approach as opposed to the segmentation or brand-specific variables. In this respect, and in concurrence with Fred van Raaij & Verhallen (2004), product differentiation and positioning requires not to function exclusively but to be counterparts of market segmentation. As such, the product’s benefit serves as the link between the market segmentation and product differentiation. Applying this concept to the CVS’s scenario, every company needs to first establish a firm and full grip of the market before going into the product’s particulars. In particular, the way a customer is likely to benefit depends on how well he/she will interact with the product or the service.

Apart from segmentation, another aspect that is very critical involves the concept of public domain. In the recent past, many countries have been making it a priority to broaden market access; they see it as a crucial intervention to promote industrial/business growth. However, due to the possibility of the pendulum swinging back for the market, the importance of investing in public domain becomes critical, and it is the same in the pharmacy market. As Drache (2005) observes, if countries devise new institutions of governance in the world that is globalizing each day, it is imperative not only to make changes nationally but also internationally to guarantee market success.

For instance, as it applies to the case of reconstitution, it is vital to have new public places, spaces, and services that can enhance democracy besides the creation of social sanctuaries where markets have not been reaching in the past. In this respect, the public domain concept strives to ensure that countries can counter the challenges that stem from market intrusiveness and at the same time promote a high performance for companies nationally. Indeed, such a performance is one proven way to reduce inequalities and market/social extrusion which are highly symbolic in the ever-volatile global economy (Drache, 2005).

In applying this scenario to the pharmacy market, it is not all companies that thrive despite the efforts they make; CVS remain dominant in the market while some find it challenging to compete effectively. For instance, it has been an unfortunate case for some that include Lupin and Glenmark to experience delayed approvals due to their origin. Another detailed example that depicts market extrusion is the Punitive Regulatory Action. As applied by the US FDA (Food and Drug Administration), the regulation proves to be a significant risk towards the companies which are seeking exports prospects (Scannell et al., 2012). A perfect illustration in the pharmacy market involves Sun Pharma or Ipca Labs which are still striving to comply with the regulatory considerations fully.

Issues in the pharmacy market keep on changing as time advances. Just as experienced in other scenarios that call for public attention, the impact of technology remains vivid in the pharmacy industry. One thing that remains certain is that there is a possibility for data interruption; it can leak or be accessed by unauthorized parties if there are problems with the technology that a particular service provider utilizes. In this regard, it becomes imperative to prioritize the patients’ privacy all the time despite the size of the business, the products it sells, or the services that it offers.

The importance of making privacy a priority stems from the fact that patients become loyal to their institutions if they are confident in the services provided. Indeed, there is nothing that is more sensitive compared to patients’ information; it should remain private all the time. In this respect, it is a responsibility for all concerned parties in the pharmacy industry to devise mechanisms that sufficiently protect patients’ information. A perfect illustration is the sensitization of a 1996 law that mandates a unique identifier for each member in the U.S. medical care system as well as the application of a standard electronic data set for all health information connected to the financial and administrative transactions and transmissions (Freeman and Robbins, 2009). Indeed, with such interventions, there is no doubt that the market will remain protected while offering quality services too.

Strategic marketing is essential for every business, and the same applies to health care organizations. Pharmacies always provide critical services, but as other businesses, they function to make profits. In this regard, they need to come up with strategic marketing approaches to gain a competitive edge. Considering that competitive businesses frequently emerge in the healthcare sector, it is essential for pharmacies to prioritize a customer-driven health system (Kotler, Shalowitz, & Stevens, 2011). Such an approach means that the customer remains the center of interest; the product and services in the industry offer have to respond to an already existing need. As such, the businesses need to be situated in strategic places, use sophisticated means to market their products or services and ensure responsiveness to the needs of the customers. Undoubtedly, this has been the case with CVS pharmacy.

The elements that dominantly feature in the pharmacy industry are never exclusive although some are worth mentioning compared to others. In concurrence with Nester & Hale (2002) observation, recording accurate medication histories remain a priority when admitting any patient into a hospital. Besides, there also needs to be accurate records of consecutive admissions and previous medications, which helps in the identification of associated factors such as allergies and their contribution to an ailment; the pharmacy becomes important in this instance to keep the patients’ information tracked (Nester & Hale, 2002). In connection with other aspects of record keeping, it is also a way to promote patients’ privacy.

Ethics also play an essential role in the pharmacy market. No business can thrive and offer quality services if it disregards the importance of ethics. Every profession follows some set guidelines that dictate the correct approach towards controversial matters, and it is the same case in the pharmacy market. Ethics in health care is necessary because medical practitioners deal with life support issues, and if they make wrong decisions, the consequences are far-reaching. Despite the rules that regulate the entire industry as well, it is also a personal choice to decide how to treat a patient; ethics ensures the consideration of morals hence carrying out an activity for the best interest of the patient. In this regard, one needs to factor essential considerations that include life continuity, protection, promotion, and a patient’s data protection.

B. Impact of the Factors

Just as earlier mentioned, it is worth noting that the pharmacy market is a business like any other but with a higher personal obligation due to the sensitivity of the services it provides. Although it needs to compete adequately with others and ensure economic and social growth, the different factors that define its success need to be balanced all the time. Irrespective of the situation and the times, it is crucial to ensure that the customers, in this case, the patients, benefit and are not short-changed. More so, other factors such as privacy, accuracy, and healthcare ethics require remaining dominant in every situation.

Just as in the case with CVS pharmacy, the primary objective is to ensure that a product has obvious benefits. There is a need for market differentiation as well as product differentiation. One apparent thing with CVS pharmacy as a business is that it offers an assortment of products and services; it even includes beauty products and cosmetics. As a result, it is aware of the different products that the customers want as they strive to remain healthy. If compared to the others, CVS is way above them as far as competition is concerned. In fact, if it remains that way and continues broadening its reach, it will be difficult for the others to match its competence. The critical point is that every business must know when, how, and where to prioritize product differentiation; it is one of the key success factors towards the current dominance of CVS.

Far from that, the concept of public domain and its situational aspects also influence a market's prosperity. Just as Drache (2005) notes, market extrusion, protection, and equality are prominent features that define the market's structure. The domain of strategic marketing also serves as a defining aspect that encompasses the behavior of organizations and environmental phenomena in respect to how organizations behave in the marketplace, how they interact with customers and consumers, and how they address competition. If there is no market protection, some companies operate at an advantage, which is likely to influence the unfortunate exit of others unfairly.

Chief among the issues in strategic marketing is the understanding of the variations in the market and how the business shape varies in response to the changes in the supply and demand side factors. Strategic marketing just as in the case of CVS is vital for any pharmacy to thrive. An essential feature that defines the success of any business in the pharmaceutical industry involves responsiveness; the market is highly competitive, and the lack of essential features to compete and adapt to situations prompts business failure (Dunlap‐Hinkler, Kotabe, & Mudambi, 2010). As a result, the highly competitive companies such as the case of CVS are the ones that embrace the modern concepts of strategic marketing.

Another important factor as earlier mentioned is the necessity for privacy. In each activity that a pharmacist carries out, there is nothing that affects his/her relationship with the clients more than the protection of their privacy. Whether they are seeking a medical service or buying a health product, clients/customers need to feel secure. If it happens, their confidence to do business with them repetitively increase and they also advise others to visit the same outlet. On the other hand, if there is a breach of privacy, insecurity rises and can prompt legal intervention. The eventuality is the loss of loyal customers, and it also brings the business down.

Just as in the case of protecting a patient’s privacy, it is vital and a critical obligation to accurately record a patient’s information. Pharmacies should not act like normal businesses where the primary goal is to maximize the profits; they need to promote health care and make it a priority as well. When accuracy is enhanced, treatment of future illnesses becomes easier, and the patients also become confident with the systems. As such, if it is a health unit operating among other competitors, it is likely to boost their confidence and visit often. Eventually, the respective business thrives.

Ethical responsibilities, however, is dependent on the interdependent roles physicians and patients play. Four essential principles describe the ways health care professionals should conduct themselves mainly in their accountability towards patients. The first principle is autonomy which involves honoring clients' rights, beneficence that assists the patient to look for advanced care for self-benefit and safe treatment while the fourth principle is justice (Beauchamp, 2007). As part of the primary ethical aspects, justice involves the treatment of similar cases alike while being fair to all patients regardless of interrelationships.

The leading role of ethics in the pharmacy market is guiding in decision making. When the executives set standards and model them, health care providers can follow the set guidelines which eventually create an environment where decision-making adheres to a set of predefined rules. As a result, there is relaxed regulation, and ethical dilemmas reduce because the guidelines determine the corrective actions. Most importantly and in conclusion, moral principles enable the promotion of better health care since treatment errors are minimal; a set of ethical standards ensures that practitioners act within the rules defined by the medical community and do not make medical decisions based on their personal opinions or feelings. Eventually, there is quality care for all.

References

Beauchamp, T. L. (2007). The ‘Four Principles’ Approach to Health Care Ethics. Principles of Health Care Ethics, 3-10.
Drache, D. (Ed.). (2005). The Market or the Public Domain: Redrawing the Line (Vol. 9). Routledge.
Dunlap‐Hinkler, D., Kotabe, M., & Mudambi, R. (2010). A story of breakthrough versus incremental innovation: Corporate entrepreneurship in the global pharmaceutical industry. Strategic Entrepreneurship Journal, 4(2), 106-127.
Fred van Raaij, W., & Verhallen, T. M. (2004). Domain-specific market segmentation. European Journal of Marketing, 28(10), 49-66.
Freeman, P., & Robbins, A. (2009). The US health data privacy debate. International journal of technology assessment in health care, 15(02), 316-331.
Kotler, P., Shalowitz, J., & Stevens, R. J. (2011). Strategic marketing for health care organizations: building a customer-driven health system. John Wiley & Sons.
Nester, T. M., & Hale, L. S. (2002). The effectiveness of a pharmacist-acquired medication history in [Inserted: The e]promoting patient safety. American Journal of Health-System Pharmacy, 59(22), 2221-[Inserted: -] 2225.[Deleted:E]
Scannell, J. W., Blanckley, A., Boldon, H., & Warrington, B. (2012). Diagnosing the decline in pharmaceutical R&D efficiency. Nature reviews Drug discovery, 11(3), 191-200.