By Denise Harrison
Over the years CVS has transitioned its business from a traditional drug store format to become more of a health care company. Why? Some trends indicated that more profitability came from its sale of prescription drugs, so a focus on health care rather than consumer products made sense. To further its movement into being a healthcare provider, it purchased MinuteClinic and opened MinuteClinics providing routine diagnosis, screening and vaccinations in many of its stores. CVS is now the biggest operator of health clinics and dispenser of prescription drugs in the US. Surprised?
What Would CVS Give Up to Continue its Focus on Providing Healthcare?
Focusing on transitioning from drug store to healthcare provider may seem like a no-brainer – but what did this move mean that CVS would have to give up? If the company was truly focused on health and wellness, how could they continue selling cigarettes? Thus, in 2015 it made the decision to stop selling tobacco products – losing $2 billion of CVS revenue.
Gutsy move – maybe. Or were they just seeing the trends and positioning themselves for the future? Some statistics on smoking adults:
As you can see the trend away from smoking is significant and if this continues down to below 10% as is expected, tobacco products will become a declining revenue source. In addition, with cigarettes off the shelves, partnerships with regional hospitals were easier to form.
- Do you have a vision of what your company needs to look like in 10 years? An idea of what it will take to be successful?
- Are you willing to give up current business to focus on positioning your company for future success?
Giving up revenue and profit is a difficult decision, but companies who are willing to make these tough choices may position themselves for long-term success.
If you are ready to assess what it will take to make your company successful in the future, please contact me at: 910-763-5194 or firstname.lastname@example.org and we can discuss how to develop a strategy that will position your company for future success.
To learn how to take your strategic planning to the next level, please listen to our webinar: Why Isn’t My Strategic Plan Working?.
Denise Harrison is a senior consultant for the Center for Simplified Strategic Planning, Inc. She can be reached at email@example.com.
© Copyright 2016 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.