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Hello. Thank you for watching and listening to this presentation

on CBS Health for my Capstone project for the Online

MBA. I'm Sherry Kendall.

This enterprise of CVS Health really began as a retail

pharmacy store in New England called CVS Pharmacy, and has

grown via organic and inorganic growth, horizontal and vertical integration

to really engage and expand into new markets and really

change the soul of the company over the years since

the 19 sixties and its inception in New England, I'm

going to cover a few key points as to their

strengths, weaknesses, opportunities and threats really discuss and dig into

some of the key components of their competitive advantage, and

then also discussed how they came.

Sustain that competitive advantage with some anticipated significant market disruption.

Buy a new entrant into the health care um, industry

of Amazon Pharmacy.

As I said, CVS Health began as a retail pharmacy

store in the early 19 sixties in New England and

has really grown and changed and evolved since that time

via strategy that really began as a horizontal um, integration

strategy, where the enterprise began purchasing smaller pharmacy retail chains

and expanding its geographic footprint throughout the us and then

also into the country of Brazil.

In the early two thousands, that strategy changed, and the

enterprise really began to look into expanding into other industries

within health care.

The first one was Pharmacy Benefit Management, or PBM, by

the acquisition of Caremark in 2006.

In 2019, the Enterprise also acquired Aetna health care benefits

and really represented a huge shift for the organization where

they continue to build on their strengths off their large

retail network, but also started to focus and evolve and

look at really the industry of health care and how

they, as a company, could participate in the change in

evolution of that industry for the betterment of its consumers

or patients.

As I said, CVS Health now participates in three healthcare

market segments.

CVS Pharmacy, which operates in the retail pharmacy segment CVS

Caremark, which operates in pharmacy benefit management, and Aetna, which

really operates within the medical benefits health care arena.

The synergies that operating in all of these different market

segments offer the enterprise through the Value Chain are really

the core strength that this enterprise has built its competitive

advantage around the information gained on their consumers by having

access to their pharmacy information, their healthcare information.

So there any encounter information when the consumer patient sees

the provider and then really having access to, um, the

pharmacy benefit management arm or segment really affords them the

data needed to understand who and what their customers are

and then what they need from the company in addition

to providing the framework for delivery.

So the retail pharmacy segment of the business operates all

over the U.

S. And in Brazil, with over 9900 physical locations in

addition to 1100 MinuteClinic, or health club locations, which really

represent the shift that the enterprise is making toward, um

really putting the patient at the center of everything that

they do and their focus on innovation.

So taking something like a retail pharmacy and turning it

into a local point of health care delivery for patients

and consumers within those areas to really improve their health.

The vision of this company and their mission is to

truly become the front door to health care for all

of their consumers and improve the health of every consumer

and patient that they interact with the market leading position

in both retail, pharmacy and pharmacy benefit management has really

afforded the enterprise the capital to then build the framework

for their innovative programs.

It allowed them to purchase wth e significant acquisition of

Etna in 2019.

This $69 billion acquisition did affect the R.

O. I C of the company for that year.

They have since moved back into a positive return on

invested capital invested capital.

Excuse me, but it did have a significant impact that

year as it was quite a large investment to acquire

Aetna, the data and the benefit of acquiring that company

that it allowed the enterprise to have within its value

chain and provide even more synergy.

Eyes really the focus of this analysis and of my

paper and really, truly speaks to how CBS Health wants

to interact with the patient at all points within the

health care delivery system and really improve each one of

those points where they access.

So CBS Health has enjoyed a market leader position.

As I stated in both retail pharmacy and within pharmacy

benefit management, they have over 22 distribution centers within the

U. S.

They have a significant volume pharmacists, and they see 4.5

um million consumers walking through their retail locations every single

day. So, like I said, they have a significant footprint

within the U.

S. Or they interact with patients and provide them with

their prescription medications.

The format of this delivery chain.

So where the patient goes to see their primary care

provider or specialist, gets a prescription for a condition and

then goes to the retail pharmacy location toe have that

filled is really being threatened by the entrance to this

industry of Amazon As a market destructor.

They have built an e commerce system based on their

acquisition of Whole Foods, which provides them local distribution points

and also pill pack pharmacy, which afforded them the industry

knowledge which bypassed the traditionally high entry barriers to the

health care segment.

Things also provides CVS health and opportunity to also engaged

within e commerce and not only protect its market position

but also gain additional customers as well.

This energy in the value chain with the ethno customer

base is a great jumping off point.

Thio add this strategy Thio there their current book of

business to continue growing protecting their market positions, but then

also to gain market share.

So really, what I've learned from this capstone are to

look at the big picture.

The primary thing is to look at the big picture

when developing a strategy.

Look at those internal customers and external customers and really

analyze and look at how this will impact both sides

of the equation and not just one or the other.

And really, as a the external market changes for a

company, what that does to their competitive advantage.

So, um, specifically, within this context, what The entrance of

a company like Amazon, Um, that has had significant growth

and has really weathered the challenges off the Koven 19

pandemic. Um, and really look at what that's going to

do to how CBS healthcare companies like CBS Health do

business and how they need to change to continue doing

business and to protect their positions within the industries within

which they operate.

Thea other piece is with all the great feedback I

got on each of my papers, that everything every great

idea, every analysis needs to be backed up by hard

data. So really, you know, the why behind, um, the

strategies and the strength and just all the information that

I rolled into each analysis every week.

Um, just I was really pushed Thio to really go

find more data and more information to back up.

Um, really, everything I was presenting in each analysis every

week. So that was a key learning for sure on

dhe. Then, really, the market disruption can really just change

the equation.

So you have thio when thinking about strategies and different

industries. What an industry looks like and how that industry

interacts with their competitors can really change due to market

disruption. And any company really has to incorporate that into

any strategy and really be forward thinking, and not just

so stuck in how they currently do business, that they

miss an opportunity on how they could do business tomorrow

after some kind of market destruction like an Amazon.

And then, lastly, sustaining a competitive advantage is very difficult

as the market continues to change and shift.

And I think like we've all seen this year with

Cove in 19 and how it's brought so many challenges.

Um, that company is really kind of constantly have to

evaluate strategies and look at, you know, is that strategy

that we developed last year does not hold up today?

Or do we need Thio to modify that and change

it and growing of all?

And then, really, how I'm gonna leverage these learnings?

Um, really, before presenting any kind of idea or strategy,

um, to just make sure I really do my homework

and look at every single potential, um, outcome And really,

what the what the budget needs to be, How you

know, if I'm proposing a new idea how I'm going

to get those resource is and how we're going Thio

really pull together the capabilities we need to drive that

idea forward and make it a reality.

And then really, does that align with my company's no

vision and mission and overall corporate strategy?

Um, I think a lot of times you have, you

have great ideas, but you forget to sit back and

think, you know, how does this align with my overall

corporate strategy on drily lining it up and making sure

that if it is lined up that that you have

that I have all of the data and the background

information needed?

So when I presented it, it's successful and it moves

forward and implementation.

And then really, um, the other piece is just remembering

to gather all that feedback.

So thinking about all of the people that a strategy

or an innovative idea is going to affect and then

gathering feedback before, during and after an implementation to just

keep improving and keep modifying and make sure that the

idea strategy or innovation continues to succeed.

Um, by really making sure that feedback loop is continuous.

And then really, lastly, um, how I'm gonna leverage these

capstone learnings is, um, just in recognizing how the Copa

19 pandemic has really accelerated just so many market forces

and remembering that to incorporate that in in anything, um,

when evaluating strategies that really can't be ignored because things

are just so different and our continued are going to

continue to be different on just making sure that with

anything going forward, that that is incorporated and those challenges

really all the learnings, um, that all of us have

gained through living through and working through, um, this pandemic

are really incorporated in the future so that it's a

little bit, um, can pivot a little bit quicker and

easier on just remember that being agile and being willing

to evolve and change is is so important to any

strategy going forward.

Thank you, dr.

For all of your input and just pushing throughout this

whole process, I very much appreciate it.

And, uh, forward to being done.

Thank you.

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