Cvs – Web Strategy

Running head possibility summary CVS THE network system Abstract CVS obdurate to expand its services by opening a Web -based drugstore. Initially, on that point were many doubts concerning how to do it flop attaining it from start, or acquisition were the options on hand. after perusal the possibilities CVS decided to acquire Soma. com and gradually (less than 3 months) turn it into CVS. com. There were many challenges during the process arrange a bicoastal boldness (Soma. om home plate were in Seattle and CVS headquarters were in Rhode Island), determining how the reimbursement were going to be dole out for online purchases, building dirt sensation and increasing traffi c and sales on the new channel (the Web). This accomplishup intends to analyze CVS Web strategy and provide most recommendations on that area. 1 cheek ANALYSIS CVS THE WEB system 2 pillow slip ANALYSIS C VS THE WEB STRATEGY After carefully studying how to venture in a new scattering channel (the Web), CVS decided to acquire an established partnership (Soma. com). The goal was to re -launch Soma. com as CVS. om, in scarcely a few months. The pres indisput fitted was high since the controversy was fierce and constantly increasing. By the time CVS acquired Soma. com there were already strong competitors in the market Drugstore. com and study innovationet Rx. Venturing on a Web-based drugstore was based on the fact that the market for drugstore produces was four times the combined sales of books and CDs, two sectors that had flourished on the web (Shah, 1999, p. 1). Everyday more than and more drugstores were sentiment about the possibility of venturing with online presence, the Internet was flourishing and every genius treasured to take returns of it.According to Shah (1999), CVS decided to acquire Soma. com for some(prenominal) reasons speed, human imagination quality, fully automated wareho use up, and equal health -care-focused beliefs. Speed was crucial t o respond to the agile -growing contention, it would go for taken them 3 to 4 months to build what they bought for the same cost (Shah, 1999, p. 6). In fact, Soma. com used pennant notch technology to operate and control its argumentation, managing up to 3,000 SKUs of just prescription drug drug medicines. Moreover, Soma. coms huma n resource was a great as rate that came with the price.Soma. com was oddly careful about hiring people with spot distinguish prescription back backdrops (Shah, 1999, p. 6). Therefore, hiring qualified employees to manage the new distribution channel was not a concern for CVS. The quest table was design to summarize the analysis of the provided information about CVS web venture. The table summarizes the strengths and weaknesses of the organization and the opportunities and threats of its environment. CASE ANALYSIS CVS THE WEB STRATEGY 3 tabularise 1 CVS Web-based Drugstore SWOT Analysis Strengths ?CVS brand equity second drugstore in the US, Wea knesses ? Bicoastal organization Soma. com and the unmatched with more number of stores. Detailed and well-design deed process from headquarters were in Rhode Island. Time dispensing to exaltation registration required, ? headquarters were in Seattle and CVS difference is a challenge. specified reimbursement wish from the customer, ? Privacy lie withs user susceptibility to sharing several(predicate) options to present the prescription, free transport of orders that included prescription reminders were not in synchronise with brick -and- edicines. ? medical information online, e-mail prescription mortars drugstores. electronic mail prescription re assume reminders for registered ? Making a product available on cvs. com was users, and 24-hour access to pharmacists via email or telephone (Shah, 1999, p. 6) Top-notch automated technology in the washbowl click on the dosage, indications and description of ingredients (Pigott as cited in prescription medicines. ? to web-enable each product to make sure you warehouse, able to deal with up to 3,000 SKU of ? time consume To add a new SKU we codShah, 1999, p. 8) Xtra CVS frequent shopper program, which ? impediment to agree on go developing could be implemented online. Making cvs. com a tool to press forward physic ians enable more products for purchase finished the jobs A physician could visit cvs. com site to website (such as cosmetics, other related prescribe, confirm a prescription or learn a healthcare products, greeting cards), but the patients formulary CVS needs to make it website team management constantly wa s in easier to prescribe through CVS than elsewhere ? trategies for the website CVS wanted to disagreement with this idea. (Shah, 1999, p. 7) ? ? Different delivery options an order could be mailed to the customers home or picked up at the Undefined long-run set strategy for the website. ? Inability to luckyly draw customers to use local CVS (Shah, 1999, p. 8) Cvs. com site was treat ed as a SBU. It had its own strategies implemented for it (free shipping, merchandise team and manager, who responded to ? the website, despite the different marketing lower prices, 24-hour service, etc. ). CVS marketing director. Online set strategy lower than in stores. CASE ANALYSIS CVS THE WEB STRATEGY 4 Opportunities ? gigantic market possibility four times as big as Threats ? Online drugstores were a novelty. No one books and CDs, products that successfully were being sold online. ? knew how productive and feasible they really were. Increased negotiation creator due to mergers and ? There was a seek of losing the reimbursement acquisitions in the drugstore industry, leaving only to online drugstores PBMs have threatened four major drugstores and the rest as industry with that. ndependents. ? ? Strong and increasing direct competition Possibility of being able to have an online (Drugstore. com, satellite Rx, Walgreens. com pharmacy built within the PBMs dispensary and e-pharmacy. com), as well as indirect (Shah, 1999, p. 9). (healthcare sites without prescription pickaxe such as WebMD, which later became Healtheon). ? Mail-order companies created by PBMs to fill long-term prescriptions created a conflict of interest amongst suppliers and online drugstores. CVS had everything figured out for a smooth submission and operation of cvs. om detailed and careful design purchase process, differentiated prices, and quality customer service. All these were back up on CVS brand equity. However, they forgot to truly integrate some(prenominal) companies not only technol ogically but functionally. Even though it appeared to be the best way to do it, having different marketing teams on different time zones created an issue for the company. That was onl y one of CVS integration issues, another one was that the website database was not synchronized with the stores database, which made the e mail reminder tool ineffective.It appears to be that the main hun ting expedition of cvs. com issues was the rush of launching the site no long-term strategies were planned. There was uncertainty in pri cing strategies for the CASE ANALYSIS CVS THE WEB STRATEGY 5 website, as well as expansion in product offerings. I t was challenging to look for common ground amongst CVS and the team managing cvs. com. To make cvs. com a successful distribution channel, CVS needed to start working on long term strategies for growth. CVS needed to take advantage of the great do of product possibilities available infra the drugstore market.There were already other online healthcare sites without prescription filling services (WebMD or Healtheon) offering rela ted products. Hence, more products needed to be introduced for online purchase, and the frequent -shopper program Xtra should have been implemented online as well. It was a fact that the hybrid order -and-delivery offering created an advantage over pur e online competition (Foulkes as cited in Shah, 1999 , p. 8), however, i f they offered different delivery options, they should offer different pricing strategies.Therefore, a discount based on the amount purchased could be designed to increase the website traffic, or a double-point system could be developed for those customers that were Xtra users. Another major issue that needed attention was the PBMs relationship. Conflicts of interest were emanation due to the similarities in the delivery process between the PBMs mail -order prescription program and the online drugstores. Contracts liabilities with the PBMs were at risk under this new distribution channel. In conclusion, cvs. com built its foundation but forgot to plan for growth.More efforts need to be made on long-term, arranged marketing strategies strategies that are a ble to attract loyal customers to the site. Moreover, CVS lack of planning is putting at risk the relationship with the suppliers (PBMs). To avoid failing and committing greater mistakes, CVS should set a mar keting plan that allows them to know the visibility of the online customer, their needs and wants. Based on that r esearch, they should r e-design a nd implement features on the website. Moreover, they need to develop strategies to keep their suppliers ( PBMs) satisfied, withoutCASE ANALYSIS CVS THE WEB STRATEGY 6 feeling at risk of losing business from their mail -order programs. For that specific issue, maybe a joint strategy could be implemented to increase awareness among their customers about whom their PBMs are. By doing so, all the 30 -day refills could be made through them. I f CVS is able to design a nd implement a long-term marketing plan for cvs. com, the website as a new distribution channel would be a complete success. CASE ANALYSIS CVS THE WEB STRATEGY 7 Reference Shah, A. (1999). CVS The web strategy. Harvard Business School.