CVS Case Study (Case Study Sample)
it was a case study on the working, operations, goals, strategies opted by CVS in general.source..
CVS Case Study
This case study will provide information regarding history, evolution, and CSR practices being done at CVS. CVS has a record of staying on fortune 100 companies for the last twenty-three years. Two major things that would be addressed in this case study include the current standing and the effectiveness of CSR initiatives of CVS Health.
It mainly originated as a beauty and health products store in Massachusetts in 1963. Two founders of this company are two brothers Sidney Goldstein and Stanley Goldstein. Ralph Hoagland is a business partner with them. It grew 17 stores by 1964 and ran pharmacy departments in various stores in 1967. It is unique from other stores as originally started with beauty and health-related products. It also came up with the novel idea of setting up small stores in shopping malls. CVS turned 25 in 1985, and it had 750 stores and sales of 1.6 billion dollars under its name. It expanded by acquiring other drug stores on a continuous basis. CVS acquired 500 drug stores in 1990 that dominated in Virginia, Washington DC., Maryland, and Pennsylvania. As a market leader in 2010, it established its online presence like other business giants. It partnered with insurers and employers to give medication solutions and aided benefits. It has recognized itself as a leading health solution provider despite its not being in health care providing business (Desai,2015).
Current position of CVS
CVS rebranded itself in 2016 and became CVS Health. It became a component of more significant healthcare industry and system. It can also be looked upon as providing ancillary services where patients have liberty to refill or make drugs at CVS. CVS has partnerships and links with health care providers and insurers for this. It uses market demand to fulfill the needs of its consumers. In 2016, it stopped selling all tobacco products at its stores. It was a bold step, as tobacco constituted nearly 3-8% of its total revenue (Tabuchi,2015). It began this by thinking over as market initiator and leader. It doubled the options of suitable healthcare services as CVS Health. It started using its facilities and locations for self-advantage and also for identifying community health in the health industry. It did so by taking initiatives such as opioid epidemic, affordable healthcare, assess and quality CVS parameters to rebrands itself, and providing a differentiated experience to its customers. CVS examined the market and realized the potential for growth and demand for improved healthcare.
In 2016, CVS captured a new arena of business opportunity when it embarked on a renewed social responsibility concept. CVS Health was determined to improve and promote pharmacy and health care by scientific methods, research, collaborations, advocacy, and analysis. This came mainly in areas of tobacco cessation and prevention, cost of care, quality and access, opioid epidemic, and chronic diseases (Pellegrin,2017).
Sales and Revenue Trend
Revenue of CVS boosted to 16% in 2017. This was a major breakthrough as there was a decline in sales in previous quarters, and this was attributed to shifting from tobacco and aided products. CVS Health returned nearly $6 billion to its shareholders during the same period. Its growth is mainly attributed to its relatively large network growth of its pharmacies.
Corporate Social Responsibility at CVS Health
CSR or corporate social responsibility is an approach that provides environmental, social, and economic benefits for stakeholders and the company itself. Like most companies, CVS has a robust CSR plan to cater to its own needs and that of the stakeholders as well. CVS published its first-ever CSR report, where it showed usual level commitment to a sustainable environment (Droopad,2015). It has built long-lasting partnerships for the last ten years to frame a robust CSR strategy. In 2011, CVS added more realistic and achievable targets of climate change policy and carbon reduction. It became accessible to far-reaching areas for delivery of its products and services in 2015. CVS has modeled its CSR initiatives in the following four components:-
* Quality Education
* Good Health and Well-Being
* Land Life
* Climatic Action
* Economic growth and Decent work
These initiatives have helped CVS frame development goals of CSR. CVS made it public in 2017 that it would show global progress in all the goals by the year 2030. Following are the details of these goals set by CSV:-
Goal 1: Well-Being and Good Health
Ensuring and promoting good well-being and healthier lives is a top priority for CVS. This would be achieved through integration and innovation models that would provide free resources and affordable health screening tests.
Goal 2: Providing Quality Education
Community advocacy programs would aid in providing quality education. CVS created programs that aim to attain 40000 students and colleague development schemes in 2017. It plans to avail of these platforms for offering apprenticeships and jobs lined with commitment to hire over 5000 apprentices before 2022.
Goal 3: Climate Action
Climate impact and reduction of greenhouse gases are widely researched and priority goals of CVS. Therefore, CVS has planned to collaborate with organizations of climate science and prioritize reduction targets at the organizational level.
Goal 4: Land Life
Land Life is significant component of environmental safety by efficient use of available resources. It is an aggressive and emergent campaign to utilize source sustainable paper. It also contains 31% store products that are certified of rainforest alliance.
Goal 5: Economic growth and Decent work
This is about providing a fair, competitive, and safe working environment. In 2017, 85000 colleagues were hired by CVS, and nearly $10.7 billion was spent in compensation and pay.
CSR Sustainability and Ranking
CSR rankings are performance metrics that help in measuring the stability and validity of a firm’s CSR initiatives and metrics. CSR activities by companies were broken down into five broad categories by the US weekly in 2017. These categories were:-
* Water productivity score
* Carbon productivity score
* Green score
* Energy productivity score
* Waste productivity score
In 2017, CVS was strong enough to rank 39 in the US and came at 62 at a global level.
Rating by Hamilton Point Investment Advisors (LLC)
Hamilton group (Non-governmental organization) released its 1st report on sustainability in 2008. This was released to guide investors. This company acquires public information and utilizes it by comparing it to responsibility and sustainability matrix.
CVS rated well and ranked as good on their matrix parameters. Overall, it acquired a 73% rate in sustainability efficiency levels.
Sustainability of CVS
CVS performs well above average on CSR activities when compared to other firms. Two reports issued by Hamilton group and ESG ranking gave CVS a 73% score that spoke high of its energy efficiency and systematic policies. CVS’s main strength is energy efficiency and reduction strategy. It has maintained effective partnerships in reducing carbon emissions. Many green efforts by CVS have been declared mandatory in supplies and logistics management of their stores. Various watch groups accept and audit these supplies systems that claim sustainability and environment safety by CVS. There are certain blind spots in CVS as well. One major weakness is lack of adequate focus on the sustainability of the environment. However, it emphasizes on community education and involvement and allows audit and questioning of its goals and the methods to attain those goals.
Water consumption strategy
CVS has less operational water usage, so it uses an organization-wide water conservation and management strategy to provide customized solution to each site for reducing consumption. Water usage per square foot in retail sections significantly reduced by 3% in 2018, while there was a 4% decrease in 2017 in-store footprints. Total water usage has decreased by 315 from 2010 onwards. CVS diverted nearly 55% of waste to recycling, and 86% solid waste was diverted for recycling in the same year. It also followed a new law in California that refrained retailers from transferring organic waste material to landfill sites. CVS created an innovation breakthrough by partnering with th
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