A Strategic Management Case Study on CVS Caremark Corporation

A Strategic Management Case Study on CVS Caremark Corporation
By: Carter Vaillancourt, Megan Land, and Emily Michaud UMFK

Overview Internal Assessment Implementation Projected Financials
Company Overview A brief history of CVS Existing Mission and Vision Existing Strategies New Mission and Vision External Assessment Industry Analysis Opportunities and Threats EFE Matrix CPM Matrix Internal Assessment Organizational Structure Strengths and Weaknesses Financial Condition IFE Matrix Strategy Formulation SWOT Matrix Space Matrix Grand Strategy Matrix Matrix Analysis QSPM Matrix Evaluation Balanced Scorecard CVS Caremark Update Implementation Projected Financials Strategic Plan for the Future Objectives Strategies

Company Timeline The CVS name was used for the first time in That year, they had 17 retail locations, and 40 stores only five years later The chain had more than 400 stores by Sales reached $1 billion in 1985, partly due to the pharmacies being added to many of CVS's older stores In 2004, CVS purchased 1,268 Eckerd drug stores and Eckerd Health Services, a PBM/mail-order pharmacy business, from J. C. Penney 1960s 1970s 1980s 1990s By 1974, CVS had 232 stores and sales of $100 million In 1994, CVS started PharmaCare Management Services. In 1999, CVS acquired Soma.com, the first online pharmacy, and renamed it CVS.com On November 1, 2006, CVS announced that it was entering into a purchase agreement with Nashville-based Caremark Rx Inc., a pharmacy benefits manager On August 12, 2008, CVS Pharmacy announced that it would acquire Longs Drugs for $2.9 billion

CVS Caremark Segments

2010 CVS Caremark Retail Segment Revenue Break Down
Figure 11: 2010 CVS Caremark Retail Segment Revenue Break Down 2010 CVS Caremark Retail Segment Revenue Break Down Revenue has grown at a CAGR of 9.2% over the last four years from $34 billion in 2006 to $57.3 billion in During this time, pharmacy sales have grown at a CAGR of 9.1% and front-end sales have grown at a CAGR of 9.6%.

CVS Caremark Corp. reported a decline in profits and lower revenue because of termination of pharmacy services contracts and fewer Medicare prescription drug program members 2009 2010

Existing Vision Statement
We strive to improve the quality of human life.

Existing Mission Statement
We provide expert care and innovative solutions in pharmacy and health care that are effective and easy for our customers.

Existing Strategies Use Minute Clinic locations and Specialty pharmacy division to lower cost while improving the health of those we serve Increase CVS Caremark leadership in and contribution to the areas of pharmacy services and healthcare

Proposed Vision Statement
CVS Caremark’s vision is to improve the quality of life through convenient and cost efficient offerings.

Proposed Mission Statement
At CVS Caremark our mission is to provide quality products and services through our pharmaceuticals and consumer products (2). We strive to be the number one provider in the United States (3) by investing not only in our company (5) and technological advances (4) but also in the communities in which we serve (8). Whether our customers are new to this world our are veterans, (1) we know that our company can provide them with the newest and most effective products and services, while promoting the healthy communities in which they live. Through our valued employees (9), CVS is able to provide quality services and quality products (7).

External Analysis

Operating Expenses as a % of Revenue

Gross Margin as a % of Revenue

Competitive Analysis

U.S Pharmacies 2010

Rx Same-Store-Sales Trends

Opportunities Universal Health Care and economy recovery, $10 trillion by 2020 Imminent introduction of generic brands lowering the cost Over the next five years, roughly $50 billion branded drugs will lose patent protection With healthcare reform slowly coming into effect, 32 million Americans previously without coverage will now have some short sort of coverage. People 65 years of age or older fill more than 25 prescriptions annually on average, 3 times the national average. As baby boomers age, approximately 70 million Americans will turn 65 in the next 20 years It is estimated that by 2014, 8 out of the top 10 drugs in the U.S. will be specialty drugs, where expenditures are expected to rise to $100 billion. Medicare part D market is expected to grow 8.5% annually from 2010 to 2020 Global pharmaceutical industry is expected to grow, especially Brazil, India, Russia, and China, which is expected to be the 3rd largest market in 2011

Threats It is estimated that there could be a dearth of 200,000 healthcare professionals and 800,000 nurses by 2020 Potential government intervention in health care after election in 2012 Imminent introduction of generic brands lowering the margin CVS’ is behind Wal-Mart by nearly $140 billion in market cap. CVS’ additional competitor Walgreens is behind them by a market cap of roughly $10 billion. Walgreens increased the number of prescriptions filled in 2010 by 7.5% , whereas ours decreased. In the next 5 years, 9 out of the top 10 best-selling drugs in the world will go off patent, resulting in an expected loss of sales Extensive regulation has increased the time from drug discovery to approval from 6 years in the 1970s to 13.5 years in the 2000s. Pharmaceutical companies struggle to develop new drugs as R&D costs become high, on average between $4 billion to $11 billion per drug

Critical Success factors
CPM CVS Walmart Walgreen Critical Success factors Weights Rating Weighted Score 0.0 to 1.0 1 to 4 Advertising 0.08 3 0.24 4 0.32 2 0.16 Product Quality 0.12 0.36 0.48 Price Competitiveness 0.10 0.20 0.40 0.30 Finanical Position Customer Loyalty 0.14 0.42 0.56 0.28 Global Expansion 0.11 0.33 0.44 0.22 Market Share 0.07 0.21 Organization Structure 0.06 0.18 Customer Service Production Capacity Employee Dedication 0.04 Totals 1.00 3.02 3.88 2.60

EFE 0.36 2.87 Key External Factors Weights Rating Weighted Score
0.0 to 1.0 1 to 4 Opportunities Universal Health Care and economy recovery, $10 trillion by 2020 0.06 4 0.24 Imminent introduction of generic brands lowering the cost 0.07 3 0.21 Over the next five years, roughly $50 billion branded drugs will lose patent protection 0.04 2 0.08 With healthcare reform slowly coming into effect, 32 million Americans previously without coverage will now have some sort of coverage. People 65 years of age or older fill more than 25 prescriptions annually on average, 3 times the national average 0.12 As baby boomers age, approximately 70 million Americans will turn 65 in the next 20 years 0.18 It is estimated that by 2014, 8 out of the top 10 drugs in the U.S. will be specialty drugs, where expenditures are expected to rise to $100 billion Medicare part D market is expected to grow 8.5% annually from 2010 to 2020 0.05 0.1 Global pharmaceutical industry is expected to grow, especially Brazil, India, Russia, and China, which is expected to be the 3rd largest market in 2011 0.15 Threats It is estimated that there could be a dearth of 200,000 healthcare professionals and 800,000 nurses by 2020 Potential government intervention in health care after election in 2012 Imminent introduction of generic brands lowering the margin CVS’ is behind Wal-Mart by nearly $140 billion in market cap CVS’ additional competitor Walgreens is behind them by a market cap of roughly $10 billion 0.28 Walgreens increased the number of prescriptions filed in 2010 by 7.5% , whereas ours decreased In the next 5 years, 9 out of the top 10 best-selling drugs in the world will go off patent, resulting in an expected loss of sales Extensive regulation has increased the time from drug discovery to approval from 6 years in the 1970s to 13.5 years in the 2000s 0.2 Pharmaceutical companies struggle to develop new drugs as R&D costs become high, on average between $4 billion to $11 billion per drug 0.09 0.36 Totals 1 2.87

Internal Analysis

EVP Internal Operations, Real Estate, Retail Field, Organizations
Organizational Chart THOMAS M. RYAN Chairman of the Board and Chief Executive Officer PER G.H. LOFBERG Executive Vice President and President – Caremark Pharmacy Services DOUGLAS A. SGARRO Executive Vice President and Chief Legal Officer LAIRD K. DANIELS Senior Vice President – Finance and Controller and Chief Accounting Officer LARRY J. MERLO President and Chief Operating Officer TROYEN A. BRENNAN, M.D. Executive Vice President and Chief Medical Officer DAVID M. DENTON Executive Vice President and Chief Financial Officer HELENA B. FOULKES Executive Vice President and Chief Marketing Officer LISA G. BISACCIA Senior Vice President and Chief Human Resources Officer JONATHAN C. ROBERTS Executive Vice President and Chief Operating Officer – Caremark Pharmacy Services SARA J. FINLEY Senior Vice President and General Counsel NANCY R. CHRISTAL Senior Vice President – Investor Relations CAROL A. DENALE Senior Vice President and Corporate Treasurer STUART M. MCGUIGAN Senior Vice President and Chief Information Officer EVP; President, Caremark Pharmacy Services EVP Internal Operations, Real Estate, Retail Field, Organizations

CVS Worth Analysis CVS Worth Analysis for 2010 (in millions)
Shareholder's equity - Goodwill - Intangibles 2,281 Net Income * 5 17,120 (Stock Price/EPS) * NI 45,726 # of Shares Out * Stock Price 45,822 Four Method Average 27,737

Income Statement

Balance Sheet

Balance Sheet Continued

CVS Caremark Financial Ratios
Walgreens Wal-Mart Liquidity Ratios Current 1.60 0.87 Quick 0.63 0.61 0.27 Leverage Ratios Debt to total assets 0.39 0.45 0.57 Debt to equity 0.65 0.82 1.34 Long-term debt to equity 0.23 0.17 0.46 Activity Ratios Fixed Assets Turnover 11.59 6.03 4.1 Total Assets Turnover 1.55 2.57 2.39 Inventory Turnover 9.01 9.14 12.31 Profitability Ratios Gross Profit Margin % 21.01 28.15 25.37 EBT Margin % 5.84 5.00 5.41 Net Profit Margin % 3.55 3.10 3.51 Return on total assets % 5.54 8.13 8.58 Return on Stockholder's equity % 9.33 14.53 21.08 Price-earnings ratio 13.35 17.28 13.64 Growth Ratios Sales Growth (5-years) 21.11% 9.82% 7.23% Net Income Growth (5-years Average) 22.85% 6.04% 6.90% Earnings per share Growth (5-year Average) 11.42% 6.88% 8.95%

Strengths CVS is the largest pharmacy health care provider in the U.S with over 7,100 pharmacies. Gross profit as a percent of net revenues increased 21.0% Operating expenses decreased 1.8% from 2009. Employee base of 202,000 employees CVS is recognized as one of the largest pharmacy benefit managers (PBMs) in the US. Registering more than four million customers per day Market cap increased by 5.8% from 44 billion to 47 billion in 2010 More than 65% of stores are open around the clock or offer extended hours Has 560 MinuteClinic locations across 26 states, easing health care overcrowding from lack of Primary care providers. Generates more than $11 billion in specialty pharmacy revenue annually

Weaknesses Substantial amount of outstanding debt, 11 million
Substantial amount of outstanding debt, 11 million Since March 2009, the Company has been named in a series of putative collective and class action lawsuits filed in federal courts Pharmacy services segment is showing less revenue than the retail segment High cost of revenue and operational expenses; 76,156, 14,092 Net interest expense increased 1.2% since 2009. Pharmacy network claims processed decreased 12.5% in 2010 due to the expiration of a few large client contracts. Income from continuing operations decreased by 7.2% in 2010 Net revenues decreased by $2.3 billion in 2010 CVS shares returned 7.9% in 2010, trailing the S&P 500 Index of 12.8% return

IFE 2.64 Key Internal Factors Weights Rating Weighted Score 0.0 to 1.0
0.0 to 1.0 1, 2, 3 or 4 Internal Strengths 3 or 4 CVS is the largest pharmacy health care provider in the U.S with over 7,100 pharmacies 0.08 4 0.32 Gross profit as a percent of net revenues increased 21.0% 0.06 0.24 Operating expenses decreased 1.8% from 2009 0.04 3 0.12 Employee base of 202,000 employees 0.03 0.09 CVS is recognized as one of the largest pharmacy benefit managers (PBMs) in the US. Registering more than four million customers per day 0.05 0.15 Market cap increased by 5.8% from 44 billion to 47 billion in 2010 0.07 0.28 More than 65% of stores are open around the clock or offer extended hours 0.27 Has 560 MinuteClinic locations across 26 states, easing health care overcrowding from lack of Primary care providers Generates more than $11 billion in specialty pharmacy revenue annually Internal Weaknesses 1 or 2 Substantial amount of outstanding debt, 11 million 1 Since March 2009, the Company has been named in a series of putative collective and class action lawsuits filed in federal courts 2 Pharmacy services segment is showing less revenue than the retail segment High cost of revenue and operational expenses; 76,156, 14,092 Net interest expense increased 1.2% since 2009 Pharmacy network claims processed decreased 12.5% in 2010 due to the expiration of a few large client contracts. Income from continuing operations decreased by 7.2% in 2010 Net revenues decreased by $2.3 billion in 2010 CVS shares returned 7.9% in 2010, trailing the S&P 500 Index of 12.8% return Totals 2.64

Strategy Formulation

SO Strengths Opportunities ST WO WT Threats Weaknesses
Expand to areas such as Latin America and Asia. (S4, S6, O2, O3, O9) Strengths Opportunities Increase number of Minute Clinics in areas where there is a large number of aging population. (S5, S8, S9, O5, O6, O8) ST WO Offer educational programs/training to better prepare our staff to answer customer questions. (S4, S7, T1) Offer incentives to employees based on customers they get to sign up for loyalty program. (W6, O4, O5, O6) Increase number of stores open 24 hours by 20%. (S7, T4, T5, T6) Expand to states/areas in the U.S. that we currently do not operate in. (W3, W6, W8, O1, O4) WT Take advantage of the expiring patents on drugs by developing generics through R&D. (W3, W6, W8, T6, T7, T8, T9) Threats Weaknesses Increase our food segment to increase revenue and better compete with Walmart and Walgreen. (W3, W7, W8, T4, T5)

Space Matrix Aggressive Conservative Defensive Competitive FS CS ES IS
Financial Strength rating is 1 (worst) to 7 (best) 1 Cash Flow 4.0 2 Price Earnings Ratio 3 Earnings per Share 5.0 4 Working Capital 3.0 5 Liquidity 2.0 6 Net Income 7 Return on Assets Space Matrix FS CS ES IS -1 -2 -3 -4 -5 -6 6 5 4 3 2 1 Conservative Aggressive Competitive Defensive Industry Strength rating is 1 (worst) to 7 (best) Total 1 Profit Potential 5.0 2 Financial Stability 6.0 3 Resource Utilization 4 Productivity, capacity utilization 5 Market Entry 2.0 6 Growth Potential 4.0 7 Extent Leveraged Environmental Stability IS Total 29.0 1 Rate of Inflation -4.0 2 Barriers to Enter the Market -3.0 3 Competitive Pressure -2.0 4 Price Elasticity 5 Demand Variability -1.0 6 Price Range of Competing Products 7 Ease of Exit from Market Competitive advantage rating is -1 (best) to -7 (worst) ES Total -20.0 1 Market Share 1.0 2 Product Quality 3 Customer Loyalty 2.0 4 Capacity Utilization 4.0 5 Technologically Advanced 3.0 6 Global Expansion 7.0 7 Product Life Cycle 5.0 X Coordinate 0.86 Y Coordinate

GSM Quadrant I 1. Market development 2. Market penetration
Rapid Market Growth Weak Competitve Position Strong Competitive Position Slow Market Growth Quadrant I 1. Market development 2. Market penetration 3. Product development 4. Forward integration 5. Backward integration 6. Horizontal integration 7. Related diversification Quadrant II 1. Market development 2. Market penetration 3. Product development 4. Horizontal integration 5. Divestiture 6. Liquidation Quadrant III 1. Retrenchment 2. Related diversification 3. Unrelated diversification 4. Divestiture 5. Liquidation Quadrant IV 1. Related diversification 2. Unrelated diversification 3. Joint ventures

Matrix Analysis IE SPACE GRAND BCG COUNT x 2 1 Alternative Strategies
Forward Integration x 2 Backward Integration Horizontal Integration Market Penetration Market Development Product Development Related Diversification Unrelated Diversification 1 Retrenchment Divestiture Liquidation

Strategic Evaluation Product Development
Increase number of stores open 24 hours by 20%. (Not Enough Need as of 2010) Offer Educational Programs/Trainings to better prepare our staff to answer customer questions. (Most questions of customers require answers from a Pharmacist) Offer incentives to employees based on customers they get to sign up for loyalty program (Causes customers to be prompted with questions on their fast and convenient stop at CVS) Take advantage of the expiring patents on drugs by developing more Generics ( Already in this market strongly) Increase our food segment to increase revenue and better compete with Walmart and Walgreens ( Did not apply to our mission) Market Development Expand into areas such as Latin America and Asia. (Country drugs laws differ)

QSPM Increase number of MinuteClinics by 100 locations
Expand to 4 other states in the U.S. that we do not have established locations Key factors Weight AS TAS External 1 to 4 Opportunities 1. Universal Health Care and economy recovery, $10 trillion by 2020 0.06 3 0.18 2. Imminent introduction of generic brands lowering the cost 0.07 - 3. Over the next five years, roughly $50 billion branded drugs will lose patent protection 0.04 4. With healthcare reform slowly coming into effect, 32 million Americans previously without coverage will now have some sort of coverage. 4 0.16 0.12 5. People 65 years of age or older fill more than 25 prescriptions annually on average, 3 times the national average 0.24 6. As baby boomers age, approximately 70 million Americans will turn 65 in the next 20 years 7. It is estimated that by 2014, 8 out of the top 10 drugs in the U.S. will be specialty drugs, where expenditures are expected to rise to $100 billion 8. Medicare part D market is expected to grow 8.5% annually from 2010 to 2020 0.05 0.2 9. Global pharmaceutical industry is expected to grow, especially Brazil, India, Russia, and China, which is expected to be the 3rd largest market in 2011 Threats 1. It is estimated that there could be a dearth of 200,000 healthcare professionals and 800,000 nurses by 2020 2. Potential government intervention in health care after election in 2012 2 3. Imminent introduction of generic brands lowering the margin 4. CVS’ is behind Wal-Mart by nearly $140 billion in market cap 0.21 0.28 5. CVS’ additional competitor Walgreens is behind them by a market cap of roughly $10 billion 6. Walgreens increased the number of prescriptions filed in 2010 by 7.5% , whereas ours decreased 7. In the next 5 years, 9 out of the top 10 best-selling drugs in the world will go off patent, resulting in an expected loss of sales 0.08 8. Extensive regulation has increased the time from drug discovery to approval from 6 years in the 1970s to 13.5 years in the 2000s 9. Pharmaceutical companies struggle to develop new drugs as R&D costs become high, on average between $4 billion to $11 billion per drug 0.09 total should be 1.0 1

QSPM Continued 3.35 3.24 Increase number of
Expand to 4 other states in the U.S. that we do not have established locations Increase number of MinuteClinics by 100 locations Strengths 1. CVS is the largest pharmacy health care provider in the U.S with over 7,100 pharmacies 0.08 3 0.24 4 0.32 2. Gross profit as a percent of net revenues increased 21.0% 0.06 0.18 3. Operating expenses decreased 1.8% from 2009 0.04 4. Employee base of 202,000 employees 0.03 0.12 0.09 5. CVS is recognized as one of the largest pharmacy benefit managers (PBMs) in the US. Registering more than four million customers per day 0.05 0.2 0.15 6. Market cap increased by 5.8% from 44 billion to 47 billion in 2010 0.07 - 7. More than 65% of stores are open around the clock or offer extended hours 0.36 0.27 8. Has 560 MinuteClinic locations across 26 states, easing health care overcrowding from lack of Primary care providers 0.28 9. Generates more than $11 billion in specialty pharmacy revenue annually Weaknesses 1. Substantial amount of outstanding debt, 11 million 2. Since March 2009, the Company has been named in a series of putative collective and class action lawsuits filed in federal courts 3. Pharmacy services segment is showing less revenue than the retail segment 1 4. High cost of revenue and operational expenses; 76,156, 14,092 5. Net interest expense increased 1.2% since 2009 2 6. Pharmacy network claims processed decreased 12.5% in 2010 due to the expiration of a few large client contracts. 7. Income from continuing operations decreased by 7.2% in 2010 8. Net revenues decreased by $2.3 billion in 2010 0.16 9. CVS shares returned 7.9% in 2010, trailing the S&P 500 Index of 12.8% return 3.35 3.24

Strategic Fit

Primary Care Shortage and Rising Demand
The percentage of U.S medical School graduates that are choosing Residency Spots in Family Medicine has declined 54% since 1997 Expected shortage of 45,000 Primary Care Physicians (PCP) by 2020 Health Care Reform expected to add 32 Million newly-covered patients by 2014

Primary Care Shortage

MinuteClinic Revenue Growth from 2007 to 2010

Lower total Healthcare costs for Person who used MinuteClinic
MinuteClinic User vs. Non User 2010 Lower total Healthcare costs for Person who used MinuteClinic

2010 MinuteClinic Overview
Largest Retail Clinic Provider Health Care/Retail Leadership 9 Million Visits since inception 50% of Population Reports for no current physician

3 Year Goals Year 1: Begin Construction ($11,500,000) Year 2: Open 50 New MinuteClinics ($9,250,000) Year 3: Open 50 New MinuteClinics

Strategic Implementation

Estimated Cost of Additional MinuteClinics
$185,000 Salaries/per location/per year $75,000 Building (start up cost) $40,000 Supplies and Equipment _______________________________________ 300,000 per MinuteClinic *100 Locations = 30,000,000 Capital Needed

Projected Financial Assumptions
Capital needed 30,000,000 Cash Used Tax Rate 35% Stock Price (Dec. 31, year end) 33.52 Dividends Paid $.50 per share 683,500,000

Projected Financials-Income Statement
Projected Income Statement (in millions) 2009 2010 2011 Total Revenue 98,729 96,413 110,874 15% increase Cost of Revenue 78,349 76,156 88,379 % of total revenue Gross Profit 20,380 20,257 22,495 Operating Expenses - Selling, General, and Administrative 13,942 14,092 15,238 8% increase, plus $18.5 mil. In salaries Operating Income or Loss 6,438 6,165 7,257 Total Other Income/Expense EBIT 5,913 5,629 Interest Expense Income Before Tax Income Tax Expense 2,205 2,190 2,540 35% tax Minority Interest 3 Same Net Income from Continuing Operations 3,708 3,439 4,720 Loss from Discontinued Operations (12) (15) Same (possible store closings) Net Income 3,696 3,424 4,705 Basic EPS 2.58 2.51 3.44 Diluted EPS 2.55 2.49 3.42 Basic Average Shares Outstanding 1,434 1,367 Diluted Average Shares Outstanding 1,450 1,377 Dividends Per Share 0.305 0.35 0.50

Projected Financials-Balance Sheet (1)
Projected Balance Sheet (in millions) 2009 2010 2011 ASSETS Current Assets Cash/Cash Equivalents 1,086 1,427 1,397 Decrease by $30 mil. For capital needed Short-term Investments 5 4 Same Net Receivables 5,963 5,436 5,653 4% increase Inventory 10,343 10,695 11,765 10% increase Other Assets 140 144 151 5% increase Total Current Assets 17,537 17,706 18,970 Long-term Investments - Plant, Property, and Equipment 7,923 8,322 8,750 5% increase, plus $11.5 mil. In supplies/building Goodwill 25,680 25,669 26,657 4%increase Intangible Assets 10,127 9,784 10,273 Accum. Amortization 374 688 708 3% increase Deferred Long-term Asset Total Assets 61,641 62,169 65,358

Projected Balance Sheet (2)
LIABILITIES Current Liabilities Accounts Payable 6,806 7,096 7,806 10% increase Current Portion Long-term Debt 5,494 3,974 2,454 same decrease as previous year Other Current Liabilities - Total Current Liabilities 12,300 11,070 10,260 Long-term Debt 8,756 8,652 8,548 Other Liabilities 1,102 1,058 1,165 Deferred Long-term Liability Charges 3,678 3,655 3,630 Minority Interest Negative Goodwill Total Liabilities 25,836 24,435 23,603 STOCKHOLDERS' EQUITY Misc. Stocks Options Warrants 37 34 same Redeemable Preferred Stock Preferred Stock Common Stock 16 Retained Earnings 16,355 19,303 23,324 Increase from net income, minus dividends paid Treasury Stock (7,610) (9,030) Capital Surplus 27,198 27,610 Other Stockholders' Equity (191) (199) Total Stockholders' Equity 35,805 37,734 41,755 Total Liabilities and Stockholders' Equity 61,641 62,169 65,358

Project Financial Ratios
CVS's Projected Ratios 2010 v. 2011 2010 2011 Current Ratio 1.60 1.85 Quick Ratio 0.63 0.70 Debt to Total Assets 0.39 0.36 Debt to Equity 0.65 0.57 Fixed Asset Turnover 11.59 12.67 Total Asset Turnover 1.55 1.70 Inventory Turnover 9.01 9.42 Gross Profit Margin % 21.01 20.29 Return on Stockholders' Equity % 9.33 11.26

Strategic Evaluation

Balanced Scorecard Area of Objectives Measure or Target
Time Expectation Primary Responsibility Customers 1 Brand Identity Industry reports/Market Cap. Higher than competitors Yearly Health Care/Strategy Marketing Officer 2 Satisfaction Customer satisfaction surveys Semi-Annual Employees 1 Employee Moral Survey Chief Human Resources Officer 2 Service Training # of seminars Chief Operations Officer Operations 1 Patient visits Increase by 1 million each year 2 Locations Increase MinuteClinic locations by 100 3 Years Business Ethics 1 Ethics Training # of ethics training sessions 2 Patient Awareness "Learn about your medicines"- medicinal information Financial 1 Revenues Increase by 15% each year CFO 2 Ratio Analysis Better than competitors/industry Avg.

CVS Caremark Update

Current CVS Locations (2013)

Stock Performance

MinuteClinic Current Locations

Update Facts In 2012, Email-Pharmacist was used 2,000 times.
CVS Pharmacy filled 1.3 million prescriptions filled through mail service and 3.7 million retail prescriptions in 2012 99.998% Dispensing Accuracy in 2012 for mail service Filled 602,992 prescriptions that were 90-day supplies Order Refill is the most visited area of their Website 60.4% of Mail Service scripts required no intervention, 39.6% required some time of follow up In 2011 Tom Ryan ( CEO ) retired, and new CEO was hired- Larry Merlo

A Strategic Management Case Study on CVS Caremark Corporation

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