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Entrepreneurial Strengths and Actions to Increase Value Creation
Complete the table below, assessing the company’s strengths and weaknesses and describing the company’s approach to innovation.
Company name: CVS Health
Company website URL: https://www.cvshealth.com/
3 to 5 entrepreneurial strengths of the company (90 – 175 words)
A significant entrepreneurial characteristic of CVS Health is its ability to link divisions to increase efficiency. A well-connected network of efficient divisions makes it much easier for the company to manage its operations and activities.
A second strength of ours is our ability to penetrate new markets effectively. As a retailer of pharmaceuticals, the company has developed a strategic business strategy that allows it to easily enter new markets and create substantial market shares. A competitive advantage is gained by the company as a result of this.
Brand equity, or the ability to sell goods and services that meet market expectations, is the third advantage (Koh et al, 2019). Firm expansion into new regional markets is expected due to a strong penetration rate.
Major elements of the company’s approach to entrepreneurship and value creation (175 words)
Two categories of methods can be used by a firm to engage in entrepreneurial activities and create value. At CVS Health, business models such as pharmacy benefit management and brick-and-mortar are used. As a subsidiary of CVS Health Corporation, CVS Caremark also uses the PBM business model, also known as pharmacy benefit management. In Pharmaceutical Benefits Management (PBM), a company oversees the distribution of pharmaceuticals to improve supply chain efficiency and lower costs for their customers. It is a subset of supply chain managed services. As a result of the American Society of Health System Pharmacists (ASHP)’s collaborative efforts, this model was created.
In addition to selling products online, CVS Health Corporation also operates its stores. With its traditional storefronts and online shop, CVS Pharmacy operates both as a single entity, which is operated by the same company. With its cost-based generic strategy for competitive advantage, this business model maximizes the company’s market reach, which suits its aggressive expansion plans in retail pharmacies and healthcare. As a business model, Kassler’s 2020 model maximizes market reach despite the competition (Kassler,2020).
A standard approach is used by the organization regarding its business strategy, so that entrepreneurial opportunities are maximized. Continually focusing on cost leadership generic approaches, CVS maintains its leadership position in retail pharmacies, formulary management, and healthcare services. It is essential for the company to establish itself as the lowest-cost supplier of the retail pharmacy industry in order to offer prices that are competitive. The company’s business model is driven by this objective (Kassler, 2020).
1 action the company could take to increase entrepreneurial value creation
Increasing marketing efforts on new continents and nations would be a wise move for the corporation to diversify. This is a real possibility because the company can keep its manufacturing costs low, and by extension, its selling prices low. By pricing its products competitively, the corporation may be able to quickly capture some of these markets. It is essential for the corporation to take such measures in order to boost its earnings in the near future (Kassler, 2020).
References:
Koh, H. K., Singer, S. J., & Edmondson, A. C. (2019). Health as a way of doing business. Jama, 321(1), 33-34.
Kassler, W. J. (2020). Turning barriers into benefits to facilitate public health and business partnership. American Journal of Public Health, 110(4), 443-445.
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