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Evaluate cvs's decision to no longer sell tobacco products

30/04/2021 Client: muhammad11 Deadline: 2 Day

1. How has CVS handled its ethical challenges?
2. Evaluate CVS’s decision to no longer sell tobacco products.
3. What is the future of CVS in positioning itself as a health care company based on its decision to be socially responsible?

In 1963 brothers Stanley and Sidney Goldstein founded the first Consumer Value Store (CVS) with partner Ralph Hoagland in Lowell, Massachusetts. The store originally sold health and beauty supplies. It was widely successful, and grew to include 17 stores in one year. By 1967 CVS began offering in-store pharmacy departments, and in less than a decade it was acquired by the retail holding corporation Melville Corporation. This marked the beginning of CVS’s expansion across the east coast through new store openings or mergers and acquisitions. It soon reached the milestone of exceeding $100 million in sales in 1974.

As the company grew, it faced intense competition, which it responded to through a differentiation strategy. CVS focused on its core offerings of health and beauty products, placing stores in shopping malls to generate more foot traffic. This strategy worked well for the company, allowing it to hit $1 billion in sales by 1985. The company celebrated its 25th year in 1988 with 750 stores and $1.6 billion in sales. The acquisition of People’s Drug stores enabled CVS to establish its presence more widely along the coast and spurred the launch of PharmaCare, a pharmacy benefit management (PBM) company providing services to employers and insurers. In 1996 the Melville Corporation restructured, and CVS became independent as a publicly traded company on the New York Stock Exchange.

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