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How has cvs handled its ethical challenges

03/05/2021 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.

This new surge of investment allowed the company to expand widely across the nation into the Midwest and Southeast. CVS’s acquisition of 2,500 Revco stores became the largest acquisition in U.S. retail pharmacy history. With the rise of the Internet, CVS seized upon the opportunity to launch CVS.com in 1999 (and Caremark.com after the 2007 acquisition). This became the first fully integrated online pharmacy in the United States. In another first for the U.S. pharmacy retail industry, the company introduced the ExtraCare Card loyalty program in 2001. The company’s 40th anniversary in 2003 was marked with increasing westward expansion, 44 million loyalty card holders, and more than 4,000 stores in approximately 30 states. In the following five years, the company’s acquisitions allowed CVS to gain leadership in key markets, begin a mail order business, and open its 7,000th retail location. It would also undergo a name change to CVS/Caremark after acquiring Caremark Rx, a prescription benefits management organization.

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