University Company Analysis: CVS Health Corporation Business Report

This report presents a comprehensive analysis of CVS Health Corporation, examining its business operations, market position, and strategic initiatives. The analysis includes a SWOT analysis, PESTEL analysis, and competitive analysis to assess the company's strengths, weaknesses, opportunities, and threats. The report also delves into industry trends, shareholding patterns, investment patterns, and potential problems and risks faced by CVS Health. Furthermore, it explores the company's prioritized business strategies for growth, including the expansion of Health Hubs, differentiation of businesses, new product introductions, and cost savings. The report concludes with recommendations for long-term value creation, emphasizing financial stability and strategic improvements.

Running head: COMPANY ANALYSIS OF CVS HEALTH CORPORATION
Company analysis of CVS Health Corporation
Name of the student
Name of the university
Student ID
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COMPANY ANALYSIS OF CVS HEALTH CORPORATION
Table of Contents
Introduction......................................................................................................................................3
Analysis of the company.................................................................................................................3
SWOT analysis................................................................................................................................3
PESTEL analysis.............................................................................................................................4
Competitive analysis........................................................................................................................5
Share holding pattern.......................................................................................................................5
Industry trend analysis.....................................................................................................................5
Investment pattern...........................................................................................................................6
Problems, issues and risks...............................................................................................................6
Prioritized the business strategy to accelerate growth.....................................................................6
Expanding the Health Hubs to build on the success of its pilot program in Houston, TX..............7
Growing and differentiating CVS Health’s businesses...................................................................7
New product introduce by the capabilities of CVS Health..............................................................7
Cost savings realization...................................................................................................................7
Strong financial stability will float the company for long-term value creation...............................7
References........................................................................................................................................8

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COMPANY ANALYSIS OF CVS HEALTH CORPORATION
Introduction
CVS health, previously known as CVS Corporation that having its first foot step in
America. It is a health care company that subsidise CVS Pharmacy, CVS Caremark a of retail
stores, Aetna, a health insurance provider. The headquarter of the corporation situated in
Woonsocket, Rhode Island. Consumer Value Stores (CVS) was established in 1963 and
following the growth stage in 1980s and 1990 the enterprise became a statutory company traded
on New York Stock Exchange as CVS with the market cap of $93.942 billion. CVS Health
Corporation is a mobilized medical service provider. The company offers management services
in terms of pharmacy benefit, retail and speciality pharmacy, disease management services, mail
order and retail clinics. The organization has primarily three segments these are the Segments of
Pharmacy Services, the Segment of Retail/LTC and the Corporate Segment. Amongst these, the
pharmaceutical service segment provides pharmacy benefit management clarifications to the
clients, which also divided by employers, insurance companies and unions etc. The study
illustrate the case analysis of CVS Health Corporation and interpret the performance based on
the financial ratios. (smf.business.uconn.edu, 2020)
Analysis of the company
This study depicts the company analysis of CVS Health Corporation. The analysis have
been done depending on the key factors of its credible sources. The study has diagnosed the
issues and risks that has been faced by the company and the business strategy would be adopted.
The detailed discussion is explained below.
SWOT analysis
The SWOT analysis report represents the analysis of internal factor and external factor of
the company containing impactful facts about the present market situation and the recent
business strategy of the largest pharmacy giant. The SWOT analysis describes the analytical
phase of company’s strength, weakness, opportunities and threats. This case analysis study that
the company not only big brand of pharmacy in US but also there is a lot of opportunity to
expand in the global market (Gürel & Tat 2017). The SWOT analysis of the company are
presented as follows:

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COMPANY ANALYSIS OF CVS HEALTH CORPORATION
Strength Weakness
One of the leading pharmacy benefit based
company
Largest drug retailer in USA
Consistent stable performance and strong portfolio
value
Brand building
Loyalty programme pushing OTC growth
Poor foot fall outside USA
Embroiled in lawsuits and controversies which
effects corrosion the brand and money
Opportunities Threats
Acquition of Aetna will refer to enter into new in
line opportunity like healthcare insurance
Growth by acquisition and collaborations
Opiate crisis fighting
Anti-aging drugs in growth stage
Population increased based on the perspective
needs
Global competition in terms of conventional and
unconventional
Regulations and interventions of the Government
Expansion of the competition because of the mail
order pharmacy
PESTEL analysis
This analysis refers the different types of challenges that faced by CVS in political,
environmental, social, technological, economic and legal dominance. The PESTEL analyzation
is also known for the external analysis of the company. This external analysis embarked the
detail significant factor and the macro-environment impact on the medicine industry. This
external analysis helps the company to have a great impact on the business structure and the
business strategy of CVS. (Rastogi & Trivedi, 2016). The PESTLE analysis of CVS are
illustrated below:
Political Economical
Addressing the public policies for the improvement
of the customers
Political implications that affects the business
policy
Lowering the prospective act and corporate tax
improvements to change the market weights.

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COMPANY ANALYSIS OF CVS HEALTH CORPORATION
Social Technological
Peoples in the United States to increase up the
healthcare segment
Rising demand in developing markets
Merger with Aetna to build up a strong health care
technology platform
Legal Environmental
Antitrust regulations Framework of broad enterprise environmental
strategy
Measure compliance
Competitive analysis
CVS Health Enterprise competes in the pharmacy segments and the retail/ LTC segments
both. In the segment of the pharmacy services, the main competitors are ExpressSctripts and
United Health Group. The company has the largest market share of 28.6% as compared to the
above-mentioned two companies with 23.0% and 13.3% respectively. (Fleisher, & Bensoussan,
2015).
Share holding pattern
The breakdown of all the major shareholders are as follows:
0.18% shares held by all insiders
79.66% shares held by institutions
79.81% of floating shares held by institutions
2176 number of institutions holding shares (in.finance.yahoo.com 2020)
Industry trend analysis
There is a positive outlook in pharmacy service segment. With the expansion in health care
coverage and people in United States, become employed. Even the industry has consolidated to
deliver more advantage to promote drug as the preventive treatment rather than visiting at the

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COMPANY ANALYSIS OF CVS HEALTH CORPORATION
costly hospital. Retail segments are showing better growth in terms of store location, higher
customer services and satisfaction. It gives better product selections with lower prices.
(smf.business.uconn.edu, 2020)
Investment pattern
There is a significant investment of CVS Health Corporation because of its capability to
generate very efficient cash flow. The company is focusing on the return from shareholders and
there level as industry leader in pharmacy providers for long-term care and attractive cost
solutions. The company has free cash flow yield of 8.98%, their dividend has increased in a
consecutive years. (smf.business.uconn.edu, 2020)
Key Financials US $ million
DCF Stock price $90.96
Multiples stock price $109.74
Weighted 50/25/25
Intrinsic value $95.24
DDM Stock price $73.83
Problems, issues and risks
Some critical issues or risks that the company (CVS) has faced presently. Changes in US
policy, laws and regulations. Abolition of the Affordable act would affect customers however
CVS referred they are ready to accept to notify any changes and work continue to bring the
resolve and eradicate the healthcare costs. The company gain a sound profit margin on drugs in
comparison to brand name. It can be seen that there are very less new generic drugs in the
present years. Finally, it has been observed that PBMs are causing drug prices to increases.
Therefore, because of the increasing the cost there would be chances to reduce the demand.
(smf.business.uconn.edu, 2020)
Prioritized the business strategy to leverage growth
CVS Health Corporation is very compelled to keep their users at the centre of its strategy
and to help those users to gain their best and positive condition by strengthening the health care
locally (cvshealth.com, 2020). The management focuses on:

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COMPANY ANALYSIS OF CVS HEALTH CORPORATION
Expanding the Health Hubs For building up the success by its pilot program
This is very laeful integrated key factor how CVS Health will serve the customers with
convenient. As per the new agenda, the company will invest an addition health hub in this year
and they have plans to expand 1500 total health hubs operating by the end of 2020 (Rosenbaum,
2016).
Growing and differentiating CVS Health’s businesses
Focusing on the inmvolvement by the personalization, the company has built up
reimbursement models and designs innovative benefit (Johnson, 2016).
New product introduce by the capabilities of CVS Health
The company is taking merit of the elevation of CVS Health’s abilities, which is not
matched. It is required to introduce new services and products. CVS health needs to obtain
programs by the government. It will produce new risks and develop some programs, which will
conduct by the government, which has some objective of critical issues like chronic kidney
diseases, and incorporate new chronicle products.
Cost savings realization
Referring the Aetna transaction, it structuring the enterprise function and efficiently
integrating operations (LaPenna, 2017).
Strong financial stability will float the company for long-term value creation
In the context of recommendation the study suggests some vision of the company’s CFO that
are being scrutinizing very clearly that CVS health CFO focuses on the modernization policy that
will drive the company more efficient and productive as well. Also following that how the
company invest in new technologies and new product that will create a long-term value (Carney,
2015). After valuation, the risks and issues the following further recommendations would be
considered:
 Continuation to drive in synergies structural improvement in a significant way.
 Cost saving, cost control and reduction of cost.

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COMPANY ANALYSIS OF CVS HEALTH CORPORATION
 Believe in going forward concept.
 Introduce the products and programs that will change the way of people’s thinking.
References
Carney, M. (2015). Breaking the Tragedy of the Horizon–climate change and financial
stability. Speech given at Lloyd’s of London, 29, 220-230.
cvshealth.com 2020 Retrieved 15 January 2020, from
https://cvshealth.com/sites/default/files/media-gallery/cvs-health-outlines-strategy-to-accelerate-
growth.pdf
Fleisher, C. S., & Bensoussan, B. E. (2015). Business and competitive analysis: effective
application of new and classic methods. FT Press.
Gürel, E., & Tat, M. (2017). SWOT analysis: A theoretical review. Journal of International
Social Research, 10(51).
in.finance.yahoo.com 2020. Retrieved 15 January 2020, from
https://in.finance.yahoo.com/quote/CVS/holders?p=CVS
Johnson, G. (2016). Exploring strategy: text and cases. Pearson Education.
LaPenna, A. M. (2017). Workplace clinics and employer managed healthcare: A catalyst for cost
savings and improved productivity. Productivity Press.

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COMPANY ANALYSIS OF CVS HEALTH CORPORATION
Rastogi & Trivedi, M. K. (2016). PESTLE technique–a tool to identify external risks in
construction projects. International Research Journal of Engineering and Technology
(IRJET), 3(1), 384-388.
Rosenbaum, S. (2016). Hospitals as community hubs: integrating community benefit spending,
community health needs assessment, and community health improvement. Economic Studies at
Brookings, 5.
smf.business.uconn.edu 2020. Retrieved 15 January 2020, from
https://smf.business.uconn.edu/wp-content/uploads/sites/818/2017/04/CVS-Report.pdf