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Competitive and Macroenvironment Factors

Melissa M. Alexander

Purdue University Global

MT 140 – Introduction to Management

Dr. Kimberly Green

April 17, 2025

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Competitive and Macroenvironment Factors

Introduction

This article investigates the analysis of competitive factors and

macroenvironmental factors impacting CVS Health Corporations. Included in this

analysis is an overview of the company, a look at its current competitors, as well as

the other factors affecting this corporation. As you will see throughout this article,

CVS Health is of the highest success in its industry and will continue to do so while

facing these competitive and macroenvironmental factors.

Impact on CVS Health Corporation

CVS Health Corp is the largest drugstore chain in the United States. CVS has

been successful since its start in 1963, when it opened its first Consumer Value

Store in Lowell, Massachusetts (Hoovers, 2025). It is known as the leading

pharmacy benefits manager, serving more than 35 million people with medical

insurance. Currently, headquartered out of Woonsocket, Rhode Island, CVS has

9,000 retail stores, more than 1,000 walk in and primary care clinics and 66,000

retail pharmacy location within the United States, including Puerto Rico, District of

Columbia, Guam, and the U.S. Virgin Islands. Furthermore, CVS Health has a

leading pharmacy benefits plan with over 90 million plan members and a dedicated

pharmacy care business serving over 800,000 senior members. While being the

leader in health solution, CVS, like any other company, faces these factors. You will

see throughout this article, many of these factors are interconnected; meaning the

situation could affect the company in more than one of the factors being analyzed.

Competitive Environment
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According to Porter, successful managers do more than simply react to the

environment; they act in ways that shape or change the organization’s

environment. Porter’s template is an excellent means for analyzing the competitive

environment and adapting to or influencing the nature of the competition (Porter,

2008). The five competitive environmental factors are rivals, new competition,

customers, suppliers, and substitutions. CVS Health Corporations is no exception

to their influence; lets look at each classification and how it affects this particular

company.

Rivals

CVS Health is a predominant player in the retail, pharmacy and healthcare

industries. With over 10,000 retail locations, and 37,000 pharmacy locations,

along with a revenue of over $372 million dollars in 2024 (Hoovers, 2025). With

that said, I believe it is clear CVS has solidified its standing as the market chief in

all three industries. Its primary rival within the retail-pharmacy space is

Walgreens. Walgreens posses over 13,000 locations worldwide, with a strong

presence in the United Stated and United Kingdom. Rite Aid is another competitor

in the retail-pharmacy chain, with 2,400 locations in 17 states (Wells, 2024). The

“Amazon Affect” is now reaching into the pharmacy industry. The entry of Amazon

into the pharmacy market has been a topic of much discussion in recent years. In

2018, Amazon purchased PillPack, “an online pharmacy that delivers pre-sorted

medication packages to customers‘ homes (Wells, 2024).’ Since then, the e-market

giant has been progressively developing its pharmacy offerings, launching Amazon

Pharmacy in 2020. Its apparent that CVS is having to work hard to keeps its

ranking and ward off potential newcomers into the industry, as well as its current

rivals.
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New competitors

According to Charles Scott of ExpertBeacon.com, CVS Health has nine competitive

advantages for keeping new competition at bay. These nine competitive

advantages include integrated retail healthcare services, robust omni-channel

capabilities, ExtraCare loyalty membership growth, in-store brand innovations,

digital health capabilities, competitive economies of scale, strategic health

partnerships, localized store optimization, and community impact initiatives (Scott,

2024). To expand on just a few of these mentioned aspects, CVS has aggressively

expanded healthcare services while maintaining its retail sector. With their buy

online, and pick up in store options at all locations, along with same day

prescription deliveries, CVS is both convenient and customer focused. “CVS is

strengthening convenience and affordable care access which should drive

customer acquisition and retention (Scott, 2024).”

Customer

CVS Health’s Services segment of clients and customers includes employees,

insurance companies, unions, governmental employee groups, health plans, and

many more. Its largest base by far, being loyal and reoccurring customers. As

mentioned in the previous section of this article, CVS has an immense ExtraCare

Loyalty Membership Program. With 75% of sales being accomplished my

individuals who, in addition, hold a membership with the store and/or pharmacy

(Scott, 2024). Offering personalized savings, based on a ones shopping habit,

keeps customers more engaged with CVS, specifically, for their healthcare, as well

as their personal needs. Additionally, by offering a physician and pharmacy

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services in one location makes for convenience for customers not feeling up to

driving around town all day for doctor appoints and prescription fills. In tandem,

CVS offers telemedical services along side same-day delivery of medication,

another immense convenience for consumers.

Substitutes

According to G2.com, listed are the top 10 alternatives to CVS Health services,

specifically within the health care industry (G2, 2025):

 OptumCare

 Change Healthcare Physician Group Management Services

 Plum

 Pharmaceutical Consulting

 CiverMed

 Anthem’s Health Care and Services

 Pristyn Care

 Maxim Healthcare Services

 One Medical

 UL Services

Furthermore, CVS Health offers services in retail. Possible substitutions could

include Walgreens, Wal-Mart, Target, and any other firm offering retail in the form

of household items, grocery or photo services. Other alternatives for pharmacy

services could be Key Care, local pharmacy firms, and even other mail-order

pharmaceutical services similar to those of the governmental Veteran Affairs

Medical Clinics.
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Suppliers

As has already been mentioned, what feels like numerous times, CVS Health

revenue is based on multiple types of sales; store front categories include, beauty

products and cosmetics, photo finishing services, seasonal merchandise, over-the-

counter medications, convenience foods, stationery and books, greeting cards, and

much, much more. Such a diverse collaboration requires an immense number of

suppliers/vendors. Based on CSI Market, the listing below shows the vast amount

of industries CVS Health utilizes suppliers from:

 Chemical Manufacturing

 Personal & Household Products

 Accident & Health Insurance

 S & L Savings Banks

 Biotechnologies & Pharmaceuticals

 Major Pharmaceutical Preparations

 Medical Equipment & Supplies

 Medical Laboratories

 IT Infrastructure

 Science & Technology Instruments

 Pharmacy Services & Retail Drugstore

CVS Health Corporation has one goal, that is “to provide outstanding service and

value to our customers – while meeting their healthcare needs and making their

overall shopping experience as easy as possible (About CVS Suppliers, 2020).”

Having the products and services customers desire in stock is a large part of

meeting this goal. Understanding that working successfully with their suppliers
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who share in the values, and commitment to the extreme standards of integrity,

help make their goal an actuality.

Macroenvironment

There are five macroenvironmental factors that impact a company, CVS Health

Corporation is no different. These macroenvironmental factors include, law and

politics, economics, technology, demographics, and social factors that affect a

company. Let’s delve into how each of these categories affect CVS Health.

Laws and Politics

Independent pharmacies in Arkansas complained about the inherent

monopolization pharmacy benefit managers have by also running pharmacies. Just

yesterday, the Governor, Sarah Sanders, signed a bill that could “reshape the

pharmacy business landscape (Hardy, 2025).” Regardless of the desperate

lobbying campaign conducted by CVS, Governor Sanders signed the House Bill

1150. This specific bill targets pharmacy benefit managers (PBMs); “middleman

companies that handle drug claims and negotiate rates on behalf of insurers

(Hardy, 2025).” The complication with this bill being signed is that three of the

nation’s largest PBMs are owned by large health care firms that also run in-house

pharmacies; the largest being CVS. CVS has agreed to meet with policy makers

within Arkansas to circumvent a way to make medications more affordable and

accessible. According to a CVS spokesperson, the signing of this bill will “take

away access to pharmacy care in local communities, hike prescription drug

spending across the state by millions of dollars each year, and cost hundreds of

Arkansans their jobs (Hardy, 2025).”

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Economy

According to NBC News, CVS Health is due for a wellness check. CVS seems to be

facing some economic downfall; with its stock down 20% this year, higher-than-

expected medical costs, and pharmacy reimbursement pressure. The result of such

economic issues is leading the top-management of CVS to consider breaking itself

apart. With the assistance of independent advisors, CVS Health is weighing on the

concept of splitting up the retail pharmacy and the insurance units. If such an

option occurred, the forecast is the company would lose customer base, as well as

revenue. According to eMarket senior analyst Rajiv Leventhal, who believes such a

split is a high possibility, “If that does happen, one side of the split becomes really

successful and prosperous, and the other would significantly struggle.

(Constantino, 2024).”

Technology

As a United States veteran, with a few sever health issues, I am thankful for the

mass improvement of technology within the healthcare industry. As a member of

both the healthcare and the pharmacy industries, CVS has always strived to be the

at the front line when it comes to technology. One of the most popular, especially

since the COVID-19 Pandemic, is virtual health care. This could include telehealth,

or the use of technology to speak to and see a medical professional for consults,

medical treatment, or even advice. You can visit with any doctor, or nurse

practitioner, whether they are your primary physician, a therapist, or even a

specialist. Personally, this helps me, as I receive care through the North Dakota

VA Clinic which I located in Fargo, ND. I live in Minot, 4 hours west, therefore

being able to still receive care virtually, as well as receive mail-order medications

is a positive impact on my life. With that said, similarly, CVS not only provides
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telehealth, but they also utilize technology to allow customer to order medications

through their phone application. They use a system dubbed ScriptSync to

synchronize refills so they can all be picked up on the same day. Such a technology

saves seriously unwell people from having to make several trips to the store, or

having to wait in line for long periods of time, as well as improving adherence to

medication regimes (Future Stores, 2025).

Demographics

As we all are aware, CVS provides household items, grocery, health and wellness

necessities, beauty products, clinical care, and pharmacy services; CVS is the

prescription for all ages. This company provides such services to all people, both

rural and urban. With young adults shopping for a late-nigh snack, or young

professionals employing its health and beauty products. Furthermore, with the

largest senior citizen population ever, seniors favor the store for its convenience

on health care and prescription services all in one place. Families of all sizes,

whether married with kids, single, or a single parent, find CVS to be a reliable stop

for all their needs (Social Signal, 2024).

Social Factors

“CVS Health is working to build healthier communities and help people on their

path to better health, ( Social Determinents of Health , n.d.)” with six programs

within their business areas and philanthropic activities. These programs include,

but are not limited to, health care access, education and literacy, food security,

quality housing, social isolation, and transportation. Through the National School

Boards, CVS has linked with rideshare mogul, Lyft, to ensure under income

families can get to appointments, food panties, and essential supplies ( Social
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Determinents of Health , n.d.). These are just a few of the many ways CVS Health

works with local communities in a positive manner; to help enrich the

communities.

Conclusion

As shown throughout this article, competitive and macroenvironmental factors

impact how a company handles it decision-making at top-management levels. It is

important for a company to predict any impending changes necessary, as well as to

transform for better products and services. The better a firm can adapt, the better

the impact on their success.

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