CVS VS. WAL-MART

CVS vs. Wal-Mart: Chains Cut Generic Drug Cost

CVS vs. Wal-Mart: Chains Cut Generic Drug Cost

Introduction

Wal-Mart Company operates retail stores in different formats worldwide. In United States of America, the retail formats implemented by the company include supercenters, discount stores, neighborhood markets, and Sam's Clubs. In the global arena, the company operates in El Salvador, Argentina, Canada, Chile, Brazil, China, Guatemala, Costa Rica, Honduras, Japan, Puerto Rico, Mexico, India, Nicaragua, and the United Kingdom. The company's headquarter is located in Bentonville, Arkansas. As of today, the company employs nearly 2.1 million people. Since operating in a highly competitive international market, the company is experiencing several risks, including market risk, commodity risk, foreign exchange risk and interest rate risk (Hill, 2009).

Sam Walton inaugurated Walton's 5&10 in Bentonville, Arkansas, on May 9, 1962. The first store with the brand name of Wal-Mart was opened in 1962 in Rogers, AR, financed 95% by Sam Walton himself. It registered itself as a public limited in the following year. Wal-Mart started trading of shares in NYSE, in 1972 (Hill, 2009). The company inaugurated Wal-Mart Supercenters, international operations, and membership warehouse clubs, namely Sam's Clubs, during the 1980s. In 1983, it introduced the concept of cash and carry and opened Sam's Wholesale Club. The company engaged in a joint venture with the Dallas-based supermarket Cullum Companies in 1987. In 1989, Wal-Mart acquired Cullum Companies. Wal-Mart entered the Mexican market in 1992 through a joint venture with the country's largest retail company, Cifra (Hill, 2009). The company continued its trend of international expansion and entered china in 1996. Moreover, it also acquired German hypermarket chain, Wertkauf and Brazil retailer Lojas Americanas in 1997 and 1998 respectively. In 1999, Wal-Mart acquired 74 German based Interspar hypermarkets. Wal-Mart started selling household appliances and private label cosmetics in the beginning of the following century. The company stepped in the Japanese market in 2002 (Hill, 2009). CVS is a competetor of Wal-Mart that is dealing in the selling of the drugs.

This paper would focus on the comparison of the adoption of the Chains Cut Generic Drug Cost strategy versus by Wal-Mart and CVS pharmacy.

Discussion

Diagnose the Company's Situation

Wal-Mart's Chain Cut Generic Drug Cost

The retail chain Wal-Mart will begin selling in the state of Florida, generic drugs at low cost through a program that will benefit people with and without health insurance. The plan will purchase 291 generic prescription drugs for $ 4 each, including those to treat and control allergies, high blood pressure and cholesterol, among other diseases. Although the measure was initially launched in the city of Tampa, Florida, Wal-Mart executives said the plan will be in the rest of the state in January 2007 and the country in 2008 (Hill, 2009). “These drugs are for diabetes, cardiovascular disease, asthma, colds and infections. It's the kind of medicine that working families need in order to treat their illness, manage conditions and stay well”, said Bill Simon, executive vice president of professional services division of ...