Cvs Business Proposal
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- Date Submitted: 10/27/2013 11:24 AM
- Pages: 8
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Introduction
In the United States, CVS is the largest pharmacy retail organization. This company operates over 6100 retail stores and specialty stores countrywide and has employed over 170,000 workers. There is a necessity of offering a wider range of prescription medication options and selections system-wide in a struggle for serving the consumer base of CVS Pharmacy more consistently and effectively. The purpose of this paper is to select a more realistic good or service for an existing industry. The paper will identify the market structure, along with elasticity of the product and will also include the way the pricing will relate to elasticity of the product. Furthermore, the paper will include the way the changes in the quantity supplied as a result of the pricing decisions will affect marginal cost and marginal revenue. Moreover, the paper will focus on the non-pricing strategies, and will explain the way the changes in the business operations could alter the mix of fixed and variable costs in line with the strategy.
Market Structure
The market structure of CVS Pharmacy is an oligopoly. It is a market structure in which a small number of organizations sell either differentiated or standardized products in which other organization’s entry is difficult. In this market structure, the control of the firm is limited over price of the product due to mutual interdependence (with the exception of when there is conspiracy surrounded by the organization) and in which there is a non-pricing rivalry (McConnell and Brue, 2004).  The oligopoly turn out is the most common structure of big -business as the establishment of trust was limited in the United States. Evasion of pricing rivalry has turned out to be nearly automatic with four or five larger firms accountable for most of the output of every industry. If an organization were to drop the prices, it is expected that their competition will do the same and all will undergo a lower profit....
In the United States, CVS is the largest pharmacy retail organization. This company operates over 6100 retail stores and specialty stores countrywide and has employed over 170,000 workers. There is a necessity of offering a wider range of prescription medication options and selections system-wide in a struggle for serving the consumer base of CVS Pharmacy more consistently and effectively. The purpose of this paper is to select a more realistic good or service for an existing industry. The paper will identify the market structure, along with elasticity of the product and will also include the way the pricing will relate to elasticity of the product. Furthermore, the paper will include the way the changes in the quantity supplied as a result of the pricing decisions will affect marginal cost and marginal revenue. Moreover, the paper will focus on the non-pricing strategies, and will explain the way the changes in the business operations could alter the mix of fixed and variable costs in line with the strategy.
Market Structure
The market structure of CVS Pharmacy is an oligopoly. It is a market structure in which a small number of organizations sell either differentiated or standardized products in which other organization’s entry is difficult. In this market structure, the control of the firm is limited over price of the product due to mutual interdependence (with the exception of when there is conspiracy surrounded by the organization) and in which there is a non-pricing rivalry (McConnell and Brue, 2004).  The oligopoly turn out is the most common structure of big -business as the establishment of trust was limited in the United States. Evasion of pricing rivalry has turned out to be nearly automatic with four or five larger firms accountable for most of the output of every industry. If an organization were to drop the prices, it is expected that their competition will do the same and all will undergo a lower profit....