Case | HBS Case Collection | December 1999 (Revised February 2001)

CVS: The Web Strategy

by John A. Deighton and Anjali C. Shah

Abstract

How should America's second-largest pharmacy chain respond to the challenge from online drugstores? What threat does the web pose to bricks and mortar distribution of prescription drugs and the other items that make up 50% of a drugstore's sales? This case describes the purchase of Soma.com by CVS, and its integration into the corporation. A number of tactical questions remain to be answered, and then there is the larger strategic question--why do this at all? Teaching purpose: Issues in the integration of traditional retailing with online channels.

Keywords: Leveraged Buyouts; Marketing Channels; Distribution Channels; Service Operations; Corporate Strategy; Pharmaceutical Industry; Web Services Industry;

Citation:

Deighton, John A., and Anjali C. Shah. "CVS: The Web Strategy." Harvard Business School Case 500-008, December 1999. (Revised February 2001.)