Response to blog post: http://blogs.ubc.ca/julietchoi/2014/09/09/cvs-caremarks-end-of-tobbaco-product-sales/
I thought that Juliet Choi’s blog was quite eye opening. However, I’m not sure that I agree with it completely. I found that ceasing the sales of Tobacco products in order to focus on promoting health, makes no sense from a business stand point. Will people really prefer to go to one CVS instead of a competitor because the competitor sells tobacco products and CVS doesn’t? Granted it makes them look good in a health perspective but it doesn’t serve as a USP. All it really does is helps them to lose profit. This change in their operations isn’t necessarily shared value as CVS is losing profits, even in the long term it doesn’t benefit them as it doesn’t help their marketing apart from the stand of point that they promote the use of tobacco, which is a legal product and honestly I don’t think they have the right to tell consumers whether they should use tobacco products or not.
CVS estimates a consequent loss of $2 billion from its $123 billion in sales and a fall in its stock value. I agree that promoting health is a positive action, however from a business prospective why would CVS choose to lose 2% of their annual sales, especially on a product like tobacco which is inelastic with constant consumer demand.