CVS Health is considering expanding into China. China represents a large potential market due to its population of 1.38 billion people and growing middle class. While expansion could increase CVS's revenue and global presence by diversifying its portfolio, there are also challenges. CVS must understand Chinese culture, consumer demands, and the economic, political, and social differences between the US and China. It should also modify its retail outlets and strategy to better serve Chinese customers. With adequate research and preparation, expansion into China's favorable business environment could strengthen CVS's competitive position globally. However, government policies and cultural differences may also impede its success.

1. MGT/576 v1
Learning Organizations
MGT/576 v1
Page 3 of 3
Learning Organizations and Value Creation
Review the 6 key elements of a learning organization (Ch. 11 of
Strategic Management, by Dess).
Complete the table below.
Evaluate the extent to which the company you’ve
selected to assess in this course epitomizes each of
the 6 elements.
Justify your determination with examples.
Learning Organization Element
Extent to which the company epitomizes this element
Provide a sentence justifying your determination
High
Medium
Low
Example
x
[This] is why I believe it is medium.
Inspiring and motivating people with a mission or purpose
x

2. CVS Health has been successful because it has developed long-
term, strategic programs that uphold company values and
encourage excellence in employees. CVS Health takes a more
hands-on approach to monitoring and supporting its staff, with
the goal of fostering an environment where workers may thrive
and thrive, and where they are given the autonomy,
responsibility, and training they need to do their best work.
Developing leaders
x
Those in charge of the business now try to put themselves in the
shoes of their employees. The focus of this form of leadership is
on creating and nurturing a healthy culture within the company.
In this case, the CEO is advocating for a culture that
emphasizes the addition of value for customers. The CEO places
a premium on customer value creation because of the crucial
role value plays in propelling business results.
Empowering employees
x
CVS Health provides its staff with career guidance and
coaching to help them reach their full potential. As an example,
when employees have connections with their managers, they are
more likely to receive equal treatment when it comes to
promotions. To help employees get the most out of their
coaching and mentoring opportunities, CVS Health has
instituted individualized training for managers (AlOmari, 2020).
Lastly, during the onboarding process, when new hires learn
about the company's ethics and principles.
Accumulating and sharing internal knowledge
x

3. Recognizing that it is challenging for an individual to amass
information, the corporation encourages team efforts to build
and share expertise inside the organization. CVS Health Viva,
an insights-driven software designed to enhance internal
interactions and knowledge sharing, has been launched across
the firm (AlOmari, 2020). The program facilitates the gathering
of data and the utilization of acquired expertise by staff
members.
Gathering and integrating external information
x
The CVS Health Corporation is driven by a constant desire to
enhance the user experience, and as a result, it employs
analytics and data science to acquire information. The business
uses technology manipulation to provide answers for workers
and clients (Bordeleau, 2020). In order to get understanding
from and organize chaotic data, the organization employs tools
like ScriptSync data factory and machine learning.
Challenging the status quo and enabling creativity
x
While the CVS Health Corporation does not stifle its employees'
freedom of expression, it does actively encourage its employees
to explore their own unique creative potential. Since the
organization values collecting a wide variety of suggestions, it
actively encourages employees to undertake creative endeavors.
As an added bonus, the organization only employs the most
talented people, which sparks innovation within the company.
Since then, the business has fostered an environment that
encourages original thinking.
Recommend at least 1 step the organization's leaders could take
to enhance 1 of the elements and explain how that could help
the organization create more value.

4. Providing employees with information about the company's
long-term goals is one method that large corporations like CVS
Health may foster the growth of future leaders.
References:
Al-Omari, Z., Alomari, K., & Aljawarneh, N. (2020). The role
of empowerment in improving internal process, customer
satisfaction, learning and growth.
Management Science Letters,
10(4), 841-848.
Bordeleau, F. E., Mosconi, E., & de Santa-Eulalia, L. A. (2020).
Business intelligence and analytics value creation in Industry
4.0: a multiple case study in manufacturing medium enterprises.
Proxduction Planning & Control,
31(2-3), 173-185.
Tripathi, D., Priyadarshi, P., Kumar, P., & Kumar, S. (2019).
Micro-foundations for sustainable development: leadership and
employee performance.
International Journal of Organizational
Analysis.
Copyright 2020 by University of Phoenix. All rights reserved.
Copyright 2019 by University of Phoenix. All rights reserved.
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Expanding the Organization

5. David Leonard
University of Phoenix
MGT/576
1 OCT 2022
1
Agenda
Identifying the country that CVS will expand into.
Assessing the prospective global market by considering the four
elements of the Diamond of National Advantage.
Assessing the factors both in the domestic and international
market that will assist the corporation succeed.
Assessing the factors that may impede its success.
Evaluating four modification leaders must make when
expanding.
Leadership Action needed.
Recommending whether the company should expand into the
country.

6. 2
Identifying the Country
China has a large population.
CVS company has a greater possibility of becoming profitable.
American and Chinese societies are strikingly comparable.
Access to a larger talent pool.
Integration would facilitate the negotiation of cultural
distinctions.
There is no country in the world with a larger potential for sales
than China, which has a population of 1.38 billion people. A
company's main demographic would be the middle class. It is
estimated that there are now around 500 million individuals
entering the middle class (Galvin, 2017). Due to China's role as
the third-largest distributor of U.S. goods, the firm has a better
chance of success and growth. Although their histories are
divergent, China and America share a goal-oriented and
successful culture in all areas that would benefit the company.
As well as tapping into a broader pool of untapped talent, the
company may also be able to expand into other cultures with the
assistance of highly skilled and creative individuals.
3
Diamond of National Advantage
Factor Endowments
China's large population density.
Large and cost-effective workforce accessibility.

7. Strategic locale with natural assets.
Availability of financial assets.
A rapid population increase.
CVS Corporation has a good chance of achieving its business
goals since both the United States and China are abundant in
raw materials. Yang, Puia, & An (2016) mention that the firm
has been able to reach its target market because of the canal as
well as other natural resources. Organizations have access to
equity capital and loans as well as other types of capital
resources. In spite of China's huge population, CVS expects its
Chinese employees to contribute high levels of expertise and
productivity even as it faces challenges in recruiting and
retaining qualified staff. As a result of the anticipated
population increase, the company would have a sizable pool of
both employees and consumers to maintain its current level of
efficiency.
4
Industry Rivalry
Assists the company in its preparation for competition.
Competition among local adversaries that is fierce.
Competition from internationally active players.
Management structure of the CVS corporation.
The organizational hierarchy of the prospective client.

8. The company will gain a better understanding of the
competition it will face by analyzing the industry's rivals in
detail and by preparing its own strategy. Firms need to
constantly come up with new ways to incorporate these
strategies into their day-to-day operations to stay competitive
with nearby businesses (Yang, Puia, & An, 2016). This puts
them under constant pressure to formulate and focus their
strategy. Both local and foreign competitors fiercely compete
with the organization, forcing it to adopt new procedures and
technologies. Because of these competitive advantages, the
company has acquired a broader customer base thanks to its
unique cost advantage and competitive advantages.
5
Demand Conditions
The demand conditions that are most important to consider are
those in the domestic market.
Size of the national market.
Discerning and demanding domestic customers.
The desires of the customers.
The conduct of the customers.
Lowering of the interest rate.
In order for CVS to strategize and plan its operations in China
effectively, the firm must take into consideration two factors:
the growth of the local market and the relevance of domestic
consumers to the firm's understanding of the larger markets.

9. The company's growth and increasing domestic market share
have provided an ideal environment for evaluating its
performance and making improvements. A firm and its brand
should think about expanding into other parts of the world due
to the larger scale of markets like China's. A solid
understanding of the home market and consumer trends is
necessary for accurately predicting consumer behavior and
demands in international markets (Yang, Puia, and An, 2016).
Because of the input it receives from its American customers,
CVS has been able to influence Chinese clients' buying
behaviors.
6
Related and supporting industries
Largest energy consumer.
The most extensive manufacturing base.
Existence of competing business sectors.
Existence of reliable suppliers located all around the world.
Strong customer base and consistently stable market
As a company, CVS produces several items for mass
distribution, then sells them through retail outlets. The vast
majority of people believe that China uses and produces the
most energy in the world. In this way, China consumes more
than 70% of its total energy from manufacturing. CVS
Corporation may be able to benefit from economies of scale if
the country's manufacturing sector and energy demand continue
to grow. Since China's population is rapidly aging, incomes are

10. increasing, business climates are becoming more open, and
consumer spending has increased, western firms are becoming
increasingly interested in the country's market (Rottig & de
Oliveira, 2019). In response to declining domestic demand,
many Western companies have opened offices in China.
7
Factors to Promote Success
Capability to negotiate the nuances of cultural norms and
expectations.
Access to strategically important partners in the area.
Obtaining permissions and licenses from the government.
A powerful factor in the expansion of the economy.
Integrative power and a thorough understanding of the regional
markets.

11. The company would benefit from interacting with and selecting
a local business that is well established and operating locally in
order to achieve a smooth and efficient branch development. As
well as management's ability to navigate the country's political
system, the company's performance is determined by its skills in
dealing with its employees. For the group's growth and regional
adaptability, Galvin (2017) stresses the importance of managing
development in China, particularly economic development.
They have a significant impact on A company's chances of
success. This will be determined by whether or not the
government is willing to provide the company with the
necessary licenses and assistance.
8
Forces that can Impede Success
Policies adopted by the government that are protectionist
(Burkus, 2012).
An accusation of engaging in unethical business practices.
A market that is constantly shifting, as well as the demands of
customers.
Difference in cultures.
The rivalry between regional businesses
While CVS might succeed in China for a variety of reasons, it
may also encounter challenges and obstacles (Burkus, 2012). As
the market rapidly changes and consumers' needs and
expectations continue to rise, CVS could struggle to expand its

12. operations across the rest of the nation. It is doubtful that
customers in the nation will be interested in buying its products
in the near future, considering how similar the firm is to Ikea,
which sells a variety of items that require manual assembly.
Because Ikea failed to anticipate the needs of its consumers, its
early attempts in China were mostly unsuccessful. The
company's impact on impacted individuals would be
exacerbated by cultural differences between the West and China
(Galvin, 2017).
9
Recommendations
Comprehending the Chinese way of life.
A comprehension of the wishes of the customer.
Modify US retail outlets in order to better serve Chinese
customers.
Understand the economic, political and social differences.
Make preparations for an efficient entry approach.
To efficiently develop into the Chinese market, it should
examine the following aspects and suggestions. Among these
are things like making an effort to comprehend Chinese culture
as well as the requirements and wishes of the customers.
Although doing so would provide CVS business with an
advantage inside the retail industry, doing so would require a
significant investment of both time and resources. Therefore,
the company has the option of adapting the format of its store in
the United States in order to better serve its Chinese customers
by gaining an understanding of both its potential customers and
its products (Liu et al., 2016). Additionally, CVS needs to have

13. an understanding of the cultural, economic, and political
differences that exist between countries. Additionally, it must
comprehend that the cumulative effects of these distinctions are
an increase in both costs and dangers. In general, CVS ought to
have a good entry strategy that it may use to ensure that it
continues to be successful in the new market.
10
Rationale
The nation's place in the global strategic order.
Market that is both accessible and substantial.
A favorable environment for the company's commercial
activities
The economy is thriving and developing at a rapid rate.
Availability of abundant and reasonably priced labor.
The country's strategic location has made it more approachable
to the rest of the world, making it an appealing investment
destination. China is also regarded as the biggest market in the
world, which is vital for the operations of CVS company, and as
a result, presents increased chances for commercial success due
to the country's rapidly expanding population. In addition, the
business environment provided by the corporation is favorable
since there is an abundance of labor that is both low-cost and
highly skilled. This factor is essential for the efficiency with
which the company operates (Zhu, 2016). In addition, the
availability of low-cost labor is critical to the success of the
organization because it enables the enterprise to achieve large
cost savings and provides a means of subsistence for the
employees.

14. 11
Conclusion
The expansion contributes to an increase in the company's
revenue.
It strengthens the company's presence across the globe.
Because it involves a diversified portfolio, this strategy reduces
the risk of adverse outcomes.
Before investing, companies should do research on the
countries.
Increases the firm's ability to compete effectively as a result.
When a company tries to raise its market shares, increasing
their competitiveness by expanding into robust and alternative
markets, an institution's expansion into an international market
can help them achieve this goal. In addition to this, it would
make certain that the market is sufficiently varied for the
organization to be able to mitigate any risks that may arise in
the event that one of the firm's branches operating in other
regions does not attain the requisite income stream. However,
the company should carry out research on the chosen country
and market in order to make sure that the market it intends to
develop into possesses the necessary characteristics. It would
have no trouble establishing its activities in the country and
carrying on with its economic operations there.
12

15. References
Burkus D. (2012). A review of barriers and adjustments for
international expansion. International Management Review.
Rottig, D., & de Oliveira, R. T. (2019). International expansion
of Chinese emerging market multinational corporations to
developed markets: a qualitative analysis of post-acquisition
and integration strategies. In Chinese acquisitions in developed
countries (pp. 37-53). Springer, Cham.
Yang, X., Puia, G. M., & An, W. G. (2016). International
Business and Multinational Corporations in China. Financial
Markets and Foreign Direct Investment in Greater China, 269.
Zhu, Z. (2016). China's new diplomacy: Rationale, strategies
and significance. Routledge.
Liu, M. T., Yan, L., Phau, I., Perez, A., & Teah, M. (2016).
Integrating Chinese cultural philosophies on the effects of
employee friendliness, helpfulness and respectfulness on
customer satisfaction. European Journal of Marketing. Retrieved
from:
https://www.emerald.com/insight/content/doi/10.1108/EJM-01-
2015-0025/full/html
Galvin, J. (2017, Oct 19). “The Challenges and Benefits of
Expanding a Business to China”. Retrieved from:
https://www.linkedin.com/pulse/challenges-benefits-
expanding-business-china-john-galvin/

16. 13
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MGT/576 v1
Porter’s Five Forces
MGT/576 v1
Page 2 of 2
Porter’s Five Forces
Complete the table below
. For the company you’ve decided to assess in week
1, determine the strength of each of Porter’s Five Forces and of
the complementors.
Justify your determination with examples.
Industry force
Strength
Provide a justifying your determination with examples

17. High
Medium
Low
Example
Threat of new entrants
x
Healthcare industry is expanding everyday and threatening the
existence of old players in the market. One PwC survey of 1,000
adults found that nearly half of them would consider getting
minor problems handled outside of traditional venues, such as
buying strep throat kits at home or getting skin rash evaluations
online, and many are also willing to get more complex services
at home, online or in retail settings if it's more convenient and
affordable. This is why I believe it is a strong force.
Power of buyers
x
Patient needs and preferences heavily impact CVS operations
and processes. Digital health startups focused on women's
health care
pulled in $1.3 billion in funding across 26
deals by October 2021—nearly doubling all of 2020's funding
with four months still left to go, according to digital health
venture fund Rock Health. This is why I believe it is a strong
force.
Power of suppliers

18. x
The demand for healthcare continues to rise regardless of rising
costs because citizens and government have a greater interest in
health and quality of life. Market suppliers have a moderate
influence because there are many suppliers.
Power of substitutes
x
Prescription medicines are preferred by customers because they
are cheaper. It is easy for consumers to find cheaper prices
anywhere there are pharmacies and medicine distributors, so
substitutes have limited power. There are many pharmacies and
medicine distributors in the industry, so substitutes have limited
power.
Rivalry among competitors
x
The healthcare industry faces intense competition. The
healthcare industry led other companies in margin according to
a 2008 report. Market competitors compete aggressively based
on services provided and operating strategies. I believe that this
is one of the reasons why competition has a greater power.
Complementors
x
Many sectors of the economy and society are being dominated
by digital platform based markets. Connected preventive
healthcare markets are thriving thanks to platforms like Apple
Healthkit and Google Fit. Companies are combining their
products and services to improve overall outcomes. A number of
complementary products and services are emerging in the
healthcare industry to enhance one another's offerings. It

19. implies that complementors have a greater power than
complements (Coffey et al., 2015).
References
Coffey, C., Fraser, K., Lee, H., & Kelsay, W. (2015). CVS.
CVS Corporation, 1-64.
Landi, H (2022).
Women are the 'power buyers' of
healthcare.https://www.fiercehealthcare.com/tech/fierce-jpm-
week-women-are-power-buyers-healthcare-and-market-
evolving-to-serve-them-
founders#:~:text=Women%20are%20the%20%22power%20buye
rs,cash%20into%20this%20growing%20market.
Copyright 2020 by University of Phoenix. All rights reserved.
Copyright 2020 by University of Phoenix. All rights reserved.
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