Assignment 2: Evaluating Organizational Alliances

Quest Diagnostics has an opportunity to develop a strategic alliance with a retailer to expand their prevention and wellness program. Quest Diagnostics can leverage their expertise and facilities to provide the employees of a retailer with services that reduce preventable chronic disease and sustain healthy lifestyles. I think developing strategic alliances within the retail industry is important because employers are losing profit due to high health cost for employees. Employees will be motivated to form prevention and wellness programs to maintain a healthy workforce to reduce expenses. The Affordable Care Act increase healthcare expenses for employers. Businesses with 50 or more employers will be required to provide health insurance to full time employees. Employers are avoiding high healthcare cost by reducing the hours given the employers to remove full time status. The retail industry has low profit margins; therefore increasing health care cost will lead to downsizing (Smart Health Care Reform, 2010).

Quest Diagnostics can offer wellness programs to educate employees on living healthier lifestyles in order to reduce health expenses. Implementing the wellness program will prevent illness and injury, as well as increase the productivity of the workforce. Developing preventative and wellness programs will provide an opportunity for Quest Diagnostics to convert clients into customers for their diagnostic testing clinics. The retail industry is the largest employers in the United States, with over 15 million jobs. The retail industry consists of 1 million stores that generate $4 trillion in revenue. Developing this strategic alliance with a growing industry will create a competitive advantage for Quest Diagnostics.

Opportunity: Develop joint venture to offer Veterinary Laboratory Testing Services

Developing a partnership provides easy access to new markets, technologies, and resources. Quest Diagnostics can develop a joint venture with a Veterinary to offer laboratory testing services. Most Veterinary have to outsource testing services due lack of resources and expertise. Both parties can combine resources to develop an animal diagnostic testing clinic. Veterinary is a growing market that can generate additional revenue for Quest Diagnostics. The best method for Quest Diagnostics to enter this market is to leverage the expertise of Veterinarians. . The U.S. veterinary diagnostics market is $2 billion industry that had a growth of 5% in 2013. This is a great industry for Quest Diagnostics to enter because they can utilize existing facilities and equipment. Veterinary diagnostics market will provide the benefits of low government involvement, transformable facilities, and opportunities for revenue growth (Carlson, 2014).

Developing a joint venture will allow Quest Diagnostics to share the risk of entering a new market.

Opportunity: Alliance with University

Developing a strategic alliance with a University can be beneficial for Quest Diagnostic’s brand and financial performance. Quest Diagnostics can offer diagnostic testing for the University Health Services. Quest Diagnostics will play a major part in promoting wellbeing on campus. Quest Diagnostics can educate students on disease prevention and offer testing services.

Being involved on campus can improve brand recognition for marketing and recruiting candidates. The average public university has over 20,000 students. Developing an alliance with a University will provide a constant stream of revenue for Quest Diagnostics.

Opportunity: Partnership with international hospital and clinics

Quest Diagnostics is the leader in diagnostics testing but has opportunity to expand operations to international markets. 97% of total revenue is generated within the United States. For the year ended December 31, 2013, less than 1% of Quest Diagnostic’s long-lived assets were held outside the United States. Quest Diagnostics can expand diagnostics to international markets by partnering with hospitals and clinics. Quest Diagnostics has large outstanding loans; therefore the organization cannot afford to build new facilities overseas. Developing partnerships will allow Quest to utilize Hospital labs to perform testing. Quest Diagnostics can help hospitals improve credibility and receive recognition for quality. Quest has a positive reputation that can attract international customers. Developing partnerships with international hospitals will provide access to customers that are need of diagnostic testing.

Opportunity: Licensing agreement with point of care provider

Quest Diagnostics has a strong brand reputation for quality and customer service. I think Quest Diagnostics should develop a license agreement to allow a point of care provider the right to sell Quest products and apply the brand name. Point of care tests designed to be used at or near the site where the patient is located (i.e. home, hospital, or ambulance) Point of Care Testing is convenient because testing can be performed outside of the laboratory. The convenience of Point of Care Testing will reduce laboratory visits. Point of Care is growing industry to can take customer from clinical diagnostic industry. This is a great opportunity for Quest Diagnostics to become a household name in an industry that’s expected to reach $9.03 billion in 2019 (Korte, 2013).

Reference

Carlson, B. (2014). Veterinary Diagnostics.PRWeb. Retrieved April 2, 2014, from http://www.prweb.com/releases/2014/01/p

Korte, B. (2013). Point-of-Care Diagnostic Testing. NIH Fact Sheets. Retrieved April 1, 2014, from http://report.nih.gov/NIHfactsheets/ViewFactSheet.aspx?csid=112

Smart Health Care Reform. (2010). Retail Means Jobs. Retrieved April 8, 2014, from http://www.retailmeansjobs.com/healthcare