Threat of New Entrants: MODERATE
According to ISISWorld, though Quest Diagnostics is a major company within the diagnostic and medical laboratory industry, with about thirteen percent of market shares within the industry, other commercial clinical laboratories may be able to increase their market shares in the clinical testing market due to their expansive service networks and lower cost structures. However, this level of difficulty can and will vary in each segment of the market. There is a higher level of entrant difficulty in the medical laboratory segment as well as in obtaining proper licenses and certifications. There are also high costs in establishing a new business within the market, which are related to equipment, service network,
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These factors include low costs to consumer for switching, suppliers can easily make the products themselves, consumers are price sensitive, clients purchase large quantities of these products, and the existence of substitute products. These factors indicate the bargaining power of Quest Diagnostics is low.
Rivalry Among Existing Competitors: LOW to MODERATE
In the industry, there are very little major companies. However, there has been an increase in competition from smaller diagnostic and laboratory companies due to lower costs they provide their clients with, as well as allowing physician insourcing to exist. In order to contend with this, Quest Diagnostics has lowered their product and service costs as well, so as not to lose their large client base. These other companies have very little market shares, let alone a significant market share within the industry. In addition, Quest Diagnostics continue to acquire other smaller companies under their wing.
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By focusing on their research and development departments, Quest Diagnostics will be able to determine the latest in technology and innovation in order to maintain their status within the industry.
In addition, Quest Diagnostics should expand into more products and services due to the advancing technology within the healthcare industry overall. By seeking to provide more than just routine and clinical testing results, the company will be able to dominate in more than one area.
Conclusion
Quest Diagnostics originated in a glassware laboratory, which only focused on a handful of medical devices and/or products. Over the next few decades, the company was able to expand by adding to its development of medical devices and/or products, and became a well-known provider for these medical products and services over time. Eventually, the original company would begin acquiring other companies and then sell its businesses to shareholders. Quest Diagnostics would then become a market place leader within the diagnostic and laboratory