Target Market and Healthcare

Quest Diagnostics Competitive Strategy

Quest Diagnostics is a company that has a lot of potential in Turkey based on its experience in other countries. The company mainly focuses on patients and physician services with the aim of making health care more effective. Turkey as a country has a challenge of having fewer doctors or medical practitioners than in other countries. However, the country has a growing GDP, with a considerable amount being spent on healthcare. Quest Diagnostics stands a chance to benefit from increased spending as the GDP improves. Consequently, the number of older adults in the country is increasing and more diagnostic procedures will be required to deal with issues associated with lifestyle diseases. The analysis focuses on the competitive advantage that Quest Diagnostics has in Turkey.

Competitive Strategy and Target Market

The competitive strategies that Quest Diagnostics should use are the cost leadership and focus. The company should focus on the older adults and the hospitals in the country to reach as many physicians as possible. Research shows that the number of doctors in Turkey is increasing thanks to the increase in government spending on health matter (Aslan, 2013). Similarly, the number of older adults in the country has also been rising in the recent past. More than five million people in Turkey are above 65 years old. At this age, the most vulnerable diseases are lifestyle in nature like cancer, diabetes, and arthritis. The implication is that more tests will be required to satisfy the needs of the population in the country (Deloitte, 2014). The fastest rising population is the old age one made up of people who are 85 years and above. This is projected to continue rising in future: a gap in diagnostics will be created as the country deal with the shortage.

Evidently, a considerable number of older adults are cut off from insurance and may not be able to achieve the necessary medical attention. In this case, the company should become a leader in cost reduction to meet the needs of the aging community. Cutting the cost of diagnostics will help the abandoned part of the population with a chance to deal with some of the illnesses that require diagnostics procedures for them to manage the illnesses (Deloitte, 2014). Consequently, a cost leadership approach also enables the company to fight off competition from companies such Synevo and LabCorp. These companies provide the same services and the only way to fight off their competition is by offering a better price to the consumers than them.

Target market

The number of hospitals and physicians in Turkey has been on the rise in the recent past due to the reforms that have taken place in the sector in the last decade. The number of private hospital beds has increased by 26.6% with the number of hospital visits in the private sector has increased by 63.5%. The medical device market in Turkey is also expected to increase by 8.5% by the end of 2018 (Jordan-Tank, 2017). The country is also planning to spend more than 47 billion dollars in building new hospitals meant to ease the burden placed on the current hospitals. The number of doctors is expected to increase leading to an increase in demand for diagnostic equipment (Deloitte, 2014). The estimation process is based on trends in purchases of the healthcare products and in particular the testing ones. Testing equipment associated with diabetes and cancer has seen a tremendous increase, which is expected to continue as the country continues to invest in the healthcare. Increased spending will mean increased buying of testing equipment.

Market Segmentation

The company should use demographic segmentation in Turkey for it to attain the best results and feed off competition from the competitors. Demographic segmentation focuses on age and occupation. The number of older adults in Turkey is increasing and more testing of lifestyle diseases will be required to ensure that the population can deal with them effectively. Similarly, a lot of focus will be placed on physicians whose number is increasing in the country in the recent times. Focusing on them will increase the sales that the company makes to hospitals as well. Geographic segmentation is also an ideal method to be used in the country. Most of the large hospitals are based in the large cities across the country. The implication is that focusing on the large towns will cover more than half of the healthcare device market.

Estimated target market size

Turkey spends more than $80 billion on healthcare each year. It translates to about $940 per person based on the GDP. Of the $80 billion that is spent, around $4 billion goes to medical equipment in the country. Therefore, the market size for the company is worth $4 billion. However, it is expected to rise from the current value and increase by 25% by the year 2020 (Deloitte, 2014). The implication is that the market size in four years will be $5 billion. Quest Diagnostics should focus on attaining a considerable share of the market to make a mark in Turkey.

Assumptions Made

While coming up with the analysis, the assumptions made are that the country's GDP will continue growing and the government will increase its spending on healthcare. The other assumption is that the country will continue employing more doctors and will ensure that the remaining reforms in the health sector have been implemented (Jordan-Tank, 2017). The third assumption is that the country will experience an increase in the number of older adults who depend on the public healthcare system. These assumptions emanate from the trends recorded in the Turkish healthcare sector that has seen tremendous improvements in the last one decade.

Rationale of the Assumptions

The assumptions made in this paper are based on the analysis made by the government. The government is a source of information and reports released can be used as a source of the predictions made in the paper. The other rationale is the experience that the company has had in the USA that can be used in turning the company into a cost leader. The assumptions are also based on the economic situation of the target market in the country especially the older adults.