Quest Diagnostics’ Multi-Pronged Strategy to Accelerate Growth

Quest Diagnostics (DGX) expects to witness a 3.0%–5.0% long-term revenue growth rate in the future. For this time frame, the company estimates earnings growth of 5.0%–9.0%.

If Quest Diagnostics manages to surpass these growth projections, it could have a positive impact on the stock as well as the iShares Russell 1000 Value (IWD). Quest Diagnostics makes up about 0.13% of IWD’s total portfolio holdings.

Quest Diagnostics is committed to its disciplined acquisition strategy to accrue 1.0%–2.0% revenue growth every year. It has also been partnering with various stakeholders in the healthcare industry such as hospitals and health payers. Currently, Quest Diagnostics has strategic relationships with major healthcare providers such as Barnabas Health and UPMC (University of Pittsburgh Medical Center).

Quest Diagnostics is also focusing on investing in its diagnostic innovation pipeline to fuel future demand. The company has made it a priority to be considered a consumer-centric diagnostic services company. Finally, the company plans to deploy its technology and care capabilities to support population health initiatives.

The broad strategy to accelerate growth has enabled Quest Diagnostics to compete effectively with peers such as Laboratory Corporation of America Holdings (LH), DaVita HealthCare Partners (DVA), and Idexx Laboratories (IDXX).

To put this strategy in practice, Quest Diagnostics implemented three major initiatives. They involved simplifying the company’s structure, deploying better processes and tools, and building a better team.

Since 2012, Quest Diagnostics has managed to improve its customer retention rate by about 20.0%. That was achieved by consolidating its seven independent sales teams into a single commercial team. The resulting simplicity of structure has helped Quest Diagnostics present itself more effectively to its customers.