Group 6 Assignment 3

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QuickMedx Inc. – Case Analysis

Submitted by
Pragati Jain, Deepika Janagal, K M Balasubramanyam,
Abhishek Naroia, Snehal Todkar
 Case Summary
• Krieger, Smith and Pontius started QuickMedx when an idea struck, and they saw a golden opportunity to offer fast & convenient testing
centres where one could get rapid testing, diagnosis & prescriptions. This was seen by the founders as a disruptive innovation. Set up costs and
expense per Kisok were $50,000 and
• These centres were run by certified Nursing Practitioners (NPs) using standard protocols and procedures, and covered 11 common illnesses.
They were located within Supervalu’s Cub grocery stores in Minneapolis and surrounding areas. Each visit was priced at $35 per patient.
• Primary target market was typically parents who sought fast diagnostic and prescriptive services for their children or themselves. Initial
customer research and pilot showed a strong positive acceptance of the idea. This led to operations getting kick-started. Once functional, the
customer base actually found to be much broader and flatter.
• Floor design and IT system design was customised to ensure 8-10 customers could get accommodated, would get quick service, and patient
records would get accessible across all centres.
• Payment accepted from customers was through card, cash or check. Company deliberately did not go for insurance tie ups initially as it wanted
to avoid additional costs, float and paperwork. However, due to interest shown by insurers, as well as to attract customer volume, they
eventually tied up with BCBS which was an autonomous insurance group in Minnesota.
• In the first year, marketing budget was limited, and was supported by Cub. Since the idea was unique, the company also received local and
national media coverage.
• A few challenges emerged – attracting and retaining NPs , how to attain business growth given the niche offerings, potential for liability
lawsuits, and how to finance the business till it became self sustaining. Medical fraternity was also sceptical and time and again they questioned
the efficacy of such a service and whether NPs should be allowed to practice independently.
• QuickMedx had opened 10 stores and closed 4. The key question was how to grow.
 Flow of the Presentation
• Case Summary
• SWOT Analysis of QuickMedx
• Stakeholder Model for QuickMedx
• Main Problem Statement for QuickMedx
• Value Appropriation Analysis
• Application of Porter’s 5 Force Framework
• Financial Challenges
 SWOT Analysis of Quick Medx
Strengths: Weaknesses:

• First movers’ advantage • Limited number of tests

• Standardised and SOP based testing – high product reliability • NP Staff – motivation & retention
• Easy accessibility for customers • Currently limited to a specific geography
• Quick turnaround and low patient wait time • Cash only payment model is deterrent to insurance holders
• Low pricing of each visit • Customer has to visit a hospital or medical centre in case of a
specific diagnosis
• Advertising is limited to some channels

Opportunities: Threats:

• Geographical growth is possible by expanding to other states • Primary health care centres and local hospitals that offer
• Can also grow volumes by tie-ups with other retailers / malls similar services or may gear up to the new window of
• Can increase the number of tests to tap additional market opportunity opened by Quick Medx
• Customer segment is diverse • Risk of liability lawsuits
• Can reach masses if tie ups with insurers happen • Potential lobbying by medical & diagnostic associations as
well as healthcare industry representatives
 Stakeholder Model of QuickMedXInc
 Company (Subject to Influence & Interest
 Internal Stakeholders Supervalu. Cup Food and might fall get in to External)
 External Stakehoder Krieger other shopping complexes
 Distal Stakeholder (Supplier) New Bridge, Health Testing
Smith Broker, Local dealer Companies,
(Rival or Competitor)
Pontius Insurance Co. (BCBS)
QuickMedx Inc.
Primary health Care Clinics
NPs Patients (Buyer) (Substitutes)

Venture Venture Capitalist Minnesota Medical

Capitalist (Stake & (Stake & Influence) Association
Influence)
State & Society Nursing Medical Institutes
 Main Problem of QuickMedx
Even after 2 years of operations, QuickMedx has not turned profitable. Further, while the
founders had a strong belief in the concept, the question now was how to grow and expand the
operations given that they offered limited services, and were a new entrant in the business and
that came with several risks, including retention of key talent, . They needed time and money
to stabilize and grow the business in order for the business too be successful.

Following slides describe the root cause/s of the problem, and how to overcome these
challenges by understanding Value Appropriation of external stakeholders and applying
Porter`s Five Framework model.
 Value Appropriation of NP, Patients and
Company
• Volume of patients can be increased by increasing the number of medical diagnostic services
offered whilst being within the medical scope of NPs. This will result in increase in appropriation
of QuickMedx without the extra cost of physician as services offered would be within scope of
NPs` medical knowledge and would be covered in NPs` salary.
• This will help in positive value creation for Patients as they will get much larger services at the
kiosk, within the $35 fees which seems to be less compare to others as mentioned in the Case
study. (as pointed by Jim Hynes Head of Twin Cities Pipe Trades association wherein same testing
provided is costing $70 to $150 in other testing centres.).
• This will result in positive value creation for the NPs, who will now be able to practice for a much
broader area, handle a large customer base, and hence will result in increased retention and
motivation levels for NPs, which was a weakness as identified in the SWOT analysis.
 Porter`s Five Framework Model: Application
and Analysis
Bargaining power of Buyer (Patients)
 Bargaining power of Patients would be less as compared to the Company, as they are
paying a low fee i.e. $35 per visit as compared to other health care testing centres.
Patients who do not have medical insurance would also prefer a service like QuickMedx.
So QuickMedx’s bargaining power seems to be higher.
 Further, the switching costs for Patients also appeared to be higher. Hence this further
adds to the bargaining power of QuickMedXInc.
 Porter`s Five Framework Model: Application and
Analysis
Bargaining power of Supplier (Supervalu)
 Today, Supervalu wields a higher bargaining power as it is the only supplier of retail space & key
infrastructure to QuickMedx. As per the current agreement with Supervalu, QuickMedx has a
limited say in placement of Kiosk at a new set up of Supervalu. QuickMedx also has to give a 60
day notice to Supervalu if it wants to set up its centre in any of the new market. The final decision
of allotting space in a new setup is entirely with Supervalu.
 QuickMedx should try entering into a joint venture or alliance with other suppliers in addition to
Supervalu. This will:
 Reduce dependence on one chain, and thereby help in de-risking the business
 Attract a larger customer base through increased presence.
 Allow QuickMedx more flexibility in operations and cost control, as this will be based on contracts.
 Facilitate business growth and expansion to other geographies
 Porter`s Five Framework Model: Application
and Analysis
Higher Bargaining power of Supplier (Supervalu) is also due to the following
reasons:
 It has a comparative larger customer base.
 It also has the option of tying up with other centres that provide health testing services (an
opportunity that is now opened due to QuickMedx’s successful launch and learning’s derived
from the partnership)
 Supervalu has low switching cost.
 QuickMedx has derived significant marketing support due to advertisements carried out by
Supervalu (Cup foods) article.
 Porter`s Five Framework Model: Application
and Analysis
Intensity of Rivalry (New Bride and others)
• There are competitors i.e. many health testing companies and several large groups that are trying to
broaden their services through retail, grocery and pharmacy set-ups. While they offer much larger
services, they are more expensive and time consuming.
• QuickMedx could enhance its service offerings to counter competition. This will also expand as well as leverage the NPs’
medical knowledge scope. Eventually, result in higher footfalls and also reduce the need for a physician in future
• QuickMedx has received good testimonials. Moreover QuickMedx offers a low – cost service i.e. $35 per
visit as compared to other centres who charge around $70 to $150. QuickMedx will have scope to
increase the fees in future.
• So from whatever Data given in Case study seems QuickMedx does stand good to bargain and increase its
appropriation in this competitive market.
 Porter`s Five Framework Model: Application
and Analysis
Intensity of New Entrants
• QuickMedx itself is New Entrant given the disruptive innovation they have created.
• Other health care testing centres are working on broading their services.
• QuickMedx’s unique model of offering services in a shopping outlet is unique, and while one can assume
that other competitor's may also think of opening up centres in shopping complexes, the case itself
doesn’t provide much detail.
• Further, competitor pricing is provided only for 1 health centre, which is higher than QuickMedx. Such
information is not available for other health centres. However, one may still deduce that QuickMedx has
a low price model and has an opportunity to grow if it work on factors described in earlier slides.
• It should be noted that for a New Entrant there is always risk in entering a new space.
 Porter`s Five Framework Model: Application
and Analysis
Intensity of Substitutes
Primary health care centres not only provide diagnostic, treatment and prescription services for a
much larger range of illnesses, but also provide care and emergency services. They also have
qualified physicians.
However, QuickMedx’s unique model of basic illness coverage through its testing, quick
turnaround time for customers and low pricing seems to work in its favour. Only if a competitor
reduces its price significantly to match QuickMedx, and also provide the convenience of quick
testing with minimal wait time, would it count as a substitute.
As of now, QuickMedx’s offering is innovative and has filled in a gap in existing medical care
system
 Financial Challenges
Since the company is yet to make profits, it needs infusion of capital to ensure business
continuity and scale up that will lead to large volumes .
QuickMedx could seek investments from Venture capitalists and existing shareholders for
such capital infusion. To make a viable case for investment, the suggestions made in the
earlier slides could be implemented, or a business projections could be made based on such
implementation. This would help convince the investors of business possibilities and future
success of QuickMedx.
The investments will result in expansion and growth of company.
Thank You