Case Review Example: 23andMe Genetic Testing for Consumers

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Boston College
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Article review
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This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

The DNA testing industry became prevalent after the completion of a sequencing procedure that took 13 years. Scientists could now study a persons gene sequencing and predict whether or not there was the likelihood of developing particular disorders. Initially, these results could only be requested by physicians, but with this development, there was the direct linkage between the provider company and the customer (Quelch, & Rodriguez, 2014). Many laboratories emerged and started providing these services which forced the market price to fall drastically over a period of five years. Personal test kits were also developed later and could also be sold directly to the clients upon request. However, the approach of the direct sale of DNA results to the customers raised a lot of concerns because it had overlapped the need for doctors demanding for the results in place of the patients. The main problem was that these tests would present false results to the patients due to the high levels that the doctors had established. Therefore, regulatory agencies were assigned to ensure that companies marketing their DNA tests got approval.

The Sale of DNA Tests to Consumers

The sale of gene testing to consumers should be allowed because of the numerous advantages it may pose to them. While many people may view it as an approach that may cause depression to people because of the likeliness of being diagnosed with a serious disorder, it poses public health benefits. The sale of DNA directly to the consumers allows them to beware whether they are at risk of developing particular diseases such as Alzheimer's and Parkinson's disease. Consequently, the company, 23andMe, and other firms have been allowed to sell the DNA tests to the final consumer. Initially, these companies were only allowed to conduct their business by selling the tests to medical facilities. However, direct sale to the consumer was seen as an approach that was more advantageous than using the central channel, in this case, hospitals. By selling the tests to the customers, 23andMe enables them to manage own health through the provision of genetic information (Quelch, & Rodriguez, 2014). Being aware of ones situation is a means of giving a person the liberty to decide what they want to do regarding their health. Nonetheless, the consumers are advised to seek medical advice after receiving their DNA results. The doctor's advice is always essential to improving one's health and knowing how to deal with the disorder indicated.

Analysis of Strategy

Arenas

Arenas are the fields where the company intends to conduct its operations. These include issues such as the market segmentation, geographical areas, creation of value strategies, the channels to use, and the product category (Hambrick & Fredrickson, 2001). In the case of 23andMe, the company hoped to conduct business that would be accessible to everyone in the United States. The primary products included DNA test kits and DNA results that would be available through the company's database (Quelch, & Rodriguez, 2014). 23andMe targeted to sell directly to the final consumer without the need for involving doctors. The objectives behind forming the company were to give the users authority over their health and creating a database for genetics that could be retrieved and used by researchers.

Vehicles

The vehicle involves how the company will move from their initial step to obtain the set objectives. A firm may choose from several alternatives such as franchising, acquisitions, licensing deals, forming joint ventures and alliances, or internal development (Hambrick & Fredrickson, 2001). 23ndMe saw the need to use internal development approaches. However, the firm also received backup during its initial stages from Google, Venture Capitalists, and Johnson & Johnson. Also, the National Institute of Health to study Allergies and Asthma contributed a lump sum amount to the young firm (Quelch, & Rodriguez, 2014). Private investors were also included as the company continued to grow.

Differentiators

These are the enablers of a business that set it apart from the rest of the competitors. They form the basis of how the firm will develop a competitive advantage and become market leaders. Differentiators are seen in how the companies price their products, product reliability, marketing speed, as well as the company image and customization (Hambrick & Fredrickson, 2001). 23andMe took the initiative of availing the DNA test kit at an affordable price range of $99. However, the firm failed to incorporate proper imaging and differentiation strategies, and therefore it took them several years before reaching the break-even point. Their reliance on the company website also played a part in their slow growth and market acquisition.

Staging

This phase involves a firm determining the speed and pattern of its moves. It entails how the company wishes to expand its business prospects as well as the initiatives it will take. 23andMe had put approximations that it would attain a million customers within the first seven years of operation. However, the firm failed to break down how such a target would be achieved. Consequently, the company neglected to address the major phases that it would have to undergo and mark its success rate as time progressed.

Economic logic

The economic logic of a company aims at how it expects to make returns from the operations. The company wishes to attain low costs by utilization of scaling advantages, pricing premiums due to competitive services, and pricing premiums caused by the features of the product (Hambrick & Fredrickson, 2001). Also, the company may attain the low costs through strategies such as replication and scope benefits. 23andMe offered kits that the customers could use at home to determine their DNA sequence. However, these kits were subject to approval which the company had failed to acquire. Therefore, the Food and Drug Administration (FDA) was forced to sanction the firms operations.

Recommendations

It can be noted that 23andMe had a slow grasp of the market which is indicated by the fact that in seven years of existence, the company had acquired only 450,000 customers. This number was below half of the initially targeted 1 million clients (Quelch, & Rodriguez, 2014). Besides, the company had also not reached a profitability level. It had taken the company seven years to reach a break-even point. Therefore, the firm needs to re-strategize to attract more customers and also start making profits. One approach that the company should implement is through increasing customer engagement. Customer engagement can be done through building informal conversations with the current clients to help in forming a buyer persona. By so doing, 23andMe can connect the values of the company to their customers. Also, 23andMe can primarily utilize the social media platforms to increase their online presence. Developing a company website does not guarantee that people will come across it when surfing the internet. However, if 23andMe marketers took the initiative of being on the major social media platforms, they would increase their customer base. An increase in the number of clients may be helpful in propelling the company to a profitable level.

 

References

Hambrick, D. C., & Fredrickson, J. W. (2001). Are you sure you have a strategy? TheAcademy of Management Executive, 15(4), 48-59.

Quelch, J., & Rodriguez, M. (2014). 23andMe: Genetic Testing for Consumers.

 

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