Quest Diagnostics 2012 Annual Report Download - page 4

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Item 1. Business
Quest Diagnostics Incorporated is the world's leading provider of diagnostic testing information services. We provide
insights that empower and enable patients, physicians, hospitals, integrated delivery networks (each an "IDN"), health plans,
employers and others to make better healthcare decisions.
Quest Diagnostics was incorporated in Delaware in 1990; its predecessor companies date back to 1967. We conduct
business through our headquarters in Madison, New Jersey, and our laboratories, patient service centers, offices and other
facilities around the United States and in selected locations outside the United States. Unless the context otherwise requires, the
terms “Quest Diagnostics,” the “Company,” “we” and “our” mean Quest Diagnostics Incorporated and its consolidated
subsidiaries.
During 2012, we generated net revenues of $7.4 billion and processed approximately 147 million test requisitions.
Additional financial information concerning Quest Diagnostics, including our consolidated subsidiaries and business segments,
for each of the years ended December 31, 2012, 2011 and 2010 is included in the consolidated financial statements and notes
thereto in “Financial Statements and Supplementary Data” in Part II, Item 8.
OUR STRATEGY AND STRENGTHS
In 2012, Quest Diagnostics launched a new vision and strategy for our Company. Our new vision is: empowering
better health with diagnostic insights. We have three aspirational goals: a healthier world; build a valuable company; and
create an inspiring workplace. Our values remain unchanged: quality, integrity, accountability, integrity, innovation and
leadership.
Our Strategy
In 2012, we introduced a five-point business strategy, grounded in today's realities, to help us achieve our vision and
our goals.
1. Refocus on diagnostic information services. During 2012, we conducted a thorough review of our portfolio, to
evaluate all assets to ensure a strong strategic fit. As a result of the review, we are refocusing on diagnostic information
services, and retaining pathology services, where we will strive to improve performance, Berkeley Heartlab,TM Celera's
discovery capabilities and our international assets. We also determined to evaluate options with respect to the Celera drug
assets and the Celera products businesses. In addition, we determined to refocus our electronic health record business,
including to pursue partnerships with top EHR vendors to jointly strengthen our value proposition. Finally, we sold our
OralDNA salivary diagnostics business and have agreed to sell our HemoCue diagnostic products business.
2. Drive operational excellence. Improving our operations will yield many benefits, including: enhancing customer
satisfaction, employee engagement and shareholder value; improving our competitiveness; and strengthening our foundation
for growth. To drive operational excellence, we will focus on four strategic imperatives. These imperatives are to enhance our
end-to-end customer value chain, enterprise information technology architecture, business performance tools and cost
excellence.
Our cost excellence program, Invigorate, is now expected to deliver $500 million in annual savings in 2014 compared
to the 2011 baseline, and $600 million run rate savings as the Company exits 2014. We are pursuing opportunities to increase
this total to $1 billion beyond 2014. Invigorate consists of six flagship programs, with structured plans in each, to drive savings
and improve performance across the customer value chain: organization excellence; information technology excellence;
procurement excellence; service excellence; lab excellence; and billing excellence.
3. Restore growth. We are pursuing seven tactical approaches to restore growth. Three of these approaches have a
near-term focus: sales and marketing excellence; grow esoteric testing through a disease focus; and partner with hospitals and
IDNs. The remaining four growth approaches have a long-term focus: succeed internationally; create value from information
assets; lead in companion diagnostics; and extend in adjacent markets.
Our vision for sales and marketing excellence is to be the preferred partner for diagnostic information services to key
segments through sales and marketing excellence, with a revitalized customer-focused culture. We will have one sales
organization in our Diagnostic Information Services business, centrally led, and focused on local customer needs. We plan to
have world-class management discipline around processes, tools and measurement. We expect to build a virtuous circle of