The Wall Street Journal reported that Illumina Inc. revealed a new information technology system that can sequence a person’s genetic code for under ten thousand dollars in less than a week. With current costs of sequencing around fifty thousand dollars, BGI (former Beijing Genomics Institute) has already purchased over one hundred of the new systems. The innovation is that the system can run two genomes at once and complete 3.1 billion pieces of information. The new system will enhance information on genetic causes of diseases and lower the costs of the information.
The system is a bottom line approach to increase the revenue of the laboratories and Illumina by decreasing the costs of the services they provide. However, a blog on Technology Review written by Emily Singer states that sequencing costs are difficult to determine because they often do not include the cost of analyzing. In my opinion the system will still cut the costs of gathering the information and the analysis costs will remain the same but the analysts’ time efficiency will be doubled. It is also possible that more analysts may be needed for hire to research the influx of data that is collected which will increase the cost of analysis.
Illumina also has many competitors who are researching and innovating newer systems that are faster and cheaper than Illumina’s new system. The Wall Street Journal article states that Illumina’s competitors are Pacific Biosciences Inc., Life Technologies Inc., Helicos Biosciences Inc., and Complete Genomics. The blog in Technology Review states that Illumina’s competitor, Complete Genomics, has a system that sequences three genomes for under five thousand dollars, but this price is not offered to laboratories commercially. In my opinion Illumina has their systems out on the market first and will capture the most market share because of this strategic move. Since Illumina is using a bottom line approach being the first in it’s market to release its service will make it easier in the future for Illumina to release newer and faster technologies. Its competitors in my opinion will follow Illumina’s lead and release their products on the commercial market soon. Though Complete Genomics has a faster technology for a cheaper price they are not maximizing their new technology and information on the commercial market when they will they will achieve a smaller market share than if they were to become the first to release it.
In my opinion Illumina has made every strategic move flawlessly. They have implemented new technologies to run their genome systems more efficiently as a result has gained more data and information on genetic causes of diseases, such as cancer tumors. Illumina has also become the first of their competitors to enter the commercial market industry therefore gaining the majority of the market share and selling more products before their competitors who have faster technologies but are only using their systems privately. As a result, I think Illumina has implemented the bottom line approach to increase revenues by using their information technology in a way that allows them commercially and privately to increase the amount of data gained.
Blog: www.technologyreview.com/blog/editors/24658/
Wall Street: http://online.wsj.com/article/SB10001424052748704586504574654712910204336.html
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