Analysis of the General Environment Factors
Market Size and growth rate:
Market size of the industry is 40 billon and the industry has been growing at the rate 20% during the period 2000-08. The industry is currently in the rapid growth and takeoff phase since many innovations are coming up and the industry is being attracted by many big corporate to enter in.
Number of rivals:
The industry is divided into two sub segments: routine tests and specialised tests. In routine test segment, the industry is fragmented into many small companies at the local and regional level. In specialised test segment, the industry is dominated by few large companies such as Piramal, SRL Ranbaxy, etc. Since there is low cost associated with setting up labs at local level and the industry has bright future prospects so it is attracting large number of local companies and also big corporate to enter the market.
Scope of competitive rivalry:
Most companies in this industry compete at local geographic area since there is less cost associated with setting up the labs in local areas and hence it is easy for local players to enter in the market. Moreover, routine market comprises of 61% of the total market share which includes large number of small players and hence the competition is fierce at local level. Also, companies present globally have competitive advantage in terms of high end technology since it requires large investments which is not afforded by small players. Therefore looking at the long term perspective, globalisation is conducive for the increase in bottom line.
Number of buyers:
There are two types of buyers: doctors and patients. But most patients visit diagnostic centres only on the recommendation of doctors. Therefore referring doctors enjoy discretionary power to refer the patients to any diagnostic centre. Also the number of local diagnostic centres are many and doctors refer the patients where they have tie up and one which provide them better incentives. Therefore doctors enjoy high bargaining power. But
Market size of the industry is 40 billon and the industry has been growing at the rate 20% during the period 2000-08. The industry is currently in the rapid growth and takeoff phase since many innovations are coming up and the industry is being attracted by many big corporate to enter in.
Number of rivals:
The industry is divided into two sub segments: routine tests and specialised tests. In routine test segment, the industry is fragmented into many small companies at the local and regional level. In specialised test segment, the industry is dominated by few large companies such as Piramal, SRL Ranbaxy, etc. Since there is low cost associated with setting up labs at local level and the industry has bright future prospects so it is attracting large number of local companies and also big corporate to enter the market.
Scope of competitive rivalry:
Most companies in this industry compete at local geographic area since there is less cost associated with setting up the labs in local areas and hence it is easy for local players to enter in the market. Moreover, routine market comprises of 61% of the total market share which includes large number of small players and hence the competition is fierce at local level. Also, companies present globally have competitive advantage in terms of high end technology since it requires large investments which is not afforded by small players. Therefore looking at the long term perspective, globalisation is conducive for the increase in bottom line.
Number of buyers:
There are two types of buyers: doctors and patients. But most patients visit diagnostic centres only on the recommendation of doctors. Therefore referring doctors enjoy discretionary power to refer the patients to any diagnostic centre. Also the number of local diagnostic centres are many and doctors refer the patients where they have tie up and one which provide them better incentives. Therefore doctors enjoy high bargaining power. But