Analysis of the General Environment Factors

Market surface and growth rate Market size of the effort is 40 billon and the industry has been growing at the rate 20% during the period 2000-08. The industry is before long in the rapid growth and takeoff phase since many innovations be coming up and the industry is being attracted by many wide-ranging corporate to get to in. Number of rivals The industry is divided into two hitman segments routine tests and work tests. In routine test segment, the industry is illogical into many small companies at the local anaesthetic and regional level.In specialised test segment, the industry is dominated by few large companies such as Piramal, SRL Ranbaxy, etc. Since in that respect is low represent 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 merchandise. Scope of competitive argument Most companies in this industry debate at local geographi c atomic number 18a 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 ambition is barbarian at local level. Also, companies present globally have competitive utility in marges of senior high school end technology since it requires large investments which is non 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 unaccompanied on the recommendation of doctors.Therefore contactring 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 on e which come through them better incentives. Therefore doctors enjoy high bar get toing power. But vary test centres are very few so they have noneworthy bargaining power. Degree of product differentiation Routine segment is characterized by low product differentiation because routine tests include simple tests a uniform(p) blood test, sugar test, etc. hich does not need much technical competency. And since there are large number of players in this segment and there is low product differentiation, this has led to intense competition and low profitability. Whereas, specialized segment is characterized by presence of economies of scale so there is high product differentiation in terms of technology, modus operandi. Also, this segment is capital intensive therefore it has fewer number of players. Product innovation The industry is characterized by rapid product innovation, for example, introduction of genome studies, molecular diagnostics and so on.As the methods of diagnosing a re becoming more sensitive and specific, it is leading to rapid obsolescence of old technology. Also there are opportunities to overtake rivals by being first to market with next generation products like Tele-Radiology, Tele Pathology. Supply/ train conditions Also as there are large number of players in routine segment, there is intense rivalry at local level. This rivalry has resulted in price wars. In specialized segment, which comprises of national players, there is condition rivalry since players compete in same markets and market potential is high. footfall of technological assortment As mentioned earlier, industry is marked with rapid change in technology and, methods of diagnosis. Rapidly advancement of technology in the methods of diagnosis and equipments is leading to rapid obsolescence of old technology. Most diagnostic centres need brisk technology with a need to replace equipments every six months which is not financially viable for most of the centres. Vertical inte gration Most competitors go only in one segment that is diagnosis.But some competitors like Piramal operate in multiple stages, for example it operates through B2C (Business to customer), D2C (Doctor to customer), B2B (Business to Business) modes. Economies of Scale The industry is characterized by economies of scale. But in routine segment, despite of the presence of economies of scale, none of the players has able to achieve high end volumes, due to intense competition and absence of government policies for restricting the entry of newer players, in order to gain substantial cost advantage. Specialized segment is also characterized by significant economies of scale.