{"id":4509,"date":"2015-12-09T04:56:08","date_gmt":"2015-12-09T09:56:08","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/dr-lal-pathlabs-achieving-scale-in-indian-diagnostics-market\/"},"modified":"2015-12-09T16:25:10","modified_gmt":"2015-12-09T21:25:10","slug":"dr-lal-pathlabs-achieving-scale-in-indian-diagnostics-market","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/dr-lal-pathlabs-achieving-scale-in-indian-diagnostics-market\/","title":{"rendered":"Dr Lal PathLabs: Achieving scale in Indian diagnostics market"},"content":{"rendered":"

Founded in 1949, Dr Lal PathLabs, headquartered in New Delhi, has grown from a single diagnostic center to a chain of 1,500 patient service centers. As one stop solution for diagnostics, pathology, super specialized tests, radiology and cardiology tests, Dr-Lal-PathLabs is serving 12 million people per year across 3500 diagnostic and related healthcare tests. With an integrated pan-India network and international presence, the company reported FY15 revenues of ~$100M with 20-22% margin and is undergoing IPO currently.<\/p>\n

https:\/\/www.youtube.com\/watch?v=GZLEwnP0KrY<\/a><\/p>\n

Media 1: Journey and evolution of Dr Lal PathLabs<\/p>\n

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Business Model: <\/strong>What is the story behind its success?<\/em><\/span><\/p>\n

Indian healthcare market, especially the diagnostics and pathology market is highly fragmented with over 80% market constituted of standalone clinics \u2013 independent or inside hospitals, mainly in urban areas. Further, rural centers are really small scale facilities carrying out basic tests but no specialized tests. In such a scenario, accessibility and quality are the major issues faced by the customers.<\/p>\n

Under strong leadership, Dr-Lal-PathLabs has done an exemplary job of addressing both these concerns and creating a highly profitable, scalable business through an asset light, hub-and-spoke, franchisee-based model. It has done a great job at managing two important customer segments well: patients and doctors.<\/p>\n

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  1. Doctors<\/strong><\/li>\n<\/ol>\n

    With several accreditations, Dr-Lal-PathLabs brand represents high quality, accuracy, and trust among the doctors. It has a proven track record for strict adherence to international standards and is recognized as a center of innovation and a premier clinical pathology laboratory in Asia.<\/p>\n

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    1. Patients<\/strong><\/li>\n<\/ol>\n

      Customer service is one of the primary focus of Dr-Lal-PathLabs. In addition to proximity and\u00a0quality, company offers a turnaround time of few hours. Additional services like home collection, online reports, loyalty program, etc. add to the spectrum of benefits to the patients.<\/p>\n

      \u00a0<\/strong>The firm also creates value for independent hospitals, clinics, and small pathology labs across India by providing services \u2013 collect samples and deliver reports \u2013 to small clinics and pathology labs that lack capabilities to conduct highly specialized tests. Specimens are collected across multiple locations within a region for delivery to a pre-designated clinical laboratory for centralized diagnostic testing. The entire system, put together, serves 15,000 patients and conducts 45,000 tests per day.<\/p>\n

       <\/p>\n

      Operating Model <\/strong>and how it aligns to business model<\/em><\/span><\/p>\n


      \n<\/strong>The company\u2019s mantra <\/em>of providing high-quality services through cost management and efficient use of technology has led to its sustainable competitive advantage in the Indian market.<\/p>\n

      Hub-and-spoke model<\/strong><\/p>\n

      \"Screen
      Exhibit 1: Illustration of hub-and-spoke model<\/figcaption><\/figure>\n

      It constitutes:<\/p>\n