Assessing unmet need and developing comprehensive business plan for veterinary diagnostics

October 14, 20200

Client context and background: Leading veterinary biologicals company keen to understand and explore growth opportunity in veterinary diagnostics in India

Sathguru was retained by a leading animal vaccine manufacturing company to assess the opportunity for veterinary diagnostics and develop a comprehensive business plan for this investment. The company’s product portfolio comprises of various therapeutic and prophylactic formulations available as generics and over-the-counter (OTC) products across the country and veterinary diagnostics was being considered as a new growth avenue for the company.

Sathguru’s Approach: Comprehensive market research and needs assessment informing a well-conceived business plan and operations roadmap with initial thrust on companion animal diagnostics

The expanding market for companion animal products in India is spurred by increasing willingness to spend on pets.  However, diagnostics as an area has lagged behind overall growth in other product and service categories for pet animals in India.   In addition to pet animals, there is also extensive unmet need in diagnostics for livestock with underequipped infrastructure and capacity in the public system to serve the expanding need.   We prioritized diagnostics for companion animals as the initial thrust area for the business plan and developed a detailed project report encompassing the following:

I. Opportunity assessment – market research, mapping of unmet needs and competitive benchmarking:

Extensive primary research to gain detailed understanding of evolving opportunity and unmet need – We assessed the clinical need across sub-segments through extensive primary research and consultations with clinicians across the public and private healthcare delivery setting.  Our survey covering doctors and pet owners across the country was designed to obtain primary insight on nature of current clinical need, types of tests where there was greater demand, areas of unmet need, operational considerations on turn around time and test specifications.  Based on the detailed market research that entailed interviewing several key opinion leaders, we developed detailed projections on market size by geography, by test category, by species et al.

Competitive landscape and current capacity – Through primary intelligence from competing labs as well as insights from the survey covering clinicians and pet owners from across the country, we assessed the evolving competitive landscape.  For every geographic region in the country, we identified major competitors, current capacity and test portfolio, and inferred overall level of competitive intensity, expanse of unmet need and nature of evolving opportunity by geographic region.

Composition of opportunity and forward looking outlook – through extensive primary research and analytics, we assessed geographic concentration of demand, a critical insight for assessing operational viability and logistics model.  We also identified key trends in demand for type of tests and developed projections for demand composition by test type across geographic clusters mapped.

II. Operations modelling for demand aggregation, logistics roadmap and overall operating model:

There is currently no nationally scaled up reference lab operations in India for veterinary diagnostics.  While there are veterinary diagnostics service providers who have nurtured regional presence, these evolving corporate efforts with limited scale don’t have offer replicable models.  The operating model and logistics were foundational to the business plan in this context and overall business viability heavily relied on an efficient model that allowed for capex recovery as well as competitive operating benchmarks on metrics such as turn around time.

We used extensive insights from primary research to identify key operational metrics that would pave the way for sustainable competitive advantage and scale.  Insights from clinician interviews and market research survey provided important inputs.  However, beyond that, we de-novo developed and assessed multiple operating models (centralized and de-centralized) for impact on financial viability, level of capex investment, capacity utilization as well turn around time.

We also drew on operating models adopted by human diagnostics reference labs’ in the Indian context and combined it with primary and secondary research with multiple logistics partners.

We developed a detailed operating model after extensive modelling of options and review of all operating considerations including aggregation of samples, logistics approach (including cold chain requirements) and turnaround time for processed samples.

We finally made recommendations on the logistics roadmap, regional roll-out strategy after considering operational considerations (in addition to commercial considerations) and overall operations model for this first of its kind veterinary diagnostics plan in India.

III. Infrastructure mapping, capex quantification and assessment of financial viability:

Based on the operating model and portfolio of tests recommended, we mapped infrastructure requirement for the proposed operations. This included space requirement, biosafety compliance by type of test, diagnostic equipment and other capital investments.   As part of the detailed project report, we quantified overall capital investment for developing the needed infrastructure.

We estimated need for technical manpower based on type of test and demand projections and estimated recurring level of fixed costs and operating costs.  Finally, we developed various scenarios for overall business ramp-up, assessed financial viability for the lab network.  In addition to Return on Investment metrics, we identified key risks and developed mitigation strategies.

IV. Go-to-market strategy:

The overall go-to-market strategy included all components of initial portfolio plan, pricing strategy, positioning and branding as well as geographic roll out plan.

We performed an exhaustive location mapping to develop two different business models for the client. A comprehensive test portfolio based on primary interactions as well as detailed pricing recommendations were made based on primary insights and competitive benchmarking. We also developed the sales and marketing strategy for different market segments as well as recommendations for future growth avenues.

Project Impact – Foundation for first of its kind diagnostics network in the country

The detailed project report presented to the client has served as the foundation for a first of its kind effort being considered in reference diagnostics for companion animals in India.   Sathguru’s experience across segments of animal health (cattle, large and small ruminants, swine and companion animals) and nuanced understanding across product categories was vital for developing this white-boarded plan.

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Assessing unmet need and developing comprehensive business plan for veterinary diagnostics

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