Background and Challenge
Diagnostics continues to grow as an industry due to changing technological and patient care trends. Molecular diagnostics, telemedicine, companion diagnostics and other changes are driving new technologies, while efforts toward efficient treatment and long-term outcome measurement are changing patient and physician needs.
These developments are creating challenges for those companies that supply, automate and enable the large diagnostic platforms. The maturation of the market for diagnostic-related supplies has squeezed margins as diagnostic platform companies demand more value from existing products while low-cost competitors are also emerging domestically and internationally. Additionally, the uncertainty in market trends makes developing “winning products” harder and more dependent on partner companies.
In this environment, a leading diagnostics supplier faced flat-sales and a dim pipeline in their automation technologies and diagnostic supplies businesses. Although the company was a worldwide leader in its markets, its core business was suffering, and the product pipeline had limited near-term revenue potential. L.E.K. Consulting was retained to develop an overall growth strategy.
Approach and Recommendations
L.E.K. led a cross-functional and collaborative team with the diagnostics company to explore needs, technologies, and opportunities. Through this research and discussion, the L.E.K. teams identified the critical success factors, needs and growth opportunities in various markets. These themes, technologies, and markets were aligned with both internal efforts and external business development to develop a growth plan forward that was presented to, and enthusiastically endorsed by, the board of directors.
The detailed strategy to grow the division included key recommendations for core products, international growth and entrance to adjacent markets.
Beyond its immediate findings, L.E.K. created and supported organizational buy-in through its collaborative approach, fact-based alignment of market needs / technologies / growth areas, and robust strategy articulation. The entire group, from the individual departments to the board of directors, enthusiastically endorsed the strategy as a clear, rigorous and strong path forward.
Today, the main strategic initiatives have been materially successful, increasing NPV significantly and enabling growth in various markets.