Analysis Of Ophthalmic Industry

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Register to read the introduction… The consumer has no choice but to buy what doctor says. Everything is dependent on the doctor. However, when we look at the buyer's power, we look at the influence they have on the prices of the product. In this industry, the buyers are price sensitive. It depends on the buying decision of the buyer as to how expensive or how inexpensive he desires to buy a certain product of. The cost of switching from one seller to another is also one factor for the low bargaining power of this industry. In this industry there are not many buyers, it is not a huge market, and buyers in this industry usually buy in small volumes. In ophthalmic industry, the buyers are scattered and they as such does not wield much power in the pricing of the products. Being a low bargaining power industry, it makes the industry more attractive and increases profit potential for the seller, whereas had it been a high buyer bargaining power industry it would have been less attractive and decreased profit potential for the seller. However, government with its policies plays an important role in regulating …show more content…
The capital requirement for the industry is very high, although creating a regional distribution network is easy, since the point of sales is restricted in this industry in India. However, creating brand awareness and franchisee amongst doctors is the key for long-term survival. Also, quality regulations by the government may put some hindrance for establishing new manufacturing operations. Going forward, the impending new patent regime will raise the barriers to entry. But it is unlikely to discourage new entrants, as market for generics will be as huge.
Due to the large product differentiation and therefore high customer loyalty and brand recognition, it is hard to enter the market. New entrants are only successful with innovative technologies or services, in niche markets, or with an existing product with a cutting price policy, i.e. spectacle frame supply from China or the recent retail disposable lens vague.

Threat of Substitutes:
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Companies within this industry compete on technological leadership and innovation, quality and efficacy of their products, relationships with eye care professionals and health care providers, breadth and depth of product offering and pricing. The presence of these factors varies across product offerings. Even if principal competitors do not have a comparable range of products, they can, and often do, form strategic alliances and enter into co-marketing agreements to achieve comparable coverage of the ophthalmic

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