Abbott - Planning to Win
SummaryA glimpse of the broad-based, versatile business strategy that has enabled Abbott to combine dynamic growth with long-term stability.
A glimpse of the broad-based, versatile business strategy that has enabled Abbott to combine dynamic growth with long-term stability.
Abbott had an excellent 2004, according to its CEO, Miles White: it achieved double-digit growth in both of its business groups. How was this managed in the face of what is perhaps the most difficult business environment the healthcare industry has ever faced
– and one that is not expected to improve significantly in the foreseeable future? How has Abbott navigated this extremely difficult environment while simultaneously transforming the company into an
organisation better prepared to overcome the same challenges in the future?
The strategic focus
Abbott was able to deliver at this high level because of the strategic work that has been done to transform the company in order to prepare for its future.
Abbott was founded on the principle of providing patients with innovative products that possess high market potential. The company has broadened its base and strengthened its organisation to include a specific mix of businesses. Abbott’s three-part strategy has focused on serving the patient with superior science across a broad base of technologies and
businesses, and the company is executing this strategy with increasing success. By building its business base and its newproduct pipeline, Abbott has become a stronger organisation, capable of delivering consistent performance – progress that has been acknowledged by several leading national publications, including recognition by Fortune as one of the most admired
companies in the industry.
Building for the future
Five years ago, it was clear that Abbott needed to make
significant changes to ensure a future as successful as the company’s past and to carry on Abbott’s legacy for patients, healthcare staff and the wider public.
As part of this change, Abbott rationalised its business structure for focus and performance. Abbott’s two business groups, Pharmaceutical Products and Medical Products, have clearly defined and complementary growth strategies, providing the company with one of the broadest and most stable business bases
in the healthcare industry.
Abbott has invested to build that base with strategic acquisitions, ranging from large transactions to enhance its global pharmaceuticals business to smaller, niche transactions involving technology-based companies to strengthen its medical products business. As a result, Abbott is now composed entirely of businesses that are either established market leaders or highgrowth,
high-margin opportunities driven by scientific innovation.
The third and final change has involved Abbott raising its science to a new level. Top-tier scientific capability is critical to the company’s future success. Abbott’s R&D investment has increased significantly over the past five years. In 2004, Abbott invested $1.7billion in R&D.
As a result, Abbott has become a significant biotechnology company through its leadership in monoclonal antibody research. And through
its varied medical products businesses, Abbott is developing innovative new technologies across a broad range of therapeutic areas and market categories.
Abbott has been recognised as having one of the best newproduct pipelines in the healthcare industry.
“Abbott has a straightforward three-part strategy:
focused on serving the patient, with superior science,
across a broad base of technologies and businesses.”
Miles White, CEO, Abbott
“Our company is now ready to achieve a higher level of success for years to come”, said Miles White, Abbott CEO, recently. “Abbott is ready to deliver breakthrough innovation across our broad base of businesses. In short, Abbott is ready to fulfil its promise – to improve
healthcare for more people, in more ways than ever before.”
Abbott’s long-term strategic vision encompasses a range of goals, all designed to keep Abbott’s business dynamic and adaptable while maintaining the levels of innovation and quality that all stakeholders are familiar with. The company has pledged to continue advancing
leading-edge technologies and building a broad-based business, and to maintain consistent results.
While delivering on its commitments, Abbott will continue its pharmaceutical focus on outstanding science and commercial execution, as well as capitalising on its strong medical products
Broad-based business model
Maintaining a broad base of business is a prominent and active part of the company’s strategy. In transforming the organisation, Abbott has invested heavily to build the right combination of businesses, and to equip and structure those businesses to
1. Pharmaceutical Products Group - Abbott’s Pharmaceutical Products Group aims to create a top-tier global pharmaceutical business: one that is dedicated to discovering, developing and marketing breakthrough drugs to improve patient health. The group’s
primary focus is on translating innovative science into effective medicine in order to address unmet medical needs. Abbott’s pharmaceutical pipeline focuses on five specialty therapeutic areas that represent new hopes for patients, many of whom suffer from diseases for which there have been no new treatments in decades. The five selected disease areas in which Abbott’s scientists are researching new treatments are immunology,
oncology, metabolics, neuroscience/pain management and infectious diseases.
2. Medical Products Group - Abbott’s Medical Products Group has built leading businesses in diagnostic testing and instrumentation, medical devices and nutritional products for children and adults. The group is committed to developing innovative, highly differentiated products for patients and consumers.
The Medical Products Group offers a range of innovative
instruments and tests across key segments in the global diagnostics market, including hospitals, reference laboratories, blood banks, physicians’ offices and clinics. The group comprises the following
businesses: Abbott Diagnostics, Abbott Molecular, Abbott Diabetes Care, Point of Care, Abbott Nutrition International, Abbott Vascular, Abbott Spine and Abbott Animal Health.
• Abbott Diagnostics provides products to serve clinical
laboratory customers worldwide.
• Abbott Molecular provides physicians with critical
information based on the early detection of pathogens and
subtle changes in patients’ genes and chromosomes,
allowing for earlier diagnosis, selection of appropriate
therapies and monitoring of disease progression.
• Abbott Diabetes Care improves diabetes sufferers’ lives
by providing innovative glucose monitoring systems that
offer patients and healthcare professionals fast, convenient
and accurate results.
• Abbott Point of Care provides immediate access to
accurate, critical diagnostic test results at the point of
patient care. I-STAT technology helps hospitals to deliver
care more quickly and so reduce backlogs in emergency
departments, operating rooms and critical care units.
• Abbott Nutrition International (known as Ross Nutritionals
in the USA) is a leader in providing trusted paediatric
nutritionals, healthy living nutritionals and related healthcare
products that provide balanced nutrition.
• Abbott Vascular markets a portfolio of coronary and
endovascular technologies and vessel closure devices used in the treatment of cardiovascular conditions.
• Abbott Spine (which operates outside the UK) offers
surgeons unique technologically-advanced devices for neck and back surgery. In addition, Abbott Spine is
concentrating on the development of non-fusion
technologies that are minimally invasive and do not involve substantial reconstruction of the spine.
• Abbott Animal Health is a leader in perioperative health care for the veterinary market. Its products include anaesthetic and wound care products, nutritionals, a complete line for IV fluid therapy, and other critical care products.
“Abbott’s two business groups, Pharmaceutical
Products and Medical Products, provide the company
with one of the broadest and most stable business
bases in the healthcare industry.”
– Miles White, CEO, Abbott
Enhancing the patients’ quality of life
Abbott’s broad base of businesses gives the company a well balanced portfolio that promises strong, consistent growth, while minimising the volatility that affects many companies that operate a single-line business. These two business models allow Abbott to capture the rapid growth that is possible with pharmaceuticals, while
smoothing out the cycles with medical products that offer high growth and profitability with less risk and uncertainty.
Abbott’s leadership position in several multibillion-dollar businesses provides a unique balance of revenue growth opportunities and cash flow sources that allow the company to invest in its future. Now you know a little bit more about Abbott, and if you are interested in a career with the company, please call the HR
Department on 01628 773355.
This feature has previously been posted in the Pharmaceutical Field Magazine