Business Strategies of Worldâ€™s Successful Companies: Abbott Laboratoryâ€™s Winning Business Strategies
Established more than a century ago as a small business start up by a young practicing physician and drug store proprietor, Abbott Laboratories is today one of the worldâ€™s most broad-based health care companies and a leader in the discovery, development and manufacture of products that span the continuum of care. This article exposes the winning business strategies that have made Abbott Laboratory such a phenomenon.
Business Strategy 1: Great Business Ideas Are Brewed When You Get Dissatisfied With What Is Obtainable
A business start up that will stand the test of time, grow from a small business and extend into different parts of the world is a business whose strategy is to provide a service better than what is presently obtainable, rather than with the mindset to make profit.
Making profit of course is what is desired to sustain the business, but if that is the primary motive of setting it up then it may not live long. This is because consumers generally, which include you and I donâ€™t easily let go their money for any item, worse is when they can see clearly that a profit is being scrapped from them.
On the contrary, we can even go as far as pleading with the seller to accept our payment when we see that what we can get from the product or service is lot more valuable than its price.
The bottom line in this basic behavior of consumers is that a business which is set out on a strategy to load its consumers with lots of goodies beyond their expectation at no further cost, and therefore fill their satisfaction completely will always be on top of the pack.
Successful companies take the effort to identify areas where consumers are less satisfied and then see that as a business opportunity to warm their way into consumerâ€™s minds by providing the service far better to their satisfaction.
Abbott Laboratory, which started as a small business start up offering pharmaceutical service was founded by a Chicago physician named Wallace Calvin Abbott in the 19th century. The small business start up took a swing upward when Dr. Abbott decided to make better quality solid alkaloids in 1888.
Before this time alkaloids, such as morphine, quinine, strychnine, and codeine where prescribed only in the liquid form, and therefore were prone to spoil easily. Then came a Belgian surgeon who could manufacture the solid form. However, Dr. Abbott was not satisfied with the quality of the pills, so he decided to make better ones.
Business Strategy 2: Continue To Develop New Products
No business, whether itâ€™s a small business start up or large can survive for long on a single or few products. Time will change and so will be the need of consumers. Therefore, your ability to continually develop and market new products or services does not only ensure your relevance in the market place, it also widens your revenue base and puts you in a position to hit one or two best sellers.
Abbott Laboratoriesâ€™ strategy of ongoing product creation is evidently one of its businessâ€™ success factors as it continued to invest heavily into the research and development of new products after the First World War, with the establishment of a laboratory in Rocky Mount, North Carolina where it developed such new drugs as sedatives, tranquilizers, and vitamins, which swelled its bank account.
Business Strategy 3: You Must Look For New Markets in Other Territories
After the business is firmly rooted, the next thing to do is to execute expansionist strategy by taking your business beyond your shores. More often than not great markets exist outside of your business location which you can tap into for big success.
In the year 1931, Abbott Laboratories began to extend its business outside of the United States with the establishment of an affiliate office in Montreal, Canada.
Business Strategy 4: It is not always safe To Put All Eggs in One Basket
Successful businesses, especially in this highly competitive era have to be flexible to easily diversify into lucrative business sectors without losing focus, rather than be stranded when their business is in depression.
The mid-1960s was a tough era for Abbott Laboratories for the fact that for several years the company was unable to develop a good selling product to keep up its income. However, Abbottâ€™s business was rescued from the gloom when it started to diversify from its primary pharmaceutical business into other fields.
This was evident by the several consumer products, such as Glad Hands rubber gloves, Pream nondairy creamer, Faultless golf balls, the cyclamate sugar, and Sucaryl, that the company launched in the years that followed.
Business Strategy 5: The Benefit of Heavy Investment in Research and Development
Nothing good they say, come easy or cheap. To have a top quality product that can meet consumersâ€™ dire need above competitorsâ€™ offering requires a sound business strategy that supports great deal of investment to research and develop such product.
You need to realize that your investment in research and development can never be too much, considering the gains your business stands to reap with a best selling, leading product.
The fact that Abbott Laboratories invested heavily in research and development from the early 1980s to the 90s, reaching almost $1billion in 1994, a staggering 10% of their sales (which was far more than any of its competitorsâ€™), the company was hugely rewarded with explosive sales. One of its new products, clorithromycin, introduced in 1991 has sold over $1billion.
Business Strategy 6: Dynamism Is Refreshing
As long as things generally, including business strategies and consumer preferences do not remain the same with time, your business certainly needs to be dynamic to recognize the changes and adapt appropriately to them, else it could become obsolete and irrelevant in the market place.
In the later part of the 1990s Abbott Laboratoryâ€™s earnings were falling real bad compared to the figures it recorded in the 1980s and this made it vulnerable to being taking over by a bigger business. However, the companyâ€™s dynamism saved it from being acquired as it shrugged off its managementâ€™s conservative approach of the early 1990s that had become outdated, to expanding through acquisition, with the purchase of such businesses as MediSense (in 1996) for $867million.
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