Abbott Laboratories of Chicago is one of America's major pharmaceutical companies, but it also has other products, including nutritionals and diagnostic equipment. In fact, more than half of the company's revenues come from these other products in markets where Abbott has the dominant share. Abbott also supplies such goods as intravenous fluids to hospitals and blood banks, along with pumps, screening tests, anesthetics, and critical care equipment. The company has shown innovative capabilities in terms of the development of new drugs for various purposes and has spent a good deal on research and development to create the next generation of such products. The key competition for this company includes other pharmaceutical giants such as Johnson & Johnson, Dow Chemical, Du Pont, Procter & Gamble, American Cyanimid, Bausch & Lomb, and Unilever, among others.
Innovative Strategies in the Pharmaceutical Industry
The pharmaceutical business unit of Abbott Laboratories achieved the leadership position in the diagnostics field in the 1980s, but this was accomplished with only a 14 percent share of the market because that market is so fragmented. The Abbott Diagnostics Division is the fastest-growing portion of Abbott's business, achieving a size twice as large as its nearest competitor and contributing an estimated $850 million to the company's $3.8 billion annual sales. The diagnostics market is about a $6.2 billion business per year. Abbott is ahead overall, but it is not ahead in certain key markets such as blood tests for glucose. The company set goals for itself in the 1980s: it wanted to lead in every segment and also to achieve at least 20 percent of the total market within a decade.
The company believed it was in a good position to accomplish this. Abbott Laboratories has an annual research and development budget of more than $150 million, which is also more than the total sales of many of its competitors. This ab...