Abbott Laboratories

1
Abbott Laboratories

• Nasir Liaqat
• Nima Azeri

2
Agenda

• Company Overview
• PEST Analysis
• Porters Five Forces
• Strategic Group Map
• Driving Forces
• Supply Chain Management
• Operations
• Marketing and Sales
• Customer Service
• RD
• Corporate Level Strategy
• Business Level Strategy

3
Company Overview

• Founded in 1988
• Over 60,000 employees
• Sells to more than 130 countries
• 2 Main product groups
• Pharmaceutical Product Group
• Medical Product Group

4
PEST Analysis

• Political Legal Environment
• Heavily Regulated, Complex, Diverse
• International harmonization of regulatory
  requirements
• Minimizing time and cost
• FDA, major regulating body in the U.S.

5
PEST Analysis

• Economic Environment
• Forecasted increase in GDP of U.S.
• Government spending on medical care

6

PEST Analysis

• Socio-Cultural Environment
• Aging Demographics
• Increase in demand by the elderly population
• Health Care Expenditure
• Increase in health care spending due to ageing
  population
• Increase in health care ? Increase in revenues
  and opportunities for pharmaceutical industry

7
PEST Analysis

• Technology Environment
• Genome Technology
• Complete set of genetic instructions for an
  individual organism
• Ability to produce medications that target
  certain diseases
• Pharmagenetics
• Study of how people respond differently to
  medicines due to their genetic inheritance
• More powerful medicines that are better, and
  safer drugs the first time

8
PEST Analysis

• Generic Drugs
• Non-branded generics through reverse engineering
• Major threat to the industry

9
Strategic Group Map
18
High RD Prescription Company Revenue Market
Share GSK 51,790 7.3 Roche 33,091 3.3 Novar
tis 19,619 4.2 Pfizer 32,373
6.8 Astrazeneca 18,032 4.8
Low RD Prescription Company Revenue Market
Share Abbott Laboratories 17,685
1.4  Bristol-Myers Squibb 18,119
4.2  Johnson Johnson 36,298 3.75 
RD As a of Revenue
12
Generic Drugs Company Revenue Market
Share Watson Pharmaceuticals1,223 2.30 Mylan
Laboratories 1,269 2.40 Teva
Pharmaceuticals 2,519 2.40
10
6
4
Type of Therapy
10
Porters Five Forces

• Direct Competitors Score 6/10
• Head-to-head competition becoming a defining
  future
• Overall competition is moderate
• Increasing competition from the generic drug
  manufacturers

11
Porters Five Forces

• Threat of Entry Score 2/10
• High Barriers of Entry
• Very high capital and financial requirements
• Time and cost to develop a new drug

12
Porters Five Forces

• Substitutes Score 3/10
• Infinite demand for pharmaceutical products
• No real substitutes
• Brand name and generic drugs view

13
Porters Five Forces

• Power of Suppliers Score 3/10
• Companies mostly own their manufacturing plants
• Future cost cutting measures could be a threat

14
Porters Five Forces

• Power of Buyers Score 5/10
• Buyers are the patients, the family members, the
  Pharmaceutical Benefits Advisory Committee, the
  Pharmaceutical Benefits Pricing Authority, the
  finance departments, the hospital boards, the
  tender boards, the chief pharmacists
• Larger they get the more bargaining power they
  have
• Summary
• Average of 3.6 out of 10
• Very attractive industry

15
Driving Forces

• Major driving forces substitutes and competitive
  rivalry
• Changes mostly because of regulatory involvement
• Pro generic drug laws
• Impact on consumer power

16
Business Level Strategy

• The Current Strategy
• Differentiation to a broad market
• Differentiation by quality and effectiveness
• To broad market by selling to anyone who needs it
  at a price they will be able to pay
• Competes based on quality and efficacy rather
  than price

17
Business Level Strategy

• Recommendations