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Abbott Laboratories is a pharmaceuticals health care company. It has 72,000 employees and operates in over 130 countries. The company headquarters are in Abbott Park, North Chicago, Illinois. The company was founded by Chicago physician, Dr. Wallace Calvin Abbott in 1888. In 2008, Abbott had over $29 billion in revenue.
In 1985, the company developed the first HIV blood screening test. The company's drug portfolio includes HUMIRA, a drug for rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis, Crohn's disease, moderate to severe chronic psoriasis and juvenile idiopathic arthritis; Norvir, a treatment for HIV; Depakote, an anticonvulsant drug; and Synthroid, a synthetic thyroid hormone. Abbott also has a broad range of medical devices, diagnostics and immunoassay products as well as nutritional products, including Ensure, a line of well known meal replacement shakes, and EAS, the largest producer of performance based nutritional supplements.
Abbott's in vitro diagnostics business is a world leader in immunoassays and blood screening. Abbott's broad range of medical tests and diagnostic instrument systems are used worldwide by hospitals, laboratories, blood banks, and physician offices to diagnose and monitor diseases such as HIV, hepatitis, cancer, heart failure and metabolic disorders, as well as assess other important indicators of general health. Abbott Point-of-Care manufactures diagnostic products for blood analysis to provide health care professionals critical diagnostics information accurately and immediately at the point of patient care. Abbott also provides point-of-care cardiac assays to the emergency room.


Abbott Strategies is a boutique strategy and sustainability firm that crafts tailored business solutions for clients across the globe. In particular, we are experts at bridging the gap that has too long separated strategy and sustainability. We help you understand how environmental, social and economic forces are rapidly influencing the strategic positions available for your company or organization. But we don’t just work at strategy creation – we actively support you through implementation, measurement and refinement of the strategy. This approach drives real performance improvement, builds trust capital among your key stakeholders, and enhances your reputation. We are a bespoke house – you get truly unique, tailored solutions that “fit” your organizational culture. Go elsewhere for off-the-rack ideas. Our core services include:
• Creation of truly sustainable strategies
• Strategy implementation, measurement and refinement
• Executive coaching, education and mentoring
• Process design, facilitation, moderation and content weaving
• Stakeholder mapping and engagement
• Speechwriting and strategic communications

Abbott Laboratories and Kaletra
• Abbott's Kaletra is considered to be the premier second-line treatment for HIV worldwide due not only to its efficacy and low side-effects but also its reduced pill burden. Due to its high price (typically four to six times more than other treatments) it is not been widely included in national treatments programs and those who developed resistance to other treatments in these countries have had few options.
• Worldwide sales of Kaletra in 2006 alone were over $1 Billion, while projections estimate the market for HIV Drugs to reach $10 Billion by 2015.
• Abbott charges $1,000 per patient per year for Kaletra in most middle-income countries and $500 per patient per year in low-income nations. Generic lopinivar/ritonavir costs $600 per patient per year. In Mexico and Colombia, Abbott charges $5,400 and $3,500 per patient per year, respectively. On January 28, 2009, activists in Mexico, Colombia, and the United States will petition Abbott to lower these prices and the respective governments to break the patents country so that the medicine is available to all who need it. 21,000 people per year die of AIDS in the two countries.

Distribution channels can also be increased by launching variety of new products. Some of the new products launched by Abbott Laboratories are as follows:
1)Pharmaceuticals
 Vicodin (hydrocodone/paracetemol)
 Biaxin/Klacid (clarithromycin)
 Dilaudid (hydromorphone)
 Depacon (valproic acid)
 Depakote (valproate semisodium)
 Desoxyn (medical methamphetamine)
 Gengraf (ciclosporin)
 Ultane (sevoflurane)
 Niaspan (niacin)
 Azmacort (triamcinolone), etc

2)Diabetes Care
 G2 Sensor Card Blood Glucose Monitor
 Precision QID Blood Glucose Monitor
 Medisense Optium Blood Glucose Monitor
 FreeStyle Freedom Blood Glucose Monitor
 FreeStyle MINI Blood Glucose Monitor
 FreeStyle Lite Blood Glucose Monitor, etc

3)Diagnostics
 Abbott Aeroset
 Abbott Architect
 Abbott AxSYM
 Abbott CELL-DYN
 Abbott i-STAT system

4)Nutritional
 Ensure
 Pedialyte
 Similac
 ZonePerfect
Above are some pf the products which were introduced by Abbott Laboratories in 2006 so that they can distribute their products to more areas and increase their distributional channels.

Influence Comments
Market factors
An important market factor is "buyer behaviour"; how do buyer's want to purchase the product? Do they prefer to buy from retailers, locally, via mail order or perhaps over the Internet? Another important factor is buyer needs for product information, installation and servicing. Which channels are best served to provide the customer with the information they need before buying? Does the product need specific technical assistance either to install or service a product? Intermediaries are often best placed to provide servicing rather than the original producer - for example in the case of motor cars.

The willingness of channel intermediaries to market product is also a factor. Retailers in particular invest heavily in properties, shop fitting etc. They may decide not to support a particular product if it requires too much investment (e.g. training, display equipment, warehousing).

Another important factor is intermediary cost. Intermediaries typically charge a "mark-up" or "commission" for participating in the channel. This might be deemed unacceptably high for the ultimate producer business.


Producer factors
A key question is whether the producer have the resources to perform the functions of the channel? For example a producer may not have the resources to recruit, train and equip a sales team. If so, the only option may be to use agents and/or other distributors.

Producers may also feel that they do not possess the customer-based skills to distribute their products. Many channel intermediaries focus heavily on the customer interface as a way of creating competitive advantage and cementing the relationship with their supplying producers.

Another factor is the extent to which producers want to maintain control over how, to whom and at what price a product is sold. If a manufacturer sells via a retailer, they effective lose control over the final consumer price, since the retailer sets the price and any relevant discounts or promotional offers. Similarly, there is no guarantee for a producer that their product/(s) are actually been stocked by the retailer. Direct distribution gives a producer much more control over these issues.


Product factors Large complex products are often supplied direct to customers (e.g. complex medical equipment sold to hospitals). By contrast perishable products (such as frozen food, meat, bread) require relatively short distribution channels - ideally suited to using intermediaries such as retailers.
Distribution Intensity

There are three broad options - intensive, selective and exclusive distribution:

Intensive distribution aims to provide saturation coverage of the market by using all available outlets. For many products, total sales are directly linked to the number of outlets used (e.g. cigarettes, beer). Intensive distribution is usually required where customers have a range of acceptable brands to chose from. In other words, if one brand is not available, a customer will simply choose another.

Selective distribution involves a producer using a limited number of outlets in a geographical area to sell products. An advantage of this approach is that the producer can choose the most appropriate or best-performing outlets and focus effort (e.g. training) on them. Selective distribution works best when consumers are prepared to "shop around" - in other words - they have a preference for a particular brand or price and will search out the outlets that supply.

Exclusive distribution is an extreme form of selective distribution in which only one wholesaler, retailer or distributor is used in a specific geographical area.
For product-focused companies, establishing the most appropriate distribution strategies is a major key to success, defined as maximizing sales and profits. Unfortunately, many of these companies often fail to establish or maintain the most effective distribution strategies. Problems that we have identified include:

Unwillingness to establish different distribution channels for different products
Fear of utilizing multiple channels, especially including direct or semi-direct sales, due to concerns about erosion of distributor loyalty or inter-channel cannibalization
Failure to periodically re-visit and update distribution strategies
Lack of creativity and resistance to change
To be fair, there can be sound reasons for these perceived weaknesses. More typically, however, they are due to failings such as simple inertia, lack of understanding of the ultimate customers and their preferences, or a failure to acknowledge the importance of a distribution strategy and invest sufficient resources in understanding it.

“Now” is absolutely NOT the time to blindly continue the status quo with your distribution strategies. The Internet is creating sea-changes in terms of traditional manufacturer-distributor relations. It has seen significant waves of disintermediation in multiple product lines, and can facilitate cost-effective broadening of distribution channels. Meanwhile, improvements in supply chain management technologies must also be factored into choice of distribution partners
 
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