Originally Published MX January/February
2003
COVER STORY
Leadership—by the Numbers
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Market leadership may not be everything, but it can sure help keep company coffers full and stakeholders happy.
Until 1997, leadership of the in vitro diagnostics (IVD) sector of the medical device industry was pretty much a toss-up. Then, within a single year, the sector witnessed unparalleled consolidation among some of the largest companies in the field. Dade International acquired Behring Diagnostics to become Dade Behring (Deerfield, IL); Beckman Instruments acquired Coulter Corp. to become Beckman Coulter Corp. (Fullerton, CA); and Roche acquired the diagnostic units of Boehringer Mannheim, keeping only the Roche Diagnostics name.
The last of these mergers helped Roche to move rapidly into the leading position in the IVD market. In 1995, 1996, and 1997, Roche had posted revenues of $677.0 million, $547.5 million, and $698.7 million, respectively. But in 1998, the newly merged Roche and Boehringer Mannheim units combined to produce sales of more than $3.3 billion, catapulting the new company ahead of rival Abbott Laboratories (Abbott Park, IL).
Since then, Roche has widened the gap between itself and its competitors (see Table I). In 2001, Roche posted revenues of nearly $5 billion—more than 40%, or $2 billion, ahead of second-place Abbott. At the end of the third quarter of 2002, the company
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Table I.
Sales revenues |
reported that its diagnostics business units had achieved increased sales revenues of 11% as expressed in local currencies. Moreover, two of the diagnostics divisions—diabetes care (15%) and molecular diagnostics (19%)—achieved double-digit growth.
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