Drive Profit Centers

In growing our business, the development of existing profit centers and the creation of new centers are equally important. Expansion and extension of current profit centers keeps them dynamic and alive . In this area, we look both for new services to expand in current market segments and for new market extensions for existing services. The development of new centers is also vital in the changing environment in which we work. For this, we seek simultaneously new services and new customers to serve with those services. This demands a different form of entrepreneurial, nonlinear management to leap to the next new thing, rather than to merely expand or extend. An entrepreneur will proceed without full knowledge of where either the resources or next answers will arise to enable success.

The opportunity for these actions and decisions is often instigated by significant change that takes place in the business environment or a related arena. Some have called this a punctuated equilibrium. In our industry, examples of an important change might include the availability of a radically different technologysuch as using viral vectors for gene therapies, or a breakthrough such as an ability to routinely clone cells or entire animals.

Entering into biopharmaceutical product manufacturing, for example, was actually an extension of our companys laboratory-based services. This was planned to build upon our profitable business in commercial contract testing and development services, especially related to growing live cells and viruses ( cell and viral cultures) for uses in testing. Significant direct testing activities are also required in biopharmaceutical manufacturing, especially in the earlier stages. In entering this new service area, the company in effect provided these services to itself, capturing the profits from testing services with each manufacturing contract. Competitors would need to set up both types of services and incur greater losses while starting up. As an added benefit, clients who manufactured for themselves also appreciated that their contract testing partner understood very well how these services fit with the manufacturing.