When Peter Leyland was appointed director of the European renal division of Baxter UK early in 1997, the business unit of the global health-care company was at a crossroads. The renal division was in the business of selling disposable bags used for kidney dialysis in the home. Although its market share for what is called peritoneal dialysis (PD) was close to 80%, PD was losing out to hemodialysis (HD), which removes toxic waste from blood. On a bag-for-bag basis, HD was cheaper. Meanwhile, new PD entrants were competing on price.
Leyland decided to cut the margin on the bags, but he would not cut costs for fear of negative customer reaction. He moved in the opposite direction, mapping with customers all the treatment activities — before, during and after the dialysis experience. Then he added value at each critical point in that cycle (helping patients, for example, to manage their private and professional lives around treatment, to update prescriptions, to dispose of used dialysis bags or to maintain machines).
Such attentions kept patients at home longer, greatly increasing the sales of dialysis bags. However, Leyland’s division was no longer thinking of itself as being in dialysis-bag manufacturing. It had started thinking like a dialysis patient caregiver. It had become a company with a customer focus. Most enterprises think... To read the complete article, login or sign-up using the form below.
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