1 Key Thing Successful Companies Tend To Do

Last Friday, Tim Cook, Chief Executive Officer (CEO) for Apple Inc., was interviewed by talk show host, Charlie Rose. As our Foolish readers may be aware, Apple is the manufacturer of popular smart devices such as the iPhone and the iPad.

During the interview, Cook shared a lot of interesting statements, but none of it was as impactful as his statement on the power of Apple’s focus. The key moment came when he stressed on the extreme focus that Apple was willing to go to – where every single product the company ships is able to fit on the interview table. This extreme focus has also brought about equally extreme results – it will create around US$180 billion in revenue this year.

The tweet below captured this key moment:

It would be hard for competitors to argue with Apple’s success over the past ten plus years: From 2004 to 2013, the consumer electronics giant had successfully increased its revenue by more than 20 times.

The power of focus!

At the local front, Raffles Medical Group Ltd. (SGX: R01) is a healthcare provider with 78 multi-disciplinary clinics, 21 specialist centres, and one tertiary hospital. At first glance, it would seem like the company operates a diverse range of centres and clinics.

When we look deeper, we will find that 63% of its revenue for 2013 came from its hospital services. Additionally, in a speech made on 28 September 2013, Dr. Prem Nair, Chief Corporate Officer for Raffles Medical, also stressed on the key role the network of clinics has in acting as a feeder for the company’s main hospital services and specialist centres.

It should also be noted that the hospital services segment has better margins. For 2013, the hospital services segment reported a pre-tax profit margin of 24.6%, while the healthcare services segment only reported a pre-tax profit margin of 8.3%.

As such, despite the larger network of clinics and centres, it can be summarized that the group is really focused on its higher end hospital services.

In all, the company’s business focus has had its desired impact on its corporate performance and in turn, its share price. As my fellow Fool Ser Jing points out, Raffles Medical’s growth in profits has helped propel the company’s share price to gains of more than 1000% in the past ten years.

Foolish take away

Companies which are able to identify their core competence, and relentlessly focus on it, may find outsized successes, as Apple has shown. As such, the process of studying a company could begin with the identification of the company’s core competence which can help it succeed in its own industry.

This focus on its core competence might be that extra edge which helps the company’s business to excel. With this edge, the company’s share price might follow the business performance and deliver the investing results which we are looking for.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong owns shares in Apple.