Bayer: An Analysis of its strong market presence in United States
"One of the leading OTC healthcare product manufacturer in US
It is publicly listed on Frankfurt Stock Exchange, with market capitalization of US$60.9 billion (2011). Pharmaceutical and consumer healthcare are the biggest segment contributing approximately 49% of total revenues (2009-2010). One of the largest OTC healthcare manufacturer and distributors in United States, with strong penetration across Europe and Asia-Pacific. The company provides health care, corpscience and materialscience with product portfolio of approximately 5,000 (October 2011). North America is the second biggest marketspace for Bayer AG constituting 25% (2006: 27%) of group revenues in 2010. Bayer is stipulated to improve annual revenues by 5-7% in 2011. It was incepted in 1863.
US OTC healthcare market is stipulated to reach US$32 billion (2014)
United States OTC healthcare market reached US$28.5 billion, with year-on-year growth of 3.5% in 2009-2010. The market is stipulated to reach US$31.8 billion, with CAGR of 3.8% in next 3-4 years (2010-2014). Globally, United States is the third biggest OTC healthcare marketspace accounting for 25% of total value sales in 2010. Cough and cold preparations is the biggest segment constituting 21.8% of regional value sales (2009-2010). Analgesic is second leading with value sales of 14.5%. The marketspace is highly fragmented with three largest manufacturers controlling 27% of share. Johnson & Johnson is the biggest manufacturer with market share of 18.1%. Bayer AG faces steep competitive pressures from Wyeth and P&G on long-term basis.
New product development across niche pharmaceutical segments in US
In September 2011, the company launched its flagship stroke and systemic embolism based brand ?Rivaroxaban (Xarelto)? in United States. On the other hand the company is aggressively restructuring its diagnostics business activity to improve operational efficiency and profitability on long-term basis. Further, the company's third trial for Alpharadin brand offering medication for patients with prostate cancer will be launched in United States in early 2012. Bayer is expanding its regional penetration via new product development into niche pharmaceutical markets in United States.
Can Bayer AG surpass J&J and P&G across US OTC healthcare marketspace in next 2-3 years0?
In September 2011, the company won U.S antitrust lawsuit against Sandoz related to its flagship contraceptive pill brands Yaz and Yasmin in United States. On the other hand, Bayer AG was fined approximately US$750 million on account for contamination of rice crop. Bayer is focusing on horizontally and vertically diversifying pharmaceutical product portfolio to improve competitive advantage in United States. It is vital to understand Bayer's organic growth strategy to offer long-term sustainability in second biggest marketspace?"