Bayer: A market study on its improved brand equity worldwide
"Third leading OTC healthcare product manufacturer worldwide
Third largest OTC healthcare manufacturer worldwide, with market share of 4.5% in 2010. The company provides health care, corpscience and material science with product portfolio of approximately 5,000 (October 2011). It has presence in 100 countries worldwide. Europe is the flagship marketspace for Bayer AG constituting 45% (2006: 48%) of group revenues in 2010. The company is publicly traded on Frankfurt Stock Exchange, with approximately 0.306 million shareholders in 2011. Germany based shareholders controlled 27% of equity (October 2011). Pharmaceutical and consumer healthcare are the biggest segment contributing approximately 49% of total revenues (2009-2010). Bayer's annual revenue is stipulated to reach Euro 35-36 billion, with year-on-year growth of 5-7% in 2011-2012. It was incepted in 1863.
Worldwide OTC healthcare market is stipulated to reach US$132 billion (2014)
Global OTC healthcare market reached US$114.8 billion, with year-on-year growth of 3.7% in 2009-2010. The market is stipulated to reach US$131.5 billion, with CAGR of 3.5% in next 3-4 years (2010-2014). Globally, Europe is the leading OTC healthcare marketspace accounting for 38% of total value sales in 2010. Cough and cold preparations is the biggest segment constituting 17.6% of global value sales (2009-2010). Traditional medicine is second leading with value sales of 16.5%. The marketspace is highly fragmented with three largest manufacturers controlling 23% of share. Johnson & Johnson is the biggest manufacturer with market share of 12.8%. Bayer AG faces steep competitive pressures from GlaxoSmithkline (market share of 5.7%) on long-term basis.
Strategic partnership and alliance to improve long-term sustainability worldwide
In February 2010, Ehrfeld Mikrotechnik BTS (wholly owned operations of Bayer Technology Services) signed manufacturing and distribution license agreement with Lonza related to microreactors. On the other hand the company has signed strategic partnership agreement with AC Immune for distribution of pharmaceutical product portfolio related to alzhemier diseases. It has signed strategic development and distribution alliances with GVK Biosciences Private Ltd, The Greenery, Bioton SA and Algeta ASA in past 18-24 months. The partnership and alliances have optimized the research & development expenditure on long-term basis.
Can Bayer AG surpass J&J and GlaxoSmithline across global OTC healthcare marketspace?
In 2010, Bayer AG generated net revenues of Euro 46.4 billion, with year-on-year growth of 7% in 2010. The growth was primarily attributed to improve business environment of core business activities i.e. Pharmaceutical (+4.2%) and consumer health (+8.8%). Asia-Pacific is the fastest growing segment for Bayer constituting 17.5% (2006: 13.6%) of group revenues (2010). Although the enterprise is aggressively expanding product portfolio it is vital to understand whether organic growth strategy to offer long-term competitive advantage?"