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Bayer: A study on its dominant market presence in United Kingdom

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"One of the leading OTC healthcare product manufacturer in UK

One of the largest OTC healthcare manufacturer and distributors in United Kingdom, with strong penetration across Western Europe. The company provides health care, corpscience and materialscience with product portfolio of approximately 5,000 (October 2011). 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 market capitalization of US$60.9 billion (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 €35-36 billion, with year-on-year growth of 5-7% in 2011-2012. It was incepted in 1863.

UK OTC healthcare market is stipulated to reach US$4.8 billion (2014)

United Kingdom OTC healthcare market reached US$4.6 billion, with year-on-year growth of 1.6% in 2009-2010. The market is stipulated to reach US$4.8 billion, with CAGR of 1.5% in next 3-4 years (2010-2014). United Kingdom is the second biggest OTC healthcare marketspace accounting for 12.8% of total value sales in 2010. Cough and cold preparations is the biggest segment constituting 18.4% of regional value sales (2009-2010). Analgesic is second leading with value sales of 17.6%. The marketspace is highly fragmented with three largest manufacturers controlling 30.6% of share. Johnson Reckitt Benckiser Plc is the biggest manufacturer with market share of 12.3%. Bayer AG faces steep competitive pressures from Johnson & Johnson and GlaxoSmithkline Plc on long-term basis.

Strategic partnership and alliance to improve long-term sustainability in UK

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. Finally, Bayer AG signed joint venture agreement with The Greenery improving food chain network base on long-term basis. Aggressive long-term partnership and alliances is enhancing regional penetration across UK and Western Europe.

Can Bayer AG surpass J&J and Reckitt Benckiser in United Kingdom?

In May 2011, the company secured development distribution of Cotavance Paclitaxel Coated Balloon Angioplasty Catheter across Europe along with ATX-101 phase III clinical trial in collaboration with Kythera Biopharmaceuticals. On the other hand, Bayer AG witness strong growth of 7% with net revenues reaching Euro 46.4 billion in 2010. Bayer is focusing on horizontally and vertically diversifying pharmaceutical product portfolio to improve competitive advantage in United Kingdom and Europe. It is vital to understand Bayer's organic growth strategy to offer long-term sustainability in its largest marketspace?"

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