Economics

Competition

There are many pharmaceutical companies world wide and some competitors which Bayer’s has to compete with include Pfizer, Novartis, Merck & Co., Sanofi, GlaxoSmithKline and Johnson & Johnson. Because Bayer’s specializes in different markets we have to consider that its competitors depend on the similarity of the product and can come from any of the above named companies.

To name a few, according to Media Wiki (2011), “In women's healthcare, the Yasmin/Yasminelle/Yaz line of oral contraceptives mainly competes with Johnson & Johnson's Ortho Tri-Cyclen, in the oncology market, Nexavar, a kidney cancer drug, competes with Sutent (Pfizer), Torisel (Wyeth), and Avastin (Roche and Genentech), in the diabetes market, the Ascensia Contour and Ascensia Breeze glucose monitoring systems compete with similar devices from Roche Pharmaceuticals (RHHBY) (Accu-Check) and Johnson & Johnson (LifeScan) and In the chemical products market, Bayer's main competitor is Dow Chemical Company (DOW), which produces a wide range of polymers and other chemicals”.

In addition to some of the main competitors Bayer’s has a few small regional competitors such as DuPont, BASF SE (BASFY), Down Chemical Company (DOW) and Monsanto Company (MON). Revenues of these smaller companies range from $10.5 to $50.7 billion dollars per year (Media Wiki, 2011).

Market Growth

According to the “PRLog” (2008) website some of the key research findings in regards to pharmaceutical market growth for 2012 include:

▪ Growing at a CAGR of around 8%, the global pharmaceutical market is forecasted to reach US$ 1043.4 Billion in 2012.

▪ North America remains the largest pharmaceutical market constituting 42.8% of the global sales in 2007. Growth in the region is however expected to slow down in near future owing to patent expiration of key drugs and increased prevalence of generics.

▪ In Europe, growth in the top five markets is expected to remain sluggish in next five years....