Merck Germany: Pharmaceutical and Life Science Sector Analysis Report

This report provides a comprehensive analysis of Merck Germany's position within the pharmaceutical and life science sectors. It begins with an overview of Merck, a German-based multinational company, and its operations in various global markets. The methodology section outlines the data collection and analysis methods employed, including primary and secondary data sources, and qualitative analysis. The literature review covers market overview, focusing on the pharmaceutical and life science sectors, including cell culture media, and utilizes frameworks such as PESTLE, SWOT, and Porter's Five Forces. The research analysis section examines Merck's market positioning, competitors, the influence of emerging markets, social media comparisons, price comparisons, and its pricing strategy. The report concludes with findings, recommendations for Merck to enhance its revenue and market share, and a list of references. The report emphasizes the importance of the pharmaceutical sector, its revenue trends, market size, and the role of research and development in driving growth. It also explores the life science sector, its revenue, global sales, and market size, including the significance of cell culture media and its market overview.

Merck Germany

Table of Contents
INTRODUCTION...........................................................................................................................1
OVERVIEW TO THE COMPANY................................................................................................1
METHODOLOGY..........................................................................................................................1
Data collection.............................................................................................................................1
Data analysis................................................................................................................................2
LITERATURE REVIEW................................................................................................................2
Market Overview.........................................................................................................................2
Pharmaceutical sector..................................................................................................................2
Life Science Sector......................................................................................................................6
Cell Culture Media (definition)...................................................................................................7
Frameworks.................................................................................................................................9
PESTLE analyses.........................................................................................................................9
SWOT analyses.........................................................................................................................10
Porters five forces......................................................................................................................11
RESEARCH ANALYSIS..............................................................................................................11
Positioning of Merck.................................................................................................................11
Competitors................................................................................................................................12
Influence of emerging markets..................................................................................................13
Social media comparisons correlation.......................................................................................14
Price comparisons......................................................................................................................15
Pricing strategy (Cost leadership)..............................................................................................15
CONCLUSION..............................................................................................................................15
FINDINGS.....................................................................................................................................16
RECOMMENDATIONS...............................................................................................................16
REFERENCES..............................................................................................................................18

INTRODUCTION
Pharmaceutical sector has been the most important sector which is involved in providing
medical and healthcare related drugs and equipment to the customers. The present report makes a
comprehensive discussion regarding the position of Merck in the market (People at Merck,
2018). Merck is a pharmaceutical company involved in providing medicated drugs and
equipment to the customers. The report will discuss revenue and market share aspect at various
stages, such as, life science, pharmaceutical sector and cell culture media. In the end,
recommendation based on the findings will also be provided to Merck whose adoption can help
the organization to enhance its revenue and market share in comparison to available competitors
in the market.
OVERVIEW TO THE COMPANY
Merck group is a well-known German based company which operates at multinational level.
It commonly deals in multinational chemicals, pharmaceutical and life sciences products. The
company is headquartered in Darmstadt with approximately 50,000 employees operating in 70
countries all around the world. Merck was founded in 1668 and is renowned for being wold’s
oldest company which operates in pharmaceutical and chemical products. It is operating in
Africa, Asia, America, Oceania and Europe. The major research and development centres of the
company are situated at Beijing, Tokyo, Boston and Darmstadt.
Merck has been able to pioneer the commercial manufacturing of morphine in order to
expand in global market. In order to have continuous growth in the pharmaceutical and life
science sector, the company is involved in never ending research of drugs that can help in
treating the disease which are non-curable yet. It also helps in ensuring that the organization
come up with constant innovation techniques so as to remain competitive in the market. Merck
plays an important role in evolving the healthcare sector and come up with the medicines and
devices which are not yet offered by any other company in the market worldwide in the year
2013, Merck was involved in investing around €1183 million in its research and development
department so that innovation can be initiated in the company and ultimately attract large number
of customers towards it (Projected growth of the world pharmaceutical market by regional
group between 2018 and 2022, 2017).
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METHODOLOGY
Data collection
It is important that appropriate method of data collection is used by researcher so that
expected targets out of the research can be developed. Basically, there are two types of data
collection methods. These are, primary data and secondary data. Primary data collection method
is related to collecting first hand analysis so as to prepare a review. However, secondary data is
related to analysis of information that has already been collected by other researchers. Critical
analysis to various point of view of the investigator is assessed for in depth analysis. Hence, the
present case of Merck, various regulations issued for pharmaceutical sector will be analysed
(Blackstone and Fuhr, 2012). Moreover, analysis of the industry and market, it belongs to, will
be prepared for its set up. Various online journals and articles will be studied so as to make the
knowledge base concrete regarding pharmaceutical and life science sector and assess revenues
and market share related aspects and views and suggestions given by various researchers to
Merck.
Data analysis
After collecting adequate data, it is important to analyse the same with utmost care as
results from this aspect affect overall conclusion and recommendation aspect of research. There
are basically two types of data analysis methods which are qualitative and quantitative. Since, a
secondary type of information collection method has been adopted, in that case, qualitative type
of data analysis method will be adopted for the present study. It will help in giving adequate
amount of knowledge to the reader regarding same.
LITERATURE REVIEW
Market Overview
It is important to analyse the market before opting for any expansion or adoption of new
strategy. It helps in developing a fair idea regarding the functioning of a particular sector. Since,
majority of the companies these days are working at global level and require 360-degree view of
the same. Hence, global industry analysis is generally performed by the researcher so that
substantial idea regarding the particular sector can be developed.
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Pharmaceutical sector
According to Drahos and Braithwaite, (2017) Pharmaceutical industry plays an important
role in discovering, developing, producing and marketing pharmaceutical drugs which are
generally used as medication to treat a certain health issue or disease. These types of companies
are generally involved in dealing with generic or branded medicines and other medical devices.
It is important for these organizations to follow variety of laws, rules and regulations that are
issued by the government of a particular country, such as, patenting, safety, testing, efficacy and
marketing of drugs. Germany has been ruling this sector since years where it has been the best
location for research, production and distribution of pharmaceutical products as an exceptionally
high level. It has direct access to international renowned scientists, who are involved in
researching and discovering new medicines and marketing the same in all around the world. An
increased demand of pharmaceutical products has given rise to expansion of this sector.
Statistics
As per the views of Fischer and et.al., (2012) majority of companies belonging to this
sector are small and medium enterprises. There are around 105 million people who are indulged
in working in this sector. 95% of the pharmaceutical companies owns less than 500 employees.
However, Gustot and et.al., (2015) specific that various large companies involved in this sector,
such as, Merck, have to cut their cost due to immense cost pressure from the market. Rigorous
competition in the market have forced the company to come up with affordable drugs so as to
remain competitive.
Revenue
Revenue is an important aspect to judge that whether the company is able to gather
adequate amount of profits for its sustainability or not. As per the statistics collected in 2014,
total revenue earned by this sector worldwide exceeded one trillion US dollar. Since, a major
dependence of pharmaceutical sector has been found on research and development aspect.
Hence, majority of the organizations are involved in investing 20% of the total revenue in
research and development activities.
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Figure 1Revenues of pharmaceutical sector
(Source: Revenue of the worldwide pharmaceutical market from 2001 to 2016 (in billion U.S.
dollars). 2017)
Global sales
Due to increase in the requirements of individuals for pharmaceutical products, a constant
growth in global sales can be noticed. Hence, a growth rate of 6.3% can be seen in the overall
sales of the industry (Saeedkia, 2013). Its growth is related to rigorous research and development
program adopted by companies to grow and stay competitive in the market. Merck has been able
to generate the highest revenues in year of 2013 with an annual growth rate of 5%.
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Market Size
A tremendous growth is expected to take place in pharmaceutical sector by the year,
2020. It is expected that overall revenue of the sector will grow by 1430 billion. The growth is
expected to be 30% by 2020 which is 15% in year 2016. The overall value of German market is
expected to be $65 billion by 2020.
Figure 2Market share
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(Source: Contract drug production – discover trends and markets with highest revenue
potentials. 2017)
Figure 3 Market share of Germany pharmaceutical company
(Source: German Pharmaceutical Market Set to Hit $65 Billion by 2020. 2015)
Life Science Sector
A continuous evolution has been noticed in life science organization. Life science is related
to the field of biotechnology, biomedical technologies, nutraceuticals, food processing, life
systems technology etc. A variety of efforts are devoted in research, development, technology
transfer and commercialization by the team that is involved in this practice. It is considered to be
the main aspect in functioning of pharmaceutical industry.
Revenue
The life science industry has been able to earn a total revenue of US $ 1.7 trillion in the
year 2015. Researchers have stated that it takes around 10 to 15 years to develop a particular
drug. A tremendous growth has been experienced by this sector since years due to exposure of
advanced research and development technology (Vandoros and Stargardt, 2013). A positive
trend of growth has helped the organization to invest majority in the research and development
so as to come up with advanced methods in life science.
Global sales
There are various companies in the market that are present who opt for life science sector
these days. Availability of fierce competition in this field has helped in expanding the Germany
market to a global level where there are various companies who are involved in serving the
requirements of global market as well. The generic market which is related to life science
industry is expected to have a global revenue of 283 billion US dollar by the year 2018.
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Market size
As per the views of Quirke, (2012) a continuous increase in the market share helps an
organization to grow tremendously in a manner that maximum customers are attracted towards it.
The organization also ensures that the best methods are adopted by it so that it can enhance its
market share. An increased growth is expected out of pharmaceutical sector which helps in
ensuring that an expansion of Germany pharmaceutical market can be expected by the year 2020.
The amount of revenue being earned by the company is expected to expand by 30% which is
only 15% in the year 2016. In case of Merck Germany, it is expected that a growth of 15% in its
market share can be predicted in next few years. As per the views of de Jong, (2013) it indicates
that a vast enhancement in the funding criteria in expected by enhancing the overall confidence
of the investors in this sector. It is also analysed by the researchers, that 80% of the projected
growth is estimated in the form of pharmaceutical sales through the established markets of the
world, such as, China, United States, Europe, North America and Germany. Merck is considered
to be one of the major brands of Germany and a key role will be played by it in the expansion of
the overall revenues of the sector.
Cell Culture Media (definition)
Cell culture is considered to be one of the major technique in life sciences. The term is
generally used for the removal of cells, organs and tissue from plants or animals so that they can
subsequently be placed in an artificial environment for the measurement of its survival and
proliferation. The environmental requirements of the cells are taken into consideration so that
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they can grow in the conducive environment optimally. It can be in the form of temperature
control, providing appropriate medium of growth, maintain correct pH level of them, etc (Parikh,
2016). Another important step for effective cell culture is in the form of selection of optimum
medium that can enhance the growth. It is a liquid or gel designed form of support that assist in
the growth of microorganism, small plants and cells. Cell culture media also comprises of
appropriate source of energy that helps in regulating cell cycle. The typical culture medium is
comprised of various compounds, in the form of vitamins, amino acids, glucose, inorganic salts
and serum as a source of growth factors, harmonies and other factors attached to it.
Cell Culture Media Market Overview
Due to significant decrease in World economic growth, a greater impact has been
suffered by the cell culture media industry. However, the sector has been able to manage
adequate amount of growth in optimistic manner. As per the views of Comanor and Scherer,
(2013) an increasing rate of growth has been estimated by the researchers that is directly attached
to cell culture media market. It is due to various reasons that is attached to increase in the
number of biotechnology business enterprise. A rapid increase in the overall number of
companies related to it is also traced. An excellent growth is expected out of this industry, where,
the organizations related to bio technology and pharmaceutical sector will grow by 9.4% from
the year 2017 till the year 2020. It is due o increasing demand of pharmaceutical products that
may lead the sector to enhance its overall market share.
Market size
The market size of global cell culture market is estimated to be of USD 16.4 billion as in
2014. The market size of cell culture media has been able to maintain an average annual growth
rate of 5.66% in the form of $1280 million dollar in 2013 to $ 1510 million dollar in the year
2016. It is expected by the researchers that there will be a massive growth rate of the sector by
the year 2021. Hence, it optimistically expected that the sector will be grown and reach up to
$1980 million (Gadipelly and et.al., 2014). A growing advancement in the gene expressions and
development of new vaccine for various diseases has increases the demand for investment in cell
culture. It has demanded vertical integration in then market hence, growth in this sector is
expected to be grown by leaps and bounds enhancing the overall market size and revenues of the
companies attached to it as well.
Segmentation
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The companies that are linked to cell culture media market opt for marketing techniques
in order to attract large number of investors towards it. The market is generally segmented based
upon geographical region where it is assessed that whether the company will be able to satisfy
the requirements of a set of individuals or not. hence, based upon the customer base that can be
covered by the seller for the particular product is selected and assessed the reach and
requirements are judged as per increase in overall market share and revenue of the company.
Key Players
There are various companies who have been involved in this sector. Major role is played
by the companies belonging to brazil, China, US and South Korea. Germany have been able to
maintain its place where it has been one of the largest exporter to pharmaceutical products in
various countries. China has also been one of the major producers of pharmaceutical products
where it has diverse market of overall 3000 local manufacturers that are being present in the
country and have been able to implement growth in the sector (Magano and Dunetz, 2012). It has
played an important role in enhancing overall growth of pharmaceutical sector which is
responsible for continuous economic growth and development.
Frameworks
PESTLE analyses
As per the view of Jahan, (2018) Merck is the international pharmaceutical firm that
conducts its operations across the world. Though it has encountered huge success worldwide but
still cited firm is facing huge issues. There are various external factors that impact on the overall
performance of business unit to great extent. Political component is considered as one of the
major element that affect its operations. Growing political focus is creating pressure on health
care firms to make changes in their existing practices. Trade in Germany causes trouble for the
Merck. Government of Germany pays more attention of quality of pharmaceutical products and
make necessary changes in standards so that population can get quality products from the
suppliers. Government stability is the positive element that supports the Merck in conducting its
operations in the Germany significantly. Recently tax rates have been increased in the nation that
has enhanced burden of the cited firm. Wace, (2014) stated that economic condition is the main
factor that affect overall business operations of the business unit significantly. Germany has
stable economy. Interest rate in the country is high that force Merck to enhance its product's
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prices. It is essential for the Merck to increase its prices to manage its costing but due to this
burden transfer to the end users. That sometime impacts on the sales of the pharmaceutical firms.
According to NZUKI, (2017) social cultural aspects plays significant role in the business
unit. Population of Germany believes in traditions. There are diverse cultural people live. This
impacts positive on the business unit because it becomes able to offer them pharmaceutical
products as per their beliefs and cultural aspects. Jahan, (2018) stated that technological factor is
considered as one of the major element that impact on the business unit to great extent. Merck
always implement the latest technologies and discover new ways so that it can produce such
medicines that can prevent people from diseases. Merck concentrates on conducting market
research and look at the therapeutic categories. For example cardiovascular disease, infectious
diseases are taking place with the rapid speed. Thus, Merck concentrate on using advance
technologies that can help the firm in producing high level of pharmaceutical medicines that can
improve health of people and can provide support to medical professionals in order to deliver
quality care services to patients. Before implementing any technique cited firm concentrates on
occurrence of disease and how it works. It analyses the mechanism and try to find out its
effectiveness. Using any drug in any pharmaceutical product is risky task so Merck discover the
things about drugs and then develop medicines.
According to Wace, (2014) environmental and legal factors impacts on the business
performance of the firm, Merck follows environmental and other laws and take care of
environmental elements so that it does not harm to the surrounding.
SWOT analyses
NZUKI, (2017) stated that Merck has strong brand image. That supports the firm in
conducting its business across the world significantly. One of the major strong point of the
business unit is its research and development procedure. Company spends much time on its R&D
activities and before using any drug in the end product it discovers the facts about it. Company
has employed more than 400000 employees. All these workers contribute well in improving
performance of business unit to great extent.
As per the view of Wace, (2014) as Merck has strong global brand image and operating
globally but fake imitation has affected its reputation to great extent. It was in light before some
time due to its fake imitation of products. Market entry strategies of Merck is weak that is why it
is unable to enter into emerging markets. Jahan, (2018) argued that Merck has opportunity to use
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