Bayer case2 Essay

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Category: Aspirin

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Supply chain factors must also be taken into account in the decision-making if substantial capacity changes are involved like reintroducing Bayer Aspirin. Key questions include: What impact will the changes have on suppliers, warehousing, transportation, and distributors? If capacity will be increased, will these elements of the supply chain be able to handle the increase? Conversely, if capacity is to be decreased, what impact will the loss in business have on these elements of the supply chain?

Finally, customer and public opinion is very crucial to consider during decision-making. Will they still accept the new reintroduced product as before? What would be the common sentiments of the people regarding the possible decision? In evaluating alternatives during decision-making, a manager must consider both quantitative and qualitative aspects. Quantitative analysis usually reflects economic factors, and qualitative considerations include intangibles such as public opinion and personal preferences of managers.

Thus, in deciding for the Bayer Aspirin case, is not solely dependent on economic factors because these are not the only things that would be affected when changes are being implemented. As an organization, Bayer should draw out what are the quantitative and qualitative considerations at hand, in order to come up with efficient and effective decisions for their company. 4. ) In what ways is Aspirin Brand valuable for Bayer?

When aspirin first appeared in the spring of 1899 in a handful of articles in a few German medical journals, the author introduced it without fanfare as a serviceable substitute for the salicylic acid and sodium salicylate that had been in use for more than twenty years to treat rheumatic disorders. Aspirin reduced fever and inflammation quickly, but more importantly it did not appear to have an ill effect on the stomach. Side effects were minimal, so patients tolerated it quite well and they did not rebel against the treatment.

The doctors who tested it and the company that manufactured it therefore recommended the drug as a promising anti-rheumatic medication and no doubt expected respectable profits from its use in this modest market. No one, however, apparently anticipated that in less than two decades this new compound would become the manufacturers best-selling medicine and the worlds most widely used drug (a distinction it still holds), not so much because of its role in treating rheumatism but because of its effectiveness in managing minor pain, especially headaches.

And by the time Aspirins overall popularity was apparent, it was also apparent that it had achieved this exalted status not simply because of its considerable medical merits but also because of the deliberate business policies and practices of its manufacturer, the Farbenfabriken vormals Friedrich Bayer und Companie of Elberfeld, Germany, or simply known as Bayer. Headquartered in Leverkusen, Germany, Bayer is involved in 20 different business units that research, develop and manufacture products in the life sciences, polymers and specialty chemicals areas.

Considered as the jewel at the very center of the Bayer crown, Aspirin is more than just a brand name that Bayer acquired. It is without question the most successful over-the-counter drug in history. In fact, 1999 marked the 100th anniversary of Aspirin, it is still the number two analgesic drug in the world with net sales in 1998 of DM1. 1 billion (US$654. 8 million). Only Tylenol exceeds ASPIRIN in sales, but 95% of Tylenols sales are in the US; in the rest of the world, Bayer is still number one (Buchanan and Merker, 2002).

As a brand, its popularity is undeniable around the world. Exhibit 3 shows that the market of Aspirin covers 90 countries. At present, Bayer Aspirin is a family of well-known brands and products, which includes Childrens ASPIRIN®, ASPIRINProtect®, ASPIRIN Direct®, ASPIRIN+C®, and many others. All are geared for specific uses such as cough and cold, headache and pain, stroke and heart attack prevention. Many have unique delivery systems such as granules, effervescent tablets, and chewable forms. Of the US$654.

8 million in total worldwide net sales of all Aspirin products in 1998, US$37. 5 million (5. 8%) came from the sale of Childrens ASPIRIN®. In reality, Aspirin as brand propelled Bayers success all throughout its history. By promoting Aspirin (not acetylsalicylic acid), Bayer had foreseen that the brand name would be so firmly entrenched in the medical community that when the patent expired, rival manufacturers of ASA would be unable to compete in the American market. True enough that by 1909, Aspirin accounted for 31% of Bayers US sales.

Although Bayer continues to hold a trademark on the brand name in many countries of the world, it had once lost that right in several key countries like the United States. Bayer trademark was lost initially in the US at the end of World War I to Sterling Drug, Inc. as the result of the US governments retaliatory practice of confiscating and then auctioning off the property of German companies with holdings in the United States. It wasnt until 1994, 76 years after the expropriation of the trademark Bayer Aspirin, that Bayer Group finally reacquired the brand.

According to the Bayer Website, Bayer continues to look for new possibilities for Aspirin, being considered as the miracle or wonder drug. In 1988, Australian epidemiologist Professor G. Kune discovered that people who took Aspirin had a 40% lower incidence of colon cancer than those who did not. Later, a number of studies, including a large-scale study conducted by the American Cancer Society, confirmed that Aspirin is indeed effective in preventing colon cancer.

According to one estimate, Aspirin inhibits cell mutation, a theory that paves the way for future research and the promise of new developments. Research is also being conducted into Aspirins effects on Alzheimers Disease and diabetes. Thus, Aspirins value for Bayer do not just depend on the brand name itself, but all its hidden potentials that could benefit all sick people because of its low price and time-tested usefulness. 5. ) How is the pharmaceutical market and the market for Aspirin evolving?

Is it to the advantage or disadvantage of pharmaceutical companies? Originally prescribed for rheumatic disorders, aspirin has come a long way of just adrug marketed to reduce fever and inflammation quickly. As a drug, aspirin not only has the properties of an analgesic or painkiller, it is also an antipyretic (anti-fever), an anti-inflammatory and an anti-platelet (see Table 1). The first three qualities make it a headache, cold, and flu medication, but it is the fourth quality that makes Aspirin a preventive medication.

Interestingly, the anti-platelet effects of aspirin occur at a surprisingly low dosage: 30-50 mg. or so, and Childrens ASPIRIN is one of the lowest dose aspirin products on the market. It also happens to be the cheapest among the ASPIRIN family of products. The significance of these two characteristics gave Childrens ASPIRIN a new market, as doctors around the world started recommending and prescribing Childrens ASPIRIN to their middle-aged patients as a means of prevention.

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