Introduction 1 ) Given the respective scenarios and the projections described in the exhibits for each option , evaluate and choose the alternative that best optimizes Bayer ‘s prevention and children ‘s business . Explain . Upon reading the two options that have come up , the best alternative would be choosing the second option : Reintroduce Children ‘s ASPIRIN worldwide as a prevention product and rename it under the brand ASPIRIN 100 (R . Figure 2 (See below ) summarized that this option appears to have more benefits than the first option given .
Although venturing into this option would require repackaging , relabeling , and reindicating the brand and it might accelerate the cannibalization of Pharma ‘s sales , reintroducing the product could attract new users from competitive brands . As Joachim Zander analyzed the two scenarios under when they reintroduce their product : “Under the first scenario , we essentially create attention for ourselves and the market reacts . As a result , Pharma ‘s high-end product , CardioASPIRIN (R , loses 10 of its sales due to our cheaper alternative . However , we also appropriate incremental sales of 10 from the competition .
Beyond that , by keeping the product on the market , though in a new form , we are able to keep 20 of the children ‘s ASPIRIN customers . Under the second scenario , I envision that the market does the opposite and reacts very little to our product change . Thus , Pharma doesn ‘t lose any volume , and Consumer Care is unable to gain any incremental volume from the competition . Either way , we still keep 20 of the children ‘s ASPIRIN customers ‘ Comparing Exhibit 6 with Exhibits 7A and 7B , the forecast losses in Option 1 will be substantially greater given the Middle and Worst Case Scenarios than what is featured in losses in Option 2 .
Although in the Best Case Scenario in Option 1 could appear to be advantageous , assuming that scenario to happen would be faulty . Also , as emphasized in Exhibit 5 , although the sales of children ‘s aspirin is declining , its margin against the Prevention CardioASPIRIN (R ) is still significantly higher . Keeping their seasoned and most valued customers who give them more profits will be the optimal approach . Thus , the win-win solution would be Option 2 because either way 20 percent of the children ‘s aspirin customers will be maintained .
This business decision will be less damaging to the company , either best or worse case happens . 2 ) Do you agree with quantitative assumptions used to develop the forecasts ? Why or Why not ? Yes , I agree . In order to come up with the best decision , managers must make a number of educated assumptions about future trends and events and modify those assumptions once new information becomes available . Quantitative forecasts are typically based on historical data or tests and which involve complex statistical computations , which the Bayer Aspirin Case presented to represent the financial outcomes of the two options .
Although quantitative forecasting is not foolproof , it is a valuable tool that enable managers to fill in the unknown variables that inevitably crop up in the planning process . History Bayer AG was founded in Barmen (today a part of Wuppertal), Germany in 1863 by Friedrich Bayer and his partner, Johann Friedrich Weskott. Bayer’s first major product was acetylsalicylic acid (originally discovered by French chemist Charles Frederic Gerhardt in 1853), a modification of salicylic acid or salicin, a folk remedy found in the bark of the willow plant.
By 1899, Bayer’s trademark Aspirin was registered worldwide for Bayer’s brand of acetylsalicylic acid, but because of the confiscation of Bayer’s US assets and trademarks during World War I by the United States – and the subsequent widespread usage of the word to describe all brands of the compound, “Aspirin” lost its trademark status in the United States, France, and the United Kingdom. It is now widely used in the US, UK, and France for all brands of the drug. However in over 80 other countries, such as Canada, Mexico, Germany, and Switzerland, it is still a registered trademark of Bayer.
In 1904, the Bayer company introduced the Bayer cross as its corporate logo. Because Bayer’s aspirin was sold through pharmacists and doctors only, and the company could not put its own packaging on the drug, the Bayer cross was imprinted on the actual tablets, so that customers would associate Bayer with its aspirin. [citation needed] As part of the reparations after World War I, Bayer had its assets, including the rights to its name and trademarks confiscated in the United States, Canada, and several other countries.
In the United States and Canada, Bayer’s assets and trademarks were acquired by Sterling Drug, a predecessor of Sterling Winthrop. The Bayer company then became part of IG Farben, a conglomerate of German chemical industries that formed a part of the financial core of the German Nazi regime. IG Farben owned 42. 5% of the company that manufactured Zyklon B,[2] a chemical used in the gas chambers of Auschwitz and other extermination camps. During World War II, the company also extensively used slave labor in factories attached to large slave labor camps, notably the sub-camps of the Mauthausen-Gusen concentration camp.
[3] When the Allies split IG Farben into several pieces after World War II for involvement in organized Nazi war crimes, Bayer reappeared as an individual business. The Bayer executive Fritz ter Meer, sentenced to seven years in prison by the Nuremberg War Crimes Tribunal, was made head of the supervisory board of Bayer in 1956, after his release. [4] In 1978, Bayer purchased Miles Laboratories and its subsidiaries Miles Canada and Cutter Laboratories (along with a product line including Alka-Seltzer, Flintstones Vitamins and One-A-Day Vitamins, and Cutter insect repellent).
In 1994, Bayer AG purchased Sterling Winthrop’s over the counter drug business from SmithKline Beecham and merged it with Miles Laboratories, thereby reacquiring the U. S. and Canadian trademark rights to “Bayer” and the Bayer cross, as well as the ownership of the Aspirin trademark in Canada. On November 2, 2010, Bayer AG signed an agreement to buy Auckland-based animal health company Bomac Group. Due to confidentiality obligations, no financial information was disclosed. [5] Bayer Heroin bottle Bayer has discovered, among others.
Primodos hormone pregnancy testing Operations Werner Wenning (Chairman of the Board of Management until October 2010) In order to separate operational and strategic managements, Bayer AG was reorganized into a holding company in December 2003. The group’s core businesses were transformed into limited companies, each controlled by Bayer AG. These companies are: Bayer CropScience AG; Bayer HealthCare AG; Bayer MaterialScience AG and Bayer Chemicals AG, and the three service limited companies Bayer Technology Services GmbH, Bayer Business Services GmbH and Bayer Industry Services GmbH & Co. OHG.
Following the reorganization, its chemicals activities (with the exception of H. C. Starck and Wolff Walsrode) were combined with certain components of the polymers segment to form the new company Lanxess on July 1, 2004. Lanxess was listed on the Frankfurt Stock Exchange in early 2005. Bayer HealthCare’s Diagnostics Division was acquired by Siemens Medical Solutions in January 2007. Bayer AG shares are listed on the Frankfurt Stock Exchange, the London Stock Exchange and previously on the New York Stock Exchange. Bayer is governed by a board of management, consisting of: Klaus Kuhn, Wolfgang Plischke, Richard Pott, and Marijn Dekkers.
[6] In 2004 Bayer HealthCare AG acquired the over-the-counter (OTC) Pharmaceutical Division of Roche Pharmaceuticals. On March 13, 2006, Merck KGaA announced a €14. 6bn bid for Schering AG. Merck’s takeover bid was surpassed by Bayer’s $19. 5bn bid on March 23, 2006. On March 11, 2008, Bayer HealthCare announced an agreement to acquire the portfolio and OTC division of privately owned Sagmel, Inc. , a US-based company that markets over-the-counter medications in most of the Commonwealth of Independent States countries such as Russia, Ukraine, Kazakhstan, Belarus, and others. [7][8] [edit] Locations.
Germany – headquarters of the holding company as well as the subsidiary companies Bayer CropScience, Bayer MaterialScience and Bayer HealthCare Belgium – including production facilities for Makrolon and polyurethanes (in Antwerp) Canada – Toronto headquarters and offices in Ottawa and Calgary France – including European headquarters of Bayer CropScience (in Lyon) Italy – including 5 production facilities Philippines – including production of Canesten, Autan and Baygon. United States – Bayer USA operates a suburban Pittsburgh headquarters. United Kingdom – Newbury Berkshire.