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Swot the Pest Analysis of the Company Bayer AG Dr Scholars Bulletin Abbreviated Key Title: Sch Bull ISSN 2412-9771 (Print) |ISSN 2412-897X (Online) Scholars Middle East Publishers, Dubai, United Arab Emirates Journal homepage: http://scholarsbulletin.com/ Subject Category: Logistics Swot the Pest Analysis of the Company Bayer AG Dr. Sc. Bojan Rosi* Professor, Faculty of Logistics Celje, Marko Šarić univ.spec.oec, Slovenija DOI:10.21276/sb.2019.5.7.2 | Received: 15.06.2019 | Accepted: 25.06.2019 | Published: 30.07.2019 *Corresponding author: Dr. Sc. Bojan Rosi Abstract Abstract: The paper will outline the basic SWOT and PEST analysis features of the Bayer-AG company from Leverkusen. In this paper, we will present the strengths and opportunities, as well as the weaknesses and threats of the mentioned company. The Bayer AG demonstrates its strength through its strong business relationship and focus on research and development for product improvement. All human resources and financial flow management are well utilized. The paper also deals with the political and technological environment in which the company is located and how it affects the business strategy. Keywords: Bayer AG, SWOT, PEST analysis. Copyright @ 2019: This is an open-access article distributed under the terms of the Creative Commons Attribution license which permits unrestricted use, distribution, and reproduction in any medium for non-commercial use (NonCommercial, or CC-BY-NC) provided the original author and source are credited. INTRODUCTION SWOT analysis shows the image and abilities The aim of this paper is to present the SWOT of the company in the conditions of its environment. and PEST analysis of the leading German The application of SWOT analysis is not limited to the pharmaceutical and chemical company Bayer AG based valuation of an enterprise, but is used as a method for in Leverkusen. The idea behind the company's self-assessment of managers, teams, projects, functions leadership is "science for a better life". The first product or individual products [3]. In SWOT analysis we of Bayer AG is acetylsalicylic acid, which today is the recognize internal and external elements. Internal main ingredient of the famous Aspirin product. Bayer is elements consider strengths and weaknesses, while a globally recognized innovation company whose main under external elements we mean opportunities and production areas are human and veterinary threats. The first step of the SWOT analysis is to pharmaceuticals, and agricultural and biotechnological identify the main strengths and weaknesses of products. The structure of the company consists of three companies ranked by relevance and identify the major departments: Pharmaceuticals, Consumer Health, Crop opportunities and threats to the likelihood of their Science and a separate Animal Health department [1] appearance. BY the strength of an enterprise it is According to Interbrand's survey conducted in 2015, the understood what the company owns, and leads to the value of the Bayer brand amounts to more than 6.3 increase in its competitiveness such as: high efficiency, billion euros [2]. In this work we will use the SWOT quality products, high competence of people and such. analysis to look at Bayer's strengths as well as the Disadvantages are everything that diminishes the weaknesses and threats it faces. In the PEST analysis, competitiveness of the company such as poor we will also show the political, economic, social and organizational culture and organizational processes, technological environment that affects the successes non-existent or bad contacts with customers and and failures of the company. suppliers and such. Opportunities and threats are conditioned by external factors such as political, Model and explanation of SWOT and PEST analysis economic, social and technological factors. Occasions The SWOT analysis appeared in the early 70s are all situations that positively stimulate the demand of the 20th century, and Ken Andrews is considered as for products or services offered by the company, while its creator. For its applicability in all companies, it threats are all adverse situations that can jeopardize the quickly became a popular instrument that is considered achievement, goals and health of the company. The as an inevitable situational analysis method. The result of an effective SWOT analysis is the definition of SWOT analysis can be read from the very identification of strategies with which we will use name that makes the acronyms of the English terms forces to reduce weaknesses and increase opportunities strengths, weaknesses, opportunities and threats. to minimize threats [3]. © 2019 |Published by Scholars Middle East Publishers, Dubai, United Arab Emirates 323 Bojan Rosi., Sch Bull, July 2019; 5(7): 323-327 In addition to the current situation, the SWOT the business environment. The aim of the analysis is to analysis can give an overview of the future situation if identify and point out factors that have a significant it is regularly updated. Although highly applicable and impact on the current and future state of the company. easy to use, SWOT analysis achieves its limitations in In addition, it is important to recognize the dynamics of some situations. The Strategist may consider some interaction between these factors in order to identify elements irrelevant which ultimately can lead to serious opportunities and threats for the enterprise. PEST strategic overtones. Likewise, SWOT analysis is often analysis is applicable to all levels of enterprise strategy. subjective since it is based on the assessment of one When analyzing, it is important to use different sources person or one team. An effective strategist will use it as of information such as: expert opinions, professional a reference for further planning and analysis, rather than journal and book data, consulting materials and online as a final strategic planning tool. sources. In Table 1 & 2, examples are given for each of the factors of analysis. The PEST analysis can be PEST analysis is close to SWOT analysis. expanded by a more detailed analysis that involves the PEST analysis is a relatively young environmental elements of the PEST analysis, including local, national analysis method. Using the PEST analysis, it is possible and global dimensions, called LONGPEST analysis. It to supplement the estimate of the external factors is useful for global and multinational companies dealing described in the SWOT analysis. It implies a process of with various activities in multiple markets [5]. analyzing information obtained by studying political and legal (P), economic (E), sociocultural, ecological SWOT analysis of Bayer AG and media (S) and technological-scientific (T) factors of Table-1: The strengths, weaknesses, threats and capabilities of Bayer AG Strengths Weaknesses Global reach and strong business connection Enforcement in court proceedings and Strong focus on research and development for product patent disputes improvement Dedicated and coordinated human resources Consistent financial performancewith strong cash flows Opportunities Threats Growing interest for healthespecially by elderly people Unfair patent laws Potential Business Alliance with Governments Sharp regulation of environmental issues Strengths Dedicated and coordinated human resources Global reach and strong business connection Strong human resources of 115,200 people Bayer AG is present in 301 companies worldwide are responsible for a healthy work operating in 78 countries that make a strong and environment and a continual employee training integrated distribution system. The company has more program. All of this affects the performance than 150 years of existence within which it has gained a enhancement. 65% of the company's workforce is leading role in health care and agriculture. The structure specialized in different areas of science and technology, consists of three main branches: Pharmaceuticals, which has a strong focus on innovation and technology Consumer Health and Crop Science. In addition, it advancement. focuses on further departments such as Animal Health, which develops products and solutions for the Consistent financial performance with strong cash prevention and treatment of domestic animal diseases. flows The fact that earnings per share amount to 5.44 Strong focus on research and development for euros, which is more than the official dividend product improvement amounting to 2.7 euro, with their operative amounting Bayer's R & D department has already brought to 9.98 million euros can be considered as a healthy exceptional products such as Aspirin, Rennie, Poncho sign [6]. and many more and continues in that direction. If we look at the costs of the 2016 annual report, Bayer is Weaknesses investing in worldwide research, for example North Enforcement in court proceedings and patent America 1081 million, Middle Europe and East Africa disputes 3285 million, and Latin America with 71 million euros. As an example of the company's weakness can In 2016, EUR 4.7 billion was spent on research and be taken usage of a Bayer drug Lipobaya. One of the development, which is 9.2% more than in 2015. more familiar court proceedings started in 2002 when the connection between taking Lipobaya and more than a hundred deaths was discovered. Then Bayer stopped selling that drug, and lawsuits came from all over the world. In some patients, the preparation has caused © 2019 |Published by Scholars Middle East Publishers, Dubai, United Arab Emirates 324 Bojan Rosi., Sch Bull, July 2019; 5(7): 323-327 muscle fatigue,
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