Porter’s Five Forces Analysis of Bristol Myers Squibb
|Name||Bristol Myers Squibb|
|Industry||Drugs & Biotechnology|
|Headquarters||New York, United States|
|Revenues||US$46.39 billion, 2021
US$ 46.15 billion,2022
|Competitors||Novartis AG Swiss , Astrazeneca PLC, Pfizer|
Bristol-Myers Squibb Co is one of top leading pharmaceutical company with a specialized cancer treatment medicines including Revlimid and Opdivo. It is founded by William McLaren Bristol and John Ripley Myers in 1887. The Bristo Myers Squibb experienced a 7% YoY% growth with Net Assets 96.82 billion as of FY 2022. It is ranked 82nd by Fortune 500 as of FY 2022. It ranks 113th on the Forbes Global2000 list.
Porter’s Five Forces Analysis
Porter’s Five Forces Analysis is used to determine the company’s competitive position reference to it’s Industry for better strategizing the companies’ operations for higher profits and less competition, defined by Professor Micheal E. Porter in 1979,at Harvard Business School.
Bristol Myers Squibb Rivalry among Existing Competitor
- Bristol Myers Squibb:Bristol-Myers Squibb is a New York-based international pharmaceutical corporation that produces medications and biologics for a wide range of therapeutic purposes. Its revenues have increased, notably in its specialized brand segments.
BMS announced the acquisition of Celgene,another giant of its niche, in April 2019 and finalized the transaction in November 2019, making it one of the largest pharma megadeals in recent years.
If we review its annual revenue, its major part comes from USA amounting to US$29.12 billion and then Europe US$10.69 billion and rest of world US$5.63 billion.BMS revenue has been US$46.39 billion, US$42.52 billion, US$26.15 billion and US$22.561billion for 2021,2020,2019 and 2018 respectively and its net income / (loss) is US$7.014 billion, US$(8.99) billion,US$3.460 billionand US$4.947 billionfor 2021,2020,2019 and 2018 respectively.
- Novartis AG Swiss: Novartis AG is also operates in pharmaceutical industry with the production and selling of healthcare products.
Novartis is split into two divisions: Pharmaceuticals (formerly termed Innovative Medicines) and Sandoz. The Pharmaceuticals division accounts for the majority of overall revenue, accounting for more than US$41 billion in 2022. From a geographical standpoint, Novartis produces the vast majority of its income in the United States and Europe.
Cosentyx, an immunomodulation agent, and Entresto, a cardiovascular medication, are two of Novartis’ top pharmaceuticals. Novartis’ medications are anticipated to reach about 690 million patients globally.
In 2022, Novartis will spend about US$10 billion on research and development, accounting for approximately 20% of total revenue. Since patent expirations can result in large income losses, R&D is a critical concern for the top pharmaceutical corporations. Piqray, a PI3K alpha inhitor focused at cancer treatment, is expected to have the highest potential among Novartis’ current R&D efforts.Novartis AG revenue is US$51.63 billion, US$48.66 billion, CHF47.44 billion and US$51.90 billion for 2021,2020, 2019 and 2018 respectively and Novartis AG net income isUS$24.02 billion, US$8.07 billion, US$11.74 billion and US$12.61 billion for2021,2020, 2019 and 2018respectively.
Main reason of revenue jump in 2021 is Income from associated firms climbed by US$14.7 billion in the current year to US$15.3 billion from US$673 million the previous year. This rise was mostly attributable to the $14.6 billion gain reported on the sale of our shareholding in Roche. As a result of our decision to sell our stake in Roche, the Group stopped recognizing its portion of Roche’s profits on November 3, 2021.
- Astrazeneca PLC:AstraZeneca Plc is a pharmaceutical holding company that conducts research, development, and manufacturing. Its pipeline is utilized for cancer, cardiovascular, renal, metabolic, and respiratory therapies.Astrazeneca revenue has beenUS$37.42 billion, US$26.62 billion, US$24.38 billion and US$22.09 billion for 2022,2021,2020,2019 and 2018 respectively. Astrazeneca net income has been US$5.96 billion, US$4.80 billion, US$ 2.97 billion and US$2.62 billion respectively.
- Pfizer: It is worldwide hold leadership position in the biopharmaceutical industry. Pfizer is in the spotlight because of their COVID-19 vaccine, which was developed in collaboration with the German biotech business Biotech. This was the first COVID-19 vaccination to get widespread approval from national health authorities. Pfizer was the world’s largest pharmaceutical corporation in terms of pharma sales revenue in 2021, thanks to its enormous sales during the pandemic.
Pfizer annual revenue has grown up as follows; US$81.28 billion, US$41.65 billion, US$41.172 billion and US$53.647 billion for 2021,2020, 2019 and 2018. Pfizer net income is US$22.46 billion, US$6.67 billion, US$10.86 billion and US$11.18 billion respectively.
Bristol Myers Squibb Threat of New Entrants
- High research and development spending:High research and development (R&D) costs can be a major barrier to entry for new businesses as long-term R&D projects can take months or even years to come to fruition, making them a risky investment for new businesses with limited resources. Bristol-Myers Squibb incurred US$5.92 billion US$4.94 billion US$6.46 billion US$6.33 billion US$6.15 billion US$11.14 billion US$11.35 billion from 2015 to 2021 respectively.
Only in FY 2022 the company invested US$ 9.5 billion in research and development.
- Acquisition of competitors:Bristol-Myers Squibb announced its acquisition of Celgene in April 2019 and completed the deal in November 2019, making it one of the greatest pharmaceutical megadeals in recent years. Its assets increased from US$34.99 billion in 2018 to US$129.94 billion in 2019 due to that acquisition.
This is also an aspect to decrease the threat from new entrants by absorbing them.
Bristol Myers Squibb Bargaining Power of Suppliers
- Major players in the market: Being market leader supplier follows Bristol-Myers Squibb,It encourages its main suppliers to connect their environmental management systems with the ISO 14001 criteria. Furthermore, in 2015, it completed 67 EHS (Environment, Health and Safety) evaluations, these standards reduce bargaining power of suppliers.
- Diversified Supplies & Trained Human Capital (Technologically): The supplied in the pharmaceutical industries regarding the chemical, plastic and other raw material including active pharmaceutical ingredients (APIs) and other critical non-commodity materialis diversified so it is easy accessible globally also being continuously monitored and evaluated by EHS questionnaires. The other important supply is the availability of technologically trained human resource capital hiring and retaining.
- Efficient Supply Chain and Strict Supplier Monitoring: The Bristol Myers Squibb developed and evaluating suppliers through different programs and acts like Standards of Business Conduct and Ethics for Third Parties (3P Standards), EHS, Pharmaceutical Supply Chain Initiative (PSCI)and also following andCalifornia Transparency in Supply Chains Act Disclosure of 2010for a better and vetted supply chain cycle.
Bristol Myers Squibb is also part of GSN (Green Suppliers Network).
Bristol Myers Squibb Bargaining Power of Buyers
- Highest seller in niche market: Bristol-Myers Squibb’s main products in 2021 included Revlimid, whose sales increased from US$1.30 billion in 2019 to US$12.82 billion in 2021, and Opdivo, which produced US$10.80 billion. These are used to treat cancer in such situation buyers have no bargain power at all.
- High Brand Equity and Awareness Brand Equity and awareness is one of the most important factor for customers specially in pharmaceutical industry patients including doctors and prescribers refer the large brand’s medication due to trust and confidence factor.
Bristol Myers Squibb is standing at brand value of US$ 4.6 Billion with a global numbering on 8th after following 7 more other big multinational pharmaceuticals including Johnson and Johnson on number 1 with a brand value of US$ 13.3 billion.
Bristol Myers Squibb Threat of Substitute Products or Services
- Acquisition Strategy- Oncology Market Leadership: The worldwide oncology market has expanded dramatically in recent years, with new medicines being introduced on a yearly basis. Bristol-Myers Squibb came in 3rd place among the top pharmaceutical corporations in terms of worldwide oncology market share.
Roche and Colene are two more major pharmaceutical businesses some data on these two can be added Keytruda, Revlimid, and Opdivo are the top three anticancer medications in the world, according to market share they are sold by Merck and Celgene has been acquired by BMS.
- Collaboration Strategy – Leadership position during Pandemic:AstraZeneca, a British-Swedish biopharmaceutical corporation, rose to prominence in 2020 as a result of its extremely promising COVID-19 vaccine.
The vaccine, codenamed AZD1222, was by far the most pre-ordered COVID-19 vaccination in the world. The vaccine was created at the Jenner Institute at the University of Oxford.
In April 2020, the two companies Catalent and Bristol-Myers Squibb announced a collaboration in which AstraZeneca will be in charge of trials, manufacture, marketing, and logistics. The vaccination would be offered at cost, according to the business.As comparing other vaccinations in the market, this vaccine does not have the cold logistics and storage requirements. As a result, AZD1222 has proven particularly appealing for countries lacking an existing ultra-cold supply chain, as well as emerging countries.
- Bristol Myers Squibb, Fortune 500
- Bristol Myers Squibb, About
- Bristol Myers Squibb Instruments, profile, Forbes
- Bristol Myers Squibb Instruments, profile, ForbesGlobal2000
- Revenue of Bristol-Myers Squibb from 2010 to 2021, by world region(in million U.S. dollars) at Statista
- Bristol-Myers Squibb income statement from 2018 to 2022 available at Wall street journal, WSJ
- Pfizer income statement from 2018 to 2022 available at Wall street journal, WSJ
- Bristol-Myers Squibb’s revenue from 2006 to 2021(in million U.S. dollars) at Statista
- Novartis on Forbes
- Novartis – Statistics & Facts at Statista
- Novartisannual report 2021, officialweb
- Novartisannual report 2018, officialweb
- Astrazeneca on Forbes
- Astrazeneca annual report 2021, officialweb
- Astrazeneca annual report 2018, officialweb
- AstraZeneca’s revenue from 2006 to 2021(in million U.S. dollars) at Statista
- AstraZeneca – Statistics & Facts at Statista
- Bristol-Myers Squibb’s research and development spending from 2015 to 2021(in million U.S. dollars) at Statista
- Bristol-Myers Squibb’s total assets from 2015 to 2021(in million U.S. dollars) at Statista
- Pfizer on forbes
- Pfizer – Statistics & Facts at Statista
- Pfizer’s total revenue from 2006 to 2021(in million U.S. dollars) at Statista
- Our Suppliers, Bristol Myers Squibb
- Bristol-Myers Squibb’s top products based on revenue from 2016 to 2021(in million U.S. dollars) at Statista
- Reuters (January 3,2019) Bristol-Myers to buy Celgene for $74 billion in largest biopharma deal. Available at Reuters
- Pharmaceutical Technology (June 30,2020) Catalent’s Covid 19 Vaccine Manufacturing Facility, Anagni. Available at Pharmaceutical Technology
- Statista (March 17,2023),Brand value of the world’s most valuable pharmaceutical brands as of 2022 (in million U.S. dollars).Available at Statista