Free «Novo Nordisk» Essay Paper

Introduction

Novo Nordisk A/S is a transnational publicly traded pharmaceutical company, which is the world leader in diabetes care sector. It operates within homeostasis, hormone replacement and growth hormone therapy segments. Thus, the main aim of this paper is to investigate the key information about Novo Nordisk, pharmaceutical industry, and to provide the business summary.

Pharmaceutical industry is one of the fastest growing and the most profitable sectors of the world’s economy. The amount of companies, which are represented in the sphere, grows every year. Therefore, the demand for employees in pharmaceutical companies is constantly high; moreover, the salaries offered are competitive. Novo Nordisk applies innovative principles of business, which are aimed at stimulating the employees to develop their skills and knowledge. There is a multiple choice of employees’ learning programs in Novo Nordisk. For this reason, my motivation in choosing this topic was based on my belief that working for Novo Nordisk could give me an opportunity to make a brilliant career.

 

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The core goals of me doing this research include getting some information about the company, enough to distinguish the situation of Novo Nordisk in the market, to define key strengths, weaknesses, opportunities and threats for the business.

Business Summary

Novo Nordisk started its activity in 1989, when the company Novo Industri A/S (created in 1925) merged its rival Nordisk Gentofte A/S (founded in 1923). The two companies were working independently as the beginners of diabetes care industry. After the merger, Novo Nordisk started rapidly expanding the production facilities and the product range. Novo Nordisk formed an international health care organization World Diabetes Foundation in 2001 and The Novo Nordisk Haemophilia Foundation in 2005 (Novo Nordisk, 2012).

Novo Nordisk is a transnational company, therefore, there is a number of subsidiaries located worldwide. For instance, international production facilities of Novo Nordisk can be found in six countries: Denmark, USA, France, Japan, Brazil and China. Affiliates of the company are presented in 81 countries. The Novo Nordisk headquarter is in Denmark. The current number of the corporation’s employees is over 29,000 in total (Novo Nordisk, 2012).

Novo Nordisk produces pharmaceutical goods in two main spheres: diabetes care and biopharmaceuticals. Insulin production includes providing modern insulins, human insulins, oral antidiabetic agents, Glucagon-Like Peptide-1 and diabetes devices. Novo Nordisk is the largest insulin producer in the world. Haemostasis, hormone replacement therapy and human growth hormone are the product areas included into biopharmaceuticals produced by the company. Novo Nordisk sells its products in 179 countries of the world (Novo Nordisk, 2012).

The form of Novo Nordisk ownership is a public limited liability company. It is a publicly traded company, one of the largest pharmaceuticals corporations in the world.

The share capital of Novo Nordisk is formed with A share capital (non-listed shares) and B share capital (listed shares). The nominal value of A share capital is DKK 107,487,200; while the nominal value of B share capital reaches DKK 492,512,800 (Novo Nordisk, 2012). B shares of Novo Nordisk are listed on the stock exchanges in Copenhagen and on London Stock Exchange with the price 812.12 DKK per share on June, 24^th (London Stock Exchange, 2012). Additionally, Novo Nordisk listed its ADSs on the New York Stock Exchange with the price $138.07 per share on June, 24^th (NYSE, 2012). The ratio of Novo Nordisk’s ADRs is 1:1 to B shares owned by the company (Novo Nordisk, 2012).

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Novo Nordisk is a successful company, although the company faces a couple of external threats. First of all, there is an intense competition between the three leading companies in the sector: Novo Nordisk, Eli Lilly and Sanofi Aventis (Next Generation Pharmaceuticals, 2012). The need to hold the leading position in the market requires heavy investment and additional effort put into innovation, research and development, production, administration, promotion and marketing. Secondly, inelasticity of demand for pharmaceutical products does not always allow the company to predict consumer behavior.

The diabetes care sector is constantly expanding with the growth of diabetics segment. Therefore, the external opportunities for the company are connected with further increase of the company’s market share and products development. The insulin production is quite dynamic; the kinds of insulin and diabetes devices often change. During the last few decades the diabetes devices changed from syringes to pens, inhalers, injectors and insulin pumps (Cloe, 2010). Therefore, I think that development and invention of new diabetes devices can be one of the biggest opportunities for Novo Nordisk nowadays.

Thereby, Novo Nordisk has impressing figures of the employees involved, the amount of offices and subsidiaries. The company’s activity is highly innovative and profitable. Although the main threat for Novo Nordisk is the competition factor in the sector, the company has been the leader in diabetes care for a long time. It proves that it was using the opportunities for enlarging the market share and developing the products.