2. AGENDA
Roche Introduction
BOD & Corporate Governance
Roche Business Model
Janssen Business model
Novartis business model
Financial figures
3. Introduction
About Roche
Founded in 1896 in Basel, Switzerland, as one of the first industrial manufacturers of branded
medicines, Roche has grown into the world’s largest biotechnology company and the global leader in
in-vitro diagnostics. The company pursues scientific excellence to discover and develop medicines and
diagnostics for improving and saving the lives of people around the world. they are a pioneer in
personalized healthcare and want to further transform how healthcare is delivered to have an even
greater impact.
Roche has been named one of the most sustainable companies in the pharmaceuticals industry by the
Dow Jones Sustainability Indices for the thirteenth consecutive year.
The company controls the American biotechnology company Genentech, which is a wholly owned
affiliate, and the Japanese biotechnology company Chugai Pharmaceuticals, as well as the United
States-based companies Ventana and Foundation Medicine. Roche's revenues during fiscal year 2020
were 58.32 billion Swiss francs. Descendants of the founding Hoffmann and Oeri families own slightly
over half of the bearer shares with voting rights (a pool of family shareholders 45%, and Maja Oeri a
further 5% apart), with Swiss pharma firm Novartis owning a further third of its shares.
4. Introduction
Market Cap
As of March 2022 Roche has a market cap of $338.39 Billion. This makes Roche the world's 23th most
valuable company by market cap according to our data. The market capitalization, commonly called
market cap, is the total market value of a publicly traded company's outstanding shares and is
commonly used to me sure how much a company is worth.
7. About Board of Directors
Board of Directors Independence
The Annual General Meeting elects the members of the Board of Directors on a yearly basis with
elections in which each nominee is voted on separately.
The majority of the seats on the Board of Directors (BoD) are held by independent directors. With the
exception of Dr Severin Schwan, none of the Directors is employed by the company in an executive
role.
Roche’s Board of Directors’ independence definition is based on the definition in the ‘Swiss Code of
best practice for Corporate Governance’ of 'economiesuisse'
8. About Board of Directors
In order to be considered as independent, a director must:
•not have been an employee of the company in an executive function within the last 5 years
•not be a family member of an employee of the company, who is or was employed in an executive
function by the company or any of its subsidiaries
•not be a member the company's senior management
•not be (including not be affiliated with a company) an advisor or consultant to the company
•not be affiliated with a significant customer or supplier of the company
•have no personal services contract(s) with the company or a member of the company’s senior
management
•not be affiliated with a not-for-profit entity that receives significant contributions from the company
•not have been a partner or employee of the company’s external auditor during the past three years
•must not have any other conflict of interest that the BoD itself determines to mean they cannot be
considered independent
9. About Board of Directors
Corporate Governance
Roche is committed to serving all its stakeholders. As a basis for the successful implementation of this
commitment our Corporate Governance principles accordingly put the focus of our business activities
on sustainable value creation and innovation and prescribe a management culture conforming to
recognized standards of good corporate governance and a policy of transparent communication.
The Board of Directors assigns responsibility for the operational management of the company – i.e. all
specific short to medium-term measures – to the Corporate Executive Committee. Consequently, the
Corporate Executive Committee is also appointed and monitored by the Board of Directors.
As a body, the Corporate Executive Committee deals solely with operational matters that affect all
divisions and functions – i.e. the company as a whole. The individual members of the Corporate
Executive Committee, however, carry out all managerial tasks in relation to their individual business
area (division or function).
11. Business Model
Transformative Business model Elements
•Personalization
•Closed loop Process
•Asset Sharing
•Usage-based pricing
•Collaborative Ecosystem
•Agile and Adaptive Organization.
12.
13. Business Model
Value Proposition
Roche’s value proposition is that it researches and produces medicines and diagnostic equipment that
is targeted at particular issues – these tools may not be available from other vendors.
Further, Roche is a trusted name in the industry, having been in business for over 100 years.
14. Business Model
Key activities
Roche’s key activity is the research, development, production, and sale of medicines and other
biomedical compounds, and diagnostic equipment.
15. Business Model
Key partners
Key partners are involved in research, licensing, production, and sales. Of the four, research and
development partners (e.g. AbbVie, Array Biopharma) form the most significant aspect of Roche’s
business.
Roche manages over 200 partnerships worldwide and a third of their pharmaceutical sales are from
partnered products.
16. Business Model
Key resources
Roche’s key resources are: its medicines and associated intellectual properties, its human capital in the
form of researchers and industry experts, its property, plant, and equipment in the form of research
laboratories, production sites, and infrastructure, and its goodwill.
17.
18.
19. Business Model
Customer Segments
Roche does not sell directly to retail customers, and has as its two main customer segments healthcare
organizations and laboratories.
Healthcare Organizations – Roche sells both its pharmaceutical and its diagnostic products to
healthcare organizations, such as hospitals, clinics, and pharmacies. These organizations have different
purchasing profiles. For example, hospitals would usually purchase both medicines and complex
diagnostic equipment, while pharmacies would purchase medicine and diagnostic equipment that is
suitable for home use.
Laboratories – Laboratories, particularly hospital and clinical laboratories, are key customers for
Roche’s diagnostic division.
Aside from the above two customer segments, Roche also licenses its products and technology to
other biomedical firms. The income from royalties makes up less than 5% of total revenue.
22. SWOT
STRENGTHS
Most versatile producer of medical products in the
world
Good reputation, profitable and innovative company
Strong R&D commitment and productivity
Stable market share and performance
High product quality
Brightest employees and researchers
Leader in medications for Cancer
WEAKNESSES
Expensive products
Research takes several years (long time)
Long training years for employees and
researchers
Uses rare and dangerous substances
(chemotherapy)
Any manufacturing defect: global consequences.
Any mistake= whole process lost= extra cost
Opportunities
New diseases = new medications
Consistent customer growth
Sustainability
Threats
Increasing competition
Complex chemistry procedures
Any small problem consider worldwide problem
Expensive sector ( high cost)
23. Competitor 1: Janssen (J&J company)
About Janssen
a pharmaceutical company headquartered in Beerse, Belgium, and wholly-owned by Johnson &
Johnson. It was founded in 1953 by Paul Janssen.
In 1961, Janssen Pharmaceuticals was purchased by New Jersey-based American corporation Johnson
& Johnson, and became part of Johnson & Johnson Pharmaceutical Research and Development (J&J
PRD), now renamed to Janssen Research and Development (JRD), which conducts research and
development activities related to a wide range of human medical disorders, including mental
illness, neurological disorders, anaesthesia and analgesia, gastrointestinal disorders, fungal
infection, HIV/AIDS, allergies and cancer. Janssen and Ortho-McNeil Pharmaceutical have been placed
in the Ortho-McNeil-Janssen group within Johnson & Johnson Company.
24. Business Model
Customer value Proposition
Create Value for All of Your Constituents
When Chester(Chester Twigg, the first global chief customer officer at Johnson & Johnson) stepped
into the role, he shares that he knew he wanted to focus on providing more value with their three
constituents: the customer (retail partner), the consumer (the shopper), and the company. He knew
that he had to think through the following: how do you create the best selling team? How do you
ensure that there are consistent systems and processes in place to help them deliver their best every
day?
25. Business Model
Innovation drives demand planning
Capgemini and Johnson & Johnson designed and implemented an innovative demand planning
solution that features:
A central demand planning (CDP) hub composed of demand planning and data science experts to
increase the forecast accuracy of its baseline. The CDP team utilized high quality, closed loop planning
reviews driven by forecast value add and exception-based planning.
A demand planning workflow based on more than 25 algorithms to extend the choice of statistical
models and create a baseline review pack, supporting effective collaboration between the CDP team
and local demand planning teams.
A three-tier demand planning operating model to bring focus and expertise in various dimensions to
the demand planning process.
A transformation office to focus on continuous improvement and identify and deploy transformation
projects, ensuring that Johnson & Johnson would benefit from innovation after the conclusion of the
project.
26. Business Model
Key resources
key sources of revenues are Pharmaceuticals, Medical Devices, and Healthcare. While the company’s
Pharmaceuticals segment accounts for over 45% of the company’s overall revenues, it accounts for
close to 60% of the company’s value, according to our estimates. This can be attributed to higher
expected proportion of revenues and profits from Pharmaceuticals in the coming years. Within
Pharmaceuticals, Immunology and Oncology are the largest divisions, which together account for over
a quarter of the company’s overall revenues.
27. Business Model
Key Process
Improve demand planning accuracy – expanding on its existing statistical forecast models, introducing
exception-based forecasting, enhancing the quality of master data, and increasing market
collaboration across all EMEA markets would enable Johnson & Johnson to deliver a more accurate
view of customer needs. This would also promote more effective utilization of time through exception-
based planning driven by strong process rigor and forecast value add and exception-based planning.
Enhance demand planning and external manufacturing planning management – introducing
standardized operations in line with industry-proven best practices would empower Johnson &
Johnson to enable enhanced processes and reduce loss of knowledge due to turnover.
Johnson & Johnson engaged Capgemini to establish a partnership based on its experience with global
transformation projects and data science expertise. In addition, Capgemini’s “One Team” approach
ensured alignment between the two organizations in terms of core values as well as a thorough
understanding of the needs and challenges associated with the delivery.
.
28. Business Model
Cost structure
Johnson & Johnson Plans to Improve Overall Cost Structure, While Continuing to Invest in
Opportunities for Sustained Profitable Growth NEW BRUNSWICK, N.J., July 31, 2007 /PRNewswire-First
Call via COMTEX News Network/ -- Johnson & Johnson today announced initiatives that are expected
to generate pre-tax, annual cost savings of $1.3-$1.6 billion for 2008 in an effort to improve its overall
cost structure and ensure continued profitable growth in the years to come. The company will also
continue to invest in both its growing businesses as well as promising technologies and product
opportunities to strengthen its position in the fastest growing segments of the health care industry
29. Business Model
Revenue 1
Pharmaceuticals: The pharmaceutical segment of Johnson & Johnson generates the majority of the
company's sales. This division accounted for more than half of JNJ's revenue for the full year. At over
55% of overall revenue, pharmaceuticals drew in a total of $45.57 billion in sales. This was a growth of
8.4% from the previous year.
Medical Devices: This division is divided into four different areas, including:
Orthopedics: joint reconstruction, trauma, spine, sports medicine, and power tools
Surgery: surgical systems and instruments
Interventional solutions: heart rhythm disorders and neurovascular care support for health care
professionals
Vision: Revenue for the medical devices segment dropped in 2020 by 10.5%. The company attributed
this to the effects of the COVID-19 pandemic as well as medical procedure deferrals. Medical devices
generated about $22.96 billion in sales, which represented 27.8% of total revenue for the year..
30. Business Model
Revenue 2
Consumer Products
Johnson & Johnson's consumer products segment offers a broad range of products used in three
distinct categories:
Skin health
Self-care
Essential health
These categories provide consumers with a wide range of products ranging from baby care, oral care,
beauty products, women's health, wound care, to over-the-counter medicines like Tylenol, Motrin,
Zyrtec, and Benadryl.16
This segment was responsible for 17% of total sales, representing $14.05 billion of revenue for the full
year. According to the earnings report, the division's sales grew by 3% from the previous year
31. Competitor 2: Novartis
About Novartis
a Swiss multinational pharmaceutical corporation based in Basel, Switzerland. It is one of the largest
pharmaceutical companies in the world.
Novartis is the world's second-largest pharmaceutical company by market cap in 2019
Alcon: At the time Novartis bought Alcon, they had annual sales of $6.5 billion and a net income
of$2 billion.
In 2018, Novartis ranked second on the Access to Medicine Index, which "ranks companies on how
readily they make their products available to the world's poor."
32. Competitor 2: Novartis
About Novartis
For the fiscal year 2020, Novartis reported earnings of US$8.072 billion, with an annual revenue of
US$49.898 billion, an increase of 2.51 percent over the previous fiscal cycle. Novartis shares traded at
over $84.38 per share, and its market capitalization was valued at $190.3B as of September 16, 2020.
33. Business Model
Customer value Proposition
Our purpose is to reimagine medicine to improve and extend people's lives. We use innovative science
and technology to address some of society's most challenging healthcare issues. We discover and
develop breakthrough treatments and find new ways to deliver them to as many people as possible.
We also aim to reward those who invest their money, time and ideas in our company.
34. Business Model
Key resources
Novartis is structured to deliver innovative products, exploit global scale, and respond to new
opportunities and risks. Our divisions - Innovative Medicines and Sandoz - are supported by functional
organizations with global scale.
Innovative Medicines: commercializes innovative patented medicines to enhance health outcomes for
patients and healthcare professionals.
Sandoz: a global leader in generic pharmaceuticals and biosimilars that pioneers novel approaches to
help people around the world access high-quality medicines.
Advanced Accelerator Applications: a Novartis company focused exclusively on radioligand therapy and
precision imaging.
35. Business Model
Key Process
Clinical Trials. Clinical trials are research studies intended to answer scientific questions and find better
ways to treat or prevent diseases.
Participating in a Novartis clinical trial.
Investigator Initiated Trials.
Clinical trial results sharing.
Clinical Pipeline.
.
36. Business Model
Cost structure
To pay for all this innovation, Novartis has announced plans to "further improve productivity which
should further sustain operating leverage and drive greater value creation". It has initiated a group-
wide programmed to review its "manufacturing footprint" and is creating 'Manufacturing Centres of
Excellence'. In addition, it aims to optimize the cost structure across divisions "and enhance utilisation
rates at strategic sites to 80% of capacity".
With the shift to more specialty care business, Novartis is looking closely at its marketing and sales
(M&S) spending and will re-allocate resources geographically and simplify current processes. M&S
spend since 2007 has continually decreased as percentage of sales from 29.2% to 25.2% as of the third
quarter this year.
37. Business Model
Revenue Stream
In FY’15 (fiscal year ended December 31, 2015), Novartis generated $50.4 billion of total revenues. Of
these total revenues, Novartis generated.
$30.4 billion revenues, 60.4% of the total, from the Pharmaceutical segment
$9.8 billion revenues, 19.5% of the total from Alcon segment
$9.2 billion revenues, 18.2% of the total from Generics Pharmaceutical segment
$1.0 billion revenues, 1.9% of the total from Others segment.
