The global pharmacy market in 2014 saw a vast number of mergers and acquisitions. Many big deals were closed, especially with global players. Among these mergers and acquisitions one could witness strong focus on therapy technologies in different fields. There was also strong organic growth: with 40 new admissions in 2014, the FDA set a new record. Dr. Thilo Kaltenbach, leader of the Arthur D. Little Healthcare Practice, explains how medium-sized and small companies in particular were keen to develop innovative new therapies and technologies. For smaller companies that own rights, it was a tough decision whether to sell their rights to bigger players or bring the products to the market themselves. Arthur D. Little experts found that the choice of the right “fit-for-purpose commercial and operational model” determines the success of those actions.
One might believe that there is nothing new to be learnt in terms of managing assets, and the associated supply chain in oil and gas, that operational efficiency must be as good as it can be, and that the industry is well capable of being highly competitive. And yet, as oil prices plunge, the industry yet again has to deal with unprecedented change. In this article, a guest feature written by Russell Pell at Arthur D. Little, Russell discusses why the entire industry is under pressure and the importance of producers being efficient to stay in business.
Despite strong industry growth, the past few years have been challenging ones for the wind industry. A combination of slowdowns in some of the major markets, production overcapacity, reduced subsidies and the financial crisis caused margins to be depressed and a number of businesses to run into difficulty. However, the last couple of years have seen a turnaround by some of the major players, as new technologies have expanded the range of market opportunities and new business approaches have strengthened financial performance. In this article, a guest feature written by Robin Francis at Arthur D. Little, Robin reviews the current state of the industry, examines the strategies major players have used to strengthen their positions, and draws some lessons regarding key factors for success.
The German energy transition is heating up the debate regarding how best to ensure an affordable and sustainable energy supply. Arthur D. Little recently published a new study which proves that lignite power is currently the most important domestic source of energy in Germany. The report says that 42% of Germany’s domestic energy was produced with lignite whereas renewable energies only produced 37%. Germany currently covers 70% of its energy requirements with imports of oil and gas. Lignite currently produces 12% of the German overall consumption. The report revealed that 54% of the German population are against a shutdown of lignite-fired power stations and an Insa Consulere study found that people see lignite energy as a chance for more independence from Russian oil and gas supply. The Arthur D. Little study confirms the increasing importance of lignite for the German market.
The European telecommunication sector is suffering hardship. Companies are observing decreasing revenues due to governmental restrictions and cheap online competitors such as Skype and WhatsApp. Furthermore, global online traffic makes big investments into mobile networks necessary. Arthur D. Little experts point out that this environment is fertile soil for more big mergers and acquisitions in the sector. Europe has seen several recent spectacular takeovers, such as the E-Plus/Telefonica deal in Germany. Companies are trying to realize synergies to improve their competitive positions and reduce costs. Arthur D. little analysed recent mergers in detail and found that mergers were expected to be more efficient than usual in market. However, the experts point out that a final evaluation of takeovers cannot be carried out before three years because integration of all distributions within a company is a difficult and long-lasting process.
Since mid-2014, the price for oil has dropped. The question is whether prices will pick up again, as the markets have recently suggested. Arthur D. little experts predict an oil price of around 80 US dollars a barrel as the “new normal”. The high oil price in the last year prompted strong investments in the oil business. New oil platforms were opened around the globe. This caused an economic surplus. Today many producers are no longer able to produce profitably with the new prices, which has reduced the supply again. Arthur D. Little experts believe that in the medium term the US will be the new global swing producer for oil. New fracking technology gives the country a chance to become independent from other suppliers. This development will weaken the position of the powerful OPEC states, which is dominating the global oil business today.
US technology giant Apple shocked the mobile networking sector recently by announcing that it would develop a SIM offering customers the cheapest available prices of all providers in the market. Currently SIM cards are only unlocked for one provider. The new Apple technology would change the sector significantly. For mobile networking operators the new technology would be a big threat that would destroy their current market model. At the moment the new Apple SIM is just an idea and still far from market introduction. But Christian Niegel from Arthur D. Little considers the new model a realistic ambition. The Apple SIM would open new doors in the field of Big Data. Apple is very interested in collecting increasing amounts of customer data. The new SIM would be an interesting data collection method, and the security issue is one of the big hurdles for Apple to cross.
The banking sector has been in crisis for years. More and more young people are turning away from the established stationary banking model. Instead, they prefer new financial services – mainly from the digital sector. This field is currently dominated by several start-up companies, as well as US technology giants Apple and Google. Apple Pay and Google Wallet have already started to conquer the field of mobile payment and digital banking. This development is a massive threat for traditional banking. Arthur D. Little’s Viewpoint explains how banks will have to look for new partners and alliances to fight back against the new competitors. They predict a convergence of banking and telecommunication. Telco companies seem to be suitable partners with which banks could enter the digital field. These companies have many customers and a deeper market penetration. Experts advise telecommunication companies to create new digital banking products. They also have a second big advantage for banks – a better reputation, as the financial crisis of 2008 is still affecting the global image of banking. New partners may help to start a successful comeback.
Innovation today is a key driver of organic growth for all companies—regardless of sector or geography. And it is increasingly important for companies to be able to deliver a pipeline of “breakthrough (or radical) innovations” in order to respond to emerging competition and increasing customer power. In this article, the journalist discusses the key findings of Arthur D Little’s report, 'Systematising Breakthrough Innovation.'
A new Arthur D. Little study proves that nine out of 10 companies feel insecure about the handling of breakthrough innovations. Top managers that were interviewed for the study admitted that they were not confident about having successful strategies to establish innovations within their companies. However, they were aware that those disruptive innovations would have a big impact on the company’s success in the future. As a result of the study, Arthur D. Little came up with advice for companies to improve their innovation management. Successful innovation has its origin in the culture of a company. Still, innovation depends a lot on funds and professional teamwork.