<p align="justify">Bayer is one of the biggest multinational life science and pharmaceutical company in Germany. Its operations are widely spread across the globe. The company’s headquartered in Leverkusen. The major areas of the business involve veterinary and human pharmaceuticals, agricultural chemicals, healthcare products, animal health products, biotechnology and seed products. The company is listed in stock market index. The company successfully address the most pressing challenges across the globe and continued its growth by developing new solutions. It believes that with the increase in the population and needs, it is their responsibility to provide medicines and good quality food in quantities (Bayer, 2019).</p>
<p align="justify">Bayer is working at global level, and offering wide portfolio of products, it is necessary for the company to analyze the threats and challenges from the industry. It is necessary for the company to make sure it is responding accordingly to the market change. Thus, Porter five forces model will help the company in determining the new industrial challenges, and the competition level. Here is the detailed Porter five forces analysis of Bayer;</p>
<h2 align="justify">Bargaining Power of Buyers</h2>
<p align="justify">The bargaining power of the buyers in pharmaceutical industry is limited, However, in consumer goods is moderate to high. The number of alternatives in the consumer goods are many, and low switching cost, which gives the power buyers to set the prices. However, consumers do not take risks with life and buy medicines in any price, which decreases their control over prices. Moreover, in other fields, the differentiated products increase the buyers bargaining power. It is important for the Bayer to set the prices according to the needs and demands of the consumers and assess how much consumers are willing to pay (Murphy, 2018).</p>
<h2 align="justify">Bargaining Power of Suppliers</h2>
<p align="justify">In the industry of consumer goods, Bayer has largest market share which requires high amount of supply chain, and good supplier relationship. This also triggers the idyllic purchasers for suppliers. hence, none of the supplier has ever complained about the company’s dealing, or low prices, or anything else. This enhance and strengthen their relationship with Bayer. However, it is necessary for Bayer to increase its supplier list in order to take more control over prices and improve the long-term profitability. However, in the pharmaceutical company, the suppliers have bargaining power, because chemicals, and supplies used for making medicines have high demand, and very critical to deal with (Marathon, 2019).</p>
<h2 align="justify">Threats of New Entrants</h2>
<p align="justify">The threats from the new entrants for Bayer is very limited. There are multiple factors which restrict the new entrants from entering in the market where there are already big companies are operating. Bayer is involved in the consumer food industry, and its is difficult for the new entrants to analyze the market according to the consumer requirements. Competing with already existing companies who knows the consumer requirements and build the consumer base, as new entrants has to build the customer base which is difficult task. Moreover, achieving economies of scale is a difficult tasks for the new entrants (Marathon, 2019).</p>
<h2 align="justify">Threats from the Substitute Products</h2>
<p align="justify">In the pharmaceutical industry, Bayer is having low threats from the substitute products, because of the fact that certain company specializes in particular medicines, and doctors recommend that. No consumers will switch to alternative without any prescription or recommendation. However, there are many substitutes available in consumer goods and this is a matter of concern for Bayer. Bayer needs to increase its customer base, and should work more towards diversification in terms of geographical segments (Murphy, 2018).</p>
<h2 align="justify">Rivalry of Existing Players</h2>
<p align="justify">The rivalry among the companies in the pharmaceutical, biochemical, agricultural and consumer goods is very intense. The firms help in determining the industry lucrativeness where all companies compete for maintaining the power and market position in industry. The competition is mostly on the basis of the diversity, barriers of entries and exits and developments in sectors. Pharmaceutical companies like Sanofi, Novartis, etc. are competing with Bayer and providing more advanced medicine, and hence making the competition more intense (Harvard case study, 2019).</p>
<h2 align="justify">References</h2>
<p style="text-align: left;" align="left">Bayer, 2019. Our Businesses. [Online], Available at: <a href="https://www.bayer.com/">https://www.bayer.com/</a>, [Accessed on: 22nd November, 2019].<br />
Case Marathon, 2019. Bayer Ag A Porter’s five forces analysis. [Online], Available at: <a href="https://casemarathon.com/ivey/bayer-ag-a/porters-analysis.php">https://casemarathon.com/ivey/bayer-ag-a/porters-analysis.php</a>, [Accessed on: 22nd November, 2019].<br />
Harvard Case study, 2019. Bayer Ag B Harvard Case Study Solution &; Online Case Analysis. [Online], Available at: <a href="https://caserighted.com/bayer-ag-b/">https://caserighted.com/bayer-ag-b/</a>, [Accessed on: 22nd November, 2019].<br />
Murphy, E. 2018. Bayer Porter Five Forces Analysis. [Online], Available at: <a href="https://www.essay48.com/term-paper/13894-Bayer-Porter-Five-Forces">https://www.essay48.com/term-paper/13894-Bayer-Porter-Five-Forces</a>, [Accessed on: 22nd November, 2019].</p>