Transnational corporation Novo Nordisk A/S is the world’s biggest insulin producer. The company has a strong market position supported by constantly increasing financial indexes. Therefore, this paper analyses Novo Nordisk’s financial data and key financial indicators presented in two last financial reports for 2010 and 2011.
Novo Nordisk showed significant growth of its financial performance over the last few decades. The last two years also were successful for the company. Main financial indicators had a positive surplus in 2011 comparatively to 2010.
Novo Nordisk’s sales increased by 8% while growth profit went up by 7% in 2011. Operating profit had positive tendencies as well; it grew by 12%. To summarize, Novo Nordisk’s net profit increased by 19% in 2011 comparatively to 2010 (Novo Nordisk, 2011).
Total assets of the company and cash flow from operating activities had an increase by 3% and 18% respectively in 2011. Sales of diabetes care products grew by 6-10% for different items. Sales in biopharmaceuticals segment increased for all products by 3-12%. Total sales of the company had positive dynamics of rising by 8% in 2011 (Novo Nordisk, 2011).
Novo Nordisk has been selling A shares (non-listed shares) and B shares (listed shares) in Copenhagen and on London Stock Exchange in 2010 and 2011. The stock price for a share is $146.66 on July 13, 2012 (NASDAQ, 2012). Novo Nordisk’s stock market chart for the last year shows a sharp increase in prices in February 2012 comparatively to January 2012 by approximately $20 per share. The index had been slightly growing till May of the same year. However, it decreased by $14 in June 2012 (NASDAQ, 2012).
Thus, the tremendous increase in profits proves high development level of the company and its stable position in the market. The raise of total assets and cash flow indexes indicates the increase of Novo Nordisk’s sales operations. Novo Nordisk uses its resources in a responsible and sufficient way. Successful performance of Novo Nordisk in the market is also proved with the company’s market share. Novo Nordisk’s market share is 41-63% in different countries (Novo Nordisk, 2011). Hence, the company’s profitability and position in the market significantly improved during 2010 and 2011.
The results of researching Novo Nordisk’s business structure, strategy, management system, marketing mix, and financial analysis prove the sustainability of the company and its successful business performance. Novo Nordisk is a large business, which involves a number of employees all over the world. Its strategy and goals are thoroughly planned for a long period. The management system has a stable structure with shared responsibilities. Products, price, distribution channels, and promotion system are well developed and efficient.
The company is highly competitive, although there is a threat of tough competition from its main rivals Eli Lilly and Sanofi Aventis. The business structure of Novo Nordisk includes a well-developed system of production facilities and distribution centers.
Pharmaceutical sector grows and develops extremely fast. The profits in the pharmaceutical industry can be described as highly competitive. The number of companies in the sector increases every year. A large amount of new technologies in the pharmaceutical sector makes it profitable and increasingly innovative. Therefore, I am positive that the industry will keep evolving and growing generating higher profits in the future.
Thus, I consider the idea of working for or owning Novo Nordisk as an attractive opportunity. The company’s policy toward its employees and the general business strategy is the key reasons why I would like to become a Novo Nordisk employee. Investing money in Novo Nordisk is also an interesting possibility since the company has a reliable and stable financial situation.
The company operates in 179 countries, producing its insulin in 6 countries. Therefore, I would recommend Novo Nordisk to build extra production facilities in a few more countries in order to decrease the transportation cost. Moreover, it would allow producing insulin in bigger quantities.