Businessmodel of Becton Dickinson

Customer Segments

Becton Dickinson targets customers within the medical and healthcare sector. Its customers can be divided broadly into three categories:

• Distributors and independent sales agents, which market and sell Becton Dickinson products to end-users across multiple markets and jurisdictions;
• Medical and healthcare institutions that use Becton Dickinson products in the course of their work, including life science research organisations, clinical laboratories, pharmaceutical companies, medical facilities and medical practitioners; and

• General consumers, who purchase Becton Dickinson products for personal healthcare use. Becton Dickinson divides its customers geographically into four groups:

• the US, including Puerto Rico;
• Europe;
• Greater Asia, including Japan and Asia Pacific; and
• Other, comprising Latin America, Canada, the Middle East and Africa. The US continues to be Becton Dickinson’s largest market, accounting in 2015 for almost 50% of the Company’s total revenues.

Among Becton Dickinson’s customers are Coherus Biosciences, Innovus Pharmaceuticals, Avalanche Biotechnologies, Greenestone Healthcare, and Cardinal Health.

Value Propositions

Becton Dickinson provides value to its customers through the quality and reliability of its products and services, the accessibility of its products, its commitment to innovation and development, and its established brand name.

Channels

Becton Dickinson operates a website a www.carefusion.com. The Company, however, does not operate an online sales channel.

Becton Dickinson employs a hybrid sales distribution model. Its products are marketed and sold in the United States and internationally through independent distribution channels, as well as directly to end-users by Becton Dickinson sales representatives.

Becton Dickinson’s domestic sales team sells primarily to distributors. The Company also uses third-party distributors, resellers and independent sales agents internationally to enhance its proprietary sales channels.

Becton Dickinson operates a number of sales offices and distribution centres worldwide, covering its principal geographic areas of operation: the US, Europe, Greater Asia and Other.

Customer Relationships

Although Becton Dickinson operates a website that allows customers to find information on the Company’s products, purchases cannot be made online. While the Company offers some ecommerce solutions to its distributors and resellers, Becton Dickinson products are not typically available on a self-service basis.

Becton Dickinson deals with both distributors and end-users, providing a tailored service to each customer that fulfils their individual requirements. The Company often enters into multi-year contracts, sales-type leases and operating leases with customers. It also provides its customers with extended warranty contracts and software maintenance contracts.

Becton Dickinson continues to provide personal care to its customers after-sale. Customers are able to contact the Company directly, with specific contact details provided for different business units and products ranges, over the phone or via email, in order to receive personalized technical support. This is supplemented by a range of online learning resources included in the Company’s Customer Learning Portal.

Additionally, Becton Dickinson updates its customers with company developments through its Alerts and Notices section, as well as through its Twitter, YouTube, Facebook and LinkedIn profiles.

Key Activities

Becton Dickinson is a globally-focused medical technology company. It is engaged in the development, manufacture, marketing and sale of medical devices, instrument systems and reagents. Its products, solutions and services are utilised almost exclusively within the healthcare and medical industry, including healthcare institutions, research facilities, and pharmaceutical laboratories.

The Company operates through two business segments: BD Medical, which comprises the development and sale of products and solutions covering diabetes care, medication management, pharmaceutical systems, and respiratory Solutions business; and BD Life Sciences, which refers to the Company’s development of consists of preanalytical and diagnostic systems.

Among Becton Dickinson’s products are hypodermic needles and syringes; insulin syringes and pen needles; prefillable syringe systems; infusion therapy products; blood collection products; and flow cytometry instruments.

Key Partners

Becton Dickinson partners with a number of companies worldwide in order to provide its customers with an efficient and reliable service. The Company’s partners can be divided broadly into three categories:

• Distribution and channel partners, which assist the Company in marketing products and solutions to end-users within the healthcare sector;
• Suppliers, which provide tools and resources for the production of Becton Dickinson products; and
• Strategic and joint-venture partners, which comprise medical technology companies, healthcare companies and private equity firms, with which the Company collaborates both on specific projects and ongoing research and development activities. In recent years, Becton Dickinson has partnered with Breakout Labs to fund and support biomedical start-ups, Central Admixture Pharmacy Services to provide greater end-user access to one another’s products, and Apax Partners to develop respiratory solutions.

Key Resources

Becton Dickinson’s key resources are its technology and intellectual properties, its manufacturing and logistics facilities, its supply chain and distribution partners, and its personnel.

According to its 2015 annual report, Becton Dickinson owns significant intellectual property, including patents, patent applications, technology, copyrights and trademarks, both in the US and internationally. The Company is also licensed under domestic and foreign patents. Searches of records held by the US Patent and Trademark Office identified a number of patent application filed in Becton Dickinson’s name, including applications entitled ‘Automated set-up for cell sorting’, ‘System and method for automated sample preparation’ and ‘Safety drug delivery connectors’.

While Becton Dickinson believes that its patents and trademarks are of material importance to its business, no single patent, intellectual property asset or license is material in relation to the Company’s business as a whole.

Cost Structure

Becton Dickinson incurs costs in relation to the research and development of its products, manufacture and production of its products, the storage and distribution of its products, the maintenance of its partnerships and the retention of its personnel.

The Company’s largest costs relate to selling and administrative expenses – comprising rent and utilities for its numerous sales offices and distribution centres, and the payment of employee salaries and benefits – which accounted for 24.9% of revenue in 2015. Research and development costs represented around 6.1% of total revenue.

Revenue Streams

Becton Dickinson generates revenue through the development and sale of medical devices, instrument systems and reagents. The Company also generates some revenue through the lease of medical equipment, recorded either as operating leases or sales-type leases.

In 2015 Becton Dickinson recorded annual worldwide revenues of $10.28 billion, up 21.7% on the $8.45 billion generated the previous year. The Company attributed this increase in part to revenue generated by CareFusion, which was acquired by the Company in March 2015.

The Majority of Becton Dickinson’s revenue is generated by its Medical segment, which accounted for $6.46 billion in revenue in 2015. Within the Medical segment, the Medication and Procedural Solutions unit was the most lucrative, generating $2.9 billion alone.