Businessmodel of Boehringer Ingelheim

Customer Segments

Boehringer Ingelheim serves customers from within the healthcare, pharmaceutical and animal health industries, as well as the general consumer market. Its end customers can be categorised broadly as follows:

• Healthcare organisations, including medical institutions and practitioners to which the Company provides a range of prescription medications;
• General consumers, for which the Company produces over-the-counter medicines for a range of minor ailments and illnesses;
• Veterinary organisations, including veterinary practices and practitioners, to which the Company provides a range of preventative and curative animal health solutions; and
• Pharmaceutical companies, to which Boehringer Ingelheim provides full-service contract manufacturing services. Boehringer Ingelheim sells a proportion of its products to distributors, agents, affiliates and resellers, which are then authorised to market and sell the Company’s products to end customers.

Boehringer Ingelheim is a large multinational company with offices across the world. While it is based primarily in Europe, its customers are not limited by jurisdiction, with the Company serving customers across Europe, Asia, Africa, the Americas and Australasia.

Value Propositions

Boehringer Ingelheim provides value to its customers through its established reputation as a provider of quality and reliable products, its efficient contract manufacturing services, and its commitment to research and development.

Boehringer Ingelheim is one of the largest and oldest pharmaceutical companies in the world, and has established itself as a leader in its field.

The Company devotes a significant proportion of its revenue each year to research and development, in a bid to ensure it provides the most up-to-date products to its global customer base.

Channels

Boehringer Ingelheim operates a website at www.boehringer-ingelheim.com where customers can find information on the Company’s products and services. Boehringer Ingelheim, however, does not operate an online sales channel. The Company principally makes sales through its own direct sales team, which deals with the Company’s institutional customers.

In countries where Boehringer Ingelheim has a less significant presence, notably in the Middle East and North Africa, the Company utilises a network of authorised distributors, independent sales agents, resellers and affiliates to extend its sales reach. According to its own information, the Company has 146 affiliates worldwide.

Boehringer Ingelheim reaches its general consumer customers through various pharmacy chains.

Customer Relationships

Boehringer Ingelheim does not provide any self-service offerings to its customers. The Company’s institutional customers within the healthcare and veterinary care sectors deal directly with members of the Boehringer Ingelheim sales team. The Company employs a dedicated team of representatives that interact directly with medical institutions and practitioners to market and sell the Company’s products.

Customers of Boehringer Ingelheim’s contract development and manufacturing services also deal directly with Company representatives as is necessary in accurately establishing their individual requirements. End consumers are only able to access the Company’s prescription and over-the-counter products through certified medical and pharmaceutical practitioners.

Boehringer Ingelheim makes information available to its customer through its website, including details that enable customers to contact the Company directly with feedback and enquiries. The Company also has accounts with Facebook, Twitter, YouTube, Instagram, LinkedIn and Pinterest through which it can interact directly with its customers.

Key Activities

Boehringer Ingelheim is a global, research-driven pharmaceutical company. The Company researches, develops, manufactures, and markets human and veterinary pharmaceutical products in its native Germany and internationally across Europe, Asia, Africa, the Americas and Australasia.

Boehringer Ingelheim develops and sells prescription medications in that aim to treat or prevent cardiovascular, diabetes, oncology, respiratory, central nervous system, and virology conditions; over-the-counter consumer healthcare products for minor illnesses; and animal health products, such as biologicals and natural care products for companion animals, horses and cattle.

It also serves customers within the pharmaceutical sector by providing end-to-end contract manufacturing services.

Key Partners

Boehringer Ingelheim partners with a number of companies throughout the development, manufacturing and sale of its various products. This includes:

• Research and development partnerships, primarily with companies operating within the fields of consumer health, prescription medications, biopharmaceuticals and animal health;
• Funding and joint-venture partnerships, either providing funding to research projects and start-up companies or receiving funding from private equity and venture capital firms; and
• Strategic alliances, which comprise collaborations in development and innovation with high-profile companies within the healthcare space. Boehringer Ingelheim has launched a number of well-publicised partnerships in recent years, including a deal with Propeller Health to jointly develop solutions for people living with COPD and asthma, a tie-up with AbbVie to help companies expand their cancer treatment businesses, and a joint project with Humana dedicated to improving health care and reducing costs sufferers of chronic diseases.  

Key Resources

Boehringer Ingelheim’s key resources are its technology and intellectual properties, its manufacturing facilities, its sales and distribution channels, and its personnel – notably those working within the Company’s research and development team.

Searches of records held by the US Patent and Trademark Office identified numerous patent applications filed in Boehringer Ingelheim’s name, including applications entitled ‘Binding molecules for BCMA and CD3’, ‘Aldosterone synthase inhibitors’ and ‘Inhibitors of cytomegalovirus’.

Cost Structure

Boehringer Ingelheim incurs costs primarily in relation to the research and development of its products, the operation of manufacturing facilities and acquisition of supplies, the distribution and sale of its products, and the retention of its personnel.

In 2015 the Company’s research and development costs corresponded to around 20.3% of the Company’s total net sales for the year.

Boehringer Ingelheim employs more than 45,000 staff worldwide, representing cost in the form of salaries and benefits, and operates offices across multiple continents accruing costs in the form of rent and utilities.

Revenue Streams

Boehringer Ingelheim generates revenue through its four business segments. This primarily includes:

• the production and sale of prescription drugs;
• the production and sale of consumer-focused over-the-counter medications;
• the development and sale of animal health solutions; and
• the provision of contract manufacturing services. In 2015 Boehringer Ingelheim recorded net sales of €14.8 billion, up from the €13.3 billion in net sales recorded in 2014. The vast majority of these sales came from the Company’s prescription medication business, which accounted for €10.7 billion of the Company’s total net sales for the year. Boehringer Ingelheim’s over-the-counter medication sales and animal health solutions sales both accounted for around €1.5 billion in sales, while biopharmaceutical services generated just €0.6 billion in sales.