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Risk management is very important when considering advancing in Nigeria. Risk management is the classification and evaluation of risks and the planning to reduce the impact of high-risk, unfortunate events. Nigerian companies face considerably more challenges than international companies. Fist they generate less electricity nationally than a single city in Ireland. Even though Nigeria is huge it fabricates less electricity nationally than most cities internationally. This can become a huge concern for companies trying to branch out globally.
Obtaining permits and licenses is a further challenge. There are also different types of corruption despite federal and state government reforms. Not to forget either, the crazy traffic in cities like Lagos, which can limit a company to how many meetings they can have in a day, plus the security situation, and the mobile phone network coverage. All of this has to be taken into consideration when entering this market. But even with all these challenges, competition has already entered the market. As a leader in the industry, Bayer must comprehend that growth must be merited and not taken for granted.
To really see the imaginable for Nigeria, Bayer needs to take a long look at economic headwinds and overcome structural obstacles. To grow as a company and improve patients’ access to medicines, Bayer should run a granular analysis by city, therapeutic area, and channel, and create groundbreaking offerings that drive access in the growing middle class. They need to get closer to healthcare providers, build skills at operating complex sales and distribution networks, and capitalize in the local talent in Nigeria. As Africa’s main economy, most inhabited country, and biggest consumer market, Nigeria has been addressed as the next forefront for pharma after South Africa and the hotspots of Northern Africa. A market economy is portrayed by the “invisible hand” of market forces; government takes a hands-off, or lenient, approach. But Nigeria’s slip into recession back in 2016 has made some companies wonder whether strong growth is still possible. The International Monetary Fund cut Nigeria’s GDP growth forecast, yet in spite of the bad outlook they are still a great prospect for the pharmaceutical industry. As the middle class multiplies, healthcare expenses increase. The rise in noncommunicable diseases such as diabetes and heart disease present chances for pharma companies to view themselves as long-term partners to the government by presenting access to much needed medicines. Analysis specifies that the value of the Nigerian pharma market could rise by as much as nine percent a year over the next ten years to reach way over $3. 6 billion by 2019 making it as large as the South African market today. Over the same period, Nigeria could impact between $1. 9 billion and $2. 2 billion to pharma sales growth, 55 percent of it from prescription drugs.
There are three main problems Bayer will need to face moving into this market in Nigeria. Nigeria’s healthcare infrastructure varies significantly between cities and rural areas, and between public and private provision. Overall, the country lacks the medical facilities, equipment, and competences it needs to tackle the substantial healthcare challenges it faces. Because of their lack of infrastructure, approximately 5, 000 patients have to travel out of the country for healthcare. These patients are seeking treatment in cardiology, musculoskeletal, hematology, or oncology. The next hindrance is that most patients have no type of medical coverage, so a lot is spent out their pocket which most do not have the money for such expenses. It seems the only ones who really get full healthcare are the patients who have wealth. And to make matters worse, distribution, wholesale, and retail markups can be very high. By the time medicine is reaching the patients the price has nearly doubled or tripled.
Lastly, in Nigeria the distribution of counterfeit and parallel medicines is often difficult to tell apart from the real thing. These counterfeit medicines make up about three-quarters of the pharma market. The competition is definitely brutal and highly disintegrated. Bayer needs to stay one step ahead when entering this market.
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