Novozymes Case Study
Since enzymes have various applications (food, leather production, agriculture…) , the enzymes industry is consequently global and large. Hence, the enzymes market size is significant, reaching a value of 8.18 billion USD in 2015 and is expected to follow an upward trend, as it was the case the previous years. As the awareness of consumer rises regarding product quality, it is expected that many firms, especially food & beverage producers, will increase their use of enzymes in their production process, meaning they will create an increase of the demand in the enzymes market.
Geographically speaking, the Asia-Pacific region will exhibit the most significant expansion, specifically in the next four years, with a predicted CAGR (Compound annual …show more content…
Looking at the other competitor’s figures, Novozymes’ position is relatively superior – the second highest market share only reaches 21%, not even half of Novozymes’ number-.
(Rivalry among existing firms) The enzymes industry is rather competitive, as it is based on constant innovation. However, for the moment, Novozymes does not suffer from notable competitors’ threat, thanks to their supremacy on the market, as it has only 2 major competitors (DuPont Danisco, and Captive Production)*. It is important to bear in mind that this dominant position for Novozymes is prone to significant changes in the market caused by innovation breakthroughs. Moreover, since it is a growing and changing market, respective positions of all firms are not fixed in time. (Threat of new entrants: ) The threat of new entrants is quite low for two main reasons:
The production, transformation (as today most enzymes are no longer native, but engineered enzymes) and distribution of enzymes, which is simply what Novozymes does, requires a consequent capital capability. To enter the enzymes market -regardless the application of the enzymes- is costly and requires as well a significant number of fixed assets: it can be patents, plants …show more content…
Hence, Novozymes’ customers are extremely varied. The customers tend to buy in high volumes but Novozymes has a strong culture of innovation and so tries to often offer new and state of the art enzymes which allow them to not give too much power to customers.. However, customers of enzymes-producing companies exhibit low switching costs as they can rather easily replace enzymes in their production processes with classic biochemical solutions less environmental
Geographically speaking, the Asia-Pacific region will exhibit the most significant expansion, specifically in the next four years, with a predicted CAGR (Compound annual …show more content…
Looking at the other competitor’s figures, Novozymes’ position is relatively superior – the second highest market share only reaches 21%, not even half of Novozymes’ number-.
(Rivalry among existing firms) The enzymes industry is rather competitive, as it is based on constant innovation. However, for the moment, Novozymes does not suffer from notable competitors’ threat, thanks to their supremacy on the market, as it has only 2 major competitors (DuPont Danisco, and Captive Production)*. It is important to bear in mind that this dominant position for Novozymes is prone to significant changes in the market caused by innovation breakthroughs. Moreover, since it is a growing and changing market, respective positions of all firms are not fixed in time. (Threat of new entrants: ) The threat of new entrants is quite low for two main reasons:
The production, transformation (as today most enzymes are no longer native, but engineered enzymes) and distribution of enzymes, which is simply what Novozymes does, requires a consequent capital capability. To enter the enzymes market -regardless the application of the enzymes- is costly and requires as well a significant number of fixed assets: it can be patents, plants …show more content…
Hence, Novozymes’ customers are extremely varied. The customers tend to buy in high volumes but Novozymes has a strong culture of innovation and so tries to often offer new and state of the art enzymes which allow them to not give too much power to customers.. However, customers of enzymes-producing companies exhibit low switching costs as they can rather easily replace enzymes in their production processes with classic biochemical solutions less environmental