Merck 2014 Annual Report Download - page 56

51GROUP MANAGEMENT REPORT → FUNDAMENTAL INFORMATION ABOUT THE GROUP → Objectives and strategies of the Group
is why the business portfolio of Merck KGaA, Darmstadt, Germany,
must always be balanced so that it reflects an optimum mix of
entrepreneurial opportunities and risks. The company achieves
this through diversification in the Healthcare, Life Science and
Performance Materials business sectors of Merck KGaA, Darm-
stadt, Germany, as well as through its geographic breadth with
respect to growth sources.
For Merck KGaA, Darmstadt, Germany, the principle of sus-
tainability applies not only to economic aspects. Instead, it also
encompasses responsibility for society and environmental preser-
vation. With its current and future product portfolio, the company
wants to help solve global challenges and shape a sustainable
future. That is also why innovation is the basis of the company’s
business activities; it is the prerequisite for future growth. Merck
KGaA, Darmstadt, Germany, is continually working on innovative
products and services for patients and customers and relies on a
continual process of internal innovation throughout all areas of
the company.
Group strategy
The Group focuses on innovative and top-quality high-tech prod-
ucts in the Healthcare, Life Science and Performance Materials
business sectors of Merck KGaA, Darmstadt, Germany. The com-
pany’s goal is sustainable and profitable growth. Merck KGaA,
Darmstadt, Germany, intends to achieve this by growing organi-
cally and by further developing its competencies, as well as by
making targeted acquisitions that complement and expand exist-
ing strengths in meaningful ways. Building on leading products in
all its businesses, the company aims to generate income that is
largely independent of the prevailing economic cycles. Moreover,
the aim is to further expand the strong market position in emerg-
ing markets in the medium to long term. In 2014, the Emerging
Markets region contributed 38 % to Group sales.
STRATEGIC INITIATIVES
Capability initiatives
As the company continues to grow in size and the business be-
comes increasingly global, the Group is to be seen as ONE company.
ONE Group stands not only for a strong brand, but also for a
performance-oriented global company with a strong sense of
“we”. Merck KGaA, Darmstadt, Germany, is more than the sum
of its parts. Therefore, the company has launched four capability
initiatives.
The capability initiative ONE Brand aims to strengthen the
value of the brand, to increase the company’s global visibility and
reputation and to become more attractive to customers, partners
and talent globally.
The framework for talent development, compensation and per for-
mance management is to be harmonized globally (ONE Talent
Development, Rewards and Performance Management). As part
of this initiative, the company will focus on establishing a consis-
tent and integrated talent and performance management process
and improving the talent portfolio by proactively identifying and
sourcing talent as well as ensuring workforce diversity.
The goal of the third capability initiative ONE Process
Harmonization, Standardization and Excellence is to better co-
ordinate processes and apply them consistently. This is particularly
the case with software applications. Continuous improvement will
take place through benchmarking. Ultimately, this will allow the
company to adapt rapidly to business changes as well as to inte-
grate future acquisitions both seamlessly and efficiently.
The importance of the Group’s global headquarters in Darm-
stadt is to increase along the lines of ONE Global Headquarters.
The company in Darmstadt is to become a vibrant home for
creativity, scientific exchange and innovation. By laying the cor-
nerstone for a modular Innovation Center in 2014, the company
created the basis for cross- functional and Group-wide cooperation
on projects.
Business initiatives
Furthermore, Merck KGaA, Darmstadt, Germany, has set up a range
of business initiatives in order to expand the existing portfolio
as well as to capture new business opportunities. The following
initiatives are of major significance:
Biosimilars
The company wants to use its expertise in developing, manufactur-
ing and commercializing high-quality biotechnological medicines
in order to create a competitive biosimilars portfolio. The focus is
on developing molecules through in-house research and develop-
ment as well as through partnerships.
Research & Development at the Biopharmaceuticals business
The Biopharmaceuticals business introduced a more entrepreneur-
ial model to elevate the performance dynamics of its research and
development. Based on Translational Innovation Platforms (TIPs),
the Biopharmaceuticals business wants
to foster long-term plan-
ning and an entrepreneurial mindset,
validated by an indepen-
dent advisory board of external experts
(see below).
OLEDs
Performance Materials aims to further expand its global leader-
ship
position in display materials . The Group expect s OLED tech-
nology to increase in importance in the future. Performance
Materials is therefore investing in developing a comprehensive
OLED portfolio. By 2018, Merck KGaA, Darmstadt, Germany, aims
to be a leading supplier of OLED materials.