Market portfolio

To meet shareholders expectations, U.S. and European pharmaceutical companies typically focus on leveraging products to manipulate their volume, price, and marketing portfolio in ever-changing equations to boost earnings. However, current industry pressures threaten the success of these traditional strategies. 

Capital asset pricing model An economic model of equilibrium in capital markets which predicts rates of return on all risky assets as a function of their correlation (or covariance) with the overall market portfolio. 

If the equity value is estimated by using the discounted cash flow method, the cost of capital assumes a particular relevance. Conventionally, the cost of capital is estimated through the capital asset pricing model (CAPM) that was introduced by Sharpe (1964) and subsequently improved by Lintner (1965). One of the most important variables is beta. Beta measures the sensitivity of the asset s or company returns to variation in the market or index returns. Therefore, according to CAPM theory, the risk assumed from an investor depends on the covariance (or correlation) between individual assets and market portfolio. Thus, if these singular assets do not have correlation, they will not add risk differently, if the correlation is positive they will add risk on market portfolio. 

If beta = 0, the investment does not add new risk to market portfolio and the expected return should be equal to risk-free rate (Rj=R ... 

If beta = 1, the investment has the same risk of market portfolio and, therefore, the same expected return (/ y=/ m) ... 

If beta > 1, the single stock has a covariance (between stock and market portfolio) greater than variance of market portfolio ... 

The evolution of FDA policies continues to be a significant driving force on the global pharmaceutical market. Several pharmaceutical firms have made new discoveries while evaluating enantiopure drugs originally discovered and marketed as race-mates by others. These pharmaceutical firms have merged, or other companies have appropriated portfolios of patents based on chiral switches. Thus, the FDA contin-... 

Lighting Research Center. (1994). ASeP Food Market, Old Lyme, Connecticut, DELTA Portfolio 1(1). Troy, NY Rensselaer Polytechnic Institute. 

Established in 1902, British American Tobacco (BAT) is the world s most international tobacco group, with an active business presence in 180 countries. BAT employs almost 90,000 people worldwide. Its global market share totals 15 per cent, it is market leader in more than 50 countries, and it has a strong portfolio of over 300 brands. 

Industry restructuring (portfolio swapping, marketing agreements)... 

Novozymes is a market leader in enzyme solutions. Their manufacturing capabilities are based on an advanced biotech platform, for identifying new enzyme applications. Novozymes produces and sells more than 500 enzyme products covering more than 20 different industries in the food, feed and technical sectors, in 120 countries. With more than 75 types of enzymes and almost 600 different products, Novozymes has the world largest enzymes portfolio. 

The product type can be commodity or specialty. Commodity products are considered with a defined standard quality, where price is the key buying criterion. The product life cycle for chemical commodities can be relatively long meaning that the products are in the market partly for decades. Examples for short life cycle commodities on the other hand are semiconductors that are also mainly sold over price, but are shortly out-dated due to technology advances. The number of products is medium and does not reach the complexity of specialty product portfolios, where often more than 1,000 products need to be handled by a company. The product customization is standardized with some variants with respect to product properties but not related to a specific customer. Product perishability is... 

Without having conducted a full elasticity analysis across the entire portfolio, the analysis helps to prove market perceptions such as a higher elasticity exist in one market compared to another market or comparing elasticity between products being perceived to have a different elasticity. The statistical quality of the linear regression analysis in selected months is considered as good in terms of the number of customers involved and the R-squared value proving the applicability of the approach. 

The rapid movement in the global phthalates market away from using plasticisers 2-ethylhexanol (2-EH) and diethylhexyl phthalate (DEHP) in favour of alternative products was underscored recently when BASF revealed plans to close its 2-EH and DEHP plants in Germany. The restructuring in Europe will have no effect on BASF s plasticiser portfolio in Nafta and Asia, however, where the company will continue to offer 2-EH and DEHP. About 70% of the plasticiser maiket volume is phthalates, and plasticisers make up about 60% of the plastic additives maiket. PVC accounts for 80-90% of global plasticiser consumption. In October 2003, California added DEHP to the state s list of more than 750 chemicals known to cause birth defects or reproductive harm. Previous studies had shown that the chemical can leach from plastic bags that contain intravenous fluids, blood, tube feedings or other medical treatment, and thereby enter the bodies of patients. 

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