Strategic Management Swot Analysis 575y67

Strategic Planning 26-09-2019

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Swot Analysis Johnson & Johnson Group H

Management

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Introduction Johnson & Johnson (J&J) is a multinational corporation that operates over 250 individual companies. Their products consist of medical devices, pharmaceutical, and consumer packaged goods. (JnJ, 2018) Since the company was founded in 1886, profits have seen steady growth. J&J’s operations in 60 different countries created a revenue stream of $81.6 Billion. Besides this, the value of company shares has nearly tripled between 2005 and 2018. (JnJ, 2019) Pharmaceuticals J&J’s departments in the pharmaceutical segment cover a wide range of services in the health care sector. They created different immunology products such as the anti-tumor necrosis factor, treatments of autoimmune diseases and many other disorders. A major example of its key infectious diseases products is a hepatitis c protease inhibitor. Besides this, the company also fights ADHD. “Our pharmaceutical organization has created breakthrough medicines to address some of society’s greatest unmet medical needs, resulting in meaningful outcomes and benefits to patients,” said Mr. Gorsky. (JnJ, 2018) Medical Devices The medical devices department is divided in the Orthopedics, Surgery, and Interventional Solutions sections. Each section is designed to target different demands in health care. The medical devices department focuses to reimagine the way healthcare is delivered and helps people live longer healthier lives. This is achieved by making connections across science and technology to design and deliver physician and patient-centric products and solutions. Examples of these devices are t reconstructions, trauma, spine operations, sports medicine, power tools, and biomaterials. (Johnson & Johnson, 2019) Consumer Packaged Goods Baby care, skincare, oral care, wound care, over-the-counter and woman health products are part of the J&J Consumer Companies. These products are then divided into departments for Skin Health Products, Self-Care Products, and Essential Health Products. The company offers the world’s largest range of consumer goods. “By anticipating needs and creating solutions and experiences, we help people live healthy, vibrant lives.”

SWOT ANALYSIS The SWOT analysis of Johnson & Johnson is employed to assess the company’s competitive stance by recognizing its internal strategic factors like strengths and weaknesses, external strategic factors like opportunities and threats. (S&P, 2018)

Strengths Firstly, the good returns on capital expenditures that makes J&J’s to one of the most ired companies in the world: J&J is relatively successful at execution of new projects and generate good returns on capital expenditure by building new revenue streams. (Fern Fort University, 2018)

2 Secondly, R&D focus and integrated supply chain: Research activities represent a significant part of the Company’s businesses. The company remains committed to investing in research and development with the aim of delivering high quality and innovative products. In of worldwide costs of research and development activities, 9.1 billion dollars were spent in 2016. (S&P, 2018) Thirdly, revenue spread across many product categories: Johnson & Johnson revenue sources are broadly spread across pharmaceuticals, consumer products and medical devices. All three business sectors are well positioned to address the changing needs of the customers and patients. The sales in the consumer segment were $13.3 billion, in the pharmaceutical segment were $33.5 billion whereas in the Medical Devices segment were $25.1 billion in 2016. (S&P, 2018) Fourthly, customer trust: Babycare is a product line where the primary factor that triggers purchase behaviour will be the level of trust that the mother holds for the brand. Johnson & Johnson has been highly successful in winning the trust of their target segment through a series of successful advertising campaigns and als products that keep up with the promise of the brand. (Bhasin, 2019)

Weaknesses Weaknesses depend on the Success of Launch Products: Many new launch products are vulnerable to the uncertainty of regulatory review and ultimate market benefits may vary substantially from forecast, therefore, a reliance upon launch products potentially represents a threat to Johnson & Johnson’s outlook. (Friesner, 2018) Secondly, there has been a reduction in the market demand for key products of Johnson and Johnson. Some of these products are being replaced by generics. This problem might be more manageable if the price for J&J’s could be reduced or the advertorial plan was improved to increase the need or the want of the product. (Valle, 2012) Internal weakness across the industry and not isolated to Johnson and Johnson would be the level of theft and counterfeiting of drugs managed through internal personnel. (Essay,UK, 2017)

Opportunities A wide range of potential cross-selling opportunities: Johnson & Johnson is in a position to strategically develop a myriad of cross selling opportunities. Maximizing its balance between pharmaceuticals, diagnostics, and medical devices could result in increased revenues. Potential to Exploit Biologics Market: The addition of further biologics (e.g. therapeutic proteins, antibodies) to its portfolio can serve as a buffer as small molecule patents expire which will drive the future growth of the company.

3 Changing lifestyle: With the increasing in literacy rate worldwide there is increase in concern over health & medical issues due to which there is increase in demand of medical products so J & J will also get benefited from this. (Bhasin, 2019)

Threats Some of the threats that Johnson and Johnson face are the profitability of high demand products, the company works on highly profitable yet seasonal products, so if there are any discrepancies during the peak of the season it will affect the profitability of the company. some of the new environment regulations that are under the Paris agreement are threats to certain products that are already in stock. in addition, some of the other threats that this company faces are the isolationism that the American society has, there is a domino effect on governments that create an awkward situation due to them behaving in the same way , due to this anything that has to do with international sales are in danger of not being very successful. the creative development of the company has been put in halt for the majority of their products, because of this most of the products are products that are a direct response to the developments done by other companies; there are also high- and low swings that the company suffers due to their supplies being irregular. (Fern Fort University, 2019)

Although the strength of having new distributors, it can also present a threat due to the competition of paying higher to local distributors. in addition, going to the consumer point of view, their vision and necessities are ever changing so because of this some products that were once popular might not be anymore. Also, the consumer buying behavior can change as well going from an online channel will impose a threat of physical infrastructure supply chain model. The overall sales of Johnson and Johnson have been affected over the last two years due to the fact that stable profitability expanded the number of competitors within the industry leading to overall sales to decrease due to intense competition. (Fern Fort University, 2019)

Bibliography Bhasin, H. (2019, Feb 11). Retrieved from Swot Analysis of Johnson & Johnson: https://www.marketing91.com/swot-analysis-of-johnson-johnson/

4 Essay,UK. (2017). Johnson & Johnson SWOT. Retrieved from https://www.essay.uk.com/guides/swotanalyses/johnson-johnson-swot-analysis.php Fern Fort University. (2018). Johnson & Johnson SWOT. Retrieved from http://fernfortuniversity.com/termpapers/swot/1433/39-johnson---johnson.php Fern Fort University. (2019). Retrieved from http://fernfortuniversity.com/term-papers/swot/1433/39-johnson--johnson.php Friesner, T. (2018). SWOT Analysis Johnson & Johnson. Retrieved from https://www.marketingteacher.com/johnsonand-johnson-swot/ JnJ. (2018). Outlines strategy to deliver above market growth. Retrieved from https://www.jnj.com/johnson-johnsonoutlines-strategy-to-deliver-above-market-growth-at-2019-pharmaceutical-business-review JnJ. (2019). Fourth quarter results. Retrieved from https://www.jnj.com/johnson-johnson-reports-2018-fourthquarter-results Johnson & Johnson. (2019). Medical Devices. Retrieved from Healthcare-products: https://www.jnj.com/healthcare-products/medical-devices S&P. (2018, Dec). Retrieved from Swot Analysis: https://www.swotandpestle.com/johnson-johnson/ Valle, L. D. (2012). Swot Report Johnson & Johnson.