II. Where Are We Now?
One of the main economic factors that would affect JNJ is GDP. As shown above GDP in the United States is decreasing meaning resources will be limited and there will be a much needed increase in cash flows for competitive advantage. GDP’s in others countries are increasing giving JNJ more opportunities to expand to more markets around the world to increase their market share and distribution.
Currency| US Dollar Per Currency December 31st, 2008| US Dollar Per Currency December 31st, 2009| Trend| EUR| 1.392| 1.4405| 0.0485|
GBP| 1.462| 1.6221| 0.1601|
JPY| 0.011| 0.0108| -0.0002|
CAD| 0.817| 0.9523| 0.1353|
AUD| 0.6983| 0.8999| 0.2016|
CHF| 0.9369| 0.9711| 0.0342|
CNY| 0.1466| 0.1465| -0.0001|
ZAR| 0.1075| 0.1351| 0.0276|
MXN| 0.0723| 0.0761| 0.0038|
Being that JNJ’s international operations account for almost half of their sales and revenues, foreign exchange rates can also influence JNJ. With the U.S. dollar losing value compared to many currencies, as shown above, international sales and profits will be more than projected in some countries. Some currencies on the other hand are actually losing value compared to the U.S. dollar, so revenues and profits would be less than expected. Social, Cultural, Demographic, and Natural Environment Forces In 2008 and 2009 when many firms were enduring revenue decreases while JNJ reported increased revenues from $61 billion to $63 billion. One reason for this is the fact that society as a whole is changing their attitudes towards healthier lives. Many cultures are making good health an essential part of life and even when incomes go down their health needs are staying top priority. The increase concern for healthy lives is a great trend for JNJ. According to the Census Bureau's decennial census, U.S. population is growing by approximately 3.3 million per year. This greatly influences JNJ because with increase of population and births, the higher need for health services and products. The increase of health priority, as mentioned above, makes population growth even more influential to JNJ. Another world and US trend that will influence JNJ is the aging population. The world is getting older meaning there will be an even greater need for health care services and goods. JNJ pharmaceuticals are mainly used by the older age group meaning that this trend would need for drug innovations and increase in supply of drugs and other needed health goods to accommodate the expected increase in demand. As mentioned above health is becoming more important in peoples lives. With the higher concern comes the demand for higher quality products. JNJ needs to be able to produce new high quality products and improve their existing products to be able to increase their competitive advantage to keep their current market share and even increase it. Population increases makes this even more influential to JNJ.
Political, Governmental, and Legal Forces
With a new president in office come new laws and regulations. One governmental force that’s essential to JNJ is the heath reform. If more people are able to get health care easier, than there will be a higher need for health care products and services. This is another great opportunity for JNJ to provide more people with their products and help those in need.
As countries become more and more global and increase their competition for limited resources, warfare is also increasing. Although many people see war as a negative thing, it can have a great impact on JNJ. With war come numerous injuries and sicknesses that would need attention and would allow for JNJ to provide their medical devices, prosthetics, and the different medicines and drugs that would be needed in these hard times. Technological Forces
It is very essential for JNJ to keep up with technological...