Johnson & Johnson External Factors

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MG 496

Case #2

Johnson & Johnson
(Case #21)

External Factors Analysis

• Economic
I. Economic crisis directly affected R&D budget (2009) threat II. Currency rate fluctuations
III. Change in consumer behaviors and spending patterns of health care products and services due to economic downfall. threat • Political/ Legal
I. Government legislation relating to sales, promotions, and reimbursement II. Patent expirations (Patent Cliffs); could decrease demand for a firms branded products because generic drugs would be available. threat towards J&J opportunity III. Cost reduction programs

• Technological
I. Tylenol’s online advertising campaigns with online advertisers such as Yahoo, Google, and MSN opportunity an effective advertising campaign could increase revenues. II. Life Scan ( Ultra glucose machines)

III. Research & Development
• Social/ Demographic
I. Ongoing developments into drugs geared to the treatments of HIV and cancer II. The purchase of 18.4% in Elan Corp. (This purchase gave J&J access to Bapineuzumab, a late-state in development potential Alzheimer drug.) III. Relationships with professionals, patients, and civil groups • Substitutes

I. Generic drugs ( ANDAs, Abbreviated New Drug Applications) threat II. Home remedies
• Buyers
I. Hospitals and other health care facilities opportunity II. Retailers ( Pharmacies and major stores with pharmacies within them) opportunity III. Wholesalers opportunity

• Suppliers
I. Pharmaceuticals

• Threat of Entry
I. The threat of the smaller competitors becoming large enough to compete with J&J and their 3 big competitors. threat

• Intense of Rivalry
I. Abbott Laboratories ( Pharmaceutical, Diagnostic, Nutritional and Vascular products) threat II. Merk & Co. Inc. (creator of the world’s 1st anti cancer vaccine) threat; because both J&J and Merk & Co. are researching cancer medications. III. Procter...
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