Johnson & Johnson Internal and External Analysis

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EXTERAL ANALYSIS
Macroenvironmental Analysis:
Economic: Globalization of the pharmaceutical industry is an exciting opportunity to have research and development done at cheaper prices in other countries. However, this could be a double edged sword for companies because it is easy for other countries, such as India, to produce generic versions of the drug in bulk. •Technological: Profitability is determined mainly by the ability to discover new drugs. Technology is at the forefront of the pharmaceutical industry because advances allow for expanded research and development which in turn allows for companies to create new powerful drug chemistries. •Legal/Political: According to a US senator, legislation has been introduced that would require public disclosure of grants made to groups and physicians. These grants can include free trips to exotic locations to educational conferences; some experts say these grants can improperly influence medical care. The presidential election and the governmental decisions made about health care overall may also influence consumer ability to purchase products. • Social/Cultural: Thirty-two percent of Americans have an unfavorable opinion of Pharmaceutical industry. Most of the adverse opinions come from the perceptions of profiteering. Other people also have concerns that companies are unethical in the research stage and don’t care about the long term effects on the experimental subject. •Demographics: With the baby boomers getting older, a higher percentage of the population is now 65 or older and are needed more medical care and prescription drugs. Market Analysis

Supplier: Labor, Drug distributors
Customers: Mass Consumers
Substitutes: herbal drugs, alternative therapies, therapeutic substitutes Rivalries of Existing Companies: price, features, innovation, effectiveness, availability, brand reputation

Major Competitors: Merck, Novartis, Proctor & Gamble

Conclusion: In the pharmaceutical industry what they should be most excited about it also what they should be most concerned about; globalization. Being able to research and develop drugs in other countries can give a company and economic advantage but can also put them at risk for people to create a generic version of the drug and sell it separately. Being the leader of innovation in the marketplace is most important. This will also allow companies to build brand reputation for producing the most up to date and effective drugs. A final important aspect of current rivalries is for drugs to be priced affordably. In this time of economic downturn consumers will quickly turn to a generic drug if they feel like the name brand drug is priced beyond its value.

INTERAL ANALYSIS
Resources
Tangible
Financial (USD):
oNet Income $10,567,000,000
oStock Price(9/05/08) $ 70.67
Physical: Johnson & Johnson has $1, 4185,000,000 worth of plants, property, and equipment. Technology: All the products of Johnson & Johnson rely of new technologies for them to be developed. Recent research using technology help scientist come up with new HIV treatment called Intelence and Prezista. Also, “many of the product launches in 2007—from a broad portfolio of brands that includes Clean & Clear, RoC, Neutrogena, AVEENO , Lubriderm, Ambi and Groupe Vendome—were built on proprietary technology platforms proven effective through extensive clinical research.” Technology contributed to the “new prolonged-release oral atypical antipsychotic, INVEGA Extended-Release Tablets” which helps with schizophrenia. Intangible

Culture: They believe that when you feel your best you perform your best, therefore they provide support programs that help their employees live healthier and safer lives. This encourages employees to innovate, create, develop and improve products every day. •Brand Reputation: According to this year’s Reputation Quotient survey, for the seventh consecutive year, Johnson & Johnson ranks No. 1...
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