MGT 540 MI004
Professor: Arthur Annechino
20th February 2013
Table of Contents
The reasons of decision6
Decision making style7
The problem in decision making process8
This paper is talking about the Johnson & Johnson Acquires Dabao. It starts with review the two companies’ history, and then shows the problem of them before acquiring. Further analysis of Johnson & Johnson’s decision with the problems that in their decision making process and also the decision making style that could be found in the acquisition. At last, give some recommendations to JNJ and the conclusion for this whole paper.
Johnson & Johnson (NYSE: JNJ) is an American multinational medical devices, pharmaceutical and consumer packaged goods manufacturer founded in 1886. Its common stock is a component of the Dow Jones Industrial Average and the company is listed among the Fortune 500. Johnson & Johnson is located in New Brunswick, New Jersey with the consumer division being located in Skillman, New Jersey. The corporation includes some 250 subsidiary companies with operations in over 57 countries and products sold in over 175 countries. Johnson & Johnson had worldwide pharmaceutical sales of $65 billion for the calendar year of 2011. Among JNJ’s well-known consumer products are the Band-Aid Brand line of bandages, Tylenol medications, Johnson's baby products, Neutrogena skin and beauty products, Clean & Clear facial wash and Acuvue contact lenses. Johnson & Johnson came to China in 1985, but until now, in majority of the Chinese people’s hearts, it still stay in the baby care products. In fact, Johnson & Johnson brand in the United States has more than a century history, is the products supplier with most comprehensive and the most diverse medical and health care products and consumer care in the world. The strong outstanding international performance did not make Johnson & Johnson achieve the comprehensive development of a leap in China. Especially in consumer and personal care products, Johnson & Johnson has Johnson & Johnson's Baby, Clean & Clear, Neutrogena and other brands. These brands almost cover each segment of the cosmetics industry. But in each market segment, the market share of Johnson & Johnson's product did not reach the top ten. Johnson & Johnson seems to be considered as a niche brand, which makes JNJ very depressed. In Johnson & Johnson’s view, in order to catch up with other multinationals in China, the best and quickest way is to acquire a local brand and expand its own brand extension and channel coverage. Dabao is undoubtedly the best choice to achieve this strategic goal for Johnson & Johnson. Beijing Dabao Cosmetics Co., Ltd. its predecessor factory is Beijing Sanlu Factory, is a state welfare enterprises established by the Beijing Government for the employment of the disabled. And with as many as 35% of the disabled workers. The company was founded in 1958, 1985 converting cosmetics develops, produces, sells, and exports herbal cosmetic products in China and internationally. It offers various varieties of skincare, hair care, beauty care, perfume, and clinical series products. The company’s products include slimming creams, breast configuring creams, hair stimulators, senile fleck dispeller creams, eye-bag creams, anti-wrinkle creams, ginseng shampoos and conditioners, and ginseng both lotions. Its most famous product is “Dabao SOD cream”. It sells its products through department stores and shops. The company exports its products to the United States, Switzerland, Sweden, Greece, Tunisia, Bangladesh, and Cyprus. From in 1997, Dabao won the championship of the domestic sales of skin care products for eight consecutive years. In 2003, market share of Dabao in the...