Business Decision Making for Johnson & Johnson

Topics: Johnson & Johnson, Pharmaceutical industry, SWOT analysis Pages: 5 (1058 words) Published: August 22, 2012


 Johnson and Johnson is an American multinational company founded in

Brunswick ,New Jersey in 1886 by American entrepreneur Robert Wood Johnson. It manufactures pharmaceuticals, medical devices and consumer products.  J&J and its subsidiaries have operations in over 60 countries and sell their products in over 175 countries. Today, it employs 120,000 people worldwide.  They are the world’s second largest manufacturer of health care products

and the largest developer and manufacturer of medical treatment and diagnostic devices.

Consumer Products Prescription Products Medical Devices and Diagnostics

Is actually the smallest division but include some of them most well know products

Is the second revenue earner for the company, focuses on medical needs in cardiovascular, metabolism, immunology and oncology

Is the largest segment producing medical equipment, surgical systems and devices


Strong branding and customer loyalty Patient protection Diversification in research and development of new products A single focused business segment in healthcare Company structure / Management approach

Consumer bargaining power Threat of entry Threat of substitutes Competition / Rivalry • The largest risk is the possible nationalization of the U.S. healthcare system which would increase the buyer bargaining power. •Is low because not many in the pharmaceutical industry is have the resources to fund many different potential drug candidates in parallel which is key to success in this industry.

• The largest threat of substitutes comes from generic pharmaceuticals most prevalent after patents expire

Johnson & Johnson is one of the few companies having presence before the 20th century. It is recognized for its corporate repute, strong customer base, brand loyalty and brand image Johnson & Johnson has an excellent research and development base, which is its strength for surviving in the pharmaceutical sector. Johnson & Johnson has successfully employed a strategy of differentiation that helps it distinguish itself from its competitors. The company offers a wide range of innovation and diverse products. Not reliant on a sole product line for majority of revenue The firm declared dividends for its shareholders quarterly since 1944 and the dividends have been increasing every year for the last 42 consecutive years The use of independent offices working as standalone units in various markets of the world provides the opportunity to develop concepts with cultural considerations and hence, helps the company manage the diversity.

Johnson and Johnson's key products demand is shrinking ;Several of these products were branded and have been substituted by common programs at the finish of copyright Johnson & Johnson put the company & its reputation in jeopardy by its slow & ineffective response to its ongoing problems Johnson and Johnson has had numerous recalls in their consumer healthcare division recently, which rocked the organization’s once sound image, and diminished its profits. These recalls have hurt Johnson and Johnson’s stocks and cost the company about $900 million in sales last year ( 2011). Several lawsuits are pending involving recall and illegal marketing of drugs Drug discovery and development is very expensive; of all compounds investigated for use in humans only a small fraction are eventually approved in most nations by government appointed medical institutions or boards, who have to approve new drugs before they can be marketed in those countries


Through mergers, acquisitions and the formation of new companies, Johnson & Johnson has large scope for growth and...
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