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Johnson & Johnson 2014

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Molly Cuka

on 21 November 2014

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Transcript of Johnson & Johnson 2014

The Corporate Pirates
Molly Cuka
Vasil Hlinka
Abi Shanmugam
Brendan Stec
Xiujuan Wang
Strategic Guidelines
Johnson & Johnson 2014 Case Study
Initial Strategic Decisions
In-House R&D with consultants

Pricing at $5,000

Premium Plus Marketing Strategy

Direct Representative Sales Force

Company takes the excise tax

In-House production

Market Outlook
Nastroic vs. NexBre vs. Flexibility Knee vs. 2018 Competitor
In-House R&D
Full control in development
Leveraging existing workforce

Pricing at $5,000
Covered by insurance companies
Offset excise tax

Premium Plus
Provides value to hospitals and customers

Direct Representatives
Larger market share

In-house Production
Maintain high standards
Strong public relations
Aligns with credo
In-House R&D
Later launch date
Smaller initial profits
Pricing at $5,000
Loss in market share
Premium Plus
Higher marketing expense
Direct Representative
Higher costs
Limited reach
US is leader in MD&D industry
Hold 40%+ market share
Steady growth of 3-5% annually
Aging global pop. & growing societal risk factors
Between 2000-2050 the 60+ age group will increase from 20% to 34%
Strong demand for a new superior product
Knee implant revenues
2012: $3 B
2030: $5 B
Troubles for competitor Simmer
Competitor to enter market in 2018
Immediate impact on market share
In 2020, product will experience market share erosion
Competition from current competitors
Steady 3% market growth
14% target
Medical Advances
Affordable Care Act
Leader with 30% market share


170,000 knees
20% market share

Durability focus

Encompassing strategy
1. Enthuse's Credo

2. Increasing Shareholder Value

3. Long-term financial success
Excise tax burden on Enthuse
Extra costs
Decreased profits
Secondary Decisions in 2018
Maintain price at $5,000

Continue Premium Plus Marketing Strategy
Risk Analysis
Aggressive Pricing Strategy

In-House R&D takes resources away from other pipeline projects

10% chance of product launch delay
Financial Highlights
Cumulative Net Income: $1,950 million

Strong Market Performance
Peak Market Share: 11.1%
Average Market Share: 10.4%
Ending Market Share: 10.1%

Net Present Value (NPV): $776 million

Internal Rate of Return (IRR): 33%
Comments and questions?
Potential lawsuits
Full transcript