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SWOT Analysis: Johnson & Johnson
leslie della valleon 5 December 2012
Transcript of SWOT Analysis: Johnson & Johnson
The values that guide their decision making is spelled out in their Credo. Their Credo challenges them to put the needs and well-being of the people they serve first.
The Credo consist of four paragraphs outlining their responsibilities.
1. First responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use their products and services.
2. They are responsible for their employees, the men and women who work with us throughout the world.
3. They are responsible for the communities in which they live and work.
4. Their final responsibility is to their stockholders. 1886
Three brothers, Robert Wood Johnson, James Wood Johnson and Edward Mead Johnson, found Johnson & Johnson in New Brunswick, New Jersey, U.S.
The Company publishes "Modern Methods of Antiseptic Wound Treatment," which quickly becomes one of the standard teaching texts for antiseptic surgery. It helps spread the practice of sterile surgery in the U.S. and around the world.
As part of its commitment to first aid, Johnson & Johnson publishes the first First Aid Manuals, using proven best practices from leading physicians. The manuals are packaged with the Company's First Aid Kits.
James Wood Johnson takes over the leadership of Johnson & Johnson until 1932. Design
Johnson and Johnson are coming out with a second generation of a greener product process, known as EARTHWARDS®, which helps their product teams to understand the environmental and social impacts at each stage of a product’s life cycle, identifying ways to reduce its environmental footprint and uncover opportunities for credible environmental claims. Providing the opportunity to grow the existing product portfolio. Knowing this, costumers that are more eco-loving people will be more open to buying Johnson and Jonson products SWOT Analysis: Johnson & Johnson Internal weakness of Johnson and Johnson, would be the level of theft and counterfeiting of drugs managed through internal personnel. This would fall under a sociocultural issue as it's the low moral standard that results in internal problems.
Their has been a reduction in the market demand for key products of Johnson and Johnson. Some of these products are being replaced by generics. This problem might be more manageable if the price for Johnson and Johnson's key products could be reduced or the advertorial plan was improved to increase the need or the want of the products.
Managing pricing pressures
Their Medical Devices and Diagnostics segment is facing more pressure on product prices because hospital customers are looking for cost relief. This is a competitive issue as the price of the product is the biggest problem. If the company perhaps lowered its prices or made their product more desirable, they could fix the problem Johnson and Johnson has strong global competitors. These competitors provide alternative and substitution products at lowers prices. As stated earlier, lowering prices or upgrading marketing plans or packaging can make Johnson and Johnson more of a competitive force.
conserving Biodiversity has become a main goal since there are serious threats to biodiversity in many areas of the world. If Johnson and Johnson wants to add a new building, the new buildings must be certified to LEED green building standards causing delays. Strength's Continuation Top 50 Companies for Diversity
This Diversity Inc list is based on CEO commitment, human capital, corporate communications and supplier diversity. Johnson & Johnson was ranked sixth overall. This is a cultural strength as diversity is something wanted by many companies for the look it gives to its consumers. Leslie Della Valle, Julian Colina, Karen Salazar, and Kimberly Maya Significant Strength's The company possesses a global sales force which proves strong global market.
Sales in emerging markets were up 13 percent operationally in the BRIC markets (Brazil, Russia, India and China). In addition, they launched six new pharmaceutical products in Japan, the world’s second-largest pharmaceutical market.
Wide variety of products
The Consumer segment includes a broad range of products used in the baby care, skin care, oral care, wound care and women’s health care fields, as well as nutritional and over-the counter pharmaceutical products and wellness and prevention platforms.
Their AAA credit rating represents a company able to take advantage of opportunities that arise without being limited by burdensome levels of debt. This could be considered a competitive strength as it shows how Johnson & Johnson has more credit worthiness then other companies
They generated a significant amount of free cash flow of approximately $11.4 billion**, maintained their AAA credit rating and increased the dividend to our shareholders for the 49th consecutive year. With a long-term management focus, our company has remained a solid investment choice for decades. This strength can fall under finance function. with departmentalization employees in the financing department have developed their skills and have obviously mastered their department. Operational Structure
The Company’s structure is based upon the principle of decentralized management. The Executive Committee of Johnson & Johnson is the principal management group responsible for the strategic operations and allocation of the resources of the Company. Weaknesses Continuation Johnson and Johnson organizes their management by departmentalization. Problems are assessed and managed by the business sectors and individual operating companies.
Counterfeiting and theft falls under function production. This weakness proves that Johnson and Johnson should have centralized authority on drug management. A centralized authority will allow more efficiency and greater top-management control. Reduction in market demand and a higher preference for generics falls under design and marketing function. One disadvantages of departmentalization is that often department members may start thinking alike. Getting an input from an outside source can increase market demand and improve designs with fresh new ideas.
Product pricing falls under finance function. Another disadvantages to departmentalization is that the company's response to external changes may be slow. In Johnson and Johnson's case they may be slow to realize that the economic situation is changing and consumers can not afford what they use to. 1932
Robert Wood Johnson II, son of the Company founder by the same name, begins leadership of Johnson & Johnson. Known as General Johnson, he transforms the Company into a global decentralized Family of Companies.
General Robert Wood Johnson writes Our Credo, which remains the guiding philosophy of Johnson & Johnson.
William C. Weldon becomes Chairman and CEO of Johnson & Johnson, only the eighth person to lead the Company since its founding. Under his leadership, the Company enters new therapeutic areas such as HIV/AIDS, and health and wellness.
Johnson & Johnson celebrates 125 years of caring and looks to the next 125 years of transforming care for patients, consumers and communities around the world. With the development of new rules to prevent the availability of cheap generic drugs there is the opportunity to reduce the level of lost profit due to generic introduction as patents run out. Falling under the Economic marketing environment, this can greatly reduce competition, increasing profit! Johnson & Johnson is in a position to strategically develop a myriad of cross selling opportunities. Using the disease life cycle as a base the company could exploit its product line by introducing market appropriate products and services. Building health care capacity and expanding access as health care reforms provides new opportunities to meet unmet needs. Technological developments with bio-tech concepts will potentially move the traditional pharmaceutical methods out of the market place in the long term. There is an economical argument that this form of development can be segregated to run alongside traditional methods but it will still create a competitive atmosphere. Stakeholders
The people who stand to gain or lose by the policies and activities of a business and whose concerns the business needs to address.
These stakeholders must come together to design and promote better products consumers perceive to have the best value Thank you :)