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Johnson and Johnson
18
By: Nikoleta, Rachael, Tommy, Noah, Bridget
Mission Statement
North America
"We will delight our consumers, treating each person who contacts us as if they are our only consumer, providing them with a response which is evidence of our interest and that leaves them with the clear understanding that they are important to us.”
Credo (1)
We believe our first responsibility is to the patients, doctors and nurses, to mothers and fathers and all others who use our products and services. In meeting their needs everything we do must be of high quality. We must constantly strive to provide value, reduce our costs and maintain reasonable prices. Customers' orders must be serviced promptly and accurately. Our business partners must have an opportunity to make a fair profit.
Credo (2)
We are responsible to our employees who work with us throughout the world. We must provide an inclusive work environment where each person must be considered as an individual. We must respect their diversity and dignity and recognize their merit. They must have a sense of security, fulfillment and purpose in their jobs. Compensation must be fair and adequate and working conditions clean, orderly and safe. We must support the health and well-being of our employees and help them fulfill their family and other personal responsibilities. Employees must feel free to make suggestions and complaints. There must be equal opportunity for employment, development and advancement for those qualified. We must provide highly capable leaders and their actions must be just and ethical.
Credo (3)
We are responsible to the communities in which we live and work and to the world community as well. We must help people be healthier by supporting better access and care in more places around the world. We must be good citizens — support good works and charities, better health and education, and bear our fair share of taxes. We must maintain in good order the property we are privileged to use, protecting the environment and natural resources.
Our final responsibility is to our stockholders. Business must make a sound profit. We must experiment with new ideas. Research must be carried on, innovative programs developed, investments made for the future and mistakes paid for. New equipment must be purchased, new facilities provided and new products launched. Reserves must be created to provide for adverse times. When we operate according to these principles, the stockholders should realize a fair return.
History
LATAM
Johnson and Johnson is an American multinational corporation founded in 1886 that develops medical devices, pharmaceutical and consumer packaged goods
History (2)
- Joseph Lister, Robert Wood Johnson joined his brothers James Wood Johnson and Edward Mead Johnson
- Produced first products in 1886
- Robert Wood Johnson was the first president of the company
- It was founded out of New Brunswick, New Jersey and still operated from the same location today
Competition
-Bayer, -Pfizer, Procter & Gamble, Unilever, Colgate Palmolive, Reckitt Benckiser, Merck, Bristol-Myers Squibb, Roche, Novartis and Abbott.
- Johnson and Johnson has just bought Pfizer, the World's largest pharmaceutical company, for 16.6 Billion dollars. The agreement starts in February 2020
Product Perspective
- Johnson & Johnson Consumer touches a billion lives around the world
- Vision: 'Bring science to the art of healthy living'.
- In India, businesses spanning baby care, women's health, beauty, oral & wound care and over-the-counter-products.
SWOT
Strengths:
Europe
-Flexible Business Model
-Innovations in medicine and technology
-Enhanced brand equity (It’s everywhere)
SWOT
Strengths:
SWOT
-Strong brand portfolio
-Good performance in new markets
-Strong balance sheet
SWOT
Weaknesses:
SWOT
-High prices
-Dependency on niche drugs
-Limited expansion capabilities with current business structure
SWOT
Weaknesses:
SWOT
-Litigations
-Marketing problems
- Dependence on successful launch of new products
SWOT
Opportunities:
SWOT
-Trend starters
-Market development dilutes competitors’ advantage
-Cross-selling
SWOT
Opportunities:
SWOT
-Potential exploitation of biology markets
-Changing lifestyles
-Opening up new markets with government agreements
SWOT
Threats:
SWOT
-New environmental regulations
-Changes in consumer buying behaviors
-Intense competition
SWOT
Threats:
SWOT
-Product recalls
-Generic products reducing market value
-Government regulations
Financials
Africa
37th ranked members of the Fortune 500 companies, Johnson & Johnson is extremely profitable:
- Johnson & Johnson revenue for the twelve months ending September 30, 2019 was $81.706B, a 0.4% increase year-over-year.
- Johnson & Johnson annual revenue for 2018 was $81.581B, a 6.71% increase from 2017.
- Johnson & Johnson annual revenue for 2017 was $76.45B, a 6.34% increase from 2016.
- Johnson & Johnson annual revenue for 2016 was $71.89B, a 2.59% increase from 2015.
International Revenue
Cont.
Johnson & Johnson sells their product in over 60 countries worldwide.
Currently their international sales makes up about 49 percent of total revenue
The Company is exposed to fluctuations in currency exchange rates. A 1% change in the value of the U.S. Dollar as compared to all foreign currencies in which the Company had sales, income or expense in 2018 would have increased or decreased the translation of foreign sales by approximately $390 million and net income by approximately $100 million.
Brexit
Cont.
- E.U. Given the lack of comparable precedent, it is unclear what financial, trade, regulatory and legal implications the withdrawal of the U.K. from the E.U. will have.
- Brexit creates global political and economic uncertainty
- which may cause, among other consequences, volatility in exchange rates and interest rates, additional cost containment by third-party payors and changes in regulations.
- As of December 30, 2018, the business of the Company’s U.K. subsidiaries represented less than 3% of both the Company’s consolidated assets and fiscal twelve months revenues, respectively.
Cont.
- On October 24, 2019 CVS decided to halt their sale of Johnson & Johnson talcum powder. as noted on the left hand side chart the stock. From the 23 of October to the 24, Johnson & Johnson's stock price fell by $2.40
- On October 18, 2019 Johnson and Johnson recalls 33,000 bottles of baby powder due to asbestos. as a result, their stock price fell $8.47 from the previous day(as shown in the chart to the left.
- Although in the short term Johnson & Johnson may seem uncertain in the short term, in the long term they continue to increase profitability. With a AAA credit rating, J & J is as good a stock option as you're going to get
Cont.
Nizoral
Asia Pacific
- Nizoral® is sold in India.
- Anti-dandruff shampoo containing ketoconazole.
- Helps you get rid of frustrating dandruff.
- It is available in two sizes: 5 ml and 50 ml.
Nizoral
NIZORAL® A-D kills the fungus that causes dandruff. Period.
"ketoconazole" binds to the natural protein of your hair so it keeps working between shampoos with NIZORAL® A-D. *
Once the fungus is controlled, so is your dandruff.
Asia
Tokyo Science Center
Asia
2014
TSC is a research and training facility for healthcare professionals
An International Company
INT
- 265 companies in 60 countries
- $30 billion on Actelion (Swedish)
- $12 billion remaining
Australia
New Entrants
PFF
- Brings innovation, new ways of doing things
- Pressure on Johnson & Johnson through:
- lower pricing strategy
- reducing costs
- new value propositions to the customers.
Johnson & Johnson has to manage all these challenges and build effective barriers to safeguard its competitive edge.
Bargaining Power of Suppliers
PFF
- J and J buy their raw material from numerous suppliers.
- Suppliers in dominant position can decrease margins.
- Powerful suppliers in Healthcare sector use negotiating power to extract higher prices
The overall impact of higher supplier bargaining power is that it lowers the overall profitability of Drug Manufacturers.
Bargaining Power of Buyers
PFF
- Buyers are demanding.
- Want to buy the best offerings at the minimum price.
- This put pressure on Johnson & Johnson profitability in the long run.
The smaller and more powerful the customer base is, the higher the bargaining power and higher their ability to seek increasing discounts and offers.
Threat of Substitutes
PFF
- When a new product or service meets a similar customer needs in different ways, industry profitability suffers.
For example: Dropbox and Google Drive substituted storage hardware drives.
The threat of a substitute is high if it offers a value proposition uniquely different from present offerings of the industry.
Competitor Rivalry
PFF
- If the rivalry is intense it will drive down prices and decrease the overall profitability of the industry.
Johnson & Johnson operates in a very competitive Drug Manufacturers industry.
This competition does take toll on the overall long term profitability of the organization.
Implications
PFF
Analysis = complete picture of what impacts the profitability.
Identify game changing trends early on and swiftly respond to exploit the emerging opportunity.
Understanding of the Porter Five Forces in great detail can allow to shape those forces in their favor.
Recommendations
Middle East
J&J use their popular brand name and strong brand portfolio to focus on a few areas to help their brand even more.
J&J already is a global company but there are still untapped markets that they can get into. Therefore, they should scout new areas that they could infiltrate and get a good return.
Look deeper into cross-selling. They could do this by promoting deals or creating bundles of products.
Outside agency advertise these products instead of doing it in house. With outsourcing the marketing advertisements for some products they could be refreshed and more competitive in the marketplace.
To create environmental initiatives. Numerous businesses are becoming more aware of the climate crisis and larger corporations that step in and do their part will create a better public image for themselves.
Recommendations Cont.
Understand the customers core needs
Be open to collaborate with competitors
Cont.
Innovate
Create economies of scale
Build an efficient supply chain
Build a large and solid consumer base