Introduction to the company

Johnson & Johnson is an American multinational

corporation founded in 1886 that develops medical devices,
pharmaceutical and consumer packaged goods. Its common stock is a
component of the Dow Jones Industrial Average and the company is
ranked No. 37 on the 2018 Fortune 500list of the largest United States
corporations by total revenue. J&J is one of the world's most valuable
companies.
 History about Johnson & Johnson
Robert Wood Johnson joined his
brothers James Wood Johnson and Edward
Mead Johnson to create a line of ready-to-
use surgical dressings in 1885. The
company produced its first products in
1886 and incorporated in 1887. Robert
Wood Johnson served as the first president
of the company.
 Johnson & Johnson is headquartered in New Brunswick, New Jersey. The
corporation includes some 250 subsidiary companies with operations in 60 countries
and products sold in over 175 countries. The company operates in three broad
divisions:
Consumer Healthcare
Medical Devices and
Pharmaceuticals.
Johnson & Johnson Family of Companies
Consumer Healthcare Medical Devices Pharmaceuticals

Baby Care Janssen

Biosense Webster
Skin & Hair Care Janssen R&D LLC
Ethicon, Inc.
Wound Care and Topicals Janssen Healthcare Innovation
DePuy Synthes
Oral Health Care Janssen Pharmaceuticals Inc
Janssen Diagnostics BVBA
Women's Health Janssen Diagnostics
Johnson & Johnson Vision Care,
McNeil Consumer Healthcare Janssen Therapeutics
Inc.
Over-The-Counter Medicines Janssen Scientific Affairs
Nutritionals McNeil-PPC, Inc
Mentor
• This SWOT analysis focuses on Johnson and Johnson, a global
consumer healthcare company with a portfolio of subsidiaries that
made medical devices, medical diagnostic equipment, biologics and
pharmaceuticals as well as consumer healthcare products.
• Despite its leadership position in its industry and associated markets,
Johnson and Johnson still must continually reassess its position and
strategy by examining its strengths and weaknesses as a company as
well as how effectively it can leverage the opportunities that have been
identified as well as address and minimize any perceived threats to the
organization.
• In this way, Johnson and Johnson can change its strategy and maintain
its global leadership position in consumer healthcare products.
• Strengths
• Worldwide sales continue to grow with ongoing plans for further geographic and
market solution expansion to sustain sales growth.
• Johnson and Johnson uses a flexible business model that allows to adapt quickly
to market changes and trends, focusing on entrepreneurship, problemsolving
techniques, and innovation.
• This business model has led to numerous innovative medical devices,
pharmaceuticals, and other consumer healthcare product releases,
furtherdifferentiating the company from its competitors.
• Many of its portfolio brands are admired by a wide range of customers who
regularly return to these products for reliability, quality, and value.
• The company has enhanced its brand equity through accolades like most
reputable company and one of the best companies to work for around the world.
• Weaknesses
• Pharmaceutical companies have been criticised for their high prices, which
many consumers have trouble paying so this has led to concerns
overcorporate greed.
• There have been recent protests against some of Johnson and Johnson’s
products, including its pelvic mesh implants, which have led to a
damagedreputation.
• The company is dependent on certain products and small niche drugs for
the pharmaceutical industry.
• Recent reports that employees of the company have stolen company
secrets and information, which has undermined its efforts to create an
ethical andresponsible workplace.
• Opportunities
• With a diverse portfolio of solutions, there are many untapped opportunities for cross-
selling products. This includes cross-selling between medicaldevices, pharmaceuticals,
and diagnostics related to care-giving and specific therapies for oncology, diabetes, and
other health issues.
• There are opportunities for further acquisitions to strengthen its position, further
diversify its product portfolio, expand its territories, add toits resource and research
capabilities and grow revenue streams.
• There are new medical therapies and findings that align with some of the company’s core
capabilities, providing new opportunities for additional marketshare and leadership.
• The diagnostic market appears to be growing, which positions Johnson and Johnson as a
first mover in many applications.
• Some countries are now banning generic medicine, which gives Johnson and Johnson an
advantage.
• Threats
• The company’s success with any product release, including medical devices,
pharmaceuticals, and healthcare products are often tied to regulatoryapproval
more so than market acceptance. This can also vary from country to country,
which further complicates the potential for success with new
• products.
• There have been many product recalls, which can threaten the company’s
credibility.
• Generic pharmaceutical products at a much reduced price are a significant threat
to Johnson and Johnson.
• U.S. competition has the perception of being more reliable than Johnson and
Johnson with many products, especially in light of product recalls andprotests
about the adverse side effects of some of its products.
Competitor analysis
• Major competitors
• Although the Consumer Health Care division is the smallest of the
company’s three segments, it includes some of the company’s most
recognizable brands such as Tylenol, Neutrogena, and Band-Aid. The
major competitors of J&J are Novartis and Procter and Gamble in
baby care products.
Customer analysis
• Johnson & Johnson’s (JNJ) Consumer segment revenues fell 1.5% to ~$13.3 billion
for 2016, compared to 2015. This includes operational growth of 1.5%, which was
more than offset by the 3% negative currency impact. The currency devaluation
in Venezuela impacted worldwide growth by ~1.2% during 2016.
• Baby Care franchise
• Johnson & Johnson’s Baby Care franchise contributed ~15% of the company’s
total segment sales for 2016. The franchise’s sales fell 7.2% to $2.0 billion in 2016,
including an operational decline of 2.7%. This followed the consumer shift to
premium products due to competition in the US market, as well as competition in
international markets.
• For the US market, strong sales were reported by Aveeno baby products. For
international markets, growth was driven by the Hipoglos acquisition, but Indian
demonetization and lower sales of cleansers offset the growth.
• Johnson & Johnson Company is known as the world’s leading manufacturer and of the consumer products like health care. The Company has
produced various forms of products like sterile dressings and baby shampoo. It has the long history of the management and operations of different
independent business units. It is known as one of the fastest moving company for consumer goods producer across the globe. The company is ranked
amongst the most successful and consistent enterprises across the world, among the list of most famous companies of the globe. Its division of
consumer products is growing rapidly since last few years, because of effective approaches and efficiently implementation of them. It is consider as
one of the broad and most comprehensive manufacturer of the health care services and products for customer medical, diagnostic and
pharmaceutical market (JnJ, 2018).
• Such large scale success of the company is only possible because of the effective management of production through the different sub units. However,
out of several products, some items get most favorable response, whereas some get unfavorable response from consumers. The BCG matrix thus,
helps in presenting the framework, which used for evaluating different products and also differentiate among the profitable and non-profitable ones
(Hanlon, 2018). Here is the detailed BCG matrix evaluation of the Johnson & Johnson;
• Cash Cows
• Products and services, which are operating in the market relatively for a longer time, and are successful in capturing the significant level of market
share are the cash cows for the company. Such products helps in promoting the sustainability and growth of company without much investment. Baby
and beauty products are the cash cows for Johnson & Johnson. They capture the large portion of market share and does not require heavy investment
on promoting the product or finance for the capacity expansion, because of the stable market conditions. These items enjoy the economies of scale
with high profit margins (UK essays, 2013).
• Stars
• The second type is of star products, which are the emerging products of the company portfolio. The company has the high market share and so the
growth in the industry that makes the business units the target for the growth and investment focused operation by management. These stars can be
developed in the cash cows after obtaining the maturity stage. Its health and healing products along with some beauty products are the star items for
the company. However, company needs to make effective strategies for competing in the most competitive industry, as there are many strong rivals.
Its marketing campaigns an help them in achieving the target (JnJ, Annual report, 2015).
• Question Marks
• The business is responsible for managing different products to be more successful in the industry, however, every product does
not bring the favorable outcome and gain relatively small level of the market success. Few products owns the uncertain outlook,
and this makes the management realize to invest more in these items for grabbing the high market share, by utilizing its high
growth level. For some part of the world, medical devices of Johnson & Johnson are consider as the question mark, because of
under-performing of the divisions in marketing the product. Johnson & Johnson require the investment for surviving in the highly
competitive market (UK Essays, 2013).
• Dogs
• Due to weak market growth and share in the industry, these products are known as dogs. The customers started to question the
efficiency and product effectiveness, which might force companies to shut down the production of them, and use the investment
in some other segment. However, Johnson & Johnson does not have any such products, but for some part of the world, some of
the pharmaceutical items might be categorized a dogs, however, it’s mostly on breakeven level (JnJ, 2018).
• References
• Hanlon, A. 2018. How to use BCG matrix tool. [Online], Available at: https://www.smartinsights.com/marketing-
planning/marketing-models/use-bcg-matrix/, [Accessed on: 30th August, 2018].
JnJ, 2018. About US. [Online], Available at: https://www.jnj.com/about-jnj, [Accessed on: 30th August, 2018].
JnJ, 2015. Annual report. [Online], Available at: https://www.jnj.com/about-jnj/annual-reports, [Accessed on: 30th August, 2018].
UKEssays. 2013. Case Study Johnson Johnson Marketing Essay. [Online]. Available
at: https://www.ukessays.com/essays/marketing/case-study-johnson-johnson-marketing-essay.php?vref=1, [Accessed on: 30th
August 2018].
• Johnson and Johnson is an Ameriean multinational that works for manufaeturing and selling of
medieal devices, health produets, beauty produets and pharmaeeutieals. The eompany was
founded in 1886 and is involved in selling of their produets worldwide over the years. The
eompany aims to inspire and ehange people's lives around the world, daiming this as a part of its
vision.
• Doing the porters five forees model analysis of Johnson and Johnson, we will determine the
eurrent position of the eompany in their own competitive industry in terms of five forees aeting
upon it externally.
• Threat of New Entrants
• The barriers to this industry indude the expenses involved in researehing to enter and survive in
this industry, the expense involved in produetion and manufaeturing of medieines and medieal
devices, and most importantly the eost and effort involved to maintain their manufaeturing
proeess as well as to establish their name in the industry. All these faetors hinder the easy
entranee of new eompetitors in this industry. Moreover, Johnson and Johnson has been a part of
the market for deeades now and they have maintained their brand name and their eustomers
trust them and are very loyal to them, so any new entrant in the industry ean pose very little
threat to the name and business of Johnson and Johnson. So, the threat of new entrants for
Johnson and Johnson is low.
• Threat of Substitutes
• There are very few substitutes available for Johnson and Johnson in the market, espeeially when it eomes to
their medieines. Some of the substitutes that the eonsumer may eonsider buying ean be store-brands and
natural herbs. Natural herbs are very rare and expensive so they pose a very low threat to Johnson and
Johnson. When it eomes to beauty produets, Johnson and Johnson faees somewhat more eompetition as it
is a competitive industry and some of the eompetitors have also established their brand names as well.
Despite these brands available to the eustomers, Johnson and Johnson does not lose out on its loyal
eustomers. So, Johnson and Johnson faees moderate threat from substitutes available to the eustomers.
• Bargaining Power of Buyers
• Buyers ofjohnson and Johnson produets inelude individual buyers, doetors, wholesalers, retailers,
pharmaeists and insuranee eompanies. When it eomes to wholesalers or retailers, there are very few
suppliers available to them that have aetually established a well-known brand name throughout the world
so they will try to maintain good relations with these pharmaeeutieals so their business keeps on going.
When it eomes to doetors, physieians, pharmaeists and insuranee eompanies, they also need to be
assoeiated with a eredible name sueh as Johnson and Johnson so the bargaining power is low in their ease
as well. Individual buyers have some bargaining power beeause the switehing eost for them is really low but
then again, beeause of sueh a good name that Johnson and Johnson has gained for itself, the bargaining
power of eustomers remains low. So, overall the bargaining power of buyers is low in ease of Johnson
andjohnson.
• Bargaining Power of Suppliers
• The suppliers forjohnson and Johnson indude the suppliers required in the manufaeturing of
medieal equipment as well as medieines. The eompany makes sure that it ehooses its suppliers
very earefully as they need standardized as well as eustomized suppliers. So they need to have
eredible and reliable suppliers. Johnson and Johnson usually has eontraetual agreement with the
suppliers to maintain long-term relationships. The suppliers have huge eosts involved as well, and
they would never want to lose out on sueh an established name worldwide. The bargaining power
of suppliers in ease ofjohnson andjohnson is low.
• Competitive Rivalry
• The eompetition in this industry is high in terms of the eompanies available in the market. But
they are not eompeting in terms of priee as usually the priees of the medieines are supposed to
stay stable due to eertain regulations imposed by governments around the world. Usually in this
industry, the eompanies merge or acquire eompanies that tend to inerease their business,
espeeially in the medieal industry. They also try to diversify their range of produets in the market.
In sueh terms, Johnson and Johnson is performing well as is eompeting really well globally. So, the
eompetition in the industry forjohnson and Johnson is moderate.