Presentation Outline
The presentation seeks to cover various aspects of the company, including its profile, analyze the external and internal factors affecting its operation, and discuss the company’s value propositions and market challenges. The presentation also examines the Porter 5 Forces for the company and develops strategic options and recommendations.
Company Profile
Johnson & Johnson is a health-based organization committed to using its resources, size, and reach to make the population healthier. For the past 135 years, Johnson & Johnson has been involved in health research, disease prevention and treatment, and supporting community progress. The company’s leadership team consists of the executive committee and the Board of Directors. The executive committee comprises 11 members headed by Joaquin Duato, the company’s CEO (J&J n.d.). The Board of Directors has 14 members headed by Alex Gorsky, the company’s Executive Chairman. The company’s vision is “To help people see better, connect better, live better” (J&J n.d.). The organization’s goal is to change the trajectory of health for humanity. The organization is governed by values set in its Credo, which was developed in 1943 by General Robert Wood Johnson. The company’s Credo values extend to its corporate governance. The company believes in excellent corporate governance that comes from good processes to ensure the leaders are well supported with sufficient resources, timely and accurate information, and unrestricted access to the company.
Strategic analysis and evaluation
Johnson & Johnson is a healthcare-based company uniquely positioned to develop and capture opportunities to help the world population. Across the company’s consumer business, biologics, devices, pharmaceuticals, and diagnostics, the company has the necessary know-how to bring new healthcare solutions. The company plans to improve affordability and access, put a healthy environment, body, and mind within everyone’s reach, and develop a healthier environment. The leadership team develops the company’s strategic direction. The organization’s operations are based on decentralized management, and each senior leadership group is responsible for its strategic plan.
The company’s SWOT Analysis shows the internal issues impacting the organization. The company’s strengths include a global sales force and an excellent distribution network. Weaknesses include the company’s dependence on the launch products’ success, over-reliance on Small Molecule Drugs, and tense issues. The organization also faces various threats, including the adverse effects of current product recalls, strategic acquisitions, product diversification, and optimistic revenue growth projections. Among the opportunities, it has been exploiting the biologics market and maximizing the company’s balance between medical devices, diagnostics, and pharmaceuticals.
PESTEL Analysis reveals the external issues impacting the organization. These include Political, Economic, Social, Technological, Environmental, and Legal issues. Politically, changes In the healthcare system and politics at the local, state, and national level has had a tremendous impact on the company. Economically, the issues related to the European Union economic crisis had had some effect on the company. Socially, the aging population and surging rates of health issues have shifted how the company operates. Technologically, the company must place a strong emphasis on innovation and research, especially regarding diagnostics and medical devices. This is because the pharmaceutical drug market is saturated, and various drug strategies have become obsolete. Environmentally, the organization has to maintain sustainability and be environmentally conscious. Lastly, the legal issues impacting the organization include compliance with labor laws, privacy, and confidentiality laws.
Value propositions
Johnson and Johnson Company should use the opportunity provided by technology, data, and digitalization to engage consumers and enhance inclusive accessibility effectively. The company also seeks to accelerate innovation, especially regarding patient reach and communication. The company provides online sale websites where consumers get diagnosed virtually and have their medication delivered (James et al., 2018). The organization has focused more on advancing innovation and the Consumer Health business to allow the company to reach more consumers with healthcare products that can make a real difference in individuals’ lives. The organization’s New Consumer Health sector is anticipated to help it benefit from a better investment grade profile.
Market Challenges
Johnson & Johnson faces stiff competition from other big pharmaceutical companies, such as Pfizer, Roche, AbbVie, and Novartis, with efficient production systems and world reach. Other problems that impact the company include disruption of the supply chain. Even though the organization’s management seeks to enhance the process for maximum efficiency and effectiveness, technical contingencies have been found to disrupt smooth operations and cause severe delays (Newsroom, 2019). Moreover, the organization lacks enough qualified staff to perform the intellectual and technical work required across the company. The company relies on qualified staff to make its future promising and provide quality health services (Newsroom, 2019). Moreover, the healthcare industry is rapidly changing and requires that organizations collect and analyze large volumes of data. This has been a challenge to Johnson & Johnson company due to its reduced capacity to collect and analyze global data. Moreover, the company has also faced various challenges relating to agility and transparency. The pharmaceutical sector needs a transparent and accurate operation in all departments to promote teamwork and collaboration.
Porter’s 5 Forces for Johnson & Johnson
Regarding supplier power, Johnson & Johnson requires standardization in which the organization treats the whole world as a single market with minimal meaningful variation. The company must choose its suppliers carefully and remain environmentally conscious. Concerning buyer power, the organization needs to assume that its health products can meet the needs of individuals regardless of their place of origin. The company does not sell its products directly to consumers. Competing among rivals does not strongly impact the organization; the consumers’ demand keeps increasing while the prices remain stable (Bélyácz, 2019). The threat of substitution is severe in the pharmaceutical sector; this affects even J&J companies. The organization is not significantly affected by new entries because new entry into this sector involves several difficulties.
Strategic Options and Recommendations
The company is well-positioned and needs to enhance its position in the world market. The organization can use innovative products, including a comprehensive marketing strategy, to capture the global market. This can be achieved through recruiting a talented workforce and implementing robust pipelines. Moreover, the company can expand its global presence through acquisition (Newsroom, 2019). Researchers have found that acquisition improves market presence and expansion, product development, and reputation (Maiorescu-Murphy, 2020). The organization needs to switch its selling concept because most consumers can easily switch to competitors’ products. Moreover, J&J needs to improve mass communication. It needs to organize events where people can learn about the company and its products.
References
Bélyácz, I., 2019. Corporate strategy and competitiveness in a knowledge-based economy. Hungarian Economist’s Society of Romania, p.3.
James, M.M.A., Kee, D.M.H., Xian, T.H., Han, K.C., Ching, K.K. and Alshammari, M.S., 2019. Johnson & Johnson’s product safety issues and ways the company can address those issues. Asia Pacific Journal of Management and Education (APJME), 2(3), pp.7-18.
Maiorescu-Murphy, R.D., 2020. Online Corporate Diversity at Johnson & Johnson. In Corporate Diversity Communication Strategy (pp. 17-17). Palgrave Macmillan, Cham.
Newsroom, E. 2019 Johnson and Johnson faces up to supply chain challenge, edie. edie. Web.
Rameschandra, R.M., 2021. Equity research-Johnson & Johnson (Doctoral dissertation, Instituto Superior de Economia e Gestão).