Johnson & Johnson is a conglomerate of firms that operate in three segments: pharmaceuticals, medical devices, and consumer health care. Medicines are created and distributed to thousands of patients throughout the globe as part of the pharmaceutical section, which is managed in Switzerland by the company Janssen. According to DePuy Synthes, the medical devices sector is responsible for “the world’s most complete array of orthopedic goods and services,” which includes joint reconstruction products, spine surgery, and neurosurgical products; Johnson & Johnson provides its customers with a wide range of items in the consumer health care industry, ranging from over-the-counter medications to its world-renowned infant products, among other things.
SWOT Analysis of Johnson & Johnson
The internal strategic strengths and weaknesses of Johnson & Johnson shapes its capabilities and challenges. For example, the company’s global activities allow it to benefit from economies of scale, which helps it compete. The commercial opportunities and threats of Johnson & Johnson are based on the state of the business industries, sectors, and the markets in which it competes. Therefore, Johnson & Johnson must develop ways and strategies to grow and keep the company safe before the competition does. If the company Johnson & Johnson doesn’t solve the problems raised in this Swot Analysis, it won’t be able to grow or stay alive in the long run.
Strengths of Johnson & Johnson
Efficient Supply Chain System: There is an enormous supply chain in place at the company, ensuring the availability of raw materials and the timely delivery of finished items throughout the organization. (2).
A Highly Successful Brand & Reputation: Johnson & Johnson has made significant investments in developing a strong brand portfolio over the years. According to Forbes, the company has a high degree of brand recognition and a brand worth of USD 312.6 billion as of May 2016. (3). Moreover, this farm is the most powerful and essential business globally. They have an impact on the economy of the nations and include the stock market of the United States. (1).
Sales Revenues: Johnson & Johnson generated $80.86 billion in revenue over the preceding 12 months of operations. Pfizer, the pharmaceutical behemoth, has made $48.65 billion in the same period that Johnson & Johnson has earned $48.65 billion. A good revenue stream puts Johnson & Johnson in a strong position in the industry, giving the company a large competitive advantage of 66.20 percent over its nearest competitor. (3).
Product Line: Pharmaceuticals, medical equipment, and consumer health care goods are part of Johnson & Johnson’s product line. Listerine, Band-Aid, Tylenol, and Pepcid are just a few of the familiar names owned by the company. Janssen, one of Johnson & Johnson’s pharmaceutical subsidiaries, manufactures more than 380 products. It has a wide range of items, both well-known and obscure. (1).
Weakness of Johnson & Johnson
An Allegation of Gender Discrimination: Johnson & Johnson Diversity and Inclusion Policy declare a commitment to promoting and maintaining an inclusive work environment. Johnson & Johnson’s commitment to gender equality has been called into question by the announcement that a former top executive has filed a discrimination and harassment lawsuit against the company. (3).
Bribery Allegations: In exchange for prescribing its products more often, the pharmaceutical industry rewards doctors, a bribe. A whistleblower has accused Johnson & Johnson of offering free services to doctors to increase the number of Remicade and Simponi medications (3).
Over-reliance on Successful Products: Once a product has been released and has reached the top of the market, it can only fall. Johnson & Johnson’s overreliance on Zytiga’s $3.5 billion annual sales until 2018, when court-approved generic sales of the treatment led to a dramatic decrease in sales. (5).
Unacceptable Methods of Conduct: Oklahoma court held J&J guilty of spreading “false, deceptive, and harmful marketing efforts” for opioids. The judge also blamed the advertising for increasing addiction and overdose fatalities. Earlier in the year, Johnson & Johnson added $1 billion to the $4 billion set aside to resolve 2000 opioid-related complaints. (4).
Opportunities for Johnson & Johnson
Decreasing Transportation Cost: Reduced shipping costs may also cut the costs of Johnson & Johnson’s goods, giving the firm a chance to either enhance profitability or win market share by passing on the savings to consumers. (4).
Mergers and Acquisitions: Mergers and Acquisitions enable organizations to expand their product lines without spending time creating new capabilities in-house. “Momenta” was recently purchased by Johnson & Johnson for $65.9 billion. Johnson & Johnson now has a stronger foothold in producing and researching drugs for auto-immune diseases. (1).
Focusing Emerging Markets: The United States accounts for about 57 percent of Johnson & Johnson’s worldwide pharmaceutical revenues. Increased pharmaceutical sales in Latin America, Africa, and Asia will allow the company to concentrate its efforts. (2).
Targeting the Lower-Class People: To attract lower-income clients, Johnson & Johnson may manufacture more economical items or provide discounts on drugs. As medical devices and pharmaceuticals account for over 80% of overall revenue, Johnson & Johnson may enhance sales of consumer health goods by rebalancing the portfolio. (4).
Threats for Johnson & Johnson
Severe Competition: Competition from Reckitt Benckiser, Unilever, Procter & Gamble, Abbott, and many others is a threat to Johnson & Johnson’s profits. If the competition becomes more intense, Johnson & Johnson will lose a significant percentage of its market share. (3).
Delaying & Lack of Surgeries: Johnson & Johnson is a leader in manufacturing and distributing medical products. Over the last two quarters, sales have fallen here. Because of COVID-19, Johnson & Johnson saw a decrease in sales. (3).
Government Regulations: The pharmaceutical sector is heavily regulated. These rules limit how much firms may charge for their goods. Moreover, medicine price policies vary per nation. Because Johnson & Johnson operates in many countries, maintaining global compliance is difficult. (3).
A New Class of High-Tech Entrants: India, for example, is fast becoming a hotbed for new pharmaceutical companies. Johnson & Johnson will have difficulty maintaining even the majority of its clients if any competitor gains the technical ability to build cheaper and more effective rivals. (4).
Recommendations
This Swot Analysis tells us that brands like Johnson and Johnson should target rising markets of lower-class people with a cheap rate or offering a discount price. Moreover, the company must develop more inventive medications to compete with the numerous new and effective drugs being developed by other nations. In addition, the company must also resolve its legal challenges. As a result, it will lead to an increase in the company’s financial resources to sustain.
REFERENCES
- Johnson, G., Whittington, R. and Scholes, K. (2017) Exploring Strategy, 11th edn, New York, Pearson.Macrotrends.net. (2019). Johnson & Johnson Market Cap 2006-2019 | JNJ. [online] Available at: https://www.macrotrends.net/stocks/charts/JNJ/johnson-johnson/market-cap (Accessed 11 Nov. 2019)
- Forbes (2016) Available at: http://www.forbes.com/companies/johnson-johnson/
- https://www.edrawmax.com/article/johnson-and-johnson-swot-analysis.html
- Great Speculations (2019, January 24). Johnson & Johnson Will Likely See A Decline In Sales In 2019 Amid Generic Competition. Forbes
