Johnson and JohnsonINTRODUCTION

Johnson & Johnson is a U.S multinational medical devices, pharmaceutical and consumer packaged goods manufacturer founded in 1886. Its common stock is a component of the Dow Jones Industrial Average and the company is listed among the Fortune 500. In the Johnson and Johnson Company efforts to improve the quality of life for people everywhere while still maintaining a standard of employee and customer service. They are committed to working with moms, healthcare professionals, scientists and experts in public health to ensure that their products continue to achieve the highest of the JOHNSON'S Brand standards. They continue to work to reduce environmental impact to help leave behind a world which the next generation will proudly inherit. In the given project I have tried to encompass the various products and services offered by Johnson & Johnson, the market trends, the sales and distribution, the various competitors and value chain activities of the company.

What aspects of the Johnson & Johnson’s business interests me

Marketing Branding

Marketing

J&J has been doing the following types of branding in the market:

Glow shine board

Hoardings

One care vision

Posters & Danglers

MAJOR BRANDS

Some of the major Brands of J&J are:-

STAYFREE (Women health Care Products)

BAND-AID (Adhesive Bandages)

CLEAN & CLEAR ( Skin Care Products)

JOHNSON’S BABY (Baby Products)

NEUTROGENA (Skin Care Products)

LISTERINE (Oral Care Products)

BENADRYL & CALADRYL (OTC)

J&J also sponsor the programs (on Indian tele) like Neutrogena presents “tere mere bich

mein” etc.

BRAND MAKING & ITS EFFECTIVENESS

• J&J Brand making is done through by increasing consumer awareness, through advertising & promotional activities, good product visibility and availability in the market.

• J&J provides good visibility, consumer offer to the shoppers, better service to retailers, good competitive schemes, and better quality products at reasonable rates. Thus, making its brand effective in the market in terms of other brands.

JOHNSON'S SO MUCH MORE Campaign

The JOHNSON’S Brand has been pioneering the science and setting global standards in baby skin care for more than 120 years, and is now paving the way in baby care by advancing research on the importance of multi-sensorial experiences in happy, healthy baby development. The global campaign, SO MUCH MORE, is about enhancing rituals, including bath time, to stimulate baby’s senses and provide parents an opportunity to nurture baby’s ability to learn, think, love and grow.

The JOHNSON’S Global Bath Time Report, found that 84% of parents say bath time is some of the best quality time they get with their child, yet many parents underestimate its power and benefits. In fact, the Report, an online survey of more than 3,500 parents of young children around the world, conducted by Harris Poll on behalf of JOHNSON’S, found that more than half of parents (58%) say bath time is not extremely important to their child’s brain development. Yet, emerging and foundational science reveals multi-sensorial experiences are critical to helping shape baby’s growing brain.

The Brand is taking their commitment to happy, healthy baby development one step further by revealing the power of the senses in daily rituals such as bath time.

Johnson & Johnson India sales figures in mn INR(Source Euromonitor)

SWOT analysis and its integration with PESTLE

Strengths: Offers diversified products including baby cares, women’s sanitary products, orthopedic devices,

surgical products as well as internet publishing Significant sales and marketing capabilities In the process of development of oncology segment Global sales of its products Brand loyalty and brand image as a result of the corporation being known since 1886 J&J has successfully differentiated itself from competitors J&J has more than 29,925 internet domains Receives a support from non-pharmaceutical divisions Introduction of Health Future 2015 brings more customers to the till as nowadays more people

are aware of health issues.

Weaknesses 43 children over-the-counter children’s medicines were voluntary recalled, as US revealed:

“some products may not fully meet the required manufacturing specifications” In 2010 J&J recalled ASP (Articular Surface Replacement) hip prostheses from the market due to

the percentage increase in fail prostheses The corporation wastes a lot of money and time researching and hunting for information

(workers waste time replying cyclical enquiries, according to mba-lectures.com) The company has high dependence on the revenue of Risperdal and CNS J&J faces strong pressure to reduce prices and preserve copyright expirations

Opportunities Acquisition of Pfizer by J&J will help in a further growth and a development of pharmaceutical

branch J&J can increase market share by product development and product innovation globally Expansion and innovation of diagnostics and medical devices Acquisition of other pharmaceutical companies which trigger a growth of J&J corporation

Threats J&J has strong global competitors Has a very low market growth rate Damage of the brand due to the recalls Weaker consumer environment is expected in US (news.com) Makes investments into non-core areas, such as social media with Maya’s Mom

PESTLE

PESTLE Analysis is a macro environmental framework used to understand the impact of the external factors on the organization and is used as strategic analytical technique. PESTLE stands for "Political,

Economic, Social, Technological, Legal and Environmental” factors. Francis Aguilar is referred to as the originator of this tool. (Pandey, 2011)

Political Environment: Johnson & Johnson operates worldwide, it must keep track of the political developments that may affect its business.For example changes in the healthcare system may effect to the target market. (This could be a threat to J&J)

Economic Environment: Operating in the European Union and larger European community means that Johnson & Johnson has felt the effects of the current economic crisis. Aware of the crisis, the company has been able to plan for its impact, and fortunately, the effects on Johnson & Johnson have not been severe, as medical products remain necessities even in periods of economic downturn.

Also, discussions surrounding the use of the euro and the benefits and disadvantages of a common currency are debates that Johnson & Johnson should be aware (This could be threat).

Adopting the euro made transactions with other countries more convenient (speed-up of transactions). J&J also faces the numerous practical difficulties with tasks such as accounting that occurs with a change in currency. Keeping such economic scenarios in mind is crucial to Johnson & Johnson's success.(This is a mix of Threat and Opportunity)

Social Environment:

There are two major social changes on the horizon that will both affect Johnson & Johnson as well as provide tremendous opportunities. The first is the aging population. The baby generation, has a huge social and economic impact on the world since its birth. This trend will continue as the generation is beginning to enter old age. The influx of senior citizens will create huge demands throughout all realms of medical care (This is an opportunity for J&J). J &J can expect to see increased sales across all three of its segments – pharmaceuticals, medical devices and diagnostics, and consumer goods – in the coming decades, and must plan production accordingly to be able to meet the needs of this huge generation as they enter their most medically-dependent years.

Another major social change affecting Johnson & Johnson is the phenomenon of surging rates of various health problems, especially in developed societies but spreading worldwide, from obesity and diabetes to cancer and mental disorders. As a company that invests heavily in research and development, Johnson & Johnson has the opportunity to lead the way in finding ways to address these serious public health issues.

In response to a falling birth rate, J&J, involved with the provision of baby-care products, have effectively targeted these products at an adult female audience. (This is strength of J&J). For example, their baby lotion is now marketed as being kind and gentle to women’s skin, as well as that of babies. This represents a response to changes in the general environment that directly affect their industry.

Technological Environment:

As many pharmaceutical drug markets become saturated and the drug strategy becomes obsolete due to the major changes occurring in the industry, innovation and breakthrough, medical technologies are essential for finding blue oceans in which to compete. Predictive medicine, which entails predicting diseases based on genetics and preventing them, and personalized medicine, which involves managing a patient’s health based on his or her individual characteristics as opposed to following the more traditional “standards of care” model, are growing fields into which Johnson & Johnson can expand.( This is an opportunity) The company’s strong emphasis on research and development and its leadership in the medical devices and diagnostics segment put it in an excellent position to become a frontrunner in making new discoveries in these promising new technological fields.(This is a strength).

Legal

Side effects of medicines are always there. The company got stuck in many legal issues(This is the weakness)

Environmental factors

This is also a challenge to the company in terms of waste. Be it any industry J&J is related to.

In its annual Citizenship and Sustainability report, Johnson & Johnson reported it had realised a 9.6% absolute reduction in facility CO2 emissions since 2010 and a 19% reduction in its fleet emissions per mile, nearly meeting its 2015 Healthy Future targets.(Strength)

Johnson & Johnson reported a slight increase in waste disposed off-site in 2014, up 1.3% compared to 2010. The firm also experienced a 13.5% increase in hazardous waste generation from 2013.(Weakness)

Johnson & Johnson Strategy USA and India

• Most of the US based companies are moving their business towards India.

• Globalization is also a key factor.

• The sales are high in India

• They also have very high comparative advantage

• Proper supply chain management.

Porter’s Five forces Model

• Threat of new entrants is Low ,due to entry barriers such as investment cap and tuff regulations.

• The substitute's threat is High, Example of Risperdal, latent expired in 2007 and became available in generic form.

• Buyer’s bargaining power is Low cost than the original version of the drug gives consumers more capacity than company.

• Industry Competition is Low, because of diversification and lack of giant companies

• Bargaining power of suppliers , diverse and wide range of lots of drugs and pharmaceutical products supplier

MARKETING MIX

Product

• Johnson and Johnson products are basically in three main categories: Pharmaceuticals, Medical Devices & Diagnostics, and Consumer product division.

• The following are examples of the Johnson & Johnson product inventory: Feminine hygiene, First aid, Family planning, Diabetes care, Vision care, Allergy and flu treatment, Medical devices and diagnostics.

Price

• Johnson and Johnson strive to keep their net price increases for health care products within the Consumer Price Index (CPI).

• Johnson and Johnson work with Government to develop differential pricing approach to help more people access their range of products.

• The following are examples of Johnson and Johnson consumer product prices in Indian markets: Johnson’s baby lotion (200ml) Rs93, Listerine mouth wash (250ml) Rs 85, Johnson’s baby powder (400g) Rs 110, Neutrogena Extra gentle cleanser (200m) Rs 320 etc.

Place

Johnson and Johnson products can be found at Retailers, Wholesaler & Modern trade markets like Metro Cash & Carry, Dmart, Wal-Mart, Bigbazar, Reliance fresh, Hypermarket viz.

Promotion

Johnson and Johnson offers special discount coupons on products such as baby Soap, Powder, Stayfree Secure & others.

Johnson & Johnson is involved with many causes and advertising campaigns that encourage healthy lifestyles. Key initiatives include: The Campaign for Nanhi Kali,

Nursing's Future, Dermatologists training, Having a Baby Changes Things, Clean and Clear Fresh Face (Currently Shown in times of India and other leading news papers).

2009 2010 2011 2012 2013 20140

5,000

10,000

15,000

20,000

25,000

30,000

35,000

17,978 19,18121,436

23,60125,940

28,605

Sales (in mn INR)

Sales

Impact of the Structure on the performance of the Organization

In the mid of 80s of the last century many companies began experiencing the problems with managing the control over the production. Just like those companies, Johnson and Johnson was utilizing the old system of business management that in 1982 nearly had brought the company to its break down. J&J was relying onto the main four success factors, among which were: size role clarity, control and specialization However very soon the corporation had realized that there was a need to consider a new set of the factors, such as: speed, flexibility, integration and innovation.

Since then, Johnson & Johnson in order to achieve its goals and reach the vision used a Decentralized Management Approach. It is big and small at the same time. For instance each of its operating companies functions as its own small business. They are strongly entrepreneurial in character, and they know that their success depends on anticipating customers’ needs and delivering meaningful, high-quality solutions.

Johnson & Johnson focuses on the fundamentals of the business and makes sure that the companies balance the short-term and the long-term in their strategic planning. The Corporation invests in promising new businesses while maintaining leadership positions in high growth businesses. It is also focused on sustainability, and constantly reviews key economic, environmental, and employee health and safety indicators to ensure that it is on the right path. Over the last year J&J established an internal innovation fund to keep the company at the leading edge of transforming health and well-being.

Conclusion: Johnson and Johnson is recognized to be the sixth largest consumer health company as well

as the company that provides the world's largest and most diverse medical and diagnostic devises.

Johnson & Johnson's brands include numerous household names of medications and first aid supplies. Each year the number of employees increases with the same bringing the corporation one level higher. The introduction of the Heath Future 2015 project was another proof for customers that the company cares for the quality of the products and services it delivers every day.

J&J revises its vision on regular bases and expands its production to more and more countries. Such strategy gives the company an opportunity to identify the problems and eventually find a solution to them, with the same building a more trustworthy corporation and bringing more customers to the till all around the globe.

Suggestions:

In order to grow and expand in India it has to take a strict care towards its safety measures otherwise it can completely lose its image.

J&J should boast several strong nutritional brands with the emerging markets in India demanding nutritional products as new middle classes emerge, would increase its presence in one of the most attractive markets of the world at present.

J&J should open “innovation centres” in world's leading innovation hotspots such as India, with one-stop access to science and technology experts at Johnson & Johnson who can facilitate collaborations across its pharmaceutical, medical device and diagnostics and consumer companies”.

In India, J&J should open consumer care centres in which they should appoint health care consultants to explain about J&J products or to solve any query or give any information.

J&J in India, should focus on expansion of its medical and diagnostics field

The company should focus to enhance their future growth and consolidate their overall management by launching the advanced products and services in India in the near term.