Group No. 4Prajakta Talathi – GSEP13CMM031Avinash Singh – GSEP13CMM023Anirudh Venkat – GSEP13CMM020Manish Barapatre – GSEP13CMM038

Executive SummaryJohnson and Johnson is has more than 250 companies located in about 60 countries. These group companies are organized into three main segments which then further comprise of different brand and product categories. Broadly, its businesses are segmented into pharmaceuticals, consumer healthcare and medical devices & diagnostics.

To improve sales J&J uses a hybrid model of where inside sales people initiate sales discussions over the telephone and emails and eventually travel when necessary to close these sales. Market Development, Market Intelligence and Generation of Leads with the help of their supply chain partners is the strategy implemented by J&J.

Different roles are present for sales job following the sales process to “Identify the Prospect” and “Make the Sale”. Culture of Johnson and Johnson is achieved by

1. Innovation2. Education3. Customer focus4. Credo-led organization

Employees are trained for Global Leadership Profile, E –University, Learning and Development and other Leadership Development Program. In every segment J&J operates, it holds the position of a market leader. For being a leader in the market, company always comes up with innovative products. In a nutshell it works by the way of New Market Development.

Three major opportunities available for J&J medical at present are as follows: Collaboration with Government, Increase the Reach and Strategic Alliance with other Companies. But presently J&J is facing few challenges such as Pricing, Legal and Government Issues and Sales and Operational Planning.

Based on the research, few recommendations are suggested to improve the sales, to improve the culture and to restructure future of J&J.

Table of ContentsExecutive Summary...............................................................................................................................1

Industry Analysis....................................................................................................................................4

Company Structure............................................................................................................................4

Pharmaceuticals............................................................................................................................4

Consumer Healthcare....................................................................................................................4

Medical Devices & Diagnostics......................................................................................................4

Strategy.............................................................................................................................................4

Inside and Outside Sales................................................................................................................4

Market Development....................................................................................................................5

Marketing Intelligence...................................................................................................................5

Generation of Leads......................................................................................................................5

Roles..................................................................................................................................................5

Hunters & Farmers........................................................................................................................5

Industry Roles................................................................................................................................6

Sales Process.....................................................................................................................................6

Identifying the Prospect................................................................................................................7

Making the Sale.............................................................................................................................7

Culture of Johnson and Johnson............................................................................................................7

Training..................................................................................................................................................7

Global Leadership Profile...................................................................................................................7

E –University......................................................................................................................................7

Learning & Development...................................................................................................................7

Leadership Development Program....................................................................................................7

Approach to Sales..................................................................................................................................8

Opportunity & Challenge.......................................................................................................................8

Opportunity.......................................................................................................................................8

Collaboration with Government....................................................................................................8

Increase the Reach........................................................................................................................8

Strategic Alliance with other Companies.......................................................................................8

Challenges.........................................................................................................................................8

Pricing............................................................................................................................................8

Legal and Government Issues........................................................................................................9

Sales and Operational Planning.....................................................................................................9

Managing the Challenges..................................................................................................................9

Price...............................................................................................................................................9

Legal & Government Issues...........................................................................................................9

Sales and Operational Planning.....................................................................................................9

Recommendations.................................................................................................................................9

Improve Sales....................................................................................................................................9

Improve Culture...............................................................................................................................10

Restructure For Future....................................................................................................................10

End-to-end Approach..................................................................................................................10

Focus............................................................................................................................................10

Proactive Risk Management........................................................................................................10

Correct Talent Deployment.........................................................................................................10

Proper Communication................................................................................................................11

Bibliography.........................................................................................................................................12

Industry Analysis

Company StructureJohnson & Johnson, J&J, has more than 250 companies located in about 60 countries. These group companies are organized into three main segments which then further comprise of different brand and product categories. Broadly, its businesses are segmented into pharmaceuticals, consumer healthcare and medical devices & diagnostics.

Pharmaceuticals The Pharmaceuticals vertical includes oncology (e.g., multiple myeloma and prostate cancer), immunology (e.g., rheumatoid arthritis, irritable bowel disease and psoriasis), neuroscience (e.g., schizophrenia, dementia and pain), infectious disease (e.g., HIV/AIDS, Hepatitis C and tuberculosis), and cardiovascular and metabolic diseases (e.g., diabetes) (J&J, 2014).

Consumer Healthcare This segment has under it a range of products used in the baby care, skin care, oral care, wound care and women’s health care fields, as well as nutritional and over-the-counter pharmaceutical products, and wellness and prevention platforms (J&J, 2014).

Medical Devices & Diagnostics This business segment contains products and services that are used predominantly in health care fields like orthopaedics, neurological disease, vision care, diabetes care, infection prevention, diagnostics, cardiovascular disease, and aesthetics. This segment is comprises Global Medical Solutions, Global Orthopaedics and Neurological, and Global Surgery Groups (J&J, 2014).

The below report is for Medical Devices and Diagnostics segment of J&J.

Strategy

Inside and Outside SalesInside salespeople work entirely from an office over the telephone and emails. Sometimes inside sales manages the entire sales cycle over the phone and through email whereas sometimes they initiate the sales discussion and transition the leads to outside sales to close the deal. In this situation they their performance is rated on the number of qualified leads transitioned to sales.

Outside salespeople are those that make visits to prospective customers in their territory. They thrive on face-to-face interactions and build a strong familiarity and rapport with their clients by meeting them frequently and only coming back to the office for sales meetings.

Johnson & Johnson

Pharmaceuticals Consumer Healthcare Medical Devices & Diagnostics

Nowadays J&J is using a hybrid model of where inside sales people initiate sales discussions over the telephone and emails and eventually travel when necessary to close these sales. The effectiveness of Inside sales can be seen by Marc Benioff’s statement in his book “Behind the Cloud,” that salesforce.com “grew their company for the first five or six years with a telesales or inside sales model (Benioff & Adler, 2009).” Group companies of J&J have an optimal mix of these types of sales people because each industry requires a different approach.

Market DevelopmentThe main strategy of J&J is Market Development where they develop market for their own innovative product.

Marketing IntelligenceSales and Marketing Strategy of J&J depends largely on their network. Based on the insights of their Intelligence team, they formulate their strategy.

Generation of LeadsJ&J gets their leads with the help of Supply Chain partners, especially their distributors & Front line sales people.

RolesSales contain direct sales and a host of back-office sales functions that are geared towards helping the on-field sales teams achieve their goals. All sales roles can be classified into the following:

Hunters & FarmersHunters have the responsibility of bringing in new business for a company either over the telephone or through on-field sales. Whereas Farmers focus only on growing existing accounts. This can be done through up-selling and cross-selling to those particular accounts. J&J needs to retain the current business as well as grow their accounts i.e. increase the accounts share of wallet in the company and increase the company’s share of the clients spend. J&J has a mix of these roles across all the group companies.

Industry Roles

Vice President: Vice president heads the entire Sales & Operation of the company. He is looks after Sales, Marketing, Operation and Finance of the company.

Franchisee Director: Franchisee director reports to Vice President & is responsible for looking after the Sales & Marketing function of the organization.

National Sales Manager (NSM): National Sales Manager reports to Franchisee Director and is responsible for delivering the sales number for the country.

Regional Sales Manager (RSM): Each country is divide in 4 regions (East, West, North and South) which is headed by a RSM. They report to NSM and are responsible for delivering the sales number for the region.

Regional Sales Executive (RSE): RSE are also called as State Managers or Supervisors. They report to RSM and are responsible for delivering sales number for a state.

District Manager/Assistant District Manager/Territory Manager: These are the front-line salesperson with slight difference in employee band. They are at customer-end and look after daily sales operation.

Sales ProcessThe typical series of events that J&J goes through to sell a product of service constitutes the sales process. It generally varies from customer to customer and depends on a lot of factors such as type of product of service, what is the firms’ position on the value chain etc.

Vice -President

Director-Finance Franchisee Director(Sales & Marketing)

National Sales Manger

Reginal Sales Manager

Regional Sales Executive

District Manager Assitant District Manager Territory Manager

Marketing Manager

Product Manager Product Manager

Director-Supply Chain

Identifying the Prospect

Making the Sale

Culture of Johnson and JohnsonJ&J CREDO is the foundation of its culture and commitment to people, community and wellbeing. It influences the way people interact with each other as well as the way to serve to customers and their patients and engage with all stakeholders (Jnj.com.au, 2014).Johnson & Johnson Medical aspire to be the most trusted, caring and innovative healthcare company which, in partnership with healthcare professional improve life of people around the world (Jnj.com.au, 2014). This is achieved by:

1. Innovation2. Education3. Customer focus4. Credo-led organization

TrainingJ&J encourages its people to utilize all possible opportunity for their development. To help employee in their job, J&J provides the following training:

Global Leadership Profile It is a framework used for self-assessment between manager and employee. It helps in finding out talent pipeline within the organization.

E –University This as an online tool which allows employee to register for a particular course & study it online.

Learning & Development Various learning & development training such as Product & Procedure Training, Negotiation Skills etc. are provided on regular basis.

Leadership Development Program This program is for people coming from different management schools to give them rigorous on job training & groom them for their leadership role.

Identifying Prospect/s

ResearchBuying

Motivators/Behaviour &

Analysis

Sales PlanningHow do we

approach? our Value

Proposition?

ApproachCold Calling or

Feild Sales

Building a Relationship/Rap

port

M aking the Sales Pitch Closing Sale

After Sales Support &

Service

Approach to SalesIn every segment J&J operates, it holds the position of a market leader. For being a leader in the market, company always comes up with innovative products. In a nutshell it works by the way of NEW MARKET DEVELOPMENT. J&J never operates in markets developed by someone else.

To achieve this objective the major focus of company is in spreading more & more of surgical education to the customer and updating their knowledge & skills about the latest innovation in the market so that they can provide better treatment to their patients.

Opportunity & Challenge

Opportunity Three major opportunities available for J&J medical at present are as follows:

Collaboration with Government Government is running lot of healthcare schemes in India (e.g. NRHM-National Rural Health Mission etc.) J&J still does not have a dedicated plan for tapping this opportunity. By collaborating with government on this kind of project will help in developing new business and contributing to the society.

Increase the Reach J&J is operating with very premium priced product which is affordable to a particular class of society. These people are basically situated in the metro city or other big cities of India. A big chunk of customer living in small cities is still untouched by the company. J& J must find out some low cost alternative to penetrate this big market.

Strategic Alliance with other Companies J&J is a very diverse and leading healthcare company in the world. Nonetheless it can collaborate with other medical device manufacturing companies and create a stronger position for itself in the market. Presently, customers such as hospitals are trying to take advantage of manufacturing companies. This alliance with other companies will help J&J while negotiating with the customers.

ChallengesThree major challenges in front of J&J Medical are:

PricingEvery year Company is increasing its price of products by 5-6 %. J&J is already charging very premium price. Indian Market is very price sensitive; hence J&J is losing its business. Sales people are having hard time to defend the business in the market with such a high premium price.

Legal and Government IssuesSince last few years J&J is facing Government and Regulatory issues. Two of the production plants in India have been stopped by Maharashtra FDA. So company is having tough time dealing with Government bodies. J&J was also fined for some of their defective orthopaedic implants in the US.

Sales and Operational Planning Failure of supply chain to make product available to the customer when he requires it is one of the frequent problems faced by J&J. This is observed regularly because of the communication gap between sales and supply chain department of company. Because of this gap company loses business some time.

Managing the ChallengesTo operate efficiently and to generate regular profits, company needs to address the aforementioned challenges faced by it. The various ways used by J&J are:

Price To justify the premium price charged, company Is investing big amount in spreading surgical education in country. They have well equipped labs for training surgeon. Company is also trying to come up with specific surgical kits applicable to different surgeries .These kits will be helpful in providing low cost alternative to customer in small cities.

Legal & Government Issues To avoid any legal or Government issues, company has become very strict in terms of its quality control at every plant. Also the process of launching a new product has been made more stringent which requires different stages of trial & testing for the product.

Sales and Operational Planning To manage the issue of Sales and Operational Planning, company is trying to incorporate a process where supply chain does its own estimation of demand based on previous data and sales team has also been asked to give its own demand forecast for future on quarterly basis. Supply chain works on compiled outcome of these two projections. Also they are keeping enough buffer stock to address any ups & downs in demand.

Recommendations

Improve SalesGrant Legitimate Powers to front-line Sales team

Front-line Sales team lacks authority to decide price and make other commitments to the customer. Salesperson will need approval from higher authority before proceeding with any deals. Owing to this delay, J&J might lose its customer. Hence, if front-line salesperson gets some decision making power, the deal between customer and J&J may happen quicker.

Fill the Gap in Sales and Operations Planning

Wrong demand forecast by the improper supply chain planning, has caused lags in delivery and customer dissatisfaction. Adopting proper forecasting methodologies and improving supply chain planning will help J&J improve their sales.

Reduce Prices

J&J delivers goods at a very premium price and hence is not affordable by all. They have expansion opportunities B and C level cities and target the price sensitive people residing there.

Improve CultureReduce Hierarchy

All big organizations have hierarchical organization structure. In J&J hierarchy has led to Bureaucratic misuse which needs to be improved. If situation like this persists, soon the moral of employees will degrade and this will not be good for the company.

Restructure Process

There are too many processes in J&J which need to be followed for any simple thing. This becomes very time consuming and can result into losing the customer. Rather than following complex and lengthy processes, J&J should incorporate simple and easy-to-follow processes.

Improve Transparency

More hierarchy and processes have reduced the transparency in the organization. J&J needs to make their system more transparent.

Restructure For FutureJohnson & Johnson goes for restructuring every 2-3 years. Basic Purpose of restructuring is to look for innovative solutions for complex problems in the market. By restructuring company deploys different sales people for different role. But this kind of restructuring of keeping only sales into consideration has some flaw in it & ultimately leads to financial or talent loss in the organization. So for future we would like to recommend the following things to be considered while restructuring:

End-to-end Approach This type of holistic approach will reduce any surprise elements in the process.

FocusA focused approach will help in managing any effect that come into play after change.

Proactive Risk ManagementThese restructure will lead to financial losses at some place & talent losses at other. So a proactive approach to handle risk will be helpful in avoiding this kind of situation.

Correct Talent DeploymentDeployment of right person at right place is very critical for the success of any restructure program.

Proper CommunicationSometimes Company lacks in communicating with employee about the progress of restructuring which creates an unstable environment in the organization. Information about restructuring should be communicated properly to the employees.

BibliographyBenioff, M., & Adler, C. (2009). Behind the Cloud: The Untold Story of How Salesforce.com Went from

Idea to Billion-Dollar Company and Revolutionized an Industry. San Francisco: Jossey-Bass.

J&J. (2014, March 28). Retrieved March 30, 2014, from Johnson & Johnson: http://www.jnj.com/about-jnj/company-structure

Jnj.com.au. (2014, March 29th). Retrieved from Johnson & Johnson: http://www.jnjmedical.com.au/people/values-culture