Guidelines for Analyzing Short or Mini Cases in Strategic Management Situation Analysis: Analyze the current situation as described in the case A. The firm B. The industry the firm operates in C. Competition D. Major Challenges the firm/industry faced with The firms Business Strategy: What strategy the firm has adopted (Cost leadership, Differentiation, Cost Focus or differentiation Focus) and what are its implications on firm's economic performance. Internal Analysis of the Firm from Strategic Management Perspective You could discuss issues from the following: External environment. Internal environment. Rivalry in the industry. Market growth rate Firm's market share. SWOT Analysis. Overall evaluation of the internal environment ...... Overall evaluation of the external environment ......... Alternatives to Solve the Highlighted Issues or Problems ............................... Criteria Matrix to Evaluate Alternatives Recommendation Action Plan Contingency (emergency) Plan Answers to the questions References \f. STUDENT'S NAME: SUZAN ALIAN SYUDENT'S ID: 201410177 MIDTERM CASE STUDY: JOHNSON & JOHNSON SUPERVISED BY : DR. DHAFAR HUSSAIEN . Content History . Vision statement. Mission statement. Strategic business units. Competitive profile . J&J household Names . External opportunities and threats. Internal strength and weaknesses. EFAS-IFAS-SFAS Ratio Analyses Evaluation and Recommendation. References. . Brief history Formed in 1886 by the three brothers with the idea of nurses and doctors applying dressings, sterile suture along with bandages in treating individuals' wounds. Mostly associated with the health care products or facilities, and the consumer services, medical devices, and the pharmaceutical as well as the diagnostics markets. . J&J household Names J&J went public in 1944 with brands like Tylenol, Accuview, LifeScan, Neutrogena, and Band-Aid. They created the company credo, outlines the company's responsibilities to doctors, patients, customers, and employees. Their product brand names become household words, such as Band-Aid. generic . Vision statement To bring healthy vision to everyone, everywhere, every day. Or in other words to increase the worldwide power of diversity as well as inclusion in order to guide vital business results and the sustainable competitive advantages. . Mission statement Vision statement was incorporated into the company's mission statement; the leading innovator and manufacturer of the disposable contact lenses. The company is driven by its vision and mission in the continues product advancement as well as industry impacts.(How) ? . Mission statement 1- Work place 2- Work force 3- Market place 4- External stakeholders Drive innovation to accelerate growth . Achieve high performance by diversifying global marketplace. Identify and establish targeted market opportunities for consumers across diverse demographic segment. Enhance external relationships with professional, patient and civic groups to support business priorities. . Strategic business units 1. The consumer health care: makes products that are used by people of all ages which serves to heal them and get them in healthier status. 2. Pharmaceuticals: provides medicines that treats most of the world's dangerous diseases. The company invests in research and development for need of new medicines to the known and other diseases. . Competition The company faces stiff and aggressive competition from other companies. Such competitors includes: Abbot Laboratories; engaged I development, manufacturing, discovery as well as the sale of a number of healthcare products via its four business units. Other competitors include; Merck & Co. Inc, Novartis, Pfizer, Procter & Gamble. All these poses stiff competition to the company. . External opportunities and threats Opportunities Continued smart purchasing of companies with complementary products. Development of personalized drugs with various purposes. Threats Stiff competition in stents. Increasing pressure to move to generic drugs. . Internal strengths and weaknesses Strengths Generally smart acquisition of companies. Strong brands. Repeat customers who are loyal to the company's brand. Existence of a wide range of products. weaknesses Most of its big drugs have lost or will soon lose the patent protection. Majority of its products are commodities. A conglomerate of the relatively independent firms posing stiff competition. . EFAS Table for JOHNSON & JOHNSON External factors Weigh t Opportunities 1. Constant evolution of technology 2. Expansion of product lines 3. Acquisitions of rivals 4. Global expansion 5. Online growth potential Rating Weighe Comments d score 0.20 0.10 0.05 0.10 0.10 1.00 4.20 0.13 0.30 1.00 0.42 0.13 0.30 0.30 Well positioned constant -Well expanding Will take some time 0.20 0.10 0.05 0.10 5.0 3.0 2.5 4.5 1.00 0.03 0.23 0.30 Continuous evaluation questionable Implementing guidelines Censured reputation Threats 1. Patient safety 2. Economic downturn 3. Sales and marketing 4. Lawsuit on "censured" policy and misrepresented warranties Total Scores 1.00 . Market sales RATIO ANALYSIS Margins % of Sales 2006-12 2007-12 2008-12 2009-12 2010-12 2011-12 2012-12 2013-12 2014-12 2015-12 TTM Revenue 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 COGS 28.24 29.05 29.04 29.80 30.51 31.31 32.22 31.33 30.60 30.73 30.73 71.76 70.95 70.96 70.20 69.49 68.69 67.78 68.67 69.40 69.27 69.27 SG&A 32.69 33.47 33.71 31.99 31.54 32.25 31.04 30.61 29.54 30.26 30.26 R&D 13.36 12.57 11.89 11.29 11.11 11.61 11.40 11.47 11.67 12.91 12.91 Other 1.05 2.54 0.28 1.73 1.73 0.81 0.32 0.32 Operating Margin 24.66 22.36 25.08 25.19 26.84 24.84 23.61 25.77 28.20 25.78 25.78 Net Int Inc & Other 2.69 -0.62 1.48 0.27 0.68 -5.83 -3.11 -4.08 -0.53 1.61 1.61 EBT Margin 27.36 21.74 26.56 25.45 27.52 19.01 20.49 21.69 27.66 27.39 27.39 Gross Margin . Evaluation and Recommendation of strategies At this juncture, divisions in terms of consumer products renders the firm and its image in jeopardy in terms of its slow and ineffective reaction to a number of issues that fosters inadequate quality control within some of the manufacturing plants, reluctant, slow, and the ineffective correction steps FDA concerns. Hence the end outcome is the torn apart of J & J prestigious reputation. J&J is an exemplar of superb ethical conduct in the sense. Therefore it may work forward to improve the responses from the slow and ineffective rate to a quick redressal for the sense of restoring its sterling reputation. . References Salazkin, Mikhail. "Staying On The Top: A Case Study Of Johnson&Johnson". FR 1.1 (2007): 34-37. Web. Johnson, Mike Stafford. "Online Case Study: Canine Medicine". Companion Animal17.9 (2012): 26-26. Web. .t hjk d dhk Thank you Running Header; JOHNSON AND JOHNSON CASE ANALYSIS LECTURER'S NAME STUDENT'S NAME COURSE TITLE DATE OF SUBMISSION 1 Running Header; JOHNSON AND JOHNSON CASE ANALYSIS HISTORY Johnson & Johnson was founded by three brothers named Robert, Edward, and James Johnson. The company was established in the year 1886 in New Brunswick, the New Jersey. At first they focused on the manufacture of wound care items or goods such as bandages as well as sutures, and the baby products. Johnson & Johnson also deals with the first aid kits to railroad employees before they became a common element in other environments. They also sold health products related to women's care such as hygiene and pregnancy. Johnson & Johnson is also known today for their global contributions like help for the HIV/AIDS patients. Johnson & Johnson purchased Tibotec-Virco BVBA within the year 2002 which is an organization committed to assisting individuals suffering from infectious diseases such as HIV/AIDS. In the year 2006, the company purchased the Pfizer's health care unit and then added products in the likes of Bengay, Lubriderm, and Listerine to the company's product line. But the company has a number of issues surrounding its business operations, in this light the U.S. Food and the Drug Administration have chaired a number of investigations of Johnson & Johnson associated to establishment of various medications as well as other potentially dangerous products. In some cases, the FDA ordered Johnson and Johnson to issue recalls. Johnson & Johnson was censured for the improper marketing of antipsychotic medications. This is considered to be a violation of the customer protection laws and the impact is that it renders victims in danger. COMPANY ISSUES 2 Running Header; JOHNSON AND JOHNSON CASE ANALYSIS Johnson and Johnson have experienced a large number of problems over their span as a firm. For instance the recalls performed from the quality control matters and lawsuits from patients harmed by their products. A Tylenol recall was granted in the year 1982 happened after seven individuals had lost their lives from the cyanide poisoning (Johnson and Mike, 2012). More than 30 million bottles or containers of Tylenol were to be recalled. More issues were reported in the year 2008 when clients complained that some of their products had either bacteria or metal pieces in them. After two years, the FDA investigated and had to issue a recall on nearly 300 million items due to quality control matters. The FDA pointed out that Johnson and Johnson had gone against the manufacturing protocols which resulted to the contamination to the products. Johnson and Johnson bought the DePuy in the year 1998. DePuy is considered to be the first orthopedic producer and was the leading manufacturer of hip replacements in 2010. They were the first to manufacturer the metal-on-metal design for hip replacements. The Pinnacle Hip Replacement System, the ASR Hip Resurfacing System, as well as the ASR XL Acetabular System have been employed by approximated 70,000 victims within the United States. However, there was a flaw in the design which triggered by the metal elements to abrade against one another and eat away the metallic aspects into the system of patients. This issue resulted to critical injuries to victims and the implants have then been investigated by the FDA. The lawsuits were then recorded against both J & J and DePuy and are believed to cost the firms billions. And in this light there are currently still more than 14,000 hip replacement lawsuits that are still pending against the J & J Company. Johnson and Johnson's blood thinning treatment Pradaxa and Xarelto have both been associated with critical bleeding events that have limited treatment available. There is no antidote to such 3 Running Header; JOHNSON AND JOHNSON CASE ANALYSIS medications in the case where a patient suffers from a bleeding event making this a crucial risk to the patient safety (Johnson and Mike, 2012). More than 500 patients have died from use of Pradaxa and there are also 3,781 crucial events identified from Pradaxa within the adverse incidents database. Therefore, these are the critical issues surrounding the company's operations in the industry From the case analysis there are a number of opportunities that J & J may work on to realize the growth of its operations for instance; a number of Potential Cross-selling opportunities, in this sense the company is in a position to strategically develop a myriad of cross selling opportunities. Increasing its balance between pharmaceuticals, diagnostics, and the medical devices could lead to increased income. The ability to Exploit Biologics Market for instance the addition of further biologics such as therapeutic proteins and antibodies to its portfolio may serve as a buffer as tiny molecule patents wear out. The company has potency for increasing its sales for the upcoming years and therefore it has to venture and explore all the available opportunities for it to increase its sales in order to maximize its profit. The table below shows how the company obtains its revenues from the cross selling of products to customers of all origins and ages from the year 2012 to the year 2014. 4 Running Header; JOHNSON AND JOHNSON CASE ANALYSIS Johnson and Johnson has a number of threats to its growth and expansion, for instance dependence on the Success of Launch Products; majority of new launch products are vulnerable to the uncertainty of regulatory review, therefore, a reliance upon launch products potentially represents a threat to Johnson and Johnson's outlook. The company also has negative effect of the recent product recalls for example Johnson and Johnson has had the misfortune of having to recall of more than 40 medicines recently. The company stands to take a hit to its reputation, competence as well as integrity. The company has a number of weaknesses a long with threats; it depends mostly on small molecule drugs in this sense the small molecules are more caused by generic competition. Johnson & Johnson's small molecule drug sales dropped in 2008 and are forecast to fall again 5 Running Header; JOHNSON AND JOHNSON CASE ANALYSIS into the year 2012. The importance of obtaining replacements for billion dollar goods as they mature represents a daunting function. Another weaknesses is that the company over relies upon the merits of launch products most of new launch products are subjected to uncertainty of the regulatory review. These weaknesses and threats are considered to be the major risks to its operations and as such challenges the expansion and growth of Johnson and Johnson. Some other risks emanates from the existing competition from other companies in the industry such as the Abbot Laboratories; engaged I development, manufacturing, discovery as well as the sale of a number of healthcare products via its four business units. Other competitors are the Merck & Co. Inc, Novartis, Pfizer, and Procter & Gamble. All these poses stiff competition to the company, rendering the company at risk of losing its potential customers who may sought to obtain products and services from these competitors selling substitute goods at a relatively cheaper price. If the company loses some of its prospective customers will then experience a drop in its sales and hence will affect it in terms of growth and expansion (Salazkin, 2007). Additionally, a number of divisions in terms of consumer products render the firm and its image in jeopardy in terms of its slow and ineffective reaction to a number of issues that fosters inadequate quality control within some of the manufacturing plants, reluctant, slow, and the ineffective correction steps FDA concerns. Hence the end outcome is the torn apart of J & J pristine reputation. In conclusion the case of Johnson and Johnson company analysis has brought forward a number of critical issues affecting the company. For instance the U.S. Food and the Drug Administration have chaired a number of investigations of Johnson and Johnson associated to establishment of various medications as well as other potentially dangerous products. In some cases, the FDA ordered Johnson and Johnson to issue recalls. Johnson & Johnson was censured for the improper 6 Running Header; JOHNSON AND JOHNSON CASE ANALYSIS marketing of antipsychotic medications. The company needs to operate within the regulatory policies regarding the product quality and safety. The company should aim to minimize risks within its operations via employing research and development in order to manufacture new drugs that may be used to treat various diseases that is by use of the company's strategic business units such as pharmaceuticals. Also the company's consumer health care is capable of making products that are used by people of all ages which serves to heal them thus healthier status. These strategies are very critical for the operations of the company as it will be able to overshadow its competitors in the industry. Therefore, J&J is an exemplar of superb ethical conduct in the sense. Hence the company may work forward to improve the responses from the slow and ineffective rate to a quick redressal for the sense of restoring its sterling reputation. 7 Running Header; JOHNSON AND JOHNSON CASE ANALYSIS References Salazkin, Mikhail. "Staying On The Top: A Case Study Of Johnson&Johnson". FR 1.1 (2007): 34-37. Web. Johnson, Mike Stafford. "Online Case Study: Canine Medicine". Companion Animal17.9 (2012): 26-26. Web. Salazkin, Mikhail. "Staying On The Top: A Case Study Of Johnson&Johnson". FR 1.1 (2007): 34-37. Web. 8 Running Header; JOHNSON AND JOHNSON CASE ANALYSIS Appendix FDA- Food and Drug Association J & J- Johnson and Johnson HIV/AIDS- Human Immune Deficiency Syndrome/ Acquired Immune Deficiency Syndrome U.S- United States 9 Running Header; JOHNSON AND JOHNSON CASE ANALYSIS 10 Running Header; JOHNSON AND JOHNSON CASE ANALYSIS 11 Running Header; JOHNSON AND JOHNSON CASE ANALYSIS 12 Running Header; JOHNSON AND JOHNSON CASE ANALYSIS 13