Choosing Your Competitive Advantage

Instructions: Review what you’ve learned about competitive advantage in Sessions Four and Five.
Choose two or three of your entrepreneurial venture and then describe them.

Business: ______________________________________________________________

Competitive Advantages Description:

Johnson & Johnson
When seven people died in the Chicago area in the fall of 1982, and the source of their deaths was
traced back to Tylenol Extra Strength capsule, business, and marketing experts said that brand would
never recover. As Tylenol’s market share collapsed from a dominant number one position at 35
percent to 8 percent, it looked as if the experts were right.

Historically, other companies handled such tragedies using denial, blame, and other aggressive
defenses. However, Tylenol’s parent company, Johnson & Johnson, operated out of a deeply held
set of core business values called Our Credo that outlined its beliefs in how to treat its customers,
employees, and stakeholders. Because Our Credo was an authentic set of guiding principles, it
helped to successfully drive the company through a tragedy that could have ended in bankruptcy
and a shattered public image.

It’s said that ethics are what someone does when no one is looking. In this case, Johnson & Johnson’s
ethics help up with everyone was looking. The company learned of the crisis when the reporter
called to ask for response. It was quickly established that Johnson & Johnson was not at fault because
the product had been tampered with on store shelves. However, relying Our credo, the company was
not willing to take chances with the public’s health or betray public’s trust. Despite being cleared of
any blame, Johnson & Johnson took several actions that it was not obligated to take, including:

 Halting production.
 Recalling 31 million bottles of product.
 Asking consumers to stop consumption of the product.
 Offering to exchange all capsules for solid tablets.
 Covering medical and counseling costs of the victim’s families.
 Providing too-free hotlines to address the public’s questions and concerns.
 Offering large reward for information about the unsolved crime.
 Giving substantial discounts to people who continued to use the company’s products.
 Introducing tamper-resistant packaging on all its product.
In the end, Tylenol completely recovered its market share, returning to the number one spot among
its competitors. Johnson & Johnson also restored the public’s trust, saving it from financial ruin.
Although it cost the company millions of dollars, despite having no responsibility for the tampering,
it proved that being ethical is good for business.
Ethical Dilemma One

1. What is the ethical dilemma?

2. List reasons why she shouldn’t decide on the unethical choice.

3. List possible reasons why many new entrepreneurs decide on the unethical choice.

4. Cause and Effect: What might be the possible consequences for each of the following
stakeholders if she does decide on the unethical choice?

 Her Costumers.

 Her Employees.

 Her investors or the bank.

 Other stakeholders, for example suppliers, competitors, or the community.

Ethical Dilemma Two

1. What is the ethical dilemma?

2. List reasons why she shouldn’t decide on the unethical choice.

 3. List possible reasons why many new entrepreneurs decide on the unethical choice.

4. Cause and Effect: What might be the possible consequences for each of the following
stakeholders if she does decide on the unethical choice?

 Her Costumers.

 Her Employees.

 Her investors or the bank.

 Other stakeholders, for example suppliers, competitors, or the community