Strategic Management, Module 2 1

Conduct a SWOT Analysis for the Johnson and Johnson Company (www.jnj.com)

By: Charles Dallas McCarthy

MGT340 – Strategic Management

Aston American University

Instructor: Tim Johnson, M.S.S., M.A

December 21, 2017

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Introduction

Johnson and Johnson is a multinational corporation who specialize in the manufacturing

of ‘Pharmaceuticals, Medical Devices and Consumer Products’. This global corporation owns

more than 250 companies situated in 60 countries with a manufacturing complement of 120

facilities worldwide. In 2016 it was reported Johnson and Johnson turned around 70.1 Billion

USD with an all-time high of 71.9 Billion USD in 2017. Johnson and Johnson were founded in

1885 by Robert Wood Johnson together with his two brothers Edward and James. The

corporation now employ 126 400 employees worldwide with a reputation for treating their

employees well. Retrieved from https://www.jnj.com/

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SWOT Analysis for Johnson and Johnson

1. Strengths found within the company’s Internal Environment.

Johnson and Johnson is the worlds most supported and recognized dealer in healthcare,

personal care and baby products. The corporation boasts as one of the companies with the best

corporate reputation in the United States and known for driving an entrepreneurial value system

including employee well-being programs and extensive global social responsibility initiatives

within communities, public health, environmental health and sustainability. Within both their

medical devices and pharmaceutical divisions they offer excellent research, development and

innovative opportunities while their diverse consumer products are well marketed and available

internationally. The three divisions operate through using a ‘decentralized operating structure’

allowing respective management teams to make important decisions and so stimulate innovation

and forward thinking in each division. This approach also assists in protecting the company in

the event one of the markets suffers consequences. The three markets are segmented as follow,

Pharmaceutical 45%, Medical Devices 35% and Customer Division 20%. Retrieved from

http://www.vault.com/company-profiles/personal-care/johnson-johnson/company-overview.aspx

2. Weaknesses found within the company’s Internal Environment.

A history of litigations filed against Johnson and Johnson costing the Multinational Corporation

millions in legal and settlement fees. Llamas, M. (2017) said the period 2010 to 2017 legal action

included ‘shareholders lawsuit, illegal marketing of Risperdal, foreign bribery, consumer fraud

settlement, the use of the Red Cross symbol by Johnson and Johnson on their products, Boston

Scientific lawsuit, patient infringement case against Abbott Laboratories, vaginal mesh implant

and 1000 woman who sued Johnson and Johnson as it was alleged the talc in their baby powder

products promoted vaginal cancer.’ Llamas continue in say, furthermore there was several
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recalls of both pharmaceutical products and medical devices. The ‘Tylenol scare’ after it was

alleged certain batches were laced with cyanide, 7 people died in 1982. The recall of children’s

products including Tylenol and hip replacement recalls in 2010 leading up to 1 Billion USD

lawsuits.

3. Opportunities found within the company’s External Environment

Acquisitions of competing companies within the pharmaceutical and medical field are

crucial to ensure Johnson and Johnson’s future existence and continuous growth in market

shares. As for this Multi-Billion Dollar corporation and market leader in the medical field they

recently acquired Pfizer Consumer Health Care in 16.6 Billion USD deal. Furthermore it is

forecasted Pharma Industry sales will grow a staggering 1.3 Trillion USD in 2018 allowing

Johnson and Johnson to strategically place them to capture far greater dividends. After the recent

enforcement by the World Trade Organization to control the manufacturing of low cost generic

drugs, Johnson and Johnson has the opportunity as a recognized brand to extend their patents on

manufactured drugs ranges, and will also benefit to keep on producing the same drugs as the

preferred generic range even after the patent has come to an end. Retrieved from

http://www.vault.com/company-profiles/personal-care/johnson-johnson/company-overview.aspx

4. Threats found within the company’s External Environment

Bazanson and Riley (2015) say for living in the technological era pharmaceutical

companies will soon see the end of conventional Pharmaceutical methods only to be replaced by

Nano Technologies and Bio-tech concepts, although some experts say this is debatable. The

recent uprising of counterfeit drugs also brings with reason to concern due to low pricing and

increase in black market availability. Bazanson and Riley continued in saying that factors which

might further affect pharmaceutical companies similar to Johnson and Johnson are stringent
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government legislations, risk of litigation as their products directly affect human life, increase of

ransomware, advance cybercrimes and corporate espionage. According to Llamas records point

out employees working at a number of pharmaceutical companies was found guilty for bribing or

promoting kickbacks to entice doctors or medical staff to use their products. Regrettably many of

these events took place outside the borders of the US therefore legal action is governed by the

host country in which such an employee is operating from within. As an example, in 2014

GlaxoSmithKline faced a hefty fine of 500 Million USD after employees was caught paying for

Chinese doctor’s trips and related expenses. In return the doctors will prescribe GSK products to

their patients as the drug of choice. According to Harris (2011) Johnson and Johnson suffered the

same consequence in 2011 after they had to pay 70 Million USD in fines after employees bribed

doctors in Greece, Poland and Romania using the same modus operandi.
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Conclusion

Johnson and Johnson’s success during the last 130 years is owed to their evolvement by

embracing change, technology and continuous innovation. Combined with their credo,

entrepreneurial values and decentralized operating structure they share best practices to ensure

positive growth in market shares and turnover.

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References

Bazanson, P., & Riley, R. (2015, August 18). Four risks pharma companies face. Retrieved from

http://www.pharmacompliancemonitor.com/four-risks-pharma-companies-face/9474/

Harris, G. (2011, April 8). Johnson & Johnson settles bribery case. Retrieved from

http://www.nytimes.com/2011/04/09/business/09drug.html

Johnson & Johnson Homepage | Johnson & Johnson. (n.d.). Retrieved from https://www.jnj.com/

Johnson & Johnson|Company Profile|Vault.com. (n.d.). Retrieved from

http://www.vault.com/company-profiles/personal-care/johnson-johnson/company-

overview.aspx

Llamas, M. (2017). Johnson & Johnson. Retrieved from

https://www.drugwatch.com/manufacturer/johnson-and-johnson/