Strategic Analysis Case

Study 2009
Jarryd Phillips, Jermaine West, Spencer
Jacoby, 1
Overview
Company Overview
Strategic Assessment
History
SWOT Matrix
Current Vision Statement & Space Matrix
Credo Grand Strategy Matrix
Proposed Vision & Mission BCG Matrix
Statements IE Matrix
External Assessment Matrix Analysis
Positioning Map QSPM
Recommendations
CPM Matrix
Objectives
Opportunities & Threats Strategic Implementation
EFE Matrix EPS/EBIT
Internal Assessment Projected Balance Sheet
Organizational Chart Projected Income Statement
Evaluation
Financial Ratios
Balanced Scorecard
Trends Possible Issues
Strength & Weaknesses Sources
IFE Matrix Questions

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 Timeline
 1886- 3 brothers founded Johnson & Johnson in Brunswick, New Jersey.
 1888- Pioneered the first commercial First Aid Kit.
 1894- Launches first maternity kit to make child birth safer
 1898- First to mass produce dental floss.
 1921- An employee invents the first BAND-AID
 1937- Began international expansion with companies in Argentina &
Brazil
 1954- Baby shampoo enter the market
 1978- The Company begins construction on their new World
Headquarters in New Jersey.
 1990’s- Ethicon Endo-Surgery pioneers minimally invasive surgery.
 2002- Johnson & Johnson acquires Tibotec-Virco BVBA
 2006- Johnson & Johnson acquires Pfizer Consumer Healthcare
 2009- Acquisition of Mentor Corporation

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 2009
Highlights
Strengthened core business and invested
in new launches
Acquired Cougar Biotechnology in July
Continued to expand globally

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 Current
Vision
“To maximize the global power of diversity and
inclusion to drive superior business results and
sustainable competitive advantage.”

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 Johnson & Johnson
Credo
This is a statement of our values and
responsibilities that was written more than
60 years ago. It articulates our
responsibilities to customers, employees,
communities and shareholders. It sets the
tone for what is expected at J&J.

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Our philosophy and core values are centered on our desire
to provide the safest and most reliable products and
services to our customers, employees, medical
professionals, and stockholders (1, 2, 6, and 9). Our
consistent market growth and competitive advantage
within the world market will ensure profitability and is a
tribute to our trained employees, innovation, technology,
and market research (3, 4, and 5). In regards to local and
domestic communities, it is our goal to ensure that
Johnson and Johnson adhere to policies and procedures to
be socially responsible and for the betterment of all 1. Customers
2. Products or services
members of our value chain (7, 8). 3. Markets
4. Technology.
5. Concern for survival,
growth, and profitability
6. Philosophy
7. Self-concept
8. Concern for public image
9. Concern for employees

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Johnson and Johnson’s vision is to be the most
recognized, innovative, and socially responsible name
in pharmaceutical, consumer health, medical device,
and prescription products in the world. Through this,
we will earn our customer’s respect and enthusiasm
with continuous improvement that is driven by
innovation, integrity, teamwork, and the desire to
provide value for the investment. As a result, J&J will
gain market share to increase sales and generate
dividends for our shareholders.

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“Caring for you from the
beginning, to the very end!”

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Position Number of
Stores

Map (High)

Narrow Price Wide Price

Competitivene Competitivene
ss ss

Number of
Stores
(Low)

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 Opportuniti
es
• Acquisition of Synthes could enhance J&J’s Failure of prospective
products to deliver leadership position in global orthopedics market
• Leveraging therapeutic coverage of non-prescription
pharmaceutical segments could provide cross-selling opportunities
• Addition of Crucell to broaden J&J’s position in biologics and
vaccines market
• R&D investment will add to the potential growth rate of the
company in surrounding markets.
• Economic recovery will be a boost in income thus company revenue
will increase.
• Global expansion

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 Threat
s
• Negative Impact of Recent Product Recalls
• Healthcare regulations
• Better research and development of competitors
• Low market growth rate.
• Strong competition from the generic market.
• Launch success in that newly launch products are uncertain
because of regulatory review, thus making the launch a
potential threat if it fails.

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Organizational
Chart

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Sales by Geographic
Region

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Sales by
Segment

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 Strengths
• Diverse business offering
• Forecast growth despite challenges
• Significant sales and marketing capabilities
• Robust financial position
• They have strong global presence operating in more than 57
countries with 250 subsidiary companies
• They have successfully employed strategies to
differentiation that helps it distinguish itself from its
competitors.

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 Weaknesse
s
• Generic drug's exposure
• Private label exposure
• Quality issues in OTC products affecting consumer
healthcare product sales
• Key product demand is shrinking.
• Theft and counterfeiting of drugs from internal staff as much
as this is not isolated to J&J.
• Pressure to reduce prices in accordance with medical
budgets and maintain patent expirations to help generic
programs.

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 SO Strategies
•S1, O1: JNJ Should aim to be an
industry leader in all its diverse
business offerings.
•S2, O2: With the addition of new
products in various departments,
JNJ could potentially still predict
growth in challenging times.
ST Strategies
•S1, T1: JNJ`s diversity should not
be a means for its products to be
valued as "average", its diversified
range should be known for the
high quality.
•S2, T2: The prediction of
increased sales in challenging
times should be a testament to
JNJ`s value and quality of products.
WO Strategies
•W1, O1: Although there is a wide
variety of generic drugs, JNJ should use
this as an opportunity to highlight the
value and quality of their products and
increase R&D in specific segments to
increase market share in surrounding
markets.
•W2, O2: OTC sales should be used as a
prime opportunity to highlight the value
and worth of JNJ`s products.
WT Strategies
•W1, T1: Product recalls can
seriously hinder the perceived
value and quality of JNJ.
•W2, T2: Healthcare regulations
along with challenging economic
times can prove costly to JNJ as a
whole.
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 1 0. 0.
+1 5 0
5

-15

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 Recommendatio
ns
Increase R&D in the pharmaceutical segment by
$75 million; will result in 8% projected sales
increase
Continue to improve on product recalls; this will
give a better quality perception to consumers and
medical personal
 Improve cross-sell techniques of diversified
products
Total cost = $75,000,000

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We are proud of our 2009 accomplishments, but we recognize there is a
great deal more to do. In the near future, we continue to assess what
more we can do across our business segments, our supply chain and
together with partners, including governments, other companies and
social and environmental non-governmental organizations.

The people of Johnson & Johnson remain committed to living up to the

responsibilities laid out in Our Credo. As our Company approaches our
125-year milestone, improving human health and well-being is still our
crucial mission and the ultimate measure of upholding our
responsibility now and for generations to come.

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Projected Balance
Sheet

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 Possible Issues
 Additional product recalls/ lawsuits
 Another economic downturn
 Competitor’s gaining market share
 Federal regulations that affect potential new products
and existing processes
 Litigation from people being hurt through defective
products
 International regulations that limit foreign expansion

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 Sources
 Johnson & Johnson Annual Report.
http://files.shareholder.com/downloads/JNJ/1782599548x0x359541/6EAF4E16-08B2-4AD4-86AC-
5BDB928E5320/JNJ_2009AR.PDF
 Johnson & Johnson. http://www.jnj.com/connect/
 The Street. 10 Companies that paid the least in taxes.
http://www.thestreet.com/story/11077452/1/10-companies-paying-the-least-in-taxes.html
 CBS News. J&J layoffs: the jobs that are the safest and those that aren’t.
http://www.cbsnews.com/8301-505123_162-42843383/j038j-layoffs-the-jobs-that-are-safest-and-
those-that-arent/
 Historical Stock Prices. http://finance.yahoo.com/q/hp?
s=JNJ&a=11&b=31&c=2009&d=11&e=31&f=2009&g=d
 Competitor Comparisons. http://www.nasdaq.com/symbol/jnj/competitors
 Competitive Profile. https://business.missouri.edu/ifmprogram/reports/2010SP/J%26J%20Report.pdf

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Question
s?

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