Strategic Analysis Case

Study 2009
Jarryd Phillips, Jermaine West, Spencer
Jacoby,

Overview
Company Overview
History
Current Vision Statement &
Credo
Proposed Vision & Mission
Statements
External Assessment
Positioning Map
CPM Matrix
Opportunities & Threats
EFE Matrix
Internal Assessment
Organizational Chart
Financial Ratios
Trends
Strength & Weaknesses
IFE Matrix

Strategic Assessment
SWOT Matrix
Space Matrix
Grand Strategy Matrix
BCG Matrix
IE Matrix
Matrix Analysis
QSPM
Recommendations
Objectives
Strategic Implementation
EPS/EBIT
Projected Balance Sheet
Projected Income Statement
Evaluation
Balanced Scorecard
Possible Issues
Sources
Questions

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.
1990s- 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

2009
Highlights
Strengthened core business and invested

in new launches
Acquired Cougar Biotechnology in July
Continued to expand globally

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

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.

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
Customers
be socially responsible and for the betterment of all 1.
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

Johnson and Johnsons 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 customers 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.

Caring for you from the

beginning, to the very end!

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Position
Map

Number of
Stores
(High)

Narrow Price
Competitivene
ss

Wide Price
Competitivene
ss

Number of
Stores
(Low)

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Opportuniti
es

Acquisition of Synthes could enhance J&Js 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&Js 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
+1
5

0.
5

0.
0

-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
Competitors 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/1782599548x0x359541/6EAF4E16-08B2-4AD4-86AC5BDB928E5320/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 arent.
http://www.cbsnews.com/8301-505123_162-42843383/j038j-layoffs-the-jobs-that-are-safest-andthose-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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