BPL 5100 Johnson& Johnson case PDF

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BPL 5100 Johnson& Johnson case
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BPL 5100 PTRA BARUCH College Spring 2109 Case study Johnson & Johnson - Essay 3 For understanding the internal environment and the competition in a particular industry, we can use four type analyses: 1) value chain analysis, 2) resource based view, 3) financial ration analysis, and 4) SWOT analysis to interpret it. Through those analyses to evaluate Johnson & Johnson’s resources and capabilities and then compares with J&J’s critical success factors such as marketing, product quality, and market share. As it compares the strengths and weakness, J&J can know better and clear which areas they need to improve and which parts need to protect. 1. Value chain analysis The value chain analysis method is used to analyze the activities a firm perform and links the sources to the competitive position. There are two categories of activities: Primary activities and Supporting activities. Firstly, primary activities for Johnson and Johnson can divide to five sections: inbound logistics, operations, outbound logistics, marketing and sales, and services. J&J’s inbound logistics are including warehousing of physical products, material handling, and architecture to receive and store customer information for digital media company, also J&J has outsourced most of its inbound logistics activities. On outbound logistics section, J&J endeavors these activities to distribute the finished products to collaborate partners and final buyers. On the marketing and sales section, J&J’s activities include channel selection, sales force management, pricing, advertising, event promotion and marketing etc., all about encourage more buyers to buy J&J’s products. J&J’s service activities include after sales services, maintenance for successful usage of the products, some part of supply, training, installation services. Secondly, there are four divisions in supporting activities: Procurement, Technology, Human Resource, and Research and development. Procurement activities for J&J contain

activities are attempting to purchase inputs that are used by J&J’s value chain, which doesn't include purchase inputs themselves. As well as procurement also cover employs technology such as procedures, vendor management, information system, and supply chain partner qualification rules and ongoing performance evaluation. Next, technology development plays a critical role for J&J because not only it has exceptional project management, interpersonal, and presentation skills but also has many opportunities for career moves along technology or leadership pathways. Human Resources Management(HRM) is key to the success of any organization. J&J being a global company, decentralized structure of firm allows its employees to develop themselves in the company. HRM also helps in innovation that employees use their skills and knowledge effectively to bring together products and technologies in different areas to meet with J&J’s customer demands. Normally, J&J around the world are coordinated by local people in particular country. As the result of this management, J&J can understand the needs in those market and utilize themselves in those market. The last activity is research and development(R&D), for J&J includes expenses relate to the process of discovering, testing, and developing new products and improving the existing range of products in order to ensure the delivery of high quality and innovative products. 2. Resource based view(RBV) Along with value chain analysis, RBV emphasizes the internal capabilities(tangible and intangible assets) of the organization in formulating strategy to achieve a sustainable competitive advantage in its markets and industries. Due to evaluate a J&J’s resources, use VRIO method (value, rarity, imitability, organisation) as a strategy tool to build a sustainable competitive advantage over its rivals in the industry. First, in “Track Record of Leadership Team” resource, J&J provides strong competitive advantage because it’s valuable, rare, can’t be imitated by

competitors, and organized. Second, in “Global and Local Presence” resource also provides strong competitive advantage because as it diversify the revenue streams and isolate company's balance sheet from economic cycles, it’s valuable and rare. It can be imitated by competitors but it is difficult in short-term and it is one of the most diversified companies in its industry, so its organization is yes. Third, in “Marketing Expertise within the Technician Human” resource considers temporary competitive advantage. It’s valuable because firms are competing based on differentiation in the industry. It is not rare because as most of the competitors also have decent marketing know-how and neither on the imitation part, pricing strategies are often matched by competitors. And it’s a yes on organization because J&J is leveraging its inhouse expertise. Last but not least, in “Opportunities in the E-Commerce Space using Present IT Capabilities” resource provides sustainable competitive advantage in the long run. The reason is the e-commerce space is rapidly growing and J&J can leverage the opportunities, also the AI and inhouse analytics can be difficult to imitate. On the other hands, it’s not rare because most of the competitors are investing in IT to enter the space and J&J just the start for the organization. 3. Financial ratio analysis Ratio analysis is a quantitative method of gaining insight into a company's liquidity, operational efficiency, and profitability by comparing information contained in its financial statements. From J&J’s net sales figures in the last 14 years annual report (Statistic., 2019), we see a generally consistent growth in its net sales. Although there is a dip in worldwide sales figure from 16.5 billion in 2016 to $1.3 billion in 2017, this can be accounted with J&J’s spending on research and development as well as acquisitions and collaborations. Although this will cause a reduction in J&J’s sales margin, it will benefit the organization in the long-run whereby profits will be reaped upon returns on investment.

4. SWOT analysis( Strength, Weakness) There are two sections of SWOT analysis relate to internal environment: Strengths and Weakness. In the Strengths section, J&J’s worldwide sales continue to grow with ongoing plans for different geographic and market solution expansion to sustain sales growth. Besides, J&J uses a flexible business model that allows to adapt quickly to market changes and trends, focusing on entrepreneurship, problem solving techniques, and innovation. This business model has led to numerous innovative medical devices, pharmaceuticals, and other consumer healthcare product releases, further differentiating the company from its competitors. Also, a big amount of its portfolio brands are admired by customers around the world who consistently return to these products for reliability, quality, and value. On the contrary, the weakness of J&J is reputation damaged due to many new launch products are vulnerable to the uncertainty of regulatory review. Another pressure for J&J is its high prices in pharmaceutical markets, which many consumers have trouble paying so this has led to concerns over corporate greed.

References 2017 Health for Humanity Report. (2017). Our Value Chain. [online] Available at: http://healthforhumanityreport.jnj.com/our-approach/our-value-chain [Accessed 10 Mar. 2019]. Blue Ocean University. (n.d.). Solved Value Chain : Johnson & Johnson: The Promotion of Wellness Analysis. [online] Available at: http://blueoceanuniversity.com/frontpage/portervaluechain/12298-health-johnson [Accessed 10 Mar. 2019]. Blue Ocean University. (n.d.). Solved VRIO : Johnson & Johnson Company (A) Analysis VRIN. [online] Available at: http://blueoceanuniversity.com/frontpage/vriocase/7296-technician-human [Accessed 10 Mar. 2019]. Bhasin, H. (2018). SWOT analysis of Johnson and Johnson - J & J SWOT analysis. [online] Marketing91. Available at: https://www.marketing91.com/swot-analysis-of-johnson-and-johnson/ [Accessed 10 Mar. 2019]. Essays, UK. (November 2018). Johnson And Johnson Strategic Plans. Retrieved from https://www.ukessays.com/essays/business/strategic-global-business-solutions-report-on-johnson-and-johnsonbusiness-essay.php?vref=1 Statista. (2019). Johnson & Johnson net income 2005-2018 | Statistic. [online] Available at: https://www.statista.com/statistics/281389/johnson-und-johnsons-net-income/ [Accessed 10 Mar. 2019]....