International Business

Case Analysis
BUILDING A GLOBAL ORGANIZATION AT JOHNSON & JOHNSON

I. Executive Summary

Johnson & Johnson was founded by three brothers: Robert Wood Johnson I, James
Wood Johnson and Edward Mead Johnson Sr in New Brunswick, New Jersey in 1886. J&J
has evolved into the most broadly based healthcare company in the world. International
activity began in 1919 with J&J Canada. Headquartered in New Brunswick, New Jersey, J&J
now lists some 250 operating companies across the world, sells products in more than 175
countries and employs about 115,000 people worldwide.

The company’s steady success in renowned. Sales in 2012 passed $67 billion, while
dividends increased for the 51st consecutive year. Some believe the intricacy of the
company’s organization in terms of its decentralized structure, sophisticated coordination and
control systems and credo based culture anchors its superior performance.

II. TIME CONTEXT

Sales in 2012 passed $67 billion while dividends increased for the 51 st consecutive
year.

III. VIEWPOINT

Ralph Larsen, former CEO: “Gives people a sense of ownership and control – and the
freedom to act more rapidly”

IV. STATEMENT OF THE PROBLEM

Despite the success of Johnson & Johnson, the company will face different challenges
in the near future. What would Johnson & Johnson do to maintain its continued growth and
profitability in the world market?

V. AREAS OF CONSIDERATION

Strengths
▪ Largest healthcare provider
▪ Trusted Brand
▪ Increased on sales and dividends
▪ Successful record of developing new products with quality
▪ Highly skilled workforce which allows managers to make decisions
▪ Building an organization flexible enough to exploit each employees knowledge
▪ Strong brand portfolio

Mary Chris J. Del Rosario Master in Business Administration International Business

 Weaknesses
▪ Decentralization slowed the global diffusion of products and programs
▪ Units resisted integration, arguing that global standards poorly fit their
circumstances

Opportunities
▪ Adoption of new technology standard and government free trade agreement to
enter a new emerging market.
▪ Low inflation rate which will bring stability in the market
▪ Acquisition of other smaller companies and increasing J & J presence
▪ Changing lifestyle which has an increase in demand of medical products wherein
J&J will also get benefited from this.

Threats
▪ Pressures to integrate operations due to market trends, competitors’ moves and
changing technologies
▪ Tough standards of the global market
▪ Changing consumer buying behaviour from online channel could be a threat to the
existing physical infrastructure
▪ Intense competition means limited market share growth for Johnson & Johnson
▪ Availability of cheap substitutes and low priced competitors

VI. ALTERNATIVE COURSES OF ACTION

Johnson & Johnson to review their business plans to address some of the world’s major
medical needs.

VII. RECOMMENDATION

Based on my assessment, I thereby recommend that Johnson & Johnson should continue
on their research and development approach, rigorous investment prioritization and internal
and external sources of innovation to achieve long term growth.

VIII. ACTION PLAN

▪ Increase investments in emerging markets, evaluating market appropriate commercial

approaches and portfolios
▪ Remain focus on key developed markets
▪ Invest in talented people and organizational capabilities locally, regionally and
globally.
▪ Build in Research and Development capabilities in new technology areas and
emerging markets.

Mary Chris J. Del Rosario Master in Business Administration International Business