Johnson and Johnson Global Business

Johnson and Johnson jut outetary BusinessIn this report, we argon using Johnson Johnson as the go with for our strategical populationwide character reference draw solutions project report. Introduction is invented as the plan background of Johnson Johnson. The focus of this report go forth be placed on JJs subsidiary Johnson Johnson, Group of Consumer Companies, Inc. Johnson Johnson. We leave behind be focusing and relating this report on the tike product fold of Johnson Johnson.The strategic initiatives of Johnson Johnsons skills, egressline, stave, structure, frame and sh argond determine pass on be discussed and examined in this report. We looked into their friendship functions so as to infract d deliverstairsstand them to enable advocatorful decision makings. A policy-making economic analysis is conducted to provide international happen insights for Johnson Johnson that is beneficial to JJ manage those risks as potential and risk. In relat ion to Johnson Johnson s deflower c be products, door guards forces model is designd to analyze the emulous advantage of the firm. unitary of the key understandings is that the middle- noble rivalry is present with less(prenominal) number of competitors on minor back up product line from competitor standardized California frustrate, Simple. organise analysis show that Johnson Johnson holds healthy competitive advantages subsequently comparing its pros and cons despite of a few disadvantages of worldwide normalisation schema. The ontogeny scheme of Johnson Johnson bequeath be selected based on both ingrained and external purlieu factor for the three geezerhood plan. These diagnoses be in reference to the uprise analysis based on the company resources summations, intellectual property, and pot. Lastly, the modes of entry will be affected by the several internal factors in this report. It comprises of internal requirement, technology know-how, wariness k now-how as well as pressure for represent reduction.The recommendation part would provide several suggestions for the improvement of Johnson Johnson through the organisation of rules structure and Human Resource Management.IntroductionWe have chosen to drub on Johnson and Johnson (JJ) for our strategic globular headache solutions project report for it is a global Ameri enkindle pharmaceutical, medical devices and consumer packaged goods manufacturer founded in 1886. With to a corkinger extent(prenominal) than 250 subsidiary companies located in 57 countries around the world and having its products exchange in over 175 countries, JJ is a listed company evident with its itemization among Fortune 500 and registering its stock with NASDAQ (NYSE JNJ). With a diverse range of products interchange in global market placeplaces, JJ espouse the business strategy of global standardisation whereby there is particular customization needed for its products for focus is placed on h aving customers severalize and identify JJ as a household shuffling.Focus of this report will be placed on JJs subsidiary Johnson Johnson, Group of Consumer Companies, Inc.Strategic green light of Johnson JohnsonSkillsAs Johnson Johnson is a global manufacturer with many subsidiaries on a global scale, JJ would hire its employees through a stringent deal of woof and focus on ones performance. This implies that JJ recruits people of experience and ability with a global mindset hires third-country national (TCN), indicating that recruitment of people is mainly dependent on being consistent with JJs organisational structure.StrategyWith the target of market exploitation and maximizing profits in prepare to be creditworthy to their stockholders, JJ adopted the business strategy of global standardization. Choice of global standardization strategy is because JJs focus is placed on number oneering costs and that there is limited need for customization of products for it gene r all in ally the same some other than slight changes in the products packaging. rungThe employees of JJ can be said to be well motivated to turn for JJ has provided their staff with many incentives ranging from someoneal to performance put ons (i.e. annual incentive bonus, long haul incentive awards, and severance benefits). As JJ have towering expectations on their employees, JJ sends their staff on regular employee training that clocks an average of 8 hours or more yearly (i.e. leadership increment and precaution education in field akin finance and marketing). JJ a manage leaves sure that their employees are motivated by giving them the right to voice ones opinion on company issues through JJs church doctrine survey.StructureJJs organizational structure is dictated by its corporate strategy. JJ initially adopted a deconcentrated last to management however in the early 1900s, changed it to a more standardized approach for JJs top executives noniced that their subsidiaries are non well- coiffureed on a global platform to overhaul customers forecastly. The change in corporate management allowed JJ to assuage limitations posed by the decentralization approach. One instance would be JJ having reason all subsidiaries into three categories namely, consumer, pharmaceutical and professional. The chairman of each category is prone the responsibility of identifying opportunities for leveraging function and expertise across companies in any market and the franchise managers assigned the responsibility of coordinating cross-company sales of a family of products (e.g. featherbed care products in US, France, Australia). The centralized management approach benefits JJ for it gives JJs top management a better view of its global trading accomplishments and are able to effectively manage and integrate its global operations. This led to the success of JJ in being globally effective in terms of operations for cost of production is lowered in ter ms of reducing redundancies and duplications during the affect and manufacturing out increase.SystemsIn the business of wellness care, Johnson Johnson is inspired and united by a common purpose to care for the health and well-being of the people they serve around the world. Caring drives the people of Johnson Johnson in their aim to make the world a better and healthier place through boththing that they do. It is core to their business strategy and initiatives, the programs and partnerships which they flesh, the positions that they squander on public policy issues, and their care for the environment.As the company hold outs forward, it continues to push the innovation envelope as coordinated activities under the centralized control, infusing superior technology and ingenuity into every product they make and every project which the company undertakes. The procedure of the JJ functions as a remains in which build from within organization, as 95% of their people start at entry level and then progress and prosper passim the organization. This non only creates many wonderful opportunities to grow and advance, it creates a surplus comradeliness among fellow JJers, many of whom came up through the ranks in concert.Johnson Johnson came up with this gospel which speaks rough their mission enouncements, views and their pledges to the customers and society. Robert Wood Johnson, cause chairman from 1932 to 1963 and a piece of the Companys founding family, crafted Our religious doctrine himself in 1943, just before Johnson Johnson became a in public traded company. This was long before anyone ever heard the term corporate accessible responsibility.WILLIAMC.WELDON is the chairman, Board of Directors, and Chief Executive Officer of Johnson Johnson. He takes pride in the organization work procedures and describe their operation of their day-to-day work is about their response to the unmet necessitate of their patients and customers and in like manner the ir response to the needs of their colleagues their response to back up the global communities in which they live and work finally, their response to the call for explore and innovation in health care.StyleThe parent company of Johnson Johnson which is Procter put on the line (PG) has been pioneering products in nearly 50 dissimilar categories and their corrupt product line will be the function in which this report will be focusing on.As the company moves forward, it continues to push the innovation envelope every day, infusing superior technology and ingenuity into every product they make and every project which the company undertakes. The procedure of the JJ functions as a system in which build from within organization, as 95% of their people start at entry level and then progress and prosper throughout the organization.This not only creates many wonderful opportunities to grow and advance, it creates a special camaraderie among fellow JJers, many of whom came up through the ranks together.This also explains why their hiring process is so rigorous. JJ s system is as such that they are not just offering a job, they expect you to grow into one of their prox leaders. From day one youll help develop or support arouse pits you know while working on projects that have a count on impact on their global, $61.9 billion sales in two hundred9.Shared valueJohnson Johnsons management style of helping to shape and define what health and well-being means in everyday lives. Their products, services, ideas and giving now theme song the lives of at least one billion people every day. They credit their strength and endurance to a consistent approach to managing their business, and to the character of their people. They are guided in everything they do by their Credo, a management scroll authored more than 60 years ago by Robert Wood Johnson, former chairman from 1932 to 1963, and by four strategic principles.Their company style is profoundly rooted in their Credo and deeply in filtered into their employees and leaders. Johnson Johnson s system is such that their overarching philosophy which guides their business is their Credo, a deeply held set of set that have served as the strategic and moral compass for generations of Johnson Johnson leaders and employees. preceding(prenominal) all, their Credo challenges them to put the needs and well-being of the people they serve first. It also speaks to the responsibilities they have to their employees, to the communities in which we live and work and the world community, and to our shareholders. They believe their Credo is a blueprint for long-term growth and sustainability thats as relevant now as when it was written.The company behavioral style is that their values embodied in their Credo guide the actions of the people of the Johnson Johnson Family of Companies at all levels and in all parts of the world. They have done so for more than 60 years. These Credo values extend to their accountin g and financial reporting responsibilities. Their management is responsible for timely, accurate, reliable and objective financial statements and related information. As suchThey defy a well-designed system of internal accounting controls.They encourage strong and effective corporate governance from their Board of Directors.They continuously review their business results and strategic choices.They focus on financial stewardship.Synergistic teamsAll of the above of Johnson Johnson s skills, strategy, staff, structure, system, staff and shared value make together and worked in cohesively to form a synergistic team of workforce that oversee the entire operation from sourcing materials ,production lines ,manufacturing to research and schooling (RD). It is seen as that a synergy is the energy or force created by the working together of various parts or processes. In Johnson Johnson, the pamper care products are the result of synergy and superior reassurance as promise by the compa ny.External EnvironmentEnvironment cannot be controlled whence we should analyze the environment first then indicate the strategy that also ricochets the organization structure subsequently.Political Economy abridgmentThe political economy of a nation defines the forms of interdependence amongst the political, economic, and profound systems, and also reflects they move and influence each other.Political systemsThe system of government in a nation defined as political system which divided the 200 plus world entities into 2 dimensions that include the degree of collectivism versus individualism and the degree of democracy versus totalitarianism. More practically, individuals would be tied together to light upon the common or collective goals in the high context country, like South Korea, lacquer, those people focus on the benefits of society and long-term human relationship individualism means democratic political systems and free market economies like Americans have free rig hts to vote in election. Myanmar, North Korea act as the totalitarianism that government absolutely controlled by one person or political party. Whereas, china exist the grey area that it has been a move toward greater individual free market economies, save the government is motionlessness a totalitarian dictatorship.If the political systems are high stable, the company would be decentralized otherwise, the company would concentrate in the low stable situation. Although the political systems in say Japan (i.e. change in 3 pristine ministers since 2007) is comparatively unstable as compared to that of other Asian countries like Singapore, the Japanese government is more open in terms of local anesthetic market entrance of multinational companies.Economic systemsIn market economy, production is headstrong by the interaction of demand and supply besides, the government encourages free and somewhat competition between private producers, the illustrations of governments like the G reat Britain, US and France. The objective of command economy is the good of society all businesses are state owned in command economy, such as Thailand, South Korea, and Indonesia. India is the natural example of mixed economy in which certain sectors of the economy are left to private ownership and free market mechanisms while other sectors have state significant ownership and government planning.The company would decentralize in the consistent economy system or concentrate in the inconsistent economy system.Legal systemsFor a business that operates globally, understanding the polar legal systems play an primary(prenominal) role of the process. Legal aspects help to help business operations so therefore it is very crucial and a necessity for international business operators to have an understanding of the different legal systems around the world.Companies must take into consideration the legal structures of the country in which they operate in. Globalization breaks down barrie rs between nations and bring nation together in a global platform. But increasing investment among nations also makes it more surd for those in different elaborations to understand the rules of other countries. It is important to follow the legal system of the country in which business is conducted or the government has the right to have legal actions taken should laws be not comply.International Business LawsBusinesses operate in a world in which the laws of different governments and judicial systems might conflict as they originated from different cultures. It is therefore necessary to have a basic knowledge of the legal system and also understand how does business law impacts commerce in the companys own country and overseas. The impacts of international business on business law assist the inclusion of standards in their company regulations or operations that address these cunning and complex issues. affectionate cultural environmentAccording to Geert Hofstede Cultural Theory , the global social culture roughly classify as 4 dimensions which considered as costs.Individualism versus CollectivismThe individualism and individual achievement is common in the Western Countries, both substantiative and negative implementation in individualism. The positive side is showed in competition between individuals rather than collective groups and the person get pay-for-performance motivation to compete within organization especially in the dynamism of US economy that encouraged person to take chances and attempt unsanded things with unique ideas (i.e. Steve Jobs). However, the individualists just focus task-based, they cannot develop a strong and long-term relationship with others which is the advantage of collectivism. US, Canada Australia is the classical individualist representatives that are different from Asia (i.e. South Korea, China) act as collectivists.Power DistanceThe degree of betrothal of hierarchy or inequality exists among the organization, the hig her ability distance (i.e. Japan, Vietnam) reflect in the decision making by the seniorities and reward as the status, position and experiences in contrast, the decision making and authority took by the task representative and pay-for-performance reward represented in low power distance culture like Denmark and UK.Uncertainty AvoidanceThe degree of tolerance for uncertainty and indeterminate situation, the low uncertainty avoidance reflects the high risk taker and line upability of new things (i.e. Australia, Singapore) the high uncertainty displayed the low tolerance for uncertainty issues like France and Italy, those countries need the incorporated organization or rules to obey so that French and Italians are difficult to overcome the culture shock when they sent as expatriate managers.maleness versus FemininityWhether the differences of work in sexual activity roles accepted in society, Japan and China should be masculine society the jobs of gender are intelligible and form a male dominant society and person more focus on financial and material possessions. On the other hand, gender roles are overlapping in the womanhood country, such as Thailand and Finland, people in those countries focus more on quality of life. therefore, in the femininity countries, the purchasing power of lifestyle is relatively high which point out an appealing way to Johnson Johnson develop.Overall analysisThose external environments provide global risk insights for Johnson Johnson that is beneficial to JJ manage those risks as potential and risk to take advantage of the relative international business strategy to form and adapt organization structure in the long-term.Competitive Advantages Posters Five ForcesDegree of contestationThe middle-high rivalry is present with less number of competitors on Baby Care product line, like California Baby, Simple scarcely Johnson Johnson is dominant in the Baby Care industry and the economies of scale so that the firm reflects less intense competition. The cost of competitive advantage and promotions are relatively high, like the advertising and discounts additionally, JJ has over hundreds history and good ensure of Corporate Social Responsibility (CSR) result them remain competitive rather than leave the industry. Next, the high rate of growth display the middle-high competitive situation overall in the industry.Threat of new appetizersThe affrights of new entrants should be low despite of low barriers of entry in the lights of low costs of set-up. The brand equity of JJ is relatively high and it has great impacts in the industry so that a intumescent number of suppliers prefer to sign contracts with it rather than the new entrants that benefit for enhancing suppliers brand and engaging more profits, Lafes Body Care is an example of new entrant who launch a new baby care product line in recent years.In addition to the switching costs for customers, customers are keen on the brand with quality guarantee us ing for baby or not the less discrepancy of prices.Threat of substitutesSome baby care products from say Pigeon Corporation and Drapolene are suggested by doctors (i.e. responsible to babies), but drop in brand awareness recognized by customers as renowned brands and those products are not easier to buy or package of those products are not portable for customers to bring compared with them, Johnson Johnson baby care products differ from they could be bought in almost of all supermarkets under the world-wide dispersal channels and be convenient to carry about. Hence, threats of substitutes should be low.Power of BuyersThere are a passel of alternatives for customers contribute to the high bar absorbing power of customers, especially for the price-sensitive customers, who are prefer to the high-quality products with the lower costs in the traditional theory research. However, JJs Baby Care products are considered as the essential healthy pharmacy products for baby by an aggregate of trusty customers. All in all, the bargaining power of customers should be low-to-middle as its healthy baby brand image formed in customers mind around the world, even the adult females prefer to but baby products to care their skins.Power of SuppliersThere are thousands of suppliers to provide the materials, goods and services that allow JJ Family of Companies to manufacture products, supply offices and other facilities to service customers around the world. JJ perpetrate to working with small and diverse suppliers in terms of their abilities to support its long-run growth objectives and add value to its business through providing the innovative solutions to their marketing, manufacturing and RD efforts. point though the various inputs from the suppliers, the competitive situations also exist among suppliers and large amount of substitute inputs contribute to the low power of suppliers.Financial environmentAnalysis on JJs operation results is essential for it allows its stake holders to gain an insight on how JJ is playacting on the global platform and whether the management strategy employed needs to be consistent or changed according to future market projections. spirit at JJs net sales figures in the last 5 years (Appendix 1), gathered from JJs 2009 annual report, we see a generally consistent growth in its net sales. Though there is a dip in worldwide sales figure of 2.9% ($61.9 billion) from 2008, this can be accounted with JJs spending on research and development ($7 billion) as well as acquisitions and collaborations. Although this will cause a reduction in JJs sales margin, it will benefit the organization in the long-run whereby profits will be reaped upon returns on investment. Currently, JJ is expanding its operations in the BRIC countries (i.e. Brazil, Russia, India, and China) as well as other closely-developing markets. This should be a continued project of JJ for at least the succeeding(prenominal) 3 years to maximize its profits and in crease its global market share. This is inline with JJs organizational vision drive superior business results and sustainable competitive advantage. inherent EnvironmentValue ChainJJs corporate vision, to maximise the global power of diversity and inclusion to drive superior business results and sustainable competitive advantage is in line with its corporate objective of profit and growth. both(prenominal) JJs vision and focus has direct implication on its corporate structure. This is reflected upon the process within JJs value-chain.In terms of JJs organizational structure, Human resource management (HRM) plays a vital role in the direct success of JJ as an organization for it is the people, most valued asset, that contribute to achieving the goals and objectives of JJ. At present, JJ hires experienced and overt leaders to bring the organization to greater heights and JJ does not check over there. JJ provides all top executives in training which include leadership development a nd management education in fields like finance and marketing. JJ prioritizes on the professional development of every employee for JJ believe that they are capable in developing leaders within the organization by exposing them to diverse fields and giving employees heavier responsibilities to assess their ability. As mentioned above where staff motivation is important, we as consultants believe that JJ should continue to train their employees and appraise the performance of employees in the next three years. This is so that JJ would be able to make better use of their employees capabilities and talents and this will benefit the organization in the long-run when employees are loyal to JJ.Focusing on JJs consumer goods of baby products, the in-bound logistics ties in with operations before linking with outbound logistics, sales marketing and finally, providing businesses and consumers with service. JJs in-bound logistics would include the purchasing of raw materials needed for the ma nufacturing of baby products and storing the raw materials in various designated warehouses. Operations will then top whereby factory employees would have to work along a production hit with the help of machines and maintain quality checks as well as bottling of baby products. JJ would then distribute the ready products into containers for shipment, in allocated warehouses or directly to retailers and distributors. To aid JJs employees in convenient dispersal of information to sales staff, they have do use of MultiAid to resolve all marketing resource management needs. This increases JJs available efficiency and gives the organization a head start on asset management for product image, captured data and distribution to retail trade communities is quickly accessible to employees with one click on the computer system.With regards to sales and marketing, JJ advertises by relating consumers with real-life scenario whereby a mother bathes her baby with JJs baby products and having t he statement of products for the ones you love.There are two types of service provided by JJ business to business (B2B) and business to consumer (B2C). JJ provides its business partners and suppliers with business opportunities. This means that the degree of success experienced by JJ has direct impact and will benefit companies that do business with JJ. Consumers of JJ are open to gathering useful and relevant information when having purchased JJ baby products for JJ has formed a website (i.e.BabyCentre.com) and a online Baby Care Library to increase the closeness in customer interaction.SWOT AnalysisStrengths (Internal)Weaknesses (Internal) broad financial resourcesStrong brand nameProprietary technologyRespected brand image considerable product linesEconomies of scaleCommitted employeesSuperior product quality interrupt marketing skillsGood distribution skillsLow customizationLack of flexibilityOpportunities (External)Threats (External) possibleness of foreign marketsRapid marke t growthBrand switchingdemographic shiftsLow barriers to entryEconomic downturnIntroduction of new substitutes products couple firms adopting new strategiesStrengthsJohnson Johnson is a well-known healthcare brand which ranks No. 1 within the industry under one decade of its historical development with a wide variety of skincare products and superior product quality.Abundant financial resources are exploited by the RD department to employ the act staff for creating and even innovating the hygiene products through proprietary technology and build up the respected brand image. Besides, it focus on product leadership excel at product development and professional skills so that it can offer customers the best products in the industry.As the facts show that, JJ expanded internationally around the world, like Asia (Singapore, China) that triggered by the better marketing skills. Additionally, the good world-wide distribution skills due to its global standardization strategy that allow J J to generate great market shares by cost reduction that come from economies of scale and fast product development what based on stable relationship with local distribution agents and its respected brand image as well as superior product like baby care mainly.WeaknessesGlobal standardization is the main international business strategy to control cost but this also is its drawback that results in the low customization. In addition to the world-wide product structure, the managers lack of flexibility to face the challenge of changes in local markets.OpportunitiesIn order to bring along the development of local economy, most of countries welcomes the international companies deliver their products to diversify the local economy. The increasing attentions of baby nurturance and its brand image flying customers to purchase its products and grow rapidly in the global new markets.There is an opportunity to generate more market shares and enhance its brand image in the long-term in the lig hts of the rise in global demographic population reach to 7 billion that data collected from statistics of 2011, China and India act as the representatives moreover, the superior product quality of JJ is the critical to disembowel customers switching from other brands.ThreatsJJ faces the threats of the low barriers to entry due to the low cost of set-up, and the proprietary product differences will be difficult to protect when the barriers are reduced so that the customers would switch to other brands more possibly. Another threat reflected by the economic downturn, JJ is difficult to manage the exchange rate risk under the global standardization strategy.Most important, JJ would be forced to gravel at the passive threat that the customers would be attracted by its competitors and sales would be declined if rivalries adopting the new strategies.Outcome of SWOT MatrixGenerally, Johnson Johnson holds strong competitive advantages after compare its pros and cons despite of few disad vantages of global standardization strategy. In some other angle, JJ is able to switch the threats to opportunities in the lights of its calculus-based capability and resources.Growth Strategies adopted by Johnson JohnsonThere are both internal and external environments to be conservatively evaluated when planning for a three years growth strategy plan for Johnson Johnson as what happen externally and internally will affect the company. These diagnoses are in reference to the SWOT analysis based on the company resources assets, intellectual property, and people.With careful consideration and by selecting market penetration growth strategy for a three year period, it will help them to gain more market shares through promotion and advertising from their strong marketing teams. Before planned the growth strategies, the firm should generate a lot of information about if the company is selling new, existing or emergent products in a new or existing market.From the diagnosis of the porters model, understanding that the threats of new entrants are low and also credit to the high brand equity of Johnson Johnson, market penetration growth strategy defined by Ansoff is selected in the lights of situation that involves neither new markets nor new products, are forced to grow through this growth strategy. It is a strategy that is designed to give the business a greater percentage of market shares. Market penetration occurs when a company enters/penetrates a market with on-going products.This type of strategy usually seeks to gain a compet