Johnson and Johnson: PESTEL Analysis of Political, Socioeconomic and Technological Factors

Introduction

Johnson and Johnson Company is an institution based on offering health facilitates, products, and services. In the provision of the services, the company has faced several issues or problems that hinder it from better operations. Through the PESTEL analysis tool, the main factors affecting the operation, competence, and marketing strategies. The factors include political, socioeconomic, technological diversity, environmental, and legal consideration (Bambo, 2019).

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The political instability and corruption aspects have negatively influenced the performance of Johnson and Johnson Company. Setting new markets in within particular or specific political environments has been a challenge for the company. The rejection of the product as the political view is negatively addressed upon the provided health-related products. Corruption instilled or induced by politicians is also a political aspect that ends up affecting the company's operation and competence (Bambo, 2019).

Secondly, technological changes have been one of the factors causing pressure on the manufacturing process of the company's products. With the increase and advancement of technologies, the competitors' firms find it easy to produce close substitutes at more cheap cost. It, therefore, leads to market shares that reduces the company's profit margin. The company finds it challenging to embrace new technologies that are quite expensive to implement (Bambo, 2019).

Thirdly, the socioeconomic factors are also seen tampering normal operations of Johnson and Johnson Company. The cultural practices, social classes, demographic elements as well as education levels have affected the acceptance of the pharmaceutical products as well as resale cost. To change the attitudes of society on perception on this health-related product has been a challenge. Similarly, economic constraint has hindered the competence of the company. It is portrayed through the risks exposed to the company over the tax policies and interest rates on financing that do not favor it (Bambo, 2019).

Environmental difference and backgrounds are also the factors that have severely affected Johnson and Johnson Company operations as well as profit margins. The difference in environmental regulation in different states has affected manufacturing operations. Several restrictions are put across to preserve the environment as well as high taxes changed to discourage the set of such plants. The policies, therefore, leads to low production as well as the expansion of the company hence small profits.

The legal framework of different countries also tends to hinder the smooth running of the production operations as well as marketing. The standards of the drugs manufactured are set different levels at different nations. Due to the legal laws set against the standards of the product, it becomes difficult for the company to explore new markets as well as establishing new production plants at those countries. It also involves warning against drug effects, thus lowering the sales (Bambo, 2019).

Internal factors also lead to constrains. The employees' performance, management, capital generation procedures, and a close track of the production is a challenge. The employees complain over wages as well as working conditions is a challenge that causes improper operation of production and marketing. Management also finds it difficult to propagating the problems that arise within the company depending on the adversity of issue. Loans and financing procedures takes them a high risk of enormous interest rates that ends up reducing its expansion focus (Adamkasi, 2019).

Other challenges that Johnson and Johnson Company faces include, season demands of the product that at times leads to unemployment to some working staffs. It also experiences changes in consumer behavior and preferences that in one way or another cause divergence in product consumption. Changes in pre-existing environmental regulations it also creates a hard time for the company to adjust in new rules (Adamkasi, 2019). It, therefore, bothers the performance of the company.

Conclusion

In conclusion, Johnson and Johnson Company operation and competence is mainly affected by the statutory factors as well as the stiff competitions from other related companies. It has, therefore, mandate to employ new techniques in the production process as well as embracing the rules set across the world. Meanwhile, the internal company factor is not a rampant challenge. External factors affecting its operation seem to have more impact. There is a need to address those factors for better tomorrow of the company.

References

Adamkasi. (2019). PESTLE-PESTEL Analysis of Johnson and Johnson. Retrieved from https://freepestelanalysis.com/pestle-pestel-analysis-of-johnson-and-johnson/

Bambo, G. (2019). Johnson and Johnson: PESTEL Analysis. Business Policy and Strategy (MGMT-522-01A).