Research Paper on Johnson & Johnson: Global Leader in Health Care Products

Introduction

Johnson & Johnson is an American multinational company engaged in research and development, manufacture, and sale of a wide range of products in the health care field. The company was formed in 1886 and has around 250 subsidiaries in over 60 countries worldwide (Reuters, 2019). Headquartered in New Brunswick, New Jersey, it operates through three segments: consumer, pharmaceutical, and medical devices (Wilbur and Garned, 2013). The consumer segment deals with a variety of products used in baby care, including baby shampoo, baby powder, and sanitary napkins, baby lotion, massage oil, shower gels, and baby wipes, and baby toothbrush (Westervelt, 2011).

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In 1954, J&J became the first company to manufacture a shampoo that was mild enough to be used on babies without irritating their eyes (Stewart and Paine, 2012). Since then, they have remained the market leader in baby shampoo and other childcare products. Their products are also affordable for consumers around the world. The organization's commitment to improving sanitary standards for all customers allows it to offer those products free of charge in case the consumers cannot afford them. J&J has also been recognized has also gained fame for its innovative products, commitment towards employees, the betterment of babies through childcare products, and social responsibility.

Mission

The mission of Johnson and Johnson childcare is to create the gentlest and mild baby products, which can be used for every age and stage of a baby's life (Johnsonsbaby.com).

Credo

J&J call their vision their "Credo," which is a statement of guiding principles the organization uses to accomplish its responsibilities to consumers, employees, stockholders, and communities. In their credo, J&J believes their first responsibility is to physicians, patients, nurses, mothers, fathers, and every consumer that uses the company's products and services (Johnson and Johnson, n.d.). They ensure the high quality of every product or service provided. The organization must continuously struggle to minimize its costs by maintaining reasonable prices. Orders of the customers must be adequately serviced. The suppliers and distributers must also have a chance to make a fair profit. Their credo further states that the organization is responsible for its employees working around the globe.

Everyone must be considered as an individual. Their dignity must be respected, and their merit acknowledged. The individuals must have a sense of security in their jobs. Additionally, the organization must ensure fair and adequate compensation and ensure orderly, clean, and safe working conditions (Isaac, 2013). They must be mindful of how to help their employees attain their family duties. Employees must feel free to make recommendations and complaints. Equal opportunity for employees, development, and advancement for those qualified must also be observed.

The organization also provides competent management that maintains ethical behavior. Besides, the J&J is responsible to the communities (Johnson's baby, n.d.). They must be good citizens by paying taxes, supporting good deeds, and offering charity. Encouraging civil improvements, better health, and education also form part of the firm's credo. Ensuring that the property used is maintained in good order, protecting natural environments and resources are parts of the guidelines.

The final responsibility of the organization is to the stockholders. Making a sound profit is the aim of the business. J&J must experiment with new ideas. Research must be conducted, innovative programs developed, and mistakes avoided. Besides, it is a requirement to purchase new materials, provide modern facilities, and launch new products (Johnson's Baby, 2015). Lastly, reserves must be developed to provide for adverse times. When J&J upholds these principles, the stockholders will realize a fair return.

Five Forces Analysis

Threats of New Entrants

The barriers to J&J childcare include the research and production expenses as well as the advertising expenses needed to establish the brand. These factors are necessary for the survival of the company. However, they hinder the easy entrance of new competitors in the production and distribution of baby products (Adamkasi, 2017). Additionally, J&J has dominated the market for a long time and has maintained its brand name as well as customer loyalty. Any entrant in the industry can pose limited threats to the company's brand. Therefore, the risk of new entrants for the J&J childcare line is low.

Threat of Substitutes

J&J baby products have some substitutes in the market. Some of the alternatives that the consumers may consider are natural herbal products such as Mamaeath, organic affaire, and homemade products, which are readily available and are less costly (Stewart and Paine, 2012). So, these alternative products pose a high threat to the J&J childcare line due to their availability and low cost. Competition is equally a threat to the J&J childcare line. Several companies in India and around the world are determined to introduce baby products with zero health effects. Even though J&J has existed in the industry for an extended period and has gained customer loyalty, the company risks losing some of its customers to the competitors that produce high-quality herbal baby products that do not present any harmful effects to babies. So, J&J faces a high threat from substitutes available to consumers.

Bargaining Power of Buyers

Buyers of J&J baby products include wholesalers, retailers, and individual buyers. More often, these buyers are demanding because they want to purchase the best products at the minimum price possible. The increase in demand for J&J baby products across the world, as well as the availability of substitutes, implies that the company is having active buyers (Adamkasi, 2017). They can pressure the organization to lower prices and improve the quality of the products. To maintain customer loyalty and market share, J&J must comply with the demands of the customers. Most buyers tend to switch to alternative products that provide related functions and are more affordable. Therefore, it is safe to note that the bargaining power of buyers is high in the case of the J&J childcare line.

Bargaining Power of Suppliers

J&J uses a standardized method of selecting suppliers for baby products. To maintain a long-term relationship with the suppliers, the company usually has a contractual agreement with them (Isaac, 2013). On most occasions, the suppliers incur huge costs from the distribution of products. Due to the accumulated costs and the terms of the agreement with the company, they have low bargaining power on the product costs (Adamkasi, 2017). Most of the suppliers also fear to lose the opportunity in a well-established brand like J&J; therefore, they have to comply with the terms and conditions of the firm. As such, it can be noted that the suppliers in J&J Company have little to no bargaining power on the costs of the products.

Competitive Rivalry

The competition in the J&J childcare line is very high because many companies tend to manufacture more effective products at a lower cost than J&J. The primary competitors in this industry include ontelle, Mothercare, Chicco, and Himalaya Herbal (Johnson's Baby, 2015). They base their competition on pricing, reliability of the product, and customer service. Although competition is present, it is less likely to have a huge impact on the production and supply of J&J baby products due to various reasons.

First, J&J has earned an excellent reputation across the world and has a large market share (Adamkasi, 2017). Second, the company has, for a long time, gaining customer loyalty and trust. Third, the organization diversifies its range of products in the market. In such terms, it is safe to state that the J&J childcare line is performing well since it is competing fairly in the industry. Therefore, the competition in the production and distribution of J&J baby products is moderate.

Resources and Capabilities

They are the primary sources of competitive advantage and profitability for the J&J childcare line. They empower the organization to drive the business and face competition with the products and services for the customer needs. Resources for the J&J childcare line include time, workforce, and baby products like baby wash, bubble bath, cologne, cotton swabs, haircare, lotion, nursing pads, oil, powder, and wipes (Johnsonsbaby.com). Capabilities include inspiring management, innovation, customer loyalty, and trust, as well as agility and speed.

SWOT Analysis

Strengths

Johnson &Johnson Childcare has established a strong brand image since its introduction in 1886 and has contributed significantly to solving several health problems in babies (Marketing91, 2019). For instance, the company's product, such as baby powder, has been used to prevent diaper rash in babies. J&J baby products have also been used to soothe dry skin and treat eczema as well as encourage healthy baby development (Choudhuri, 2018). The company also has significant sales and appropriate market strategies, which makes it one of the dominant sectors in the world in the provision of childcare products. In addition, J&J has more than 29,950 internet domains and conduct business around the world, giving it the opportunity for global sales, hence gaining a competitive advantage (mbaskool.com).

Besides, J&J childcare supports environmental awareness and promotes several programs that help the community to be cautious about health concerns. As noted, the company operates in over 60 countries worldwide and has more than 250 subsidiary companies, which allows for a strong customer database and comprehensive economies of scale (Reuters, 2019). The presence of J&J baby products in all shops all over the country and overboard is also a strength for the company. Excellent advertising, brand visibility, and distribution network in the baby care market also makes the organization a top-of-the-mind brand. Weaknesses

J&J childcare faces several international pressures to reduce the cost of baby products and preserve the expirations of copyrights. The company also spends a lot of resources on research & development as well as sourcing of information (Isaac, 2013). Another weakness is the failure to meet product specifications for some products. For instance, one of the J&J subsidiaries recalled 43 children medicines, including Tylenol and Benadryl, because the US revealed that some of the products failed to meet specifications (Haelle, 2014). Also, some of J&J baby products such as shampoo are less popular in rural than urban markets. Lack of indigenous alternatives for babies with sensitive skin is also a weakness faced by the J&J childcare line.

Opportunities

J&J childcare can grow significantly due to its established global brand, which enables it to focus on a wide range of baby products in the emerging economies (Johnson & Johnson, 2016). Improving its presence in the rural market also allows it to grow. The company also has the opportunity to enhance its market share by concentrating on product development and technology innovations. J&J research is improving and has provided some of the side effects of baby products. As such, it often contains some precaution and safety measures at the back of each package (Johnsonsbaby.com). This strategy encourages customers to develop trust with the company. Further, its ability to tie-up with hotel chains, creches, and playhouses increases its chances for growth and development...