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Johnson & Johnson


 Abstract

In today’s world it is almost impossible to make a full recovery without the mention of Johnson & Johnson (J&J). The health care giant has a diversified network of branches in over 250 companies that are located in 60 countries world wide. The company operates in three segments; the pharmaceutical segment concentrates on the production of drugs for a range of disorders such as, pain, autoimmune diseases, blood disorders and neurological conditions. The top sellers in this segment are Psoriasis drug Remicade, Risperdal and schizophrenia medication under the diagnostics and medical devices segment, the company offers orthopedic products, surgical equipments, contact lenses and monitoring devices. The consumer segment deals over the counter products and drugs for oral care, skin care, women’s health, baby care and first aid. This research paper seeks to cover the past history and recent history of the company, products, key dates, its competitors and how they differ, its suppliers, target markets, and financial situation. This research aim at giving a clear picture of the profile of Johnson and Johnson since it began its operations.


 Introduction

Johnson and Johnson is an international American company that deals with medical devices, consumer packaged goods and pharmaceuticals which was founded in 1886. Since its founding, the company has rapidly grown to meet peoples’ health care needs across the globe. Through the formation of new companies, acquisitions, and mergers the company has become the largest and broadly based provider of health care products in the world. The Company is also listed in the New York Stock Exchange market and its stock is part of the Dow Jones Industrial average, J&J is also listed as one of the companies among the Fortune 500. Johnson & Johnson is famous for its corporate reputation and has always been rank at the top in the national corporate reputation survey by Harris interactive; the Barron magazine has also ranked the company as one of the most respected company in the world. Johnson & Johnson was also the first organization to be awarded by U.S. state department, the Benjamin Franklin award for its public diplomacy for its efforts in funding education through its international programs.


 The headquarters of the company is situated in Brunswick, New Jersey, with the consumer division being located in Skillman, New Jersey. The company boasts of about 250 subsidiary companies with branches in over 60 countries. Johnson & Johnson’s products are sold in more than 175 countries and according to the statistics in 2008 the pharmaceutical sales were approximately $24.6 globally. The brands by Johnson & Johnson include a variety of household first aid and medication supplies. Among its famous consumer products are Acuvue contact lenses, Band-Aid bandages, Johnson’s baby products, Neutrogena beauty and skin products and clear& clear facial wash. (Santoli, 2008)


 History of the company

1886-1926

In 1885 Robert Wood Johnson was moved by a speech by Joseph Lister who was an antisepsis advocate, and together with two of his brothers, Edward Mead Johnson and James wood Johnson started a small company in New Brunswick that manufactured ready to use surgical dressings. In 1886 they were able to produce their first products, the sterile surgical dressings which were commercially sold and which enabled that saving of many patients’ lives.


 The company later introduced first aid kits, Johnson’s baby powder, sterile sutures, sanitary napkins, Band-Aid adhesive bandages, and dental floss. in 1906, the company initiated disaster relief program. The company is credited for the help it provided in the San Francisco fire and earthquake, within hours of the disaster the company was able to send its products in trainloads to help the survivors.


 Robert Wood Johnson headed the company as its president and focused a lot on the improvement of the health practices in the 19th Century. He gave his name to a hospital located in New Brunswick and later died in 1910 of chronic renal insufficiency and was succeeded by his brother James Wood who led the company until 1932. In 1919 the company was able to successfully expand to Canada and later it expanded to England in 1924.


 1926-1946

Under the chairmanship of Robert wood, the company wrote its Credo in 1943. This was the period before the company became publicly traded and the concept of corporate responsibility was unheard of. The credo was meant to be more than just a moral compass it was also seen as the ingredient for the success of the business. The credo outlined the responsibility of the company to the community, employees, consumers, patients, nurses and doctors. The credo guides the decision making of the company and challenges it in serving the well being and needs of the people it serves.


 It was also during this period that the companies increased its overseas growth and also widened its efforts in medical and pharmaceuticals production the company was able to expand to Switzerland, Belgium, Argentina, Mexico, Australia, Ireland, Brazil, South Africa and France.


 The company then introduced Johnson’s baby lotion and baby oil and Modess sanitary napkins. In 1931 the company launched a gel, Ortho Gynol which was the first birth control product in the United States. Later in 1944 the company became publicly trade in the NYSE.


 1946-1966

During this period new companies were formed and others were acquired by Johnson & Johnson. They included; ETHICON, Inc that deals women related personal health products, Mc Neil laboratories Inc that created acetaminophen and Tylenol, and Codman & Shurtleff Inc, Janssen Pharmaceutica which were European pharmaceutical companies that dealt with surgical and medical instruments. The company was also able to expand to the Philippines, India, Sweden, Pakistan, Netherlands, Portugal, Scotland, Puerto Rico, Malaysia, Colombia, Italy, Zimbabwe, Venezuela, Austria, and Zambia.

In 1963, the company through Ortho Pharmaceuticals started marketing Ortho-Novu, its first pill for birth control.


 1966-1986

This period was characterized with medical advances by the companies operating under Johnson & Johnson and ground breaking products were created during this period. The company acquired Frontier contact lenses and this later grew into the vision care business and the pioneer in the manufacture of Disposable contact lenses. In 1985 the company expanded to China and further introduced a variety of ground breaking products which included;

-Haldol used in the treatment of Schizophrenia that has been in use for 25 years.

-Rhogam that is used in the treatment of hemolytic diseases mainly in newborns.

-the Proximate stapler which is a new technique for closing surgical incisions without the stitches.

-Monistat cream that is used in women’s health.

-Orthoclone OKT3, that is a therapeutic monoclonal antibody utilized in the treatment of the rejection of transplanted organs by the body.

-Vicryl is used mainly by surgeons and is made of synthetic absorbable Stitches.


 

1986-2008

Since the 1980s the company has continued to grow through internally developed businesses and acquisitions that has enabled it to dominate in a number of areas;

-the company has been able to acquire Neutrogena corporation, skin care brands like Aveeno, Roc, and Clean & clear, Lifescan Inc, that manufactures blood glucose monitors used by diabetics.

-Depuy, inc acquisition which made the company to be recognized as a leader in orthopedics.

- The company has been able to form Ethicon Endo-surgery for minimally invasive surgery and Ortho Biotech products for biotechnology.

-The company merged with Centocor, Inc that brought in products like Remicade.

-The company has also been able to introduce and market the first coronary stent, drug eluting stent and disposable contact lenses.

- The company also introduced prescription medications in this period which include; Intelence, Invega, Prezista, Razadyne, Risperdal and Procrit/ Eprex.


 Currently the company is dedicated to improving the well being and health of individuals across the globe. The company aim is to always ensure that its workers are inspired by the knowledge that the care they provide transforms the life of people. Throughout the history of the company the company has constantly aimed at making a difference in terms of health and in future to take well being and health to greater heights. The company hope to achieve this because of its financial strength, breadth and its collaborative nature.


 Products

Johnson & Johnson manufactures a wide variety of health products that are used by millions of people worldwide. The company has the broadest array of health care products from simple sniffles or skin blemish to a severe medical condition. In laboratories and operating rooms, nurses and doctors alike depend on the products from the company and its medical technology. Such products are utilized in coronary stent implants, hip replacements, carrying out tests for metastatic cancers of the breast all of these services have greatly contributed to the longer life of individuals. The company’s products are also very useful in enabling individuals to overcome life threatening diseases life colon cancer, diabetes and obesity. In addition the company manufactures pharmaceutical products and prescription medicine that are used in treating a variety of conditions that range from simple rheumatoid arthritis and migraines to serious infections and cancer.


 Competitors

Procter & Gamble

Is one of the major competitors of Johnson and Johnson, the company is listed in the New York stock exchange and manufactures an array of consumer goods. By 2008, the company was ranked as the 8th largest company world wide with respect to market capitalization and also ranked 14th largest with respect to profits. In 2007 the Fortune ranked the company 10th most Admired, P&G is recognized with the numerous business innovation involving the soap opera and brand management. Unlike J&J its operations are categorized into three business segments;

-Beauty care; this is divided into the Grooming segment and the beauty segment

-Household care; divided into family care and baby care segment and Home care and fabric care segment.

-Health and well-being; is divided into health care segment and coffee, snacks and pet care segment.

In 2007 only, the company spent $2.62 billion in advertising twice the amount used by General motors. In 2008cannes international advertising festival named P&G as the Advertiser of the year.


 Novartis AG

Novartis is another major competitor of J&J it is a multinational corporation that deals with pharmaceuticals. According to 2008 statistics the company was ranked top in Switzerland in terms of revenues, it made $53 and $ 36.173in terms of sales. The company is one of the biggest in the health care sector in the world and is considered one of the leaders among the pharmaceutical manufacturing companies. Novartis is involved in the manufacture of pharmaceuticals products, animal health products and consumer health products.


 Lilly Eli and Company

Is another major competitor of J&J, the company is a member of the New York Stock Exchange and mainly deals with pharmaceuticals and is credited as the first firm to produce penicillin in mass. Today the company is seen as the largest distributor and manufacturer of psychiatric medications in the world. The company is one of the Fortune 500 companies. Statistics in 2008 show that the company made $20 billion ranking it 148th in the U.S. and 10th largest with respect to sales in pharmaceuticals globally.


 Suppliers

Johnson & Johnson has established a collaborative and strong relationship with its suppliers some who have been in existence since the incorporation of the company. The company depends on thousands of suppliers who provide services, goods and material. The supplies are used by the Johnson & Johnson companies in the production of goods and services for its customers and to also supply the company’s facilities and offices world wide. The procurement approach that Johnson & Johnson uses is based on the company’s credo which requires the company to get the best quality of services and goods at a cost that correspond to the best possible value, whilst maintaining the highest possible standards, and taking into account the environmental and social responsibilities seriously.


 Supplier diversity

Johnson & Johnson aims at promoting a diverse base of suppliers and has put in place a supplier diversity program that is designed to make sure that the organizations having different ownership and backgrounds have the chance to becoming esteemed suppliers. The diverse suppler base is important as it reflects the company’s customer and patients worldwide, the company aims at working with diverse and small suppliers who can be able to add value to the businesses by supplying the company with innovative solutions to manufacturing and marketing efforts and also be able to sustain the long term growth objectives on the company.


 The diversity program was established in 1998 and ever since the aggregate spending with diverse owned suppliers and small businesses has been over $1 billion. The framework of the program includes a corporate office that deals with supplier diversity and which works together with the supplier diversity team which is represented in each of the branches of Johnson & Johnson companies. The top management of each company has the primary responsibility for attaining the spending targets of supplier diversity. The supplier diversity programs target diverse and small businesses which include; minority owned businesses, women owned businesses, Gay/lesbian owned businesses, Hub Zone businesses, Veteran-owned and small disadvantaged businesses.


 Target Markets

The target market for J&J can be categorized into the three business segments of the company;

Consumer health care;

Under this section the company targets the millions of people of all ages at home world wide who purchase the company’s products over the counter. The products are used in reducing fever, relieving pain, reduce smoking, treatment of allergies, keeping babies comfortable and clean and prevent sunburns. The market under this segment can be divided into 7 major franchises;

-Baby care; this section targets user of baby skin and hair care products and also family skin care products.

-Hair & Skin care; this section targets user of sun care, anti-aging and clear skin products.

-Topical health care; this section targets users of itch relief, wound care, and germ protection products.

-Oral health care; this section deals with brush, floss and rinse products and also the teeth whitening products.

-women’s health; concentrates on users of feminine hygiene and personal health products.

- Over the counter medics; this section deals with the marketing of a wide range of trusted and famous products such as antacids, allergy medicines, colds and coughs medicines, pain relievers, anti-diarrheal medicines and nasal decongestants.

-Nutritionals this are focuses on the marketing of nutritional products like dietary supplements, milk supplements and sweeteners.


 

Pharmaceuticals

Under this segment the company offers medicines that target the widespread and most serious diseases in the world that include psoriasis, rheumatoid arthritis, schizophrenia, epilepsy, cancer and HIV. The company is categorized into three main customer target units;

-Internal medicine and central nervous system; this unit mainly targets customers with illnesses such as schizophrenia, epilepsy, diabetes, and cardiovascular diseases.

-Biotechnology, immunology & oncology; this unit concentrates on marketing biologic and traditional medicines used in the treatment of autoimmune disorders.

-virology; this unit deals with the development and marketing products used in the treatment of infectious diseases such as tuberculosis, hepatitis C and HIV/AIDS.


 

Diagnostics & medical devices

Medical devices segment, the company offers orthopedic products, surgical equipments, contact lenses and monitoring devices. Target markets under this segment mainly target hospitals that use the devices that include;

-The users of hand hygiene, disinfection and a full range of innovative sterilization.

-Depuy Inc markets and develops products under Depuy Mitek, Depuy spine, Depuy orthopedics Inc, and Codman & Shurtleff, Inc. units.

-Ethicon inc. develops and markets surgical stitches, urology, wound management products and women’s health.

-LifeScan Inc targets markets for Glucose monitoring systems for hospital and home use.

-Cordis corporation manufactures and targets the markets and users of vascular technology.

-Ethicon endo-surgery inc. markets and develops medical devices used for open and minimally invasive surgeries.


 

 Financial situation

With the rapid change in the global economies, Johnson & Johnson has been able to maintain a consistent growth in revenue and dividend for its customers. The company has been able to succeed in an environment of competition due to sound planning and forecasting. The company has a sound financial plan and uses techniques such as sales forecasts, pro-forma-statements and economic assumptions. According to statistics in 2008 the company had a revenue of $ 63.747, operating income of $ 16.929, a net income of $12.949, total assets worth $84.912 and total equity of $ 42.511 and the number of employees stood at 118,700 as at 2009.


 

The strategies and policies used by the company in the numerous acquisitions and mergers have been associated with the company’s success. Due to the great asset base, the company has been able to have exceptional flexibility in its attempt to increase its growth and in the management of its operations


 

Johnson & Johnson has a very sound financial plan; the company has a good share of the market and has shown a lot of consistency in its performance. The sales of most of its major products have been on the rising trend resulting to the increase in the cash flows. The company has a good vision and its objectives are clear. The company continues to explore new markets and has been credited for its use of fair skills and strategies in competition.


 

Reference:

Daily finance (2010): Johnson and Johnson top competitors. Retrieved on March 13, 2010. from http://www.dailyfinance.com/company/johnson-and-johnson/jnj/nys/top-competitors.

Santoli, M. (2008): The markets finest. Barron’s magazine. Retrieved on March 13, 2010. from http://online.barrons.com/article/SB122065360919305361.html?mod=b_hps_9_0001_b_this_weeks_magazine_home_top#articleTabs_panel_article%3D1

The market watch (2010). Johnson and Johnson company profile. The wall street journal Retrieved on March 13, 2010. from http://www.marketwatch.com/investing/stock/JNJ/profile?siteid=mktw

Xinhua (2009): Watchdog issues inspection results on Johnson & Johnson. China Daily. Retrieved on March 13, 2010. from http://www.chinadaily.com.cn/china/2009-03/21/content_7603271.htm

Zenobank (2010): Company profile for Johnson and Johnson.  Retrieved on March 13, 2010. from http://zenobank.com/index.php?symbol=JNJ&page=quotesearch


 

 
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