I

I. Background
Johnson & Johnson is an investment holding company with interests in health care products. It engages in research and development, manufacture and sale of personal care hygienic products, pharmaceuticals and surgical equipment. J&J prides itself on its decentralized operating structure, with the management teams of its myriad and far-flung operating units having wide latitude to make decisions. Each company belongs to one of J&J’s three broad divisions: The Pharmaceuticals, Medical Devices, and Consumer divisions.
Johnson ; Johnson faced many problems in their business. It was already alerting investors that its revenue would drop. Sales of its consumer’s products were slowing as a result of a decrease in the disposable income of its customers. Its pharmaceutical business was being affected by the expiration of patents on some of its best-selling drugs and by the growth of competition from generic drugs. J&J entails very high overhead costs, they have been losing sales on its best-selling products under assault from competitors, sales of its consumer products were slowing as a result of a decrease in the disposable income of its customers, and is getting much harder for J&J to spot smaller firms with promising drugs and to avoid running up against other firms. The company need to develop a new product through already acquired businesses and should minimize the acquisition of new businesses. Johnson & Johnson need to maintain the stability through Innovation of their existing products especially Pharmaceutical and Medical Devices to cope up the changing business environment. The company must create new products through other businesses already acquired because staying ahead of the competition should always be front of mind for existing companies. New products can give a competitive advantage over the competition. R&D must be strengthened. Through this, the company will have a higher chance in succeeding in the global market.

II. Statement of the Problem
It was already alerting investors that Johnson & Johnson’s revenue for 2009 would show a drop from the previous year, the first decline the firm has experienced in its 120-year history. This links to the following factors and causes.
? Product concerns and safety
? Market competitors
? Expiration of Patents
? Expenditures
? Consumer Behavior
? Strategy
? Short term problems and Long term problems

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III. Analysis
Using PEST Analysis, the following details were taken into consideration:
Political
? There was a slowdown in government decisions due to political instability
? There were adverse changes on foreign investment
? There were corruption and bureaucratic inefficiency
Economic
? There were tax issues faced by Johnson ; Johnson
? There had been fluctuation in interest, currency, and inflation rates
Social
? Since poverty has a high rate, people are limited to buying pharmaceutical products
? People in rural areas were less aware of Johnson ; Johnson products
? There were many cases regarding unapproved psychiatric medications about Johnson ; Johnson products
Technological
? Johnson ; Johnson spends good money on research and development.

IV. Decisions – Formulation
After development of existing business lines, Johnson ; Johnson Management should focus on developing new products through the businesses already acquired, Maintain the stability of the products already in existence especially pharmaceuticals and medical devices and Strengthen research and development for collaboration.

V. Actions – Implementation
To continue developing the acquired existing business lines while establishing research and development department for collaboration and consider the time acquisition of new businesses to lessen expenditures.
The company should minimize the acquisition of new business because it can only add on the overhead cost because it only minimizes the acquired income. In developing the new product the Company should address first the customer needs; many products fail because they don’t clearly address any particular need or solve any specific problem in consumers’ lives. Very often, customers are not just looking for trendy new items; they are looking for a solution. A successful product is one that fills a void in the lives of customers. In successful marketing, that ‘voids’ needs to be clearly identified and relatable. Idea generation would take place as a starting point of finding new promising ideas after all ideas are gathered evaluation and elimination will come into the picture to eliminate ideas which are not needed. Business analysis would be the final assessment before deciding whether to develop the concept into a new product or not. Once the product is identified, it’s time to introduce the solution which is the developed product.
A good marketing strategy should be drawn from market research and focus on the right product mix in order to achieve the maximum profit potential and sustain the business. Also make sure that the product offers a reasonable price. Even if the company identify a common problem that no other product on the market addresses and you offer the perfect solution, no one will buy a product that is not worth the price. If it’s unreasonably priced, customers will try to get around their needs by using products that don’t quite fit.
Establish communication with customers, it is almost always worth the cost, since it offers the company the most important perspective of the new product from the audience that will make or break your success. Often, asking for customer feedback will lead you to make subtle adjustments to the product and your marketing efforts, which can lead to increased sales.
Everything about the created product could be perfect, but if it is difficult to acquire, customers will opt for another solution or avoid the solution altogether. The company need to carefully consider distribution – where, when and how customers can get their product. No matter what route you take for distribution, it should be straightforward and hassle-free for consumers. No one wants to navigate complicated online instructions or numerous telephone transfers just to get a product. Simple, honest and straightforward routes of obtaining will assure customers that they have made a good choice and ensure a long-term relationship with the company.