Reference no: EM132226922
Management of Johnson & Johnson desperately needs a strategic plan to save its Tylenol[1]business, but first some background. According to Johnson & Johnson,
Johnson & Johnson has been a part of people's lives for 128 years and a valuable part of their investments for approximately 70 years. Founded in 1886, we listed our shares on the New York Stock Exchange for public investors in 1944.
During our history, we have built the most comprehensive base of healthcare businesses in the world, generating approximately 70 percent of our revenues from No. 1 or No. 2 global leadership positions in our respective markets.
Our consistent performance has enabled us to deliver an exceptional track record of growth that few if any, companies can claim: 30 consecutive years of adjusted earnings increases; and 52 consecutive years of dividend increases.[2]
In 2013, the company had revenue of $71.3 billion[3]mostly from healthcare, such as skin-care products, nutritional products, over-the-counter and prescription pharmaceuticals, medical devices, and diagnostic tools. Johnson & Johnson products are found in virtually every home, hospital, operating room and doctor’s office in 188 countries worldwide.
In 1955, McNeil Laboratories introduced Tylenol, the first pain reliever without aspirin. The product was so successful regionally that Johnson & Johnson acquired the company in 1959 to expand the business globally.
This morning, Amazon announced the acquisition of a small pharmaceutical company which had secretly developed and patented a pain reviver which is much more effective than Tylenol. Although Tylenol has an excellent reputation, Johnson & Johnson cannot reformulate it. Management needs a new strategy to combat Amazon and save the Tylenol business. Help them by answering the 13 questions starting on the following page.
1. Describe two (no more!) important opportunities and two (no more!) important threats facing Johnson & Johnson’s Tylenol business, including the individual combination of strengths/weaknesses and external factors creating each.
2. Recommend long-term objectives for Johnson & Johnson’s Tylenol business.
3. Justify your answer to the previous question.