Johnson & Johnson SWOT Analysis Essay

by Simon White Free SWOT Analysis

Last modified on May 6th, 2022

This is a free Johnson & Johnson SWOT analysis available for all students. You should use it only as a reference.

Company Details

CEO:Joaquin Duato (Jan 3, 2022–)
Founded:January 1886, New Brunswick, New Jersey, United States
Headquarters:New Brunswick, New Jersey, United States
Number of employees:141,700 (2022)
Revenue (2021):$93.775B
Subsidiaries:Janssen Pharmaceuticals, Janssen-Cilag,…
Founders:Robert Wood Johnson I, James Wood Johnson, Edward Mead Johnson

Johnson & Johnson is one of the leading pharmaceutical companies in the global market for consumer products, including self-care, drugs, and other related items. With a strong economic and administrative structure, the company even survived world wars and depressions.

In the beginning, it was a family business with friends and families as employees. Now, the retail giant is operating in around 200 countries with hundreds of products catering to the diverse needs of customers, including medical devices.

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SWOT Analysis of Johnson & Johnson

A SWOT Analysis helps researchers and entrepreneurs in understanding the health of a company. It explores and discusses four different elements in a square with four quadrants for each. The elements discussed in a SWOT Analysis are strengths, weaknesses, opportunities, and threats.

A SWOT Table is to make the study easier and visually presentable by highlighting key aspects.

Let us discuss the internal and external factors in detail through Johnson & Johnson SWOT Analysis before moving on to the SWOT Table for the company.

Johnson & Johnson Internal Factors

Strengths and weaknesses are considered internal strategic factors of a business that are in its control.

💪 Strengths

Any comparative or competitive advantage Johnson & Johnson has over its competitors is known as its strength. In this section, we will take a hard look at all the strengths of the company.

Through global dominance, an excellent supply chain, and acquisitions and mergers, Johnson & Johnson is riding the high tide.

Global Dominance

There is no question about the dominance of the pharmaceutical company in the global market. With over 250 brands under its belt and a distribution network spanning over 200 countries in its business operations, it is one of the most dominant global players in personal care and drugs, as well as medical devices.

Influence

Johnson & Johnson is often considered to be the most influential company in the world for its pharmaceutical products. With many countries and small companies reliant on its wellbeing, it can even disturb the US stocks.

Experienced Player

Another point of strength that sets the company apart from its competitors is its immense experience and expertise in designing and producing consumer-centric products that drive worldwide sales.

Expansive Product Portfolio

Johnson & Johnson prides itself in offering a wide range of pharmaceutical products to its clients. The product portfolio of the company ranges from baby products to antiseptics and beyond.

Social Initiatives & Engagements

As a major stakeholder in its market segment as well as a global citizen, the company engages in many social and industrial initiatives to make the world a better and safer place. Johnson & Johnson has collaborated with the UN and other organizations to bring awareness to the masses and the producers.

Excellent Supply Chain

From procuring raw materials to supplying finished products to the retailers, distributors, and pharmacies, Johnson & Johnson has an excellent supply chain mechanism that ensures its exceptional sales.

Fruitful Partnerships

The company understands that instead of entering a new market and doing all the things on its own, it is best to get the already established brands and leading producers in partnerships to make new and exciting products.

Strategic Marketing Campaigns

Johnson & Johnson’s products have managed to carve out a corner for trust and respect in its consumers. Its marketing is on point and targeted toward capturing the emotional essence of prospects and current consumers.

Mergers & Acquisitions

In recent times, the company has acquired and merged many profitable and leading market players from different segments, such as medical devices, under its umbrella. This allows the company to start reaping profits as soon as it is done with the paperwork.

🤒 Weaknesses

The flaws and drawbacks in a business model or the operations of Johnson & Johnson are known as its weaknesses.

Bad reputation, lawsuits, financial setbacks, as well as sluggish decision-making due to its size, are some of the weaknesses in the Johnson & Johnson business model.

Lawsuits & Financial Setbacks

Through lawsuits, Johnson & Johnson has almost lost over $15 Billion, including many of its products, such as baby talcum powder Xarelto and op-addictive drug Norman.

This also resulted in eroding consumer trust and respect for the company.

Poor Product Diversity

Out of all the major brands that Johnson & Johnson controls, three divisions bring the most revenue and growth for the parent company. Due to the volatile nature of the US economy, the company can suffer both short and long-term cash flow problems.

Dependence on a Handful Brands & Products

The company depends on a handful of brands and products to bring in massive sales figures for medical devices. Yet, governments are loosening up regulations over competitive items with generic character. This allows other smaller players to carve out a bigger chunk of the market share.

Sluggish Decision Making

As a large corporation among the pharmaceutical companies, Johnson & Johnson suffers from too many moving parts and too many brands to consider resulting in slow and delayed decision making.

Controversial Production & Supply Channels

Just like other big players in the market, Johnson & Johnson has often relied on controversial suppliers and channels to replenish its supply channels. This led to backlash from regulatory and activist bodies resulting in a poor brand image.

Poor Publicity & Deteriorating Trust

Due to the controversies and the company’s nature as a large corporation in the pharmaceutical industry, Johnson & Johnson often ends up at the receiving end of negative publicity resulting in tainted trust.

Johnson & Johnson External Factors

Both opportunities and threats are combined in the external factors of a business to either provide a window for growth or run risks to end up on the ground.

🤑 Opportunities

Any market potential or avenue to generate revenue or ensure sustainability with strategic planning is known as an opportunity for the company. The opportunities that are at the disposal of Johnson & Johnson are as follows.

Redefining the portfolio, strategic expansion through acquisitions, and capturing emerging markets are sure-fire ways for the company to ensure growth and success.

Redefining Portfolio  

By redefining its portfolio and exerting focus on brands and products that bring in more revenue, Johnson & Johnson can improve not only its market reach but also its profitability.

Pfizer consumer healthcare did the same, like other pharmaceutical companies, and witnessed immense growth.

Strategic Expansion through Acquisitions

Through acquisitions of innovative products, large players such as Johnson & Johnson can improve their sustainability and market reach by grabbing on to the small but effective players.

Capturing Emerging Markets

Around 60% of the company’s global pharmaceutical revenue comes from the US alone. Johnson & Johnson can suffer a lot if the US economy takes a hit, just like during the pandemic.

By capturing and moving on to the emerging markets in the developing countries, the company can diversify its revenue streams and disperse dependence.

Value through Price Discrimination

The company can introduce value-based products and items in its business models that can cater to the needs of the clients who prefer more affordable and value-added options.

Loyalty Programs

Through loyalty programs, Johnson & Johnson can retain a larger base of clients and customers who would feel that their needs are met with care and attention.

😨 Threats

Those external strategic factors that seriously dismantle a company’s structure or its operations are threats. In the case of Johnson & Johnson, the risks and potential threats in this competitive environment are as follows.

With the competition catching up, the proliferation of generics, and campaigns against drug abuse are some of the threats that can dismantle the business model.

Cut-Throat Competition

Johnson & Johnson is not the only player in this market segment. Other players such as P&G, Unilever, and Reckitt Benckiser are catching up with the competition. If the condition persists, Johnson & Johnson can end up losing a large chunk of its earnings.

Proliferation of Generics

Recently, the generic alternatives of Zytiga were allowed to be sold in the market. If this precedent is set and other generics end up in the pharmaceutical sector in the future, the company can end up with lost revenue in the consumer health care division.

Stiff Regulations

With a global footprint in over 200 countries, the company needs to comply with all the different countries with varying, sometimes hostile regulations structures. This results in poor company growth and revenue generation.

Technologically-Improved Substitutes

Substitutes for all drugs and products are on the rise. There are many start-ups and emerging players who are determined to introduce cheaper substitutes. If this happens in the future, the company will lose major growth potential and revenue stream.

Campaigning Against Drug Abuse

The US has faced immense phases of opioid-based addiction and drug abuse. Now, the government and the public are wary of companies like Johnson & Johnson.

If the regulations start to get stricter, the company would not only lose its profitability but also needs to grab on to survival measures to stay afloat.

Johnson & Johnson SWOT Table

Johnson & Johnson SWOT Table

Strengths

  • 💪 Global Dominance
  • 💪 Influence
  • 💪 Experienced Player
  • 💪 Expansive Product Portfolio
  • 💪 Social Initiatives & Engagements
  • 💪 Excellent Supply Chain
  • 💪 Fruitful Partnerships
  • 💪 Strategic Marketing Campaigns
  • 💪 Mergers & Acquisitions

Weaknesses

  • 🤒 Lawsuits & Financial Setbacks
  • 🤒 Poor Product Diversity
  • 🤒 Dependence on a Handful Brands & Products
  • 🤒 Sluggish Decision Making
  • 🤒 Controversial Production & Supply Channels
  • 🤒 Poor Publicity & Deteriorating Trust

Opportunities

  • 🤑 Redefining Portfolio  
  • 🤑 Strategic Expansion through Acquisitions
  • 🤑 Capturing Emerging Markets
  • 🤑 Value through Price Discrimination
  • 🤑 Loyalty Programs

Threats

  • 😨 Cut-Throat Competition
  • 😨 Proliferation of Generics
  • 😨 Stiff Regulations
  • 😨 Technologically-Improved Substitutes
  • 😨 Campaigning Against Drug Abuse

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