JOHNSON AND JOHNSON MARKETING STRATEGY

RUNNING HEAD: JOHNSON AND JOHNSON MARKETING STRATEGY
Title: Analysis of the marketing Strategy of Johnson and Johnson
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Part 2
The pharmaceutical industry has evolved as one of the most critical and controversial
industry all over the world due the rise in the prices of the drugs. This industry is quintessential
in the general healthcare globally and hence, will never lose its relevance. The main targets of
this industry are the companies that develop drugs under brand names and have patent
protection. The analysis of the external factors that affects the industry will be helpful in
determining the strengths and the competencies required for improvement of the industry. The
present discussion will focus on the Porter’s five-force analysis to examine the industry context
of Glaxosmithkline Pharmaceutical Company.
Porter’s Five Forces
Porter’s Five Forces is a strategy which helps to understand business environment and
competitiveness in the market. It is very effective to find out the potential areas of a business
which can yield to profitability while the ones which are posed with threat due to market
conditions. The model is very useful to understand the forces which operate in a business
environment and employ strategies to adapt to them. The model was developed by Michael
Porter who evaluated the attractiveness of an industry and the chances of achieving profitability
(Dobbs 2014). It has been one of the most used and highly regarded strategies which has helped
businesses grow by evaluating conditions of the market. The model helps in the process of
analysis of five forces which include Competitive Rivalry, Power of Buyers, Power of Suppliers,
Threat of New Entry and Threat of Substitution.
Competitive Rivalry

2JOHNSON AND JOHNSON MARKETING STRATEGY
The number of competing forces against which the Glaxosmithkline Pharmaceutical
Company operate are less even though the companies are of large scale. The strategies which are
employed by a company have lesser chances of being unnoticed which makes the competition
within the market low to moderate (Barba-Sanchez, Calderón-Milán and Atienza-Sahuquillo
2018). The competition which Glaxosmithkline Pharmaceutical Company face is not always
restricted to the prices at which products are sold but also the regulations and rules which are
imposed by the government on health, pharmaceutical, consumer and medical products to
maintain safety and standards. Glaxosmithkline Pharmaceutical Company have large market
share which makes it one of the market leaders. Glaxosmithkline Pharmaceutical Company have
shown growth in the years and indicate growth in the years to come which is a positive sign in
the industry and competing forces will have to employ effective strategies to capture the market
share as them. Glaxosmithkline Pharmaceutical Company diversifies their product range and do
not solely concentrate on medicinal products which indicate that companies which pose
competition to them will have to open their prospects to other businesses as well.
Power of Buyers
The buyers in the market include doctors, medical practitioners, retailers, pharmacists,
wholesalers as well as insurance companies. The bargaining power of the buyer in the market
are quite low. The companies maintain product differentiation due to which the buyers are often
caught up in fixes unable to find alternatives of a specific product. The buyers of the products are
less price sensitive and it is important to maintain the quality of the products (Haleem et al.
2015). This pulls down the bargaining power of the buyers in the market as quality is a very
important factor which is also regulated by the government.

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Power of Suppliers
The power of the suppliers in the market is also quite low. Pharmaceutical, diagnostics
and medical devices require standardization. The dominant forces of the companies also needs to
choose the right suppliers to ensure success in the industry. Large scale companies require
several suppliers in order to cater to the demand and meet the deliveries which are crucial for the
growth of the company. Suppliers are responsible to manufacture medicines and medical
equipment which should meet standards. Compromising with regulations and standards may lead
to grave consequences (Haleem et al. 2015). Thus, the companies maintain contractual
agreements before initiating long tern collaborations. Glaxosmithkline Pharmaceutical Company
has more than thousand suppliers which makes it difficult for them to dominate the prices and
values of the products.
Threat of Substitutes
There is considerably high degree of threat of substitutes in the medical and
pharmaceutical industry as the demand for the products is quite high. The substitutes for medical
and health products could be medicinal herbs, plants and other ways which can be implemented
to achieve cure for diseases and conditions for which medicines are purchased, primarily because
the cost of medicines are higher as compared to medicinal herbs and other substitute products.
Products from competitive brand names may gain popularity through substitute products as well.
Pharmaceutical industry should aim at maintaining quality and standards by keeping affordable
prices of the products which will attract and retain buyers in the market.
Threat of New Entrants