Product Innovation Strategies and Management at Johnson & Johnson

This report provides a comprehensive analysis of product innovation management, focusing on Johnson & Johnson as a case study. It begins with an introduction to the significance of innovation in today's business environment, highlighting its role in driving competitiveness and growth. The report then provides background information on Johnson & Johnson, discussing its diverse product portfolio and its commitment to innovation. The core of the report examines the application of the Diamond Innovation Model to Johnson & Johnson, exploring how the company implements strategies related to product and technology, portfolio management, idea-to-launch processes, and fostering a culture of innovation. It delves into leadership, customer insights, and technology, as key drivers of innovation within the organization. A critical analysis identifies strengths, weaknesses, and areas for improvement, followed by recommendations for enhancing Johnson & Johnson's product innovation efforts. The report concludes with a summary of key findings and insights. The report utilizes academic sources to support its claims and provides a well-structured overview of the company's innovation strategies.

Running head: MANAGING PRODUCT INNOVATION
MANAGING PRODUCT INNOVATION
Name of the Student
Name of the University
Author’s Note

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Table of Contents
Introduction......................................................................................................................................3
Background of the company............................................................................................................3
Significance of innovation in the organization................................................................................4
Business strategy.............................................................................................................................6
Diamond innovation model.........................................................................................................7
Application of this strategy to Johnson &Johnson.....................................................................8
Leadership..................................................................................................................................10
Customer insights......................................................................................................................12
Technology................................................................................................................................12
Employees..................................................................................................................................12
Critical analysis.............................................................................................................................12
Identifying gaps and areas needs to be improved......................................................................12
Strengths....................................................................................................................................13
Weaknesses................................................................................................................................14
Recommendations..........................................................................................................................14
Conclusion.....................................................................................................................................15
References......................................................................................................................................16

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Introduction
The report elucidates on the significance of managing product innovation within the
organization. The company that is chosen for this study is Johnson & Johnson. In today’s
changing world, innovation plays an important role within the organization. Innovation changes
the way of doing business around the world. Innovation has been increasingly considered as the
core competency that the enterprise must develop. Although it has been one of the most complex
problems that every enterprise faces in the present era, it is a key to success of the enterprise.
Some researchers also consider innovation as the culture of participation in the enterprise and
capability to create new ideas of producing good and service. Implementation of new ideas in the
business determines the innovation level. Innovation basically involves changes in technology
that business should adopt for manufacturing products (Akintoye, Goulding, & Zawdie, 2012)..
This study highlights on the development of framework that is to be used to assess Johnson
&Johnson in terms of innovation. This assessment also identifies the gaps and the areas that are
required to be improved within this organization. The last section of this study also reflects on
the development of plan that addresses the areas of weakness of this enterprise.
Background of the company
Johnson &Johnson is one of the biggest American multinational corporations that provide
medical devices, consumer as well as pharmaceutical products. Its main stock is the component
of Dow Jones Industrial Average and is also recorded among the Fortune 500 listed companies.
This enterprise is headquartered in US and includes near about 250 subsidiary enterprises. This
organization has also made third biggest pharmaceutical settlement with the Department of
Justice of US. The brands of this enterprise include several names of first-aid as well as medical
supplies. There are three categories of their products that include – consumer products,

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pharmaceutical products and general surgery products. The aim of this company is to embrace
innovation and bring in new ideas, services and goods to life for advancing the health of
individuals across the globe. Their mission is to facilitate people live longer and healthier lives
always. As the success of their business mainly depends on their capability to collaborate with
the suppliers, who not only gives best quality goods and services but also strategically aligns
with their commitment to their social as well as environmental responsibilities (Brown &
Osborne, 2012). Through their 130 years of business, the management of this company focuses
on innovation of products, which improved their business growth over the years. In addition,
they are basically harnessing new technologies and creating new innovations, which in turn
leverage their expertise in design thinking for delivering personalized solution across the globe.
For the last few years, they have been showcasing the host of technologies at CES (Consumer
Electronics Show) in US (Al-Jabri & Sohail, 2012). However, the new products that are
innovated by them strive to address vital aspects of their people’s well being. Apart from this,
they also provide services to their customers by helping hem transform their body, soul and mind
in the future.
Significance of innovation in the organization
In the present day economic world, innovativeness has become one of the vital factors
that influence strategic planning of the business. It has also been acknowledge by some
researcher that innovation usually leads to creation of wealth in the business. In addition to this,
it has also been indicated by them that competition along with huge demand of customers leads
the enterprise to concentrate on innovation. It has been opined by Goffin & Mitchell (2016) that,
the intensity of competition has been one of the determinants of innovation as well as
productivity. As the organizations in the today’s world are facing business issues owing to effect

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of globalization, technology advancement and knowledge revolution, innovation adds value to
the enterprise and thus increases the base of employment. Furthermore, as the competition in the
present market becomes intense, the companies tries to innovate new products and services at
increasing speed, As a result, this creates pressure on the existing companies for keeping up with
the product features of their rivalries. It has been stated by Adner (2012) that, innovation
enhances the performance of business as it enhances the competitiveness of firm. Integration of
innovation facilitates to disseminate new methods in manufacturing goods and services.
Moreover, the innovation process also transforms the internal capabilities of firms and thus
making it highly adaptive to change.
Some of the most generally used measures of the innovative activities involve- patent
counts, R&D expenditures and innovation counts. The values that are created by innovations are
usually manifested in different ways of doing the process, which contributes to wealth. The
impact of innovation is to transform the inner capabilities of the organizations and making it
highly adaptive to changes. This increased flexibility within the company helps the company to
face the changing market conditions.
Johnson &Johnson mission is to create global innovation network for generating
transformational healthcare solutions with the help of value-creating partnerships (Edquist,
2013). Innovation made by this company positively affects the health of human beings and
improves several lives of people across the globe. For over the last few decades, this enterprise
has been pioneering innovation in healthcare in that fields that ranges from dental care to cancer
treatments. The innovation management of this enterprise mainly believes that scientific as well
as technological innovation plays huge role in attaining shared targets of better health as well as
quality and lower costs (Dereli, 2012). However, innovative technology generally also makes

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them possible for the development of less invasive methods with less recovery times, effective
treatments and improvement in the patient outcomes. Even the employees of this enterprise,
consumer business and medical devices are pushing boundaries of innovation for serving their
customers in better way. Thus, they are investing huge amount of money in development of
innovative method to the disease interception techniques for identifying the patients at risk and
also prevent illness at earlier stages.
Business strategy
The ability to enhance value in business through innovation is one of the vital success
drivers for most of the enterprise. The market in which Johnson &Johnson operates provides
them both opportunities as well as risk from the perspective of innovation owing to rapid change
in the competitive business environment. Appropriate model helps the company achieve better
results from the product innovation efforts. The “innovation Diamond” is one of the useful
model that mainly assess complexity and addresses few challenges in the innovation of product
by classifying them into four themes that involves- innovation strategy, management of portfolio,
new process of product development and culture of the organization. Johnson& Johnson
strategizes to implement this model in order to attain success in their innovation efforts.

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Diamond innovation model
Figure 1: Innovation Diamond Framework
Source: (The Innovation Performance™ Framework. 2018)
This model involves four strategies that the enterprise must implement in order to drive
the performance of new product in business is illustrated below:
Innovation of product and technology strategy – Adoption of effective strategy is important for
innovation of product as it helps in attaining success in the competitive market. Some of the top
business enterprise implements innovation of product and technology strategy in place that is
driven by leadership team and strategic vision of business (Adner, 2012). In addition to this,
commodity innovation strategy usually guides the direction of product innovation and thus aids
to steer allocation of resource and project selection.

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Portfolio management strategy-This highlights on the investment of resources and focus on the
appropriate projects. Most of the enterprise commits enough resources for effectively
undertaking new product projects. However, they boast effectual portfolio management system,
which in turn facilitates the leadership team focus these resources on appropriate strategic arenas
and thus short list high valued projects.
Idea- to -launch process strategy- This theme indicates the system or the procedure that drives
new commodity projects from idea stage through launch stage (The Innovation Performance™
Framework. 2018). This process mainly emphasizes on the total quality of execution, voice of
the consumer input and difficult decision points. This factor is one of the important success
drivers for the nest performers of business.
Proper climate and culture for innovation-Some of the senior executives of the top performing
organizations creates positive culture and climate for the innovation within the business. They
also fosters effectual cross -functional project teams for new product and also engages in
decision making procedure of product innovation.
However, Johnson& Johnson strategizes to implement these four strategy in the business
in order to attain success in innovation management. The adoption of this strategy is highlighted
below-
Application of this strategy to Johnson &Johnson
For the last few decades, the company has attained good reputation in the business for their
exceptional performance of innovation of products and services. The application of this
innovative diamond model to this enterprise has been explained below:

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Product innovation and technology strategy for business- The innovation strategy of Johnson &
Johnson is driven by their leadership team highlighting on strategic vision of business. This
company showcases their product innovation and technology strategies basically in their medical
device and consumer business (Kotsemir & Meissner, 2013). Their customer medical device
business creates new categories through innovation involving present pipeline of goods. Their
innovation catalyzes new technology in the pharmaceutical, consumer healthcare spaces and
medical devices.
Management of portfolio- For the last few years, this company has ramped up ambitious project
in order to expand the business in the international market. JLINX ( Johnson & Johnson
innovation) is the collaboration between bioqube ventures and Janssen Pharmaceutucak NV
provides the management team to run their JLINX operations involving management of
investment portfolio, building relationships with their external venture investors and supports
scale up of new initiative (Dodgson, Gann & Phillips 2013). Their portfolio management
basically involves defining, adopting, maintaining and improving the project standards and
practices for delivering the projects based on the plan and budget. Moreover, they also work with
the business partners for co-ordinating the planning and prioritization procedure of innovation.
Idea- to launch procedure- This Company focuses on the customers that are supported by the
research of voice- of consumers. They even develop superior and differentiated products for
meeting the needs of consumers better than the rivalries goods. Besides this, the leaders of this
enterprise execute the cross- functional activities from the basic idea to launch.
Proper climate and culture of innovation- The business culture, employees and environment are
the main performance drivers of innovation performance model. The senior executive of this

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enterprise leads innovation effort and hence are committed to the development of new product.
The innovation management of this company creates positive climate as well as culture for the
innovation. They also foster cross-functional teams and also provide empowerment to teams for
achieving good results in innovation projects.
Leadership
It has been found out by some of the researchers that this framework has been a valuable
in the business as it helps the leaders focus on their efforts to enhance their new commodity
development productivity as well as performance (Innovation, 2018). Recent evidences reflect
that senior leaders of this enterprise adopt product innovation strategy based on the requirements
of their customers and other rivalries. Their innovation strategy is based on bringing about highly
differentiated healthcare solutions, which extends as well as improves the lives of patients. For
doing this, the leaders of this company identify their right partnerships as well as deal structures
and also permits their innovators to integrate several resources. The strategy adopted by these
leaders helps to advance innovative product by allowing access to the incubation ingredients that
is supplied by strategic partner’s network (Dereli, 2013). However their leaders are working
towards accelerating scientific innovation at every development stages worldwide for delivering
cutting-edge solutions, which solves unmet requirement for patients.

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Figure 2: Framework of Johnson &Johnson innovation
Source: (The Innovation Performance™ Framework. 2018)
The innovation team leaders of this enterprise assemble their map for driving their
innovation strategy (Johnston & Bate 2013). Their leaders also adopt the strategy to advance
news solutions for health care through collaborations. In addition, disciplined portfolio
management of this company benefits their leaders to achieve target within the specified time.
Apart from this, their idea- to launch strategies mainly begins with understanding of their
customers’ requirements. They however begins the search of technologies for meeting their
needs. Furthermore, they also focuses on the safety as well as quality of products by clinical
testing it in order to confirm their efficacy. Lastly, they test these finished products before
launching it in the market. The leaders of this enterprise try to adopt effective strategies for
creating appropriate climate and culture of innovation. However, their leaders adopt
transformational leadership style for improving the innovation culture of the enterprise. This in
turn also motivates the employee’s behavior to innovate more products and services.

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Customer insights
Customer insight refers to the interpretation of human behavior trends that aims to
enhance effectiveness of the product for customers and also enhance sales for benefit. This
company mainly customizes its content of social media that is based on both the product as well
as audience. The feedback obtained from their customers through social media regarding their
product helps to design and improve their product according to their preferences and
requirements.
Technology
Technology plays important role in the business as it helps to innovate new product and
services. This enterprise innovation catalyzes new science and technology in medical device,
pharmaceutical and diagnostic healthcare spaces. Moreover, implementation of new technologies
helps the company to streamline as well as improve its production.
Employees
Employees also plays significant role within the enterprise as they are ones whose work
performance leads to improvement in business performance. The Johnson&Johnson company
basically offers huge services range to its workers. Moreover, the employees of this company
works with their health care partners to touch several people lives per day across the globe.
Critical analysis
Identifying gaps and areas needs to be improved
Innovation in the big companies faces obstacles owing to huge divisions and innovation
culture within the companies. Gaps generally occur between risk avoiding vs risk- taking groups
and varied business units. Open innovation also adds fourth kinds of division that is between