Analysis of Johnson & Johnson's Competitive Position and Marketing Mix

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Table of Contents
Introduction......................................................................................................................................2
The company overview....................................................................................................................2
Competitive advantage....................................................................................................................2
SWOT Analysis...........................................................................................................................3
Five forces...................................................................................................................................4
Organization’s competitive position................................................................................................6
Marketing mix 7Ps.......................................................................................................................6
Human Resource Management....................................................................................................7
Recommendations............................................................................................................................8
Conclusion.......................................................................................................................................9
Reference List................................................................................................................................10
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Introduction
This present study is about the business essentials of the Johnson & Johnson Company. The
business operations of this company provide the competitive advantages. The marketing process
of this company is also included in this study. In addition, SWOT analysis and five forces of
Johnson & Johnson are included to identify the factors by which this company get the
advantages in the competitive market. Moreover, the marketing processes are described in it by
analysing the seven elements of the marketing mix and the human resource practices of the
respective company.
Company overview
Johnson & Johnson was established in January, 1886. Robert Wood Johnson, James Wood
Johnson and Edward Mead Johnson founded this company in New Brunswick, New Jersey. It is
an American multinational company, which deals with medical equipments and pharmaceutical
products (Content Lab- U.S., 2019).
The company has various branches in 125 countries of the world. It serves the global customers.
It has 1065 stores worldwide and it expanded itself in Asia, Europe, Australia and many other
places. 134,000 employees are working in this organization. The company has maximum number
of market share of the pharmaceutical industry of the United States. Therefore, the company
achieve a good position as per the financial performance. It is one of the biggest companies in
USA. In 2018, it gained revenue of 81.3 billion US Dollars through its business operations. The
total profit of the company is 1.300 billion US Dollars (Content Lab- U.S., 2019).
Competitive advantage
The competitive advantage is actually the superiority of the business organizations by which it
can gain more strength, advantages and the market opportunities through the conduction of
Porter’s five forces analysis (Bull et al., 2016). When the organizations provide similar value as
the competitor companies at a lower price or when the organizations can get higher price by
providing same quality products in comparison to the competitors, then the organizations get
competitive advantages (Phadermrod et al., 2019).
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According to the Porter's generic competitive strategies, Johnson & Johnson is trying to gain
three types of competitive advantages such as cost leadership, differentiation, focus (Blockeel et
al., 2016).
The low cost manufacturing process can help Johnson and Johnson to gain the cost leadership
advantages. This company always tries to produce innovative products and that could help it to
gain the differentiation advantages. As, it has an experience of 133 years therefore such
experience about the market trend is helping the company to gain focus advantages.
SWOT Analysis
Strengths
● Market experience of 133 years
● Experienced business leaders
Weaknesses
● Lack of technology
● Poor interpersonal relationship of the
managers and employees
Opportunities
● Target market
● Change in the lifestyle of individuals
Threats
● Changing market trends
● Huge competition
Strengths
The company is 133 years old. Therefore, it has enough knowledge about the market. It is one of
the biggest strong points of this company. It always hires the business leaders and Chief
Executive Officers who have enough experience about the business process. It achieves business
success with help of these business leaders. Thus, it is strength of this company.
Weaknesses
The company has limited advanced technological equipments. It cannot provide advanced
machines and devices to the employees. Therefore, the productivity of the company is decreased
due to this reason. Another weakness of this company is the poor interpersonal relation between
the managers and the employees. Some of the managers of this company do not treat the
employees well. Therefore, the employees are not willing to take enough responsibility of the
company.
Opportunities
The company has already a target audience which is the one of the most significant opportunity
for this company. The present lifestyle of the population is changing. The literacy over the
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medical and health issues are increased among the people. Therefore, it is another opportunity
for this company.
Threats
The market trend is changing very fast. It can increase the issues in the business operations of
this company. Many other new companies are investing in this industry such as Dettol and
Savlon. Therefore, huge competition and changing market trends are the threats for this
company.
Five forces
Porter’s five forces model is a kind of business operation analysis model. It helps to define the
different levels of the profitability of various industries (Hair et al., 2015). Basically, this model
can detect the five forces of the competitive market that shape a particular industry. It also helps
to identify the weaknesses and strengths of a company (Warrink, 2015).
The Porter’s five forces model comprises of three different forces to identify the horizontal
competition such as:
● The threats of the new entrants in the market
● The threats of the rivals that are already well established in the industry
● The threats of the substitute of the services and products
The other two forces define the vertical competition such as:
● The bargaining ability of the customers and
● The bargaining ability of the suppliers
Johnson & Johnson faces several challenges when it tries to acquire more share of market. The
company also tries to maintain the marketing strategies by which they can get more competitive
advantages than the rival companies. The company applies Porter’s five forces when applying
the marketing strategies by which it can mitigate the market risks.
1) The threats of the new entrants in the market
When the company launches any new product in the market, the company cannot define that
whether the customers accept the new products or not. As a result of this, it applies various
promotional techniques such as TV commercials, social media platforms and tactical
communication tools. In this way, the customers are attracted to the products and the respective
company gets more success than its competitors.
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2) The threats of the rivals that are well established in the industry
In order to mitigate the threats the company spend a percentage of their profit in the development
of innovative and fresh products. It helps the concerned company to achieve competitive
advantages among the new rival companies.
3) The threats of the substitute of the services and products
The rival companies always try to launch the substitute products by which the acceptance of
Johnson & Johnson’s product can be decreased. Therefore, the marketing team of the company
always study the market trends and advise the manufacturing team to improve the product
quality by adding new features in the existing products. In this way, the company can gain extra
advantage in the competitive market.
4) The bargaining ability of the customers
If the customers have enough power of bargaining, the profitability of the company can be
decreased. This bargaining ability of customers increases when there are many substitute
products in the market. Therefore, Johnson & Johnson Company tries to add new features in the
existing products and to launch new and innovative products to gain competitive advantage in
the market.
5) The bargaining ability of the suppliers
The suppliers help the company by providing the resources. If the necessary resources are
adequately available in the market then the bargaining power of the suppliers is decreased.
However, when the resources are not available in the market, the company has to pay more
money to get the resources. In that case, the company has to spend more money to get the
competitive advantage.
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Organization’s competitive position
Marketing mix 7Ps
Product
The main objective of the business organizations is to maximize the level of profit. It depends on
the productivity and product quality (Boonpradub and Thechatakerng, 2015). If the companies
can provide better quality products then, the customers are attracted to the company and that
increases the profitability of the company (Anthony, 2017).
Johnson & Johnson provides elaborate and wide portfolio of the products. The company mainly
provides medical device and pharmaceutical products.
It has been identified by the market researchers that the population of the world is becoming
more conscious about their lifestyle (Enerson et al., 2016). Maximum numbers of the people try
to maintain healthy and hygienic practices in their lifestyle. In the present situation, the products
of this company help to get a better opportunity in the market as compared to the rival
companies.
Price
The customers compare the quality of the products with the price and the decision of purchasing
depends on this comparison (Issah and Zimmerman, 2016). Therefore, this element of marketing
mix is very significant for the business organizations.
Johnson & Johnson try to provide better quality products to the customers but the company also
maintains an affordable rate of the product pricing. When the marketing experts create the
pricing policy of the products, they maintain a range of the customers’ price index to gain a
better position in market.
Place
The business organizations mainly use various distribution networks (such as self distribution
channel and third party distribution channel) to provide the products to the consumers (Freytag,
2019). The organizations use either their own place or the place of the third party to sell the
products.
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Johnson & Johnson uses self distribution channel and third party distribution channel therefore,
the products of this company are extensively available in the market. This helps the company to
achieve better position.
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Promotion
It is another important element that helps the business organizations to introduce new and
existing products to the customers (Frizzo-Barker et al., 2016). It is a way to attract the
customers towards the brand.
Johnson & Johnson uses television commercials to promote their products. Some campaigns like
“having a baby changes things”, “the campaign for nursing future” are also used in the form of
promotional techniques.
People
The business organizations need many people to serve the consumers in a better way. Johnson &
Johnson try to provide the employees a better organizational culture that helps to increase the
productivity. In addition, the company also try to improve the interpersonal relation among the
managers, leaders and the employees. With help of the process, the employees take more
responsibility for the company.
Processes
Business organizations imply various processes in their working operations such as marketing
processes, manufacturing processes and quality processes (Jain, 2017). Johnson & Johnson tries
to improve the quality process as it helps the company to increase the profitability and to get a
better position in market.
Physical Evidence
The business organizations try hard to build and maintain a trustworthy image among the
consumers (Abidemi et al., 2017). A good brand image helps the companies to increase the
number of customers (Gradinaru et al., 2016). Johnson & Johnson always provide the customers
with printed documents such as money receipts, warranty cards to increase trust among them.
Human Resource Management
The human resource management plays a significant role in the business operations of the
organizations. The main objective of this department is to recruit new candidates and motivate
them properly by which the employees work hard and take more responsibility for the company
(Abdul-Hamid et al., 2017). It also increases the productivity and provides the company a better
position in the competitive market.
The human resource department of Johnson & Johnson faces some challenges in the work
processes such as:
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1. Severe competition in the business
2. Depletion of professional and managerial talents
3. Rising worker turn over
4. Poor Interpersonal relationship with the employees and the superior ones
5. Increasing differences between the employees and their expectations
In order to overcome all these challenges, the HRM department of this company employs some
positive measures such as:
Training and development process
In this process, the HRM team of Johnson & Johnson provide training and offer learning
programs for the employees to enhance their professional skills. In this way, the productivity will
increase and the company can gain success in competitive market. It also provides training to the
managers and leaders to increase their knowledge and efficiency.
Motivating the workforces
This process can mitigate the employee turnover, poor interpersonal relationship and the
problems associated with employees’ expectation. The HRM team motivate the employees to
take more responsibility for the company. They also teach their value and importance in this
company.
The HRM activities of this company help to mitigate the internal issues (such as reduction of
productivity and profit, rising of employees, turn over) and also help to increase the productivity
and profitability. Thus, the respective company gain a good position as compared to the
competitors with help of the HRM activities.
Recommendations:
Recommendation 1
In the present time, the company uses TV commercials and campaigns as the promotional
technique. Therefore, it can be recommended that the concerned company need to consider the
social network sites and tactical communication tools as they are better platforms.
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Recommendation 2
The company has not enough technological support that decreases the productivity and
employees’ safety. Therefore, the company has to adopt advance technology to provide proper
safety and productivity.
Recommendation 3
The company should improve and develop the interpersonal relationship among the employees
as it will help to increase the productivity and profitability of the company.
Therefore, by considering the above given recommendations, the respective company can
achieve and maintain their competitive advantage over the next 2 to 5 years.
Conclusion
From the findings of the study, it can be concluded that the business essentials of Johnson &
Johnson helps to gain a better position in comparison to the rival companies. The Marketing
experts of the company apply SWOT and Porter’s five forces theory to gain advantages in
competitive market. The marketing team of the company try to improve the 7Ps of marketing
mix to get better position in market. The HRM activities also help the company to achieve the
business success. This study can help the other organizations to improve their promotional
processes, productivity and organisational culture in an effective manner.
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Reference List
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and Organizational Performance: A proposed conceptual model. Asian Journal of
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Anthony, R.N., 2017. Essentials of Accounting (edition does not matter, save money, buy old
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Boonpradub, W. and Thechatakerng, P., 2015. Brand endorsement by celebrity in Thailand: 7Ps
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Lambini, C.K., Rawlins, M., Baral, H., Zähringer, J. and Carter-Silk, E., 2016. Strengths,
Weaknesses, Opportunities and Threats: A SWOT analysis of the ecosystem services
framework. Ecosystem services, 17, pp.99-111.
Content Lab - U.S. (2019). Homepage. Available at: https://www.jnj.com/ [Accessed 4 Apr.
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Enerson, M., Mason, R.B. and Corbishley, K.M., 2016. Factors that influence the marketing of
professional services.
Freytag, R., 2019. Strategic negotiations: three essentials for successful partnerships with
startups. Strategy & Leadership.
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