Business Segments and Global Operations

Introduction

Founded in 1886 by three Johnson brothers, Johnson & Johnson is an American multinational corporation that develops and manufactures consumer products, medical devices, and pharmaceutical products. In 2015, the three segments (Consumer, medical, and pharmaceutical) contributed 19.2%, 35.9%, and 44.9% respectively to the company's total revenue. The pharmaceutical segment that incorporates immunology, oncology, infectious disease, and neuroscience is the company's major franchise both in investment and returns. The segment is expected to be the fastest-growing adding $ 8.6 billion of $9.3 billion in incremental revenues in 2020 while consumer healthcare contributing $0.2 billion (3 percent) and medical devices bring in $0.5 billion (5%) in the same period. The corporation headquartered in New Brunswick, New Jersey, United States, has over 250 subsidiaries with operations in 60 countries that include Germany, France, Belgium, Brazil, and France. In 2020, the company revenue stood at $82.584 billion, a steady increase since 2005, as shown by Figure 1 (Statista, 2021). Pfizer, the company’s biggest competitor, earned 48.65 billion dollars in revenue during the same time (Grover et al., 2018).

Figure 1: Johnson & Johnson 2005-2020 revenue (Statista, 2020)

In addition to growth in its pharmaceuticals business, the company has also acquired companies such as Actelion adding over $2.8 billion in sales in 2018 (Forbes, 2021). The revenue is estimated to grow gradually by approximately 3.6% to over $91 billion in 2022. This will be led by growth in its oncology drugs, primarily Darzalex, Simponi, and Imbruvica drugs accounting for approximately 51% of expected pharmaceuticals sales (Forbes, 2021).

However, in 2020, the pharmaceutical sector accounted for 50.7% of Johnson & Johnson’s revenues whereas 32% of drug sales are from drugs linked to immunology. Arguably, the company over relies on the performance of Darzalex, Simponi, and Imbruvica drugs is dangerous and can be seen as unsustainable especially given that these products are subject to competition, patents rights from generic products, and regulations by governments. This absence of diversity ranks among the shortcomings of Johnson & Johnson. Public health insurance generates the least sales between its core industries – pharmaceutical, medical equipment, and consumer welfare – attributable to 19 technical problems and causes Villanova et al., 2020). Sales in this field will increase earnings and a spread portfolio (He, & Harris, 2020). Sales will increase more uniformly (Alalwan et al., 2017). In the wake of the COVID-19, although the company was the first to develop and start selling the vaccines, the competitors immediately followed with Pfizer and Moderna developing and requesting permission for emergency use in the U.S of its vaccines a few days later. However, two doses are required in Pfizer and Moderna vaccines while Johnson & Johnson only takes one dose. Thus, Johnson & Johnson gets double that of Pfizer and Moderna with each vaccine. This is therefore the most profitable opportunity for Johnson & Johnson (Sudha & Sheena, 2017).

Most important changes the companies should make

The dominance of the customer

It is almost a truism that today the interests and desires of the customer are vital concerns in designing and producing new goods and services and supporting business-to-profit strategies. But it is also evolving, it is bound to become ever more important to consider and predict potential buyers than it has in the past because end consumers of almost any product of the business are moving at ever-increasingly high rates of making up, place, and number (Olenski, 2017; Cattell, 2017). The Johnsons & Johnsons should not assume that the customers they had yesterday will be there tomorrow. So they must have adequate marketing resources information for them to understand and know what is happening in the market (Krizanova et al., 2019). They should strive to sell their goods and services to the right customer base. Socialists and marketers believe that consumers are increasingly worried about usage rather than possession. This pattern could impact distribution platforms, price agreements, sales calls, and even product line characteristics (such as the increasing sale of disposable items) (Sudha & Sheena, 2017).

The spread of market research

They must increase the use of marketing research—in terms of both quantity and scope. Since they are producing Vaccine doses for novel coronavirus (COVID19) they should not relax thinking that customers will come for the products at their door step this is because there are other competitors such as India who are also producing the same product. If the level of marketing success is dramatically influenced by the caliber of knowledge input, so marketing analysis is bound, considering the increasing interest in scientific marketing, to increase usage and input.

The bulk of the study carried out today by companies is based on practices such as the growth of consumer potentials, analyzes of purchasing patterns and requirements, measurements of promotional performance, stock market analyses, market characterization evaluations, revenue analysis, sales quotas, and sales area development. However, we consider a trend towards the use of marketing analysis as an innovative method to solve potential management issues beyond the importance of reporting on historical and current situations (Chen & Lin, 2019).

Metamorphosis of field selling

Currently, businesses are shifting away from the traditional marketing approaches such as mainstream media (TV, radio, and newspaper) and morphing into data and internet-based that includes use of data analytics and social media platforms to reach and engage with consumers. Within pharmaceutical industry, the performance is measured not only in retention of consumers but sales expansion to new generation, to obtain a satisfactory return on the investment (Festa et al. (2018); Palanisamy, V. and Thirunavukarasu, R., 2019). The work of the company's product line is becoming less presented and the selling of embedded systems is increasingly being complex and data-driven (Griffin, 2020). In other terms, a seller undertakes a marketing strategy including goods, demand research, publicity, promotion, and inventory management.

Recommendation

Johnson & Johnson should employ the use of competitive analysis this will help them compete for their potential customers. The competitive analysis would help the company to create sustainable revenue. The competitive analysis should help them to identify the complete product in line with the services and marketing segment. This tool would also enable Johnsons and Johnson to identify their strengths and weakness in the market and where they can improve on. Many industries will fight to serve the same market that they aspire for. This is why they can ensure that their comparative research is distinguished by sector. We also recommend that the company use market research because it is important to ensure the activity takes place; to link to its target market, to offer an alternative to the competition, or even to fill a much-needed market void. The type of data you need, though, and your budget for corporate analysis, will decide the methods of research you use to get a detailed image of the market.

The pharmaceutical industry is undergoing drastic changes facing to the integration of technology in development and importantly consumer engagement and demand analytics, regulation on prescription drugs, concerns on safety and health of drugs, to emergence and prevalence of new diseases and virus (novel coronavirus (COVID -19) and Zika outbreaks). They should take advantage of these factors and put more pressure on the company to innovate which includes investing more in technology as well as consumer engagement in an attempt to not only solve the problem but also ensure the respective company's growth and survival in, particularly competitive and regulated industry. One can argue that the global sales stream of Johnson & Johnson is its greatest asset. Moreover, thinking about the weakness of the company, one can see over-dependence on pharmaceutical products primarily the three oncological drugs. The pharmaceutical sector was called upon in a desperate moment to serve the nation. Johnson and Johnson will contribute to their proud heritage and earnings by attending the call for service.

The Johnson & Johnson Group should establish industrial assistance to enhance production efficiency, acknowledge the value of a cohesive structure and not only increase the number of support facilities and service providers. To establish an effective and comprehensive support services structure, suitable elements of centralized organization and control, along with decentralized and dispersed management and guidance, are required.

While there are several components of industrial aid systems and initial collaboration and co-operation measures – such as the State Technology Extension Partnership (STEP) program of NIST – there is a long way from being a coherent national scheme. Industrial assistance must become an important part of the production community to be successful, and for several years this will entail continued funding. In the light of changing economic and political conditions, a long-term plan must be formulated for the deployment, functioning, and financing of the national infrastructure. The system's purpose should be to ensure that any organization seeking assistance is available.

More importantly, they should consider quality at all costs mostly to the vaccines that they are producing. Because there are emerging cases that some of these covid-19 vaccines are not effective or that they cause blood coating in the body. The company should learn from those factors and consider producing quality to attract future customers. A structure of centralized coordination and autonomous, dispersed management and control requires a combination of drastic shifts in production and large variations between sectors and localities. Local and regional programs must be able to incorporate transition and provide resources most productively and reliably to meet the needs of their local markets if they are to be able to respond to customers in their production bases.

Finally, they need to make major investments in R&D. It should also rely heavily on technologies to track and maintain its database so that all marketing and patient health improvements are protected. Of course, the intellectual property of Johnson & Johnson is open to business major challenges such as hackers linked to North Korea recently, for instance, attempted to steal information from Johnson & Johnson's COVID-19 study as well as generic products, the company should work closely with consumers and other players in the industry to reduce counterfeit and promote health and safety of its products.

Reference

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