Kellie Hendeson
July 1, 2021
Week 1
MGT 4320
Johnson & Johnson is a business that creates healthcare products, the company was founded in the United States in 1886. Since its founding, the company has proven profitable and has over 200 subsidiary companies across the world. Johnson and Johnson have 71 office locations and 130,000 employees throughout 55 different countries. The company produces three types of products Pharmaceuticals, medical devices, and consumer products. The business environment faced by Johnson & Johnson has external and internal factors.
The external factors faced by the company including the risk of new entrants or existing companies creating substitute products. The threat of new entrants however is not too much of a concern to the company since there are high barriers to entry for the pharmaceutical and medical device industry. The threat of a replacement product by an already existing company in the field is much more probable, especially since the FDA requires a generic version for all pharmaceuticals. The FDA implemented this requirement to reduce the monopoly of patent-protected pharmaceuticals and to keep prices set at a reasonable level for consumers.
The internal factors affecting the company include political and social elements. Political elements affecting the company are ever-changing and since Johnson & Johnson operates on a worldwide scale the company must remain up to date on the politics across the globe. Examples of political factors that could affect Johnson & Johnson include the political stability of the countries it has subsidiaries in and the laws that might restrict or help the companies profitability. Social elements affecting the company include the demographics of potential consumers and corporate social responsibility. Demographics is an important area of focus for the company to ensure the increase of profit, an example of a demographic used by the company is the age of potential consumers. 1964 began the baby boomer generation and since now this large portion of the population is in their senior years Johnson & Johnson has focused its research on preventative medicine and less invasive surgery techniques to accommodate.
Johnson & Johnson is a highly profitable company that has been able to effectively handle the internal and external factors affecting its business environment. The company is regarded as an oligopoly since they have multiple major competitors. These major competitors do not seem to affect the pricing of Johnson & Johnson’s products the company instead competes through product differentiation. Over the last several decades the company has proven to not only be profitable but to maintain its social responsibility to society as a whole.
Works Cited
About Johnson & Johnson. (n.d.). Retrieved from https://www.jnj.com/about-jnj.
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