JOHNSON AND JOHNSON

Johnson and Johnson

Kellie Henderson

Johnson and Johnson

Alliances and acquisitions are important to Johnson & Johnson’s success. The firm excels by establishing pharmaceutical research partnerships with academic institutions, medical communities, and biotech firms. The availability of global research centers is a good strategy because J&J can address common, region-based, or rare infectious diseases with minimal logistical demands and focusing on local needs.

Johnson & Johnson will locate a drug production company or establish a R&D center in areas where a certain infectious disease is widespread. Still, the company will collaborate with an academic institution to undertake research on infectious diseases in the area in need. Nevertheless, the company will acquire a start-up if there is a high fit with local health needs (Whittaker & Cole, 2006). Together, the strategies give Johnson & Johnson high synergies. For example, locating a search center in an area where a certain infectious disease is more common ensures drugs are available to patients at low prices. Still, the firm can train and sharpen the skills of workers to focus on a certain infectious disease if operations are taken to the local area. Further, matching the skills of workers and ensuring they are fully committed to a certain disease helps fill gaps in capacity and capability (Aniqoh, 2019).

Localizing research and development ensures the firm can utilize partner resources. For example, if the firm is undertaking clinical tests in collaboration with an institution of higher learning, Johnson and Johnson utilizes the partner’s laboratory, staff, and other resources. Other than partner’s resources, J&J prefers acquisitions or research partnerships because of the time factor. The company does not have to establish working relationships or design communication channels. Instead, the American firm will work with what is already established.

J&J overcomes logistical challenges by establishing a few but high-impact research collaborations. This means the disease or health issue in question must affect a good number of people to create an enterprise on its own. For example, Johnson & Johnson has a fully functional segment on pain relievers because products are always in demand. The firm can recover the initial investment capital before patent expiration for pain relievers because of extensive manufacturing capabilities, economies of scale, and excellent distribution systems.

Having different research centers is a strategic advantage that helps Johnson & Johnson design and delivers rare products to rare and common diseases or conditions. For example, the firm has TMC 207 and TMC 407 prescription drugs targeting TB patients in different locations. Again, the firm has Prezista, Edurant, TMC 278, Doribex, and Intelence as HIV/AIDS products targeting people in different locations (Aniqoh, 2019). If one patient has not registered impressive results using one product, the other therapy may offer more benefits. Focus on rare conditions or diseases is also a strategy because the approving authority (the FDA) uses the accelerated approval process. By extension, faster approval gives the company monopoly powers to determine the price of a rare product.

Placing regional research centers helps in portfolio development. For example, the research and development center in Shanghai was established to focus on a particular area. However, the center is advancing to metabolic diseases, cardiovascular diseases, and neuroscience. In the upcoming days, due to social and economic development issues impacting Asia, the research center will have oncology treatment. Again, the Shanghai research center acquired Tibotec Virco BVBA intending to expand the rising need for HIV/AIDS and TB drugs. The firm quickly expanded because of big partnerships with local institutions with social and institutional capital.

References

Aniqoh, N. A. F. A. (2019). A Strategy Framework For Deciding Between Alliances Or Acquisition Of Johnson & Johnson Pharmaceutical Company (Case Study: Strategy Farmwork of Johnson & Johnson And Cipla Inc in The Production of Anti-Infectious Drugs). Journal of Digital Marketing and Halal Industry, 1(1), 25-46. http://dx.doi.org/10.21580/jdmhi.2019.1.1.4730

Whittaker, D. H., & Cole, R. E. (Eds.). (2006). Recovering from success: innovation and technology management in Japan. Oxford University Press.

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