Dr._Ezz_Alarab.docx

squeegovernorBiotechnology

Dec 3, 2012 (4 years and 6 months ago)

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Name: Amal Ghasan Shaa't

University No.: 120111153

e
-
mail: amola_gtc@w.cn






Introduction

Johnson &

Johnson, the New Jersey
-
based, publicly
-
listed manufacturer of healthcare
products, is the world’s largest medical device company, the fourth largest biotech and
eighth largest pharmaceutical company in the world. According to its most recent investor
fac
t sheet (2009), J&J’s 250+ operating companies in 60 countries generated $61.9 billion
in sales last year ($12.3 bln in net earnings)


more than half of which were from outside
the US.

Its
common stock

is a component of the
Dow Jones Industrial Average
.

Known for its corporate reputation
-

consistently ranking at the top of
Harris Interactive
National Corporate Reputation Survey


It is ranked as the world's most respected company by
Barron's Magazine

,and was the
first corporation award
ed the Benjamin Franklin Award for Public Diplomacy by the U.S.
State Department for its funding of international education programs.

The Objective
s
Of The Johnson & Johnson :



Provide the high quality of product & services in cure disease to help heal.



To improve the quality of life.



To be the leader in the customer satisfaction.



Manufacturing & selling products related to human health & well begin.



Education and attention the human & their promotion.



To maximize the global power of diversity and inclusi
on to drive superior business
results and sustainable competitive advantage.

Johnson & Johnson Social Responsibility

Throughout Johnson & Johnson history , social responsibility has been an
essential Part of businesses ,the responsibility takes many form
, including the
manufacturing high quality product ,protecting the environment ,promoting good
health and safety at work and at home ,and addressing the needs of communities
on which the company 's employee lives and work.



Building Health Care Capacity




Visiting Scholars Bring Expertise, Relief to Overburdened Hospitals

.



Changing Lives through Midwives

.




Bridges to Brighter Futures
.


Saving & Improving Lives



Reviving a Farm and a Family.



Improving Health and Education for
Thailand’s Children
.


A Dose of Laughter to Help Sick Children



Production's
Divisions& Kinds

The Company is organized into three
business segments:

Consumer, Pharmaceutical and Medical Devices and Diagnostics.



The Consumer
Segment

includes a broad range of products used in the baby care, skin
care, oral care, wound care and women’s health, care fields, as well as nutritional and
over
-
the
-
counter pharmaceutical products. These products are marketed to the general public and
sold both to retail outlets and distributors throughout the world.




The Pharmaceutical
Segment

includes products in the following therapeutic areas:
anti
-
infect
ive, antipsychotic, cardiovascular, contraceptive,

dermatology, gastrointestinal, hematology, immunology, neurology , oncology, pain
management, urology and virology. These products are distributed directly to retailers,
wholesalers and health care profess
ionals for prescription use.




The Medical Devices
And
Diagnostics
Segment

includes a broad range of products
used principally in the professional fields by physicians, nurses, therapists, hospitals,
diagnostic laboratories and clinics. These products inclu
de
Cord is
’ circulatory disease
management products; DePuy’s or

thopaedic joint reconstruction, spinal care and sports
medicine products; Ethicon’s surgical care, aesthetics and women’s health

products; Ethicon Endo
-
Surgery’s minimally invasive surgical pr
oducts;
Life

Scan's

blood glucose monitoring and insulin delivery products; Ortho
-
Clinical Diagnostics’
professional diagnostic products and Vistakon’s disposable contact lenses.


Consumer Products

from J&
J stand at the ready to improve the quality of your everyday life. it offer products
and information targeting baby care, skin and hair care, oral care, nutritionals, pain relief,
topical care and much more. Creating meaningful innovation in health care wi
thin the
Consumer business franchise relies on a research strategy equally rooted in technology and
consumer insights, in keeping with
its

vision:
Bringing Science To The Art Of Healthy
Living.


:









Baby Care

Skin &Hair Care




Oral Health Care

Nutritionals

Wound care & topical

inventory Disclosure

Item

Description

The Company

Raw
Material &
Supplies

Aggregated amount of
unprocessed materials to be
used in manufacturing or
production process and
supplies that will be
consumed.

Johnson & Johnson's raw
materials and supplies
declined from 2009 to
2010 but then increased
from 2010 to 2011
exceeding 2009 level.

Goods
In Process

Carrying amount as of the
balance sheet date of
merchandise or goods which
are partially completed, are
generally comprised of raw
materials, labor and factory
overhead costs, and which
require further materials, labor
and overhead to be converted
into finished goods, and which
generally require the use of
estimates to determine
percentage complete and
prici
ng.

Johnson & Johnson's
goods in process
increased from 2009 to
2010 and from 2010 to
2011.

Finished
Goods

Carrying amount as of the
balance sheet date of
merchandise or goods held by
the company that are readily
available for sale.

Johnson & Johnson's
finished goods increased
from 2009 to 2010 and
from 2010 to 2011.

Total
Inventories

Carrying amount (lower of
cost or market) as of the
balance sheet date of
inventories less all valuation
and other allowances.
Excludes noncurrent inventory
balances
(expected to remain
on hand past one year or one
operating cycle, if longer).

Johnson & Johnson's total
inventories increased
from 2009 to 2010 and
from 2010 to 2011.



Johnson Health Care Systems Inc.

Johnson &

Johnson Health Care Systems Inc. (JJHCS) provides contracting,
supply chain and business services to customers of Johnson & Johnson
companies, including hospital systems and group purchasing organizations,
health plans, physicians, specialty pharmacy prov
iders, distributors and
wholesalers, pharmacy benefits managers, long
-
term care providers,
employers, government payor programs and government health care
institutions.



Contracting Services

Contracting Services provides best
-
in
-
class contract solutions, le
verages
resources, manages risk and utilizes comprehensive contracting services to
drive business results for our customers and our companies. These services
encompass the Medical Devices and Diagnostics, Pharmaceuticals and
Consumer business segments for
government and commercial customers.



Customer Experience

The Supply Chain organization manages the order and delivery of products
globally from the Johnson & Johnson Medical Devices and Diagnostics
companies to our customers by offering a single customer i
nterface for order
and inquiry management and distribution.



Business Services

Business Services enhances the customer experience by managing customer
information and ensuring consistent data, as well as by providing advanced
logistics analytics, vendor
-
man
aged inventory coordination with the largest
accounts of Johnson & Johnson companies, e
-
commerce solutions and
services, and business continuity planning.








Brands Of Johnson
&
Johnson


J
&
J
Has 62 Brand, Distributed On 8 Production Lines Are
:



1_Baby Care : It has 10
brands


2_Skin & Hair Care : It has 14 brands



3_Wound Care & Topical

: It has
10 brands











4_Oral Health Care : It has 4 brands







5_Women's Health : It has 6 brands







6_Over
-
the
-
Counter Medicines: It has 11 brands












7
_Nutritiotionals : It has 5 brands


8_Vision Care : It has 2 brands


J&J VISION & MISSION



Vision

Caring for the world, one person at a time….inspires and unites the people of
Johnson & Johnson.


We embrace research and science


bringing innovative ideas,
products and services to advance the health and well
-
being of people. Our
approximately 114,000 employees at more than 250 Johnson & Johnson companies
work with partners in he
alth care to touch the lives of over a billion people every
day throughout the world
.


How will the Johnson

&

Johnson companies achieve this vision?



By developing a skilled, high performing workforce that is reflective of
the diverse global marketplace
.



By

fostering inclusive cultures that embrace our differences and drive
innovation to accelerate growth
.



By working with business leaders to identify and establish targeted
market opportunities for consumers across diverse demographic
segments
.



By cultivating

external relationships with professional, patient, and civic
groups to support business priorities
.



Mission

The fundamental objective of Johnson & Johnson is to provide scientifically sound
high quality products and services to help heal, cure disease and

improve the
quality of life."

Unifies their employees, focuses their broad corporate vision, and
defines their responsibilities to:



Customers
.



Employees
.



Communities
.



Stockholders
.





Research And Development



Smaller research and development
pharmaceutical companies
may not have any approved drugs on the market, but continue to
focus on research, such as clinical trial observation. Research and
development firms may also be subcontractors for mainline
companies requiring additional research su
ppor
t.

Drug discovery is
the process by which potential drugs are discovered or designed.
In the past most drugs have been discovered either by isolating
the active ingredient from traditional remedies or by
serendipitous discovery. Modern biotechnology of
ten focuses on
understanding the metabolic pathways related to a disease state or
pathogen, and manipulating these pathways using molecular
biology or Biochemistry. A great deal of early
-
stage drug
discovery has traditionally been carried out by universiti
es and
research institutions.


Manufacturing

Actual manufacturing and packaging costs are very small compared to other costs.
A prescription that is priced at $50 may only contain 50 cents worth of ingredients.
But drug companies stress that efforts to
link prices to manufacturing costs are
misguided, because of the extreme R&D costs.


Advertising

In addition to the billions of dollars pharmaceutical companies spend on sales and
marketing to physicians, pharmaceutical companies spent an estimated $1.9 bi
llion
on direct
-
to
-
consumer (DTC) advertising in 1999. Prior to the 1990s, DTC
advertisements of prescription drugs was severely restricted; prior to 1997,
advertising had to be accompanied by all of the fine print that would normally go
on a label and pac
kage insert. But in August, 1997, the FDA relaxed restrictions on
DTC advertising, leading to a boom in television and radio ads (and advertising
spending).





Description


World’s most comprehensive and broadly based manufacturer of health care
products


Serves the Consumer, Pharmaceutical and Medical Devices and Diagnostics
markets with a focus on research
-
based, technology
-
driven products
.



Consistent Performance


26 consecutive years of earnings increases adjusted for special items


48
consecutive years of dividends increases (includes April 2010 dividend
increase)


Consumer Segment:


In 2009
, Consumer segment operating profit decreased because of restructuring charges,
partially offset by cost containment initiatives in 2009.

Pharmaceutical Segment
:

In 2009
, Pharmaceutical segment operating profit decreased because of restructuring
charges, $92 million of litigation expense and negative product mix due to the loss of
market exclusivity for TOPAMAX ® and RISPERDAL

Medical Devi
ces and Diagnostics Segment:


In 2009
, the operating profit in the Medical Devices and Diagnostics segment

increased from 2008. The improved operating profit was due to $478 million gain
from net litigation settlements, favorable product mix, manufacturing efficiencies
and cost containment initiatives related to selling, marketing and administrative
expenses. T
his was partially offset by $321 million in restructuring charges.

Why operating profit of consumer segment decline ??!!!

lower sales, costs associated with the recall of certain OTC products and the suspension
of production at McNeil Consumer Healthcare'
s Fort Washington, Pennsylvania facility.

Why operating profit of Pharmaceutical

segment increase ??!!!

It lower manufacturing costs and benefits from cost improvement and benefits from cost
improvement initiatives related to the restructuring plan recorde
d in 2009 and favorable
product mix, partially offset by the impact of the newly enacted U.S. health care reform
legislation and $0.2 billion of expense related to litigation matters
.

Why operating profit improved in the Medical Devices and Diagnostics
segment for the
fiscal nine months

??!!!

Because of the

gain of 1.5 billon from net litigation matters and the gain on the
divestiture of the breast care business recorded in 2010
.














Analysis of Sales by Business Segments



SWOT Analysis


Strengths
:



Johnson & President is the world’s most comprehensive and generally

supported dealers in health care, personal care and baby products
manufacturer, having more than 200 operative companies located in 57
countries.



One of its strength is being
positioned as one of the companies with
best corporate reputation in the United States.



The firm declared dividends for its shareholders quarterly since 1944
and the dividends have been increasing every year for the last 42
consecutive years.



Johnson &
Johnson has an excellent research and development base,
which is its strength for surviving in the pharmaceutical sector.



Johnson & Johnson has successfully employed a joint strategy of
differentiation that helps it distinguish itself from its competitors.

The
company offers a wide range of innovation and diverse products.



Johnson & Johnson has employed a business model that primarily
focuses and is based on entrepreneurial values which adds to its
competitiveness in the market place.



Johnson & Johnson uses

innovative and new methods and varying
techniques for problem solving and challenges the standard
conventional practices.



Working with intensive scientific notions Johnson and Johnson utilize a
varied expanse of problem solving techniques in order to chal
lenge the
standard practice and capitalize on growth through emerging markets
which enables associated growth.



The use of independent offices working as standalone units provides the
opportunity to develop concepts with cultural considerations which can
pr
ove important when taking a product to global markets.



Johnson & Johnson is one of the world’s few companies having
presence before the 20 century.

It has higher customer satisfaction and strong R&D facilities.



Johnson & Johnson has strong global presence

by having 250
subsidiary companies with operations in more than 57 countries.



The company products are sold in more than 175 countries and it had
global pharmaceutical revenues of $24.6 billion for the FY 2008.



Johnson & Johnson is a vastly diversified c
ompany by having enormous
variety of products in medical devices, pharmaceutical, and consumer
packaged goods.



Johnson & Johnson has more than 29,925 internet domains over most of
the big Internet & technology companies.



Weaknesses
:



There is a constant pr
essure within pharmaceutical markets to reduce prices in
accordance with medical budgets and maintain patent expirations to ensure updated
generic program
s
.



With the changing demands in the market of some key products of Johnson &
Johnson, it is now facing

challenges. These were mostly branded products that
have now been replaced by generic program
s

towards the end of patent timelines.



The pharmaceutical industry has an internal weakness which include theft and
counterfeiting of drugs and hence, also a weak
ness of Johnson & Johnson.



Challenges have been faced within Johnson and Johnson where a reduction in the
market demand for key products has been identified; some of these products were
branded and have been replaced by generic programs at the end of patent time
lines.



In 2010, U.S
. Department of Justice filed suit against Johnson & Johnson for
illegally marketing its drugs throughout Omnicare (a firm that allot medicines to
nursing homes counting patients with dementia).



Johnson & Johnson is wasting a lot of money and time during t
he hunt for
information. For example, workers are wasting a lot of time replying cyclical
enquiries, rather than moving out value
-
added actions.


Opportunity:



The recent acquisition of Pfizer Consumer Healthcare by Johnson &
Johnson; it will provide the com
pany an opportunity to promote growth for
the Johnson & Johnson.



Johnson & Johnson is continuously investing in new products and
developments in its pharmacy products. The investments in its five
undergoing regulatory reviews will provide the opportunity t
o grow the
existing product portfolio.



With the development of WTO rules, to prevent the availability of affordable
generic drugs, there is an opportunity to reduce the effect of lost sales and
profits to generic introductions as patents expire. This will

also help Johnson
& Johnson where they possess the brands and are looking to capitalize on
introducing generic drugs.



Development into new functions of medical devices and diagnostics will
provide new markets to entry which will result in business growth
.



Johnson & Johnson has opportunity to increase market share by product
development and product innovation globally.



Increase global presence by expanding globally through the joint ventures
and acquisitions.



Expansion and innovation into diagnostics an
d medical devices will grants
new markets to grow.



Financial economic recovery will boost the income of consumers which will
ultimately increase the company revenues.



Assimilate current acquisitions of different companies.




Threats
:



Generally within the
main pharmaceutical companies there is a high
level of competition for the generics markets where patents finish and it
is the first to entry where success will generally be determined.



Technological developments with bio
-
tech concepts will potentially
mov
e the traditional pharmaceutical methods out of the market place in
the long term although there is an economical argument that this form
of development can be segregated to run alongside traditional methods
and complement as opposed to replace.




This ind
ustry may be on the restore, but its revival could be slowed
down by heavy
-
handed regulation and more hurting in the housing
market, amongst other things.




Johnson & Johnson has strong global competitors. These competitors
provide alternative and substitu
te products at lower prices.




Johnson & Johnson is in the mature market with very low market
growth rate.



Major pharmaceutical companies are facing strong competition for the
generics markets from the local players.




Bio
-
technological expansion will pote
ntially move the established
pharmaceutical process out of the market in the future.




All the global players are facing strong regulations in the
pharmaceutical industry by different respective countries.




Private label has increased the nonspecific drug
s growth



Competitive Advantages

The company’s competitive advantages include strong brands protected by
patents in the pharmaceutical and medical devices business units.

strong consumer brands in the consumer business unit.



Johnson & Johnson has
successfully employed a joint strategy of
differentiation that helps it distinguish itself from its competitors. The
company offers a wide range of innovation and diverse products.



Johnson & Johnson has employed a business model that primarily focuses
and
is based on entrepreneurial values which adds to its competitiveness in
the market place.



Johnson & Johnson is a vastly diversified company by having enormous
variety of products in medical devices, pharmaceutical, and consumer
packaged goods.



Johnson & Jo
hnson has more than 29,925 internet domains over most of the
big Internet & technology companies.



The company’s competitive advantages include strong brands protected by
patents in the pharmaceutical , medical devices and consumer business units



The comp
any invests a good portion of its revenue (12.5%) back



into research and development, which should provide a continued supply of
health care innovations to replace those losing patent protection.


Risks To J&J’s Competitive Position Include:



computing
power increases to the point where drugs can be completely
modeled using simulators, negating the need for costly trials. The FDA
would also need to sign off on this. This would significantly reduce the scale
required to successfully compete. This is actua
lly fairly likely at some point
in the future.



Changes to patent law that allows earlier generic competition.



The company fails to innovate at the same rate as in the past, and suffers



decreased profitability due to competition from generics. This risk is
greatest
in the company’s pharmaceutical subsidiary. To date, the company continues
to innovate, with 30% of 2008 sales coming from products developed over
the last five years, and 12% of 2008 sales coming from products developed
in 2007.



Increased buyer b
argaining power. This was discussed in detail, and the
modeled scenario looked manageable



advantage of on emerging markets which enables further growth
opportunities.

The use of independent offices working as standalone units in various
markets of the wor
ld provides the opportunity to develop concepts with
cultural considerations and hence, helps the company manage the diversity
.


Johnson & Johnson Future Success Tied To Confidence
In People

investments in J&J's future success:



Developing leaders and prepa
ring them to lead effectively
.



Creating a culture of health and increased productivity
.



Transforming HR into a catalyst for change and business growth
.



Striking the right balance between standardization and decentralization of
HR service delivery
.



And creating an employee relations function that consistently partners with
the business and provides
val.


Recommendations



The structure that I would recommend for J&J is a global matrix structure
because a matrix structure is most often the only way
global organizations
can achieve the combination of global, regional and product objectives that
exist within organizations with world
-
wide operations, distributed plants
and supply chains. Also a matrix structure can better help to balance the
need to dev
elop products and services. Sometimes matrix structures are
used only for a short period of time to complement culture change as J&J
has done with the human resources credo plan. Also matrix structures are
suited well for cross
-
functional project teams and

aid in the harnessing the
talents of a wider range of people across a global business environment
along with aiding communication lines. A matrix structure aids global
integration and aids local responsiveness, which is key in a ever
-
changing
technologica
lly advanced environment where responsiveness is key.



Improve output from in
-
house R&D.



Reduce reliance upon small drugs, to reduce exposure to generic erosion.



Improving of launch portfolio to deliver earlier than forecast launch of
generic concrete afte
r FDA review of citizen's petition.



Improve Overall Cost Structure, While Continuing to Invest in
Opportunities for Sustained Profitable Growth.



JNJ continue of research & development of new medicines .



Initiated a restructuring effort to ensure su
stainable growth. . this actions
will increase efficiency and make additional resources available for
investment in long
-
term growth platforms and new product launches.



It must move products rapidly through the pipeline, targeting such diseases
as cancer a
nd cardiovascular medicine. New strengths needed include
greater flexibility in R&D activities.



The company must continue to develop its platform for gaining segment
share and strengthening its leadership position.



The company must continue to develop coll
aborative partnerships and to
engage in
joint ventures
, particularly with players in the biotechnology
.


Conclusion

Johnson and Johnson have revolutionized the way people think about health care,
and has easily become the pinnacle of success by doing so.


Pioneers of the health
care
industry and overall human health and well being, Johnson and Johnson is
guided by its “Our Credo” and founding principle that “doctors and nurses should
use sterile sutures, dressings and bandages to treat peoples wounds” (Johnson and
Johnson
-

Our Histor
y).

Most of Johnson and Johnson's success can be attributed to its emphasis on
decentralized management, which allows for greater focus as the company blankets
250 countries across the world (Johnson and Johnson
-

Strategic Planning).


For
the last 120 ye
ars, Johnson and Johnson have been on the forefront of innovation
for each of its three divisions, but it must continue to develop and grow in order to
maintain its position for the future
.