This paper discusses external and internal business environment Johnson & Johnson (JnJ). This is the same organization that was used in the first week. JnJ is a holding company operating in the pharmaceuticals and healthcare industry (Global Data, n.d.). The company engages in research and development, and manufactures and sells products in pharmaceutical and healthcare industry.
General Environment
The general environment refers to a set of factors that can have a direct or indirect impact on operations of a company. It entails the identification and intensive analysis of variables that affect the success of a business in the immediate and extended environment. These factors are mostly beyond the company’s ability to control as explained by Hitt (2020), but the management team can respond by adjusting to changes. Technology and demographics are among the general environmental factors that could have significant impacts on the success of JnJ.
Technological Segment
Technological segment requires that organizations improve services and products by tapping into the power of innovation. Technological disruptions have a direct impact on the success of a company. JnJ should be willing to stay ahead of technology by investing in robust research and development to avoid operating on outdated technological models. Competitors are always on the lookout to capitalize on any opportunity that may arise in the technological sector.
Demographic Segment
Demographic factors have a direct impact on success of any company. Factors such as age, gender, profession, level of education, race, family size, location, linguistic background, employment status, ethnic backgrounds, and population affect the success of businesses. According to Hitt (2022), an understanding of demographic factors can help the company to respond to consumer demands. JnJ is a global company, present in more than sixty countries, and its products and services target top pharmaceutical clients, including government agencies. In an The company impacts communities in diverse ways, and it is currently a household name in the US and at the global level. Aging population has a direct impact on the company, considering that most elderly people require more medical attention and specialized care. This will increase the demand for the company’s resources.
Five Forces of Competition
Forces of competition are available in every business environment. Hitt (2020) defined forces of competition as factors within the company’s environment that determine growth and expansion. Every business has to respond to the forces of competition and remain resilient despite the challenges and costs that have to be incurred. Two of the forces of competition affecting JnJs’ operations are competitive rivalry and threat of substitution.
Competitive Rivalry
An increase in the number of competitors in the industry reduces the competing power of a company. Today, JnJ is facing stiff competition from rivals such as Merck, Squibb, Pfizer, and the Unilever. Rivals in the industry can force the company to lower its prices to attract and retain consumers. However, the competition rivalry has been a stepping stone for JnJ, considering the fact that the company has expanded its operations across countries and borders gives it the advantage to serve consumers who have unmet needs.
Threat of Substitution
The threat of substitution refers to the possibility of customers finding new ways of doing or carrying out the services that the company has been providing. This force is already having observable impacts on the company. Even though competitors tend to produce herbal products that could threaten the sale of artificial products from JnJ, it is evident that organic products are often expensive and only target upper class consumers. As a result, JnJ maintains its market share despite looming threats of substitutes.
Future Improvements
The world is slowly tending towards what one can describe as the fourth industrial revolution. Technology is changing rapidly, and so is the nature of doing business. The presence of external forces compels the organization to develop a plan that will help it in withstanding future challenges. In this case, the target is to improve supply chain and distribution lines to meet varying needs of consumers at the global level. JnJ will be required to improve and adapt innovation in every aspect of doing business ranging from manufacturing, distribution, and marketing to reach customers in remote areas and regions of the world.
Greatest External Threat
The greatest threat that JnJ faces is the competition from its rivals who are providing cheaper and affordable medical care products and services. The release of Covid-19 vaccine and medical resources is an example of how Pfizer has been working to replace JnJ.
Greatest Opportunity
Despite the looming threat from competitors, the company can tap into opportunities in the market. The best opportunity is to capitalize on its cross-border and global brand. JnJ is already a household brand among many consumers. The brand gives the company a competitive advantage and can be used as an outlet for future products with the company’s name already in the market.
Strengths and Weaknesses
JnJ saw a significant growth during the pandemic era. A surge in demand for medical resources, vaccines, and supply of other materials saw the company’s marketing and sales grow at the local and global level. The company penetrated and marketed its brand across different market platforms, making it a renowned brand.
Legal threats could affect the operations of JnJ. The company operates at the global level, where different countries have different legislations that could be a barrier for the success of JnJ. Lawsuits arising from use of the company’s products can trigger adverse consequences that could interfere with the company’s reputation. The company should be quick to own up mistakes and avoid conflicts that could cost it the established brand in the market.
Strategy or Tactic
Every business needs a strategy to maintain a competitive advantage in the market today. USPS could devise a strategy of merging with other entities to increase service delivery and performance in the market. According to Hitt (2020), independent agencies can derive benefits from mergers to maintain a competitive advantage. The merger will give the agency significant powers over its rivals.
Resources, Capabilities, and Core Competencies
A combination of resources gives the agency the power of competition in the market. Latest technology, research and development team, and an established brand are among the resources that JnJ can tap to compete against its rivals. Other resources such as customer relationship management and availability of marketing systems at home and at the global level can be tapped to improve capabilities and competencies in pharmaceutical and the healthcare industry. Capabilities set the company aside against its rivals, while competencies help it in withstanding short-term and long-term challenges. The presence of a mature brand and an established customer relationship management are among the competencies and capabilities that will drive JnJ to new levels.
The future of the JnJ lies in how the company will take advantage of its strengths to respond to external forces and threats. The presence of rivals who are engaging in aggressive research and development to produce high-quality products as well as targeting unmet needs in the market pose a significant threat to the company. JnJ can tap into the power of an established brand to strategize and overcome financial challenges that are currently threatening its sustainability in the market.
References
Hitt, I. & Hoskisson (2020). Strategic management: Concepts and cases: Competitiveness and globalization (13th ed.). Mason, OH: South-Western Cengage Learning