The Johnson & Johnson Firm’s Strategic Analysis


The fundamental intention for most companies is to consistently improve the quality of their operations and perform as efficiently as possible. Managing corporations is intricate because many different departments require to be run with a high level of professionalism. Therefore, organizations formulate various strategies to facilitate the consistent improvement of quality. Organizational management can implement positive changes by performing a strategic analysis exercise. The strategic analysis assesses an organization’s relevant aspects and utilizes the collected data to implement the most congruent strategies to achieve its intended vision and mission. This paper illustrates how Johnson & Johnson’s success results from formulating and implementing brilliant tactics guided by a thorough strategic analysis process. This paper will look into six topics that have contributed to the excellent performance of this organization. These topics include human resource management, marketing, competition management, innovation, financial management and investment, and corporate culture. The purpose of this essay is to critically analyze how the aforementioned aspects affect the performance of Johnson & Johnson.

Company’s Purpose and Vision Statement

The vision of Johnson & Johnson is to “Make diversity & inclusion how we work every day.” It means that this organization is dedicated to offering the best services to all people without any form of discrimination. The company’s vision statement is “Be yourself, change the world.” This mission statement encourages the employees to believe in themselves and deliver superior quality of service that enables Johnson & Johnson to implement change within the surrounding community.

Human Resource Management

Johnson & Johnson is recognized as one of the organizations that are excellent to work for, resulting from implementing a strategic human resource management plan. The human resource department in this healthcare institution focuses on the professional relationship between employees. The human resource management at Johnson & Johnson shows high regard for employees despite their position in the organization. Doing so has helped encourage employees to deliver the superior quality of service expected. This organization maintains stellar quality via regular training sessions. It helps to ascertain that personnel in all the organization’s subsidiary companies produce a stellar quality performance in their line of work. The human resource department of Johnson & Johnson emphasizes diversity and inclusivity when hiring personnel.

This particular strategy has improved the reputation of this organization because of the aspect of inclusivity. This organization’s selection and recruitment process are strategically designed to ensure that professionals who handle leadership positions are up to the task (Walford-Wright & Scott-Jackson, 2018). As a result, candidates wishing to occupy leadership roles in the organization are thoroughly tested for leadership skills and are cross-checked for more than sixty behavioral and personality traits.


Johnson & Johnson is one of the most highly regarded medical institutions in the United States. This organization has achieved its reputation because of its excellent marketing strategies. The Johnson & Johnson brand has been in existence for more than a century. This organization has utilized the long time it has been in existence to retain its customers and penetrate foreign markets (Alam, 2019). The loyal consumer base that Johnson & Johnson attracts and retains results from the repetitive marketing strategies that this organization utilizes. Despite the bad reputation surrounding some of the products that this organization has deployed in the past, Johnson & Johnson still manages to win public trust because of its brilliant marketing strategy (Bhasin, 2019). As a result, Johnson & Johnson is currently present in more than fifty countries worldwide.

Johnson & Johnson has a reputation for presenting functional products and medical procedures that improve medical practice. Therefore, consumers trust this organization’s brand and do not hesitate to try out the new medical solutions it presents to the market. Furthermore, Johnson & Johnson excels in market segmentation, which ensures that it simultaneously generates consistent revenue from its multiple products. An excellent illustration is how this organization is reputable for manufacturing various products that mainly target children. Johnson & Johnson is renowned for manufacturing diaper creams, baby powder, baby cream, and oil. On the other hand, Johnson & Johnson is also known for its beauty and healthcare products. Therefore, this organization generates revenue by attracting consumers from multiple market segments.

Competition Management: Strategy Five Forces Framework

The Threat of New Entrants

There are threats of entry in the market industry to Johnson & Johnson belongs. These new entrants will only have a competitive edge if they present innovative medical products. Johnson & Johnson has invested in its research and development department, enabling it to present functional products. Johnson & Johnson is a force to reckon with, and its innovativeness makes it significantly difficult for new entries to succeed in its industry.

Bargaining Power of Buyers

Buyers are an extremely salient part of the business because they are why businesses are established in the first place. Therefore, buyers can alter the price of a particular product by reducing their consumption, hence plummeting its demand. Johnson & Johnson deals with buyers’ bargaining power by offering superior quality products at relatively affordable prices.

Bargaining Power of Suppliers

The powerful suppliers in the drug manufacturing industry can hike the prices of their raw materials. Doing so can significantly increase the cost of manufacturing the products that this organization sells, which may force Johnson & Johnson to impose extremely high prices on its product and lose its competitive edge on the aspect of pricing. However, Johnson & Johnson can mitigate an occurrence of such a phenomenon by associating with multiple suppliers, where one can complement the other. Furthermore, this organization can utilize third-party manufacturers to avoid excessive dependence on existing suppliers in the drug manufacturing industry.

  • The Threat of Substitute Products/Services. The threat of a substitute product is present when similar products offer a better value proposition than a particular existing product. Johnson & Johnson is in a good position in this aspect because its products offer the utmost utility to its target market. However, this organization should offer requisite services rather than be solely product-oriented. For instance, more personalized after-sales services could make a significant difference because they are an excellent part of the consumer experience.
  • Industry Rivalry. Johnson & Johnson is not a monopoly, and other organizations offer similar products and services. The already existing competition in the industry J&J belongs to is enough to cause problems if this healthcare manufacturer fails to build brand loyalty. Therefore, Johnson & Johnson must have a competitive edge by increasing product differentiation. Furthermore, it can partner up with competitors and expand the target market instead of competing for a limited market in the United States.
  • Innovation. Johnson & Johnson is well-recognized for its smart innovations that have seen the company expand its base of operations relatively fast. This pharmaceutical empire is among the best medical care institutions today because of its corporate structure founded on value creation. Johnson & Johnson is a global force of innovation as far as medical gadgets or pharmaceutical supplies are concerned. The company has used this strategic move to become a household name in the United States successfully and beyond. Johnson & Johnson has successfully penetrated foreign markets because of its COVID-19 vaccination doses (Livingston et al., 2021). In the wake of the recent global pandemic, Johnson & Johnson was at the forefront, garnering ideas to create a solution to alleviate the current pandemic threat. There are many other cutting-edge innovations that this organization has delivered to clients and made significant milestones in healthcare delivery. For instance, this organization has innovated technological tools to help people identify and diagnose pulmonary arterial hypertension. The organization has also discovered a new way to treat bladder cancer, cell therapy, and prostate cancer and utilize technology through telehealth, among other innovations.
  • Financial Management and Investment. Johnson & Johnson has created consistent profits because of sound financial management and investment strategy. This organization has diversified its investment portfolio to ensure the highest possible chances for success. The largest stockholder of this pharmaceutical organization owns only 8.39% of the aggregate shares, followed by 5.75%. These shares are owned by, The Vanguard Group, Inc. and SSgA funds management Inc. respectively. The other major investors are BlackRock Fund Advisors (2.46%), Putnam LLC (1.93%), Geode Capital Management LLC (1.48%), State Farm Investment Corp. (1.31%), Northern Trust Investments, Inc. (1.27%), Capital Research & Management Co. (1.23%), Wellington Management Co. LLP (1.16%), and Massachusetts Financial Services Co. (1.12%). Such a vast stakeholder portfolio illustrates the high level of security within the financial performance of this pharmaceutical company. Despite the challenges that Johnson & Johnson has faced over the years, it is still pursuing excellence because affluent and professional investors back it. For instance, the Vanguard Group Inc. and Blackrock Fund Advisors are among the stakeholders, and these organizations excel in the finance arena. Therefore, Johnson & Johnson automatically benefits from the knowledge that these valuable stakeholders have to offer. Moreover, Johnson & Johnson’s financial status is safeguarded by the wide variety of products it sells to the public. Having many types of healthcare products has proved beneficial to this healthcare institution because the drop in sales of one product can be compensated by increasing sales in another product.
  • Corporate Culture. This pharmaceutical empire is in its current position today because of its corporate culture, which focuses on empowering its employees. The working environment present at this healthcare institution is conducive and encourages employees to excel within their departments to manifest a collective improvement of this organization’s performance. The employees of Johnson & Johnson are highly encouraged to practice the value of integrity and deliver the best service when implementing tasks delegated to them. Furthermore, leadership is a quality that employees are encouraged to embrace (Yukl & Gardner, 2020). The values of integrity and leadership have proved effective, as this organization has a high level of excellence when delivering products and services to the market. Furthermore, the corporate culture in this company increases organizational cohesion and has a relatively high level of employee satisfaction.
  • Usefulness of Understanding Strategic Analysis in Today’s Corporate Economy. The current corporate economy is significantly competitive, so organizations need to implement strategies that provide a competitive edge. Strategic analysis is imperative because it provides concise information that an organization’s management can utilize to ensure it remains ahead of the competition. Organizations that conduct strategic analysis can maximize their strengths and weaknesses to improve the company’s overall performance (Henry, 2021). Johnson & Johnson has been able to maintain a competitive edge by applying innovativeness and utilizing the utility of cutting-edge technology to improve the utility of the products and services that it offers.

While it seems complicated for some organizations to translate theoretical strategic analysis into actionable plans, Johnson & Johnson has been able to do so effectively. This organization understands its environment and knows how to deal with challenges when they arise. For instance, Johnson & Johnson was able to avert the negative publicity surrounding some of its products, as it still has a positive reputation. Furthermore, Johnson & Johnson excels because of being relentlessly innovative and committed to providing the most utility to its consumers. This organization emphasizes employee empowerment and trains them to practice essential values such as integrity, creativity and self-drive. The level of commitment that Johnson & Johnson displays is the reason for the current success of this organization.


Alam, N. (2019). Johnson & Johnson.

Bhasin, H. (2019). Marketing strategy of Johnson and Johnson. Marketing91.

Henry, A. (2021). Understanding strategic management. Oxford University Press.

Livingston, E. H., Malani, P. N., & Creech, C. B. (2021). The Johnson & Johnson vaccine for covid-19. JAMA, 325(15), 1575.

Walford-Wright, G., & Scott-Jackson, W. (2018). Talent rising; People analytics and technology driving talent acquisition strategy. Strategic HR Review, 17(5), 226–233.

Yukl, G., & Gardner, W. L. (2020). Leadership in organizations (Ninth edition, Global edition). Pearson.

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