Johnson and Johnson Case Analysis Essay

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Pages: 5

Johnson and Johnson Case Analysis

Johnson and Johnson, commonly called J&J for short, is one of the world's well known, largest, most decentralized and most diversified health care companies. Since 1887, Johnson and Johnson has been producing, manufacturing and selling products related to human health and well-being. Today J&J has over 200 autonomous operating companies and do business globally specializing in consumer products, medical devices and diagnostics, and pharmaceuticals. Consumer products are the company's most recognizable segment, including popular brands like Tylenol, Johnson and Johnson Baby Shampoo and Band-Aid. The medical devices and diagnostics segment manufactures products including surgical equipment
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The population of people ages 65 and older is expected to grow by 30% between 2004 and 2015. Currently senior citizens account for 1/3 of the total prescription drug. As the baby boomers age and become senior citizens J&J can increase sales by providing for their health care needs. A growth in Americans over 65 can lead to a growth in pharmaceutical sales for J&J. Furthermore the increasing average age of the American public should bring rising revenues to pharmaceutical companies in the years to come.
While there are many opportunities that J&J can take advantage of no company is invincible to potential threats. J&J is no exception. The increase in generic drugs can have an adverse impact on J&J. Drug patents on major over the counter and prescription drugs are rapidly expiring. This gives generic drug companies the opportunity to sell similar drugs that J&J has already invested many years of research and development into at a significantly lower price. Another threat that J&J needs to consider is the increasing pressure by insurance companies wanting lower drug prices. Insurance companies are very large, powerful and influential and J&J should try to appease them as best it can. However, with the high costs involved in producing successful drugs, lowering prices of these drugs might result in faltering profits for J&J. Another threat that J&J should consider, is that while such government regulation as an