Johnson & Johnson (A) Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

What Corporate strategy does Johnson & Johnson Pursue? Please explain and provide evidence from the case?

Johnson & Johnson pursued horizontal integration, growth strategy, because in this type of corporate strategy an expansion is made through acquisition or merger in the same or different industries. Johnson & Johnson have relied heavily on the acquisition of different firms to expand its businesses that broadly fall under the category of health care. In the past decade, the company had acquired 70 different firms to expand its product portfolio. With the help of its existing growth strategy the company has grown into a very complex enterprise comprising upon more than 250 businesses. This strategy has helped Johnson & Johnson to reduce the numbers of its competitors as well as it allowed the company to generate more sales. To effectively manage its businesses, Johnson & Johnson have divided its acquisitions in three different categories/divisions: consumer goods, pharmaceuticals division and medical devices divisions. Since its inception, Johnson & Johnson have acquired a number of businesses including Pfizer, McNeil, and would make a $20 billion acquisition of Synthes that is expected in 2012.

What implications do Johnson & Johnson’s corporate strategy have for its organizational structure? What are the benefits and drawbacks to this structure?

The company has currently a divisional organizational structure, where it has offered a huge amount of freedom to its various units to develop and execute their own strategies. Even many of them have their own finance and human resource departments showing that there is a great level of decentralization in the Johnson & Johnson. As the company heavily relied on acquisitions, therefore, with such a degree of freedom every business is working as an independent unit and is considering for the success of a particular unit. There is less collaboration and cooperation among the various businesses, which led to high overhead costs. Moreover, the structure lacks a proper supervision and support from the Johnson & Johnson leaders, which resulted in several lawsuits and quality issues. There is also a lack of unified brand image therefore, many employees and customers are unaware about the businesses and brands that are operating under the Johnson & Johnson Company. The management of every business unit is considering the benefits of their own business which is posing serious threats for the combine benefits of the Johnson & Johnson.

Why is Synergy Important for Johnson & Johnson and how can Johnson & Johnson create synergies between its units?

Synergy is very important for the success of Johnson & Johnson because the company is currently operating in various markets and has a diverse product portfolio. There is no collaboration between its business units, which resulted in high costs, low profitability, high threats and several quality issues. For the successful execution of a firm whose corporate strategy is a horizontal integration, growth strategy, it should focus on the combine performance of all of its units, which will be greater than the performance of individual parts. Synergy will help Johnson & Johnson to create a product portfolio to add, keep or eliminate different businesses on the basis of their growth, performance and strengths. This would help the company to eliminate those businesses that are under performing and would help in saving resources. To create synergies between various business units of the Johnson & Johnson, the company should develop a centralized human resource, and finance departments as well as the company should design a strong corporate strategy, which should be followed in various business units. Johnson & Johnson should also design an umbrella brand for products that are similar in nature. This will help the company in building a unified brand image as well as help.......................

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Describes the Johnson & Johnson corporate culture and systems, structures and procedures that reflect and promote it. The main purpose of education should get an idea of the impact of high culture can have on policy decisions and to consider such crops can be managed. "Hide
by Francis J. Aguilar, Arvind Bhambri Source: HBS Premier Case Collection 17 pages. Publication Date: August 19, 1983. Prod. #: 384053-PDF-ENG