Johnson and Johnson

TERM PAPER For STRATEGIC OPERATION MANAGEMENT Submitted by: ANALIZA T. CEDILLO BSBA 4-1 (OM) Submitted To: Prof Avila JOHNSON & JOHNSON COMPANY INTRODUCTION * The Company supports the United Nations’ Millennium Development Goals to improve the health of mothers and children in developing countries. As a founding sponsor, Johnson & Johnson helps launch the United States’ first free mobile health service, providing health information via text messages for Pregnant women and new mothers. * They are the world’s sixth-largest consumer health company There are the world’s largest and most diverse medical devices and Diagnostics Company. * They are the world’s fifth-largest biologics company. * And the world’s eighth-largest pharmaceuticals company * Johnson & Johnson was a biggest company that caring the world and enduring strength they consistent approaching and to managing they Business. * They have more than 250 operating companies in 60 countries employing approximately 129,000 people. Our worldwide. * Johnson & Johnson Family of Companies work with partners in health care to touch the lives of over a billion people every day, throughout the world.

HISTORY: Johnson & Johnson,126 years more than a century caring. Its start on 1886 with the three brothers, Robert Wood Johnson, James Wood Johnson and Edward Mead Johnson, found Johnson & Johnson in New Brunswick, New Jersey, U. S. 1901, is a Part of its commitment to first aid, Johnson & Johnson publishes the first Aid Manuals, using proven best practices from leading physicians. 1910, James Wood Johnson takes over the leadership of Johnson & Johnson until 1932. The first overseas operating company opens in the United Kingdom was on 1924. And they expand to Mexico and South Africa.

On 1932, Robert Wood Johnson II. He begins leadership of Johnson & Johnson. Known as General Johnson, he transforms the Company into a global decentralized Family of Companies. 1963-1973, Under Chairman and CEO Philip B. Hofmann’s leadership, operating companies launch new treatments for schizophrenia, family planning and personal care. Also, 1963 marks the last year that JOHNSON’S® Baby Powder is sold in tins. They announce plans to build our new World Headquarters in New Brunswick, New Jersey, and form a public-private partnership to revitalize the city. 2002, William C.

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Johnson & Johnson’s commitment to innovative health care products has resulted in consistent financial performance. The Company has 29 consecutive years of adjusted earnings increases and 50 consecutive years of dividend increases. Johnson ; Johnson, through its family of companies, employs approximately 129,000 people worldwide and is engaged in the manufacture and sale of a broad range of products in the health care field in many countries of the world. Johnson ; Johnson’s primary interest, both historically and currently, has been in products related to health and well-being.

Johnson & Johnson was organized in the State of New Jersey in 1886. Johnson & Johnson is organized on the principles of decentralized management. The Executive Committee of Johnson & Johnson is the principal management group responsible for the strategic operations and allocation of resources of the Johnson & Johnson family of companies. Johnson & Johnson’s operating companies are organized into three business segments: Consumer, Pharmaceutical and Medical Devices and Diagnostics.

A Group Operating Committee, composed of managers who represent key operations within the segment, as well as management in specialized functional departments, oversees and coordinates the activities of domestic and international companies related to each of the business segments. However, in line with the principle of decentralized management, senior management groups at U. S. and international operating companies are each responsible for their own strategic plans, as well as the day-to-day operations of those companies, and each international company is, with some exceptions, managed by citizens of the country where it is located.

HR/MANAGEMENT Johnson ; Johnson Strategic Framework They believe that in serving. those who sell their product, they serve himself. Foundation The Strategic Framework starts with Credo, the guide to help navigate way through challenges and opportunities. From Credo, there Aspiration emerges – by caring, one person at a time; they are help billions of people around the world live longer, healthier and happier lives. Strategic Planning/Principles From the foundation they build a unique kind of a set.

They based on a health care, First they focus on managing for the long term. Second they operate under a decentralized management approach. And then do all this through a unique culture that values and fosters the development of people. Executive management of Johnson ; Johnson, with the support and approval of the Board of Directors, has set the fundamental strategic direction of the Company to remain a broadly-based human health care company for the consumer, pharmaceutical and medical device and diagnostics markets.

Strategic planning is guided by the ethical principles embodied in Our Credo, unifying our people worldwide behind a set of common values and providing a constant reminder of the Company’s responsibilities to all of its constituents. With over 250 operating companies located in 60 countries throughout the world, Johnson & Johnson is organized on the principle of decentralized management. Each international company is, with some exceptions, managed by citizens of the country where it is located. Senior management groups at U. S. nd international operating companies are each responsible for their own strategic plans. On an on-going basis throughout the year, at meetings of the Board and Committees of the Board, management of the Company and Board members discuss the strategic direction and major developments of the Company’s various businesses. The process is an interactive/on-going dialogue which provides the Directors with insight into the activities and direction of the Company’s businesses. Accounting/Finance Department Corporate Governance The values embodied in the Credo guide the actions of the people of the

Johnson & Johnson Family of Companies at all levels and in all parts of the world. They have done so for more than 60 years. These Credo values extend to our accounting and financial reporting responsibilities. Management is responsible for timely, accurate, reliable and objective financial statements and related information. Such as: * Maintain a well-designed system of internal accounting controls. * Encourage strong and effective corporate governance from our Board of Directors. * Continuously review our business results and strategic choices. Focus on financial stewardship. Accounting Controls The professionally trained internal auditors travel worldwide to monitor system of internal accounting controls. This system is designed to provide reasonable assurance that assets are safeguarded and that transactions and events are recorded properly. The internal controls include self-assessments and internal and external audit reviews of operating companies, which concludes “Management’s Report on Internal Control over Financial Reporting,” printed in Annual Report.

Johnson & Johnson is guided by the values set forth in Credo, created by General Robert Wood Johnson in 1943. Credo and the principles have been woven into the fabric of the Company. The values articulated of Credo extend to accounting and financial responsibilities to Johnson & Johnson shareholders and investors. The Johnson & Johnson SWOT: Strengths * Worldwide sales have grown 14% indicating a strong position for the global group. * The business model adapted by Johnson and Johnson fundamentally uses the adaptation of entrepreneurial values in order to retain an edge within the market place. Working with intensive scientific notions Johnson and Johnson utilize a varied expanse of problem solving techniques in order to challenge 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 prove important when taking a product to global markets. Weaknesses There is increasing pressure within pharmaceutical markets to reduce prices in line with medical budgets and maintain patent expirations to ensure generic programmers are updated within critical path movements. * 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 programmers at the end of patent time lines. * Internal weakness across the industry and not isolated to Johnson and Johnson would be the level of theft and counterfeiting of drugs managed through internal personnel.

Opportunity * Whilst the recent acquisition of Pfizer Consumer Healthcare will act as an opportunity in its own right to promote growth for the organization through alternative routes there is the added value capitalized through the return on investment which will be realized 12 months before plan releasing funds back into the bottom line. * Johnson and Johnson have highlighted new developments in pharmacy products with five undergoing regulatory review which provides the opportunity to grow the existing product portfolio. Development into new functions of medical devices and diagnostics will provide new markets to entry which will result in business growth. * With the development of WTO rules to prevent the availability of cheap generic drugs there is the opportunity to reduce the level of lost profit due to generic introduction as patents run out. Whilst this will aid Johnson and Johnson where they own the brand where they are looking to capitalize on introducing generic drugs to market this ruling will become a hindrance. 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 move 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.

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