****CASE TO BE ANALYZED LISTED BELOW THE ASSIGNMENT*****
COMPANY NAME, WEBSITE, and INDUSTRY
State the company name, website address, and industry.
BACKGROUND and HISTORY
Briefly describe the company in the case analysis. What is their primary business, who were the officers or key players described in the case study? If the case study company is currently in business, list the company’s current CEO, total sales, and profit or loss for the last year where data is available. Identify key events or phases in the company’s history. Describe the performance of this company in the industry. Visit the company’s website and use http://finance.yahoo.com and/or some other financial search engine to find this data.
NOTE: Make sure to use APA citations throughout the paper. The textbook should be cited if it is the source of information.
ANALYSIS VIA PORTER’S FIVE FORCES MODEL
Analyze the competitive environment by listing the threat of new entrants, the bargaining power of buyers, the bargaining power of suppliers, the threat of substitute products and services, and the intensity of rivalry among competitors in the industry (Chapter 2). Each of the five forces should have a paragraph within this section. Summarize your key points in a figure.
STRATEGY USED
How does this company create and sustain a competitive advantage? What strategy from the readings was undertaken by this company? Were they successful? Can all companies use this strategy? How is the strategy affected by the life cycle in the industry? Remember to reference Porter’s generic strategies identified in the textbook, THIS IS CRITICAL.
Specific STRATEGY(S)
**Important to note, this is the second required strategy section in this paper. Considering this paper is worth 150 total points I’d like to draw attention to how each of these two strategy sections totals 80 points. This is the heart of the paper! Choose two specific strategies from the below list. Apply them in detail to the organization. Be sure to think strategically and show the results clearly. Use the strategy as a sub-header for each section so it is clear what is being applied.
Related Diversification
Achieving Competitive Advantage
Entry Mode
Entrepreneurial Strategy
Creating Ambidextrous Organization Designs
Leadership
COURSE OF ACTION RECOMMENDED
If you were in a position to advise this company, what strategy would you recommend to sustain competitive advantage and achieve future growth? Be specific and list the steps the company should take for successful implementation of your course of action.
OPINION
What do you think of this case study? Describe what you believe are the lessons learned from this case.
REFERENCES
When you have completed the paper using the above sections, insert a page break and have a separate reference page. The references should be listed in accordance with the APA guidelines.
FORMAT
Use a title page.
Font: Use Times New Roman, 12 point.
Place your name in the upper left hand corner of the page.
Each section of your paper should be headed by the bolded, capitalized item
described above.
Indent paragraphs.
Insert page numbers bottom right.
Paper length will be four to six double-spaced pages not including title page,
references, or illustrations and tables. If your paper is shorter it will lose 25
points per page it is short.
Use APA citations throughout the paper. If you are not familiar with APA
citation, refer to tutorial, which is contained in the last section of our course
Syllabus.
Include a separate Reference page at the end of the paper.
Please prepare reference page as follows:
References
Dess, G., Lumpkin, G., & Eisner, A. (2016). Strategic Management
(8e). Boston: McGraw-Hill Irwin.
******************* BELOW IS THE CASE THAT THIS PAPER IS ABOUT*************
JOHNSON & JOHNSON*
On January 20, 2015, Johnson & Johnson CEO Alex Gorsky proudly announced that his firm had sales of $74.3 billion during the previous year, representing an increase of 4.2 percent over 2013. Most of this growth came from the firm’s pharmaceutical division, which Gorsky pointed out was clearly generating the largest revenues and was the fastest-growing such division in the drug industry in the United States. The results of this division compensated the relatively modest increases in revenue from the firm’s medical devices and consumer health divisions, both of which were recovering from lawsuits and recalls.
Several years earlier, Johnson & Johnson (J&J) had settled with an estimated 8,000 patients over problems with its flawed all-metal artificial hip. The device had a design flaw that caused it to shed large quantities of metallic debris after implantation. It was finally recalled by the firm in 2010, after Johnson & Johnson had covered up the problems for almost five years after they began to surface. The settlement cost the firm as much as $3 billion to compensate patients who had to have the artificial hip replaced. The problems with this device would classify it as one of the largest medical failures in recent history.
The problems with the medical devices unit were compounded by serious issues that arose with the consumer products unit, leading it to recall many of its products—including the biggest children’s drug recall of all time—that were potentially contaminated with dark particles. The Food and Drug Administration also slapped a plant at one of its business units, McNeil Consumer Healthcare, with a scalding inspection report, causing the company to close down the factory to bring it up to federal standards. The publicity that arose from these problems tarnished the name of one of the nation’s most trusted firms.
Much of the blame for Johnson & Johnson’s stumbles fell on William C. Weldon, who stepped down as CEO in April 2012 after presiding over one of the most tumultuous decades in the firm’s history (see Exhibits 1 and 2). Critics said the company’s once-vaunted attention to quality had slipped under his watch. Weldon, who had started out as a sales representative at the firm, was believed to have been obsessed with meeting tough performance targets, even by cutting costs that might affect quality. Erik Gordon, who teaches business at the University of Michigan, elaborated on this philosophy: “We will make our numbers for the analysts, period.”1
Weldon was replaced by Alex Gorsky, who had headed the medical devices and diagnostics unit. Like his predecessor, Gorsky had worked his way up by meeting tough performance targets as a sales representative, and his appointment as CEO continued the firm’s 126-year tradition of hiring leaders from within. “The future of Johnson & Johnson is in very capable hands,” said Weldon.2 However, the decision to hire another insider raised concerns that the firm was not very serious about changing the corporate culture that had created so many of its recent problems. “As somebody steeped in J.&J. culture, I would be very surprised to see big changes,” said Les Funtleyder, a portfolio manager at a firm that owned J&J stock.3
EXHIBIT 1
Income Statement ($ millions)
Source: Johnson & Johnson.
C234
EXHIBIT 2
Balance Sheet ($ millions)
Source: Johnson & Johnson.
