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Transcript of 1-1. Johnson & Johnson McGraw-Hill/Irwin Strategic Management, 3/e Copyright © 2007 The McGraw-Hill...

Page 1: 1-1. Johnson & Johnson McGraw-Hill/Irwin Strategic Management, 3/e Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved.

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Page 2: 1-1. Johnson & Johnson McGraw-Hill/Irwin Strategic Management, 3/e Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved.

Johnson & Johnson

McGraw-Hill/IrwinStrategic Management, 3/e Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved.

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Johnson & Johnson

1. What kind of diversification does Johnson & Johnson pursue?

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Johnson & Johnson

2. What challenges does William C. Weldon face as CEO of J&J?

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Johnson & Johnson

3. Why is synergy important for J&J? What has Weldon done to foster synergy?

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Johnson & Johnson

4. Evaluate Weldon’s leadership of J&J. What steps has he taken to spur

innovation?

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Q1. Diversification Models

Related diversification Businesses in the health care area Even many of the consumer businesses are in the

health care area But, businesses are run autonomously

Hard to figure out what specific resources are shared between businesses

Businesses have own manufacturing and marketing functions

However, several businesses grouped together under a powerful well-known brand.

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Q2. Weldon’s Challenges

Acquisition slowdown In the past growth through acquisitions Difficulty in spotting acquisition targets Competition for acquisitions drives up prices

Drug Business’s difficulties A number of blockbuster drugs coming off

patent; threatened by lower priced generics Competition from Abbott and Amgen for J&J’s

Remicade Competition for stents from Boston Scientific

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Q3. Synergy

Synergy key motivation for related diversification Independence of business units makes synergy

difficult at J&J According to Weldon, best growth opportunities

would come from increased collaboration between units

Weldon has to balance the need for autonomy with the need for synergy

Creation of groups that draw people from different units

Payoff Drug-coated stent called Cypher Liquid Band-Aid Dandruff shampoo from Nizoral, anti-fungal treatment

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Q4. Weldon’s Performance

Established clear direction Saw need for coordination among

units and synergy (see previous question) Moved J&J away from entrepreneurial

model of innovation to a corporate innovation model.


Receivables Revsine/Collins/Johnson/Mittelstaedt: Chapter 8 McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Receivables Revsine/Collins/Johnson/Mittelstaedt: Chapter 8 McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter 2 Biology Sixth Edition Raven/Johnson (c) The McGraw-Hill Companies, Inc.

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Income Tax Reporting Revsine/Collins/Johnson/Mittelstaedt: Chapter 13 McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights.

Income Tax Reporting Revsine/Collins/Johnson/Mittelstaedt: Chapter 13 McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights.

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Intercorporate Equity Investments Revsine/Collins/Johnson/Mittelstaedt: Chapter 16 McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc.

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