Case Study Of Johnson And Johnson Commerce Essay Example

A study conducted in 2002 highlights that transitioning from being international to becoming a planetary corporation offers advantages such as expanding market reach and reducing costs. Dicken (2003) defines a planetary corporation as an organization capable of managing operations across multiple countries while maintaining functional integration. Johnson & Johnson's corporate structure revolves around motivating, coordinating, evaluating, and rewarding inputs and resources within their alliance (Caves, 1980:66). Successful corporations like Johnson & Johnson are renowned for their branded products and diverse range of merchandise according to Caves (1980). The complexity of a company's corporate structure is contingent upon various factors including its age.A younger company, operating for only 5 years, is likely to have a simpler corporate structure compared to one that has been established for 50 years. Johnson & Johnson follows specific criteria for their board of directors and elects them annually according to New York Stock Exchange regulations. Currently, the company has 14 board members, with 12 classified as "independent" (Johnson & Johnson, 2012). This type of corporate structure is common among large corporations and typically consists of five departments: Marketing, Finance, Accounting, Human Resources, and IT. According to Dicken P. (2011) Figure 5.8 (Figure 3 in this text), global corporations tend to have more complex structures compared to international corporations. For daily operations at Johnson & Johnson, the executive committee serves as the main management team. The company ensures its corporate governance through accounting controls and independent auditors. The audit committee of the board of directors also reviews business results (Johnson & Johnson, 2012). To visually see the board members of Johnson & Johnson refer to Figure 4C: UsersREDesktopConcept2.jpeg (Johnson & Johnson, 2012).

The success of Johnson & Johnson can be attributed to its strict operating style (Johnson & Johnson Strategy, 2012).As one of the largest healthcare corporations globally, Johnson & Johnson has recently experienced significant growth. Founded in 1886 by Robert Wood Johnson and his brothers in New Jersey, the company has expanded its business demands and established numerous branches while acquiring various companies across Europe, Asia, Australia, and Africa since the 1920s. The growth strategies outlined by Chandler (1962) and implemented by Johnson & Johnson (2012) have played a key role in their success. To enhance its market share and cater to consumers with similar needs in different countries, Johnson & Johnson employs various strategies including market penetration where the company improves product quality and offers discounts to influence consumer behavior. The company also focuses on market development by entering new markets and providing the same products. Additionally, they engage in product development to introduce new products to existing customers and increase their popularity. Furthermore, diversification involves creating new products for new markets while consolidation is crucial for maintaining stable relationships with consumers. Overall, these growth strategies have allowed Johnson & Johnson to establish a strong presence in the healthcare industry. Founded by Johnson in the early 1900s, it has become a global corporation with over 250 subdivisions and companies in 57 states.With about 129,000 employees, Johnson & Johnson is a major player in the business world (Johnson & Johnson, 2012). Ranking 42nd on the Fortune 500 list in 2012 solidifies its position. The company's international expansion began in 1924 when it established its first overseas operating company in the United Kingdom (Johnson & Johnson's Corporate

Structure). By joining the New York Stock Exchange in 1944, Johnson & Johnson further strengthened its presence in the global market (Johnson & Johnson, 2012).

Over time, the company has experienced significant growth. In 1987, gross sales were only $7 billion but by 2012 they had skyrocketed to over $65 billion. Net earnings followed a similar trajectory increasing from $329.5 million in 1987 to $9,672 million in 2012 (Fortune 500, 2012).

To understand why Johnson & Johnson is considered a global corporation, one must examine its unique corporate structure influenced by various market factors such as the number and size distribution of sellers and buyers as well as barriers to entry and exit (Caves,1980). The company operates through three business divisions: [Insert Content Here] (Johnson & Johnson Corporate Structure).

The consumer merchandise division includes categories like Baby Care, Skin and Hair Care, Wound Care and Topicals Oral Health Care Women's Health Nonprescription Medicines Nutritionals Vision Care Online Shop. These products are sold globally through retail stores to both the general public and wholesalers.On the other hand, Johnson & Johnson's Pharmaceutical Products and Medical Device & Nosologies divisions rely on acquiring other companies. The Pharmaceutical Products section includes Janssen R&D LLC, Janssen Pharmaceuticals Inc., Janssen Healthcare Innovation, Janssen Nosologies, Veridex, LLC. These products offer medications for common diseases. In the Medical Device & Nosologies section, there are Advanced Sterilization Merchandises, Animas Corporation, Cordis Corporation, DePuy Synthes Companies of Johnson & Johnson , Ethicon , Inc., Ethicon Endo-Surgery , Inc., Johnson & Johnson Vision Care , Inc., LifeScan , Inc., Ortho-Clinical Diagnostics , Inc. These products are primarily used in professional fields like doctors,nurses,hospitals,and diagnostic laboratories.

Johnson & Johnson has gained

a competitive advantage through global recognition and integration. The company has achieved successful execution and operation while becoming very complex with its development. It offers over 200 different types of products organized into three sections. The success of the company depends on the relationship between these sections and other business areas.

Johnson & Johnson has acquired over 60 small companies in the past decade as part of its focus on knowledge management.Corporations have various methods to grow including internal expansion, exporting, licensing, franchising, mergers and acquisitions,and geographic expansion.Previous studies suggest that geographic expansion involves entering new markets and developing resources in different countries or regions, which may include establishing international supply chains for purchasing components, materials, and services. In 1924, Johnson & Johnson implemented its growth strategy by creating its first foreign subsidiary to enhance performance. Geographic expansion has provided numerous benefits to Johnson & Johnson, such as access to global markets and economies of scale, ultimately transforming it into a global corporation. Dicken (2011) emphasizes the connection between planetary economic systems and geographical and organizational structure. He underscores the significance of territoriality in networks closely associated with geographical scale and organizational venue (Dicken, 2011). Overall, Johnson & Johnson is a complex global corporation overseen by an executive commission responsible for managing operations across its 250+ branches and subsidiaries worldwide. Companies expand their branches and subsidiaries to different countries or regions to capitalize on profits from the globalized economy. Globalization plays a vital role in transforming the world economy through increased trade between countries and contributing to economic prosperity through foreign direct investment despite some limitations. Once a company becomes globalized, it must carefully consider its

next steps or strategies.Globalization has been seen by some as the demise of geography for businesses. Many companies have profited from globalization due to its advantages. However, differentiating between international and global corporations can be difficult because the line between internationalization and globalization is not clear. Nevertheless, they can be distinguished based on geographical scale and corporate structure. According to various literature, globalized companies tend to have similar structures. A case study of Johnson & Johnson demonstrates that it is a global corporation based on its corporate structure, product lines, and company strategies. In a competitive business climate, globalization is an inevitable trend that impacts both companies and the macroeconomy. With globalization, the world becomes borderless potentially expanding international business opportunities.