Johnson & Johnson: The Tylenol Tragedy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Johnson & Johnson: The Tylenol Tragedy
In October 1982, Johnson & Johnson was confronted with a major crisis when seven deaths were attributed to poisoned Tylenol. The case reviews the facts as known a week after the incident occurred, and raises a wide range of questions regarding consumer behavior, corporate responsibility, and competitive reaction.
Swot Analysis of "Johnson & Johnson: The Tylenol Tragedy" written by Stephen A. Greyser includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Johnson Tylenol facing as an external strategic factors. Some of the topics covered in Johnson & Johnson: The Tylenol Tragedy case study are - Strategic Management Strategies, Customers, Product development, Social responsibility and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Johnson & Johnson: The Tylenol Tragedy casestudy better are - – digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, geopolitical disruptions, there is increasing trade war between United States & China,
increasing household debt because of falling income levels, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Johnson & Johnson: The Tylenol Tragedy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Johnson & Johnson: The Tylenol Tragedy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Johnson Tylenol, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Johnson Tylenol operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Johnson & Johnson: The Tylenol Tragedy can be done for the following purposes –
1. Strategic planning using facts provided in Johnson & Johnson: The Tylenol Tragedy case study
2. Improving business portfolio management of Johnson Tylenol
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Johnson Tylenol
Strengths Johnson & Johnson: The Tylenol Tragedy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Johnson Tylenol in Johnson & Johnson: The Tylenol Tragedy Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Johnson & Johnson: The Tylenol Tragedy Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Low bargaining power of suppliers
– Suppliers of Johnson Tylenol in the sector have low bargaining power. Johnson & Johnson: The Tylenol Tragedy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Johnson Tylenol to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Johnson Tylenol has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Johnson Tylenol has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High brand equity
– Johnson Tylenol has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Johnson Tylenol to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Johnson Tylenol is present in almost all the verticals within the industry. This has provided firm in Johnson & Johnson: The Tylenol Tragedy case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High switching costs
– The high switching costs that Johnson Tylenol has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Sustainable margins compare to other players in Sales & Marketing industry
– Johnson & Johnson: The Tylenol Tragedy firm has clearly differentiated products in the market place. This has enabled Johnson Tylenol to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Johnson Tylenol to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Johnson Tylenol has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Johnson & Johnson: The Tylenol Tragedy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Johnson Tylenol digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Johnson Tylenol has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Organizational Resilience of Johnson Tylenol
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Johnson Tylenol does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Johnson Tylenol has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Johnson & Johnson: The Tylenol Tragedy Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Strong track record of project management
– Johnson Tylenol is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Johnson & Johnson: The Tylenol Tragedy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Johnson & Johnson: The Tylenol Tragedy are -
Slow decision making process
– As mentioned earlier in the report, Johnson Tylenol has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Johnson Tylenol even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Increasing silos among functional specialists
– The organizational structure of Johnson Tylenol is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Johnson Tylenol needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Johnson Tylenol to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Johnson & Johnson: The Tylenol Tragedy, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Aligning sales with marketing
– It come across in the case study Johnson & Johnson: The Tylenol Tragedy that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Johnson & Johnson: The Tylenol Tragedy can leverage the sales team experience to cultivate customer relationships as Johnson Tylenol is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Johnson Tylenol has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Stephen A. Greyser suggests that, Johnson Tylenol is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Workers concerns about automation
– As automation is fast increasing in the segment, Johnson Tylenol needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Johnson Tylenol is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Johnson & Johnson: The Tylenol Tragedy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Johnson Tylenol has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Johnson Tylenol supply chain. Even after few cautionary changes mentioned in the HBR case study - Johnson & Johnson: The Tylenol Tragedy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Johnson Tylenol vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Johnson Tylenol, firm in the HBR case study Johnson & Johnson: The Tylenol Tragedy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Johnson & Johnson: The Tylenol Tragedy | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Johnson & Johnson: The Tylenol Tragedy are -
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Johnson Tylenol in the consumer business. Now Johnson Tylenol can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Johnson Tylenol to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Loyalty marketing
– Johnson Tylenol has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Johnson Tylenol can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Johnson & Johnson: The Tylenol Tragedy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Johnson Tylenol can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Buying journey improvements
– Johnson Tylenol can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Johnson & Johnson: The Tylenol Tragedy suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Manufacturing automation
– Johnson Tylenol can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Low interest rates
– Even though inflation is raising its head in most developed economies, Johnson Tylenol can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Johnson Tylenol is facing challenges because of the dominance of functional experts in the organization. Johnson & Johnson: The Tylenol Tragedy case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Building a culture of innovation
– managers at Johnson Tylenol can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Johnson Tylenol can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Johnson Tylenol to increase its market reach. Johnson Tylenol will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Johnson Tylenol can use these opportunities to build new business models that can help the communities that Johnson Tylenol operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Threats Johnson & Johnson: The Tylenol Tragedy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Johnson & Johnson: The Tylenol Tragedy are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Johnson Tylenol can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Johnson & Johnson: The Tylenol Tragedy .
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Johnson Tylenol can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Johnson Tylenol has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Johnson Tylenol needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Consumer confidence and its impact on Johnson Tylenol demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Regulatory challenges
– Johnson Tylenol needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Johnson & Johnson: The Tylenol Tragedy, Johnson Tylenol may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Environmental challenges
– Johnson Tylenol needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Johnson Tylenol can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Johnson Tylenol.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Johnson Tylenol in the Sales & Marketing sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Johnson Tylenol is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Johnson Tylenol
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Johnson Tylenol.
Weighted SWOT Analysis of Johnson & Johnson: The Tylenol Tragedy Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Johnson & Johnson: The Tylenol Tragedy needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Johnson & Johnson: The Tylenol Tragedy is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Johnson & Johnson: The Tylenol Tragedy is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Johnson & Johnson: The Tylenol Tragedy is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Johnson Tylenol needs to make to build a sustainable competitive advantage.