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 - – increasing commodity prices, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models,
technology disruption, talent flight as more people leaving formal jobs, 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 -
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.
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.
Learning organization
- Johnson Tylenol is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Johnson Tylenol is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Johnson & Johnson: The Tylenol Tragedy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Johnson Tylenol are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Innovation driven organization
– Johnson Tylenol is one of the most innovative firm in sector. Manager in Johnson & Johnson: The Tylenol Tragedy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
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.
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.
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 -
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.
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.
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.
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.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Johnson & Johnson: The Tylenol Tragedy, is just above the industry average. Johnson Tylenol needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High operating costs
– Compare to the competitors, firm in the HBR case study Johnson & Johnson: The Tylenol Tragedy has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Johnson Tylenol 's lucrative customers.
Slow to strategic competitive environment developments
– As Johnson & Johnson: The Tylenol Tragedy HBR case study mentions - Johnson Tylenol takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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.
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.
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 -
Leveraging digital technologies
– Johnson Tylenol can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Johnson Tylenol can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Johnson Tylenol can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Johnson Tylenol can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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.
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.
Creating value in data economy
– The success of analytics program of Johnson Tylenol has opened avenues for new revenue streams for the organization in the industry. This can help Johnson Tylenol to build a more holistic ecosystem as suggested in the Johnson & Johnson: The Tylenol Tragedy case study. Johnson Tylenol can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
Using analytics as competitive advantage
– Johnson Tylenol has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Johnson & Johnson: The Tylenol Tragedy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Johnson Tylenol to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Johnson Tylenol to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Johnson Tylenol in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
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.
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 -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Johnson Tylenol in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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.
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.
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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Johnson Tylenol needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Johnson Tylenol with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Johnson Tylenol high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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 .
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 .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Johnson Tylenol business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
