Case Study Description of Johnson & Johnson: Hospital Services
The main issue has to do with the lack of fit or incompatibility between the early environmental requirements for strategy and the cultural constraints on the organization. Describes the internal resistance to the proposed changes and top management's efforts to resolve the contradictory requirements of strategy and culture. A second major issue concerns the challenge facing a general manager who has been given responsibility for operationalizing the forced solution. Provides a brief background on Johnson & Johnson culture and the corporate systems and structures. A consolidated version of two earlier cases.
Swot Analysis of "Johnson & Johnson: Hospital Services" written by Andrall E. Pearson, Johanna M. Hurstak includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Johnson Requirements facing as an external strategic factors. Some of the topics covered in Johnson & Johnson: Hospital Services case study are - Strategic Management Strategies, Conflict, Corporate governance, Organizational culture, Organizational structure, Strategy execution, Supply chain and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Johnson & Johnson: Hospital Services casestudy better are - – increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs,
digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, etc
Introduction to SWOT Analysis of Johnson & Johnson: Hospital Services
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Johnson & Johnson: Hospital Services case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Johnson Requirements, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Johnson Requirements 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: Hospital Services can be done for the following purposes –
1. Strategic planning using facts provided in Johnson & Johnson: Hospital Services case study
2. Improving business portfolio management of Johnson Requirements
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Johnson Requirements
Strengths Johnson & Johnson: Hospital Services | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Johnson Requirements in Johnson & Johnson: Hospital Services Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Johnson & Johnson: Hospital Services 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 Requirements in the sector have low bargaining power. Johnson & Johnson: Hospital Services has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Johnson Requirements to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Leadership & Managing People industry
– Johnson & Johnson: Hospital Services firm has clearly differentiated products in the market place. This has enabled Johnson Requirements to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Johnson Requirements to invest into research and development (R&D) and innovation.
Learning organization
- Johnson Requirements 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 Requirements is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Johnson & Johnson: Hospital Services Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Johnson Requirements is present in almost all the verticals within the industry. This has provided firm in Johnson & Johnson: Hospital Services 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.
Strong track record of project management
– Johnson Requirements is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Johnson Requirements 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: Hospital Services - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Leadership & Managing People field
– Johnson Requirements is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Johnson Requirements in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Johnson Requirements has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Johnson & Johnson: Hospital Services 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.
Successful track record of launching new products
– Johnson Requirements has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Johnson Requirements 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 Leadership & Managing People segment
- digital transformation varies from industry to industry. For Johnson Requirements digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Johnson Requirements 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.
Cross disciplinary teams
– Horizontal connected teams at the Johnson Requirements 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.
Weaknesses Johnson & Johnson: Hospital Services | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Johnson & Johnson: Hospital Services are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Johnson & Johnson: Hospital Services, in the dynamic environment Johnson Requirements has struggled to respond to the nimble upstart competition. Johnson Requirements has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Johnson Requirements has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High bargaining power of channel partners
– Because of the regulatory requirements, Andrall E. Pearson, Johanna M. Hurstak suggests that, Johnson Requirements 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Johnson & Johnson: Hospital Services HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Johnson Requirements has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Johnson & Johnson: Hospital Services 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: Hospital Services can leverage the sales team experience to cultivate customer relationships as Johnson Requirements is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Johnson & Johnson: Hospital Services, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Johnson & Johnson: Hospital Services 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 Requirements 's lucrative customers.
Lack of clear differentiation of Johnson Requirements products
– To increase the profitability and margins on the products, Johnson Requirements needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Johnson Requirements 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 Requirements 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 Requirements is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Johnson Requirements needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Johnson Requirements to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Johnson Requirements 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.
Opportunities Johnson & Johnson: Hospital Services | 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: Hospital Services 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 Requirements in the consumer business. Now Johnson Requirements can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Johnson Requirements in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Johnson Requirements to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Johnson Requirements to hire the very best people irrespective of their geographical location.
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 Requirements can use these opportunities to build new business models that can help the communities that Johnson Requirements operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Buying journey improvements
– Johnson Requirements can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Johnson & Johnson: Hospital Services 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Johnson Requirements 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 Requirements 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.
Learning at scale
– Online learning technologies has now opened space for Johnson Requirements 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Johnson Requirements is facing challenges because of the dominance of functional experts in the organization. Johnson & Johnson: Hospital Services 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Johnson Requirements can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Johnson Requirements 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: Hospital Services - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Johnson Requirements to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Johnson Requirements has opened avenues for new revenue streams for the organization in the industry. This can help Johnson Requirements to build a more holistic ecosystem as suggested in the Johnson & Johnson: Hospital Services case study. Johnson Requirements can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Requirements 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.
Developing new processes and practices
– Johnson Requirements can develop new processes and procedures in Leadership & Managing People 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.
Threats Johnson & Johnson: Hospital Services 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: Hospital Services are -
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.
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.
Stagnating economy with rate increase
– Johnson Requirements can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Environmental challenges
– Johnson Requirements 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 Requirements can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Increasing wage structure of Johnson Requirements
– 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 Requirements.
Regulatory challenges
– Johnson Requirements 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 Leadership & Managing People industry regulations.
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 Requirements in the Leadership & Managing People sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Johnson Requirements 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: Hospital Services .
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 Requirements needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Johnson Requirements 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.
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 Requirements business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Johnson Requirements 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 Requirements has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Johnson Requirements needs to keep up with the evolution of technology in the Leadership & Managing People 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.
Weighted SWOT Analysis of Johnson & Johnson: Hospital Services 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: Hospital Services 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: Hospital Services 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: Hospital Services 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: Hospital Services 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 Requirements needs to make to build a sustainable competitive advantage.
