TOPIC: Diversification, Restructuring, turnarounds, and resilience COMPANIES: Jo
ID: 376273 • Letter: T
Question
TOPIC: Diversification,Restructuring, turnarounds, and resilience
COMPANIES: Johnson & Johnson and Pfizer
RECOMMENDED READINGS
Delios & Beamish 1999 “Geographic Scope, Product Diversification, and the Corporate Performance of Japanese Firms”
Thomas 2006 “International diversification and firm performance in Mexican firms”
Singh et al. 2007 “Performance impact of business group affiliation: An analysis of the diversification-performance link in a developing economy.”
Ghosn 2002 “Saving the business without losing the company”
Hofer 1980 “Turnaround strategies”
Robbins, Pearse 1992 “Turnaround: retrenchment and recovery”
QUESTION
1) Which of these two companies has a business that is in need of a turnaround?
2) Analyze the sources of the business’s problems. Suggest ways for this business to initiate and execute a successful turnaround.
3) Does the business lack anything to start a successful turnaround? What kind of help can it get from the corporation?
Explanation / Answer
In context to the companies Johnson & Johnson and Pfizer let us solve these questions one by one:
Question No. 1) Which of these two companies has a business that is in need of a turnaround?
Answer: The Johnson & Johnson and Pfizer are the two multinationals in the Pharmaceutical business. Bot the companies are innovator companies who have developed new molecules or drugs for treating ailments and diseases. The country of origin of both the companies is the United States of America. Being in the same business both of them are competitive in nature. So that both the companies have business of pharmaceutical market that can be turned around to survive in the market for a longer time.
Question No. 2) Analyze the sources of the business’s problems. Suggest ways for this business to initiate and execute a successful turnaround.
Answer: The main problem which pharmaceutical business in the world is phasing the regulatory challenges and strict norms of the regulators for producing safe and effective medicines. Since a long time J & J is facing problem in its one of the segment of baby product ranges in which there are multiple quality complaints arises with the use of its products. Severity of causes ranges from minor rashes to even deaths caused by cancer producing substances which were alleged to be present in the products of Johnson and Johnson’s baby powder. As per one of the case study one lady has alleged that she suffered from ovarian cancer due to use of J & J's baby powder.
Since there are strict regulatory norms to produce a safe and efficacious medicines and products so these company's can be suggested to get into the strategic alliances to do their research. Because research work involves a lot of financial need to come up with an innovative research product and in the present time doing research and running R&D without alliances is very difficult to run.
Question 3) Does the business lack anything to start a successful turnaround? What kind of help can it get from the corporation?
Answer: Yes, in my opinion both the companies regardless of their market competition should work for the strategic alliances so that both of them get benefited in a long run. Two of these companies have a great scientific pool and knowledge which if can put together then these firms can be more successful as compared to current growth. They corporation can help them in financing the funds for a collaborative research work which is required to perform a research work to generate new chemical entities and to produce a new drug which shall ultimately give them market exclusivity and in turn help the human mankind.
Outcome of the articles which were suggested in recommended readings also reveals that if companies want to remain in the business and survive for a longer time then they should think for Strategic alliances, Turnaround strategies and business affiliations to get benefited in a long run.
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