Johnson and Johnson 3

What are the major growth and performance challenges facing J&J during the next decade?

Although J&J has well diversified business and segments which can serve J&J in its future but the challenge in the changing world is to maintain health earnings with the growth of the business. Johnson and Johnson has made its market share during 20^th century but as it’s 21^st century, there will be different challenges which can effect J&J’s performance in the market.

Over the time the sciences which is used in the pharmaceutical industry has been drastically changed and as the technology is changing it can be worst situation for the companies ruling in the market like J&J. As new technology is getting innovated a new set of opportunities and treats are getting introduced within different industries. There is a threat of substitutes after the expiry of the patents. J&J as a market leader can face a major challenge in the next decade of new innovation. There is a lack of new innovations among the products which J&J is trying to manufacture as out of 56 drugs which was in the late testing stage; just 8 were the new ones. Although they spend so much revenues in the productivity and research and development department so as to get new products by which J&J can get a competitive advantage (every year they spend around 10% of their revenues in R&D). In industries where J&J deals competitive advantage means a lot so as to maintain their presence in the market and R&D is a major part of it which can help a company to maintain their profits. In case of J&J pharmaceutical business the barrier to entry for new competitors is very high due to Cost of R&D and Patents limitations. One of the challenges they can face is with respect to FDA because the blockbuster drug they innovated was not been approved by FDA which is very important for the revenues of J&J.