кейси для індивідуальної роботи 2014 н.р. / JOHNSON & JOHNSON INC IN CONSUMER HEALTH

SCOPE OF THE REPORT

Scope

All values expressed in this report are in US dollar terms, using a fixed exchange rate (2011).

2011 figures are based on part-year estimates.

All forecast data are expressed in constant terms; inflationary effects are discounted. Conversely, all historical data are expressed in current terms; inflationary effects are taken into account.

Consumer Health

US$199 billion

Disclaimer

Much of the information in this briefing is of a statistical nature and, while every attempt has been made to ensure accuracy and reliability, Euromonitor International cannot be held responsible for omissions or errors.

Figures in tables and analyses are calculated from unrounded data and may not sum. Analyses found in the briefings may not totally reflect the companies’ opinions, reader discretion is advised.

J&J continued to experience quality control issues which resulted in continued product recalls through 2011 and into early 2012. However, the company remained the market leader in the global OTC market despite significant share and sales erosion. Euromonitor International examines its performance over the past year and evaluates its future prospects in the lucrative growing consumer health market.

STRATEGIC EVALUATION

Key company facts

Johnson & Johnson Inc

Headquarters: New Brunswick, NJ, USA Regional involvement: Global

OTC, vitamins and dietary supplements, herbal/traditional products, allergy care, paediatric consumer health

Johnson & Johnson is the world’s leading player in the consumer health industry, with over 4% value share in 2011.

The company operates three business divisions: Pharmaceuticals, Medical Devices and Diagnostics, as well as Consumer Health, with the former two being its primary business focus.

J&J’s net revenue rose by 6% in 2011 to US$65 billion, after a fall in 2010 due to significant sales decrease in its domestic US market, partly offset by sales increase in international markets. A series of product recalls in its consumer health business greatly impacted its retail value sales for the year.

Three of the company’s manufacturing plants were placed under an FDA consent decree in 2011 and one of the plants, Fort Washington, Pennsylvania, was suspended, resulting in the company’s many brands being unavailable in the market for a long period of time. J&J is making progress in arranging product re-siting from the troubled plants and a modest amount of products returned to the market in the fourth quarter of 2011.

STRATEGIC EVALUATION

Consumer products recovers

 Sales of J&J’s consumer health segment bounced

J&J Net Revenue by Category

2009-2011

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

J&J Net Revenue by Geography

2009-2011

70,000

60,000

50,000

40,000

30,000

20,000

10,000

A broad base

 J&J has sought to establish a broad-based human health-focused business, with more than 250 operating companies. J&J sees this breadth as providing a base for the identification of emergent consumer needs and scientific and technological breakthroughs, and for the development of new products and even new businesses. Furthermore, it is believed to provide a framework for the transfer of innovation, marketing insights and manufacturing expertise across the company’s businesses.

Decentralised management

 Decentralised management is a key feature of

J&J’s strategy, with the company conferring a significant degree of operational independence on its subsidiaries. The strategy helps its operating companies to nurture a sensitivity to local market conditions. In 2011, J&J divided McNeil into two operations with the US operation overseeing the product recall issues while international operations focus on exploiting new market opportunities.

Regaining consumer trust

 The biggest challenge J&J faces is to overcome its product quality control problems which resulted in a number of product recalls in 2009-2012 and undermined its position as one of the most trusted names in the US market. Long-established consumer loyalty has been central to J&J’s successful development, and re-establishing its bond with consumers through effective communication activity is key for its positive future performance.

Emerging market expansion

 With the company facing a number of significant challenges in the US, expansion in emerging markets represents an important aspect of J&J’s development strategy. The company has established significant positions in key categories in major emerging markets, including China, Brazil and Russia. In the face of intensified competition J&J needs to maximise its capacity to combine local sensitivity with considerable global resources in order to fend off rivals.

% value growth

World vs J&J Performance in Value Growth Rates 2007-2011

A: 2007 - The company falls behind overall global growth as it seeks to refocus its business in light of the Pfizer acquisition and divests noncore brands, including Act, Balmex, Cortizone, Kaopectate and Unisom.

B: 2010 - A series of product recalls due to contamination in its production plants in Pennsylvania starting mid-2009 continues throughout 2010. The suspension of the plant results in many key brands being unavailable in its core US market, dragging down the company’s performance during the year.

C: 2011 - Sales of consumer health recover in 2011 as strong performance in international markets more than offsets continued sales decline in the US. Despite the efforts in re-siting manufacturing of recalled products and more thorough quality checks, J&J continues to underperform in global consumer health market.

2011 was a relatively good year for consumer health players as economic downturn and uncertain recovery continued to put a strain on consumers’ confidence, encouraging self-medication for minor ailments and keeping healthy and fit by means of vitamins and dietary supplements to prevent ailments occurring.

Most key players focused on organic performance and delivered stronger performance in 2011 when compared to the previous year, except J&J, the only company within the top 10 to suffer further sales decline due to continued product recalls caused by weak quality control starting in 2009.

Pfizer has been performing strongly since its return to the consumer health market in 2009 when it bought

Wyeth. The company’s portfolio exposure to highgrowth categories such as multivitamins, as well as competitor J&J’s massive product recalls have contributed to its strong performance.

Although performance in 2011 was positive for Novartis, the company is in danger of losing its fourth place to Pfizer from 2012 due to the closure of one of its OTC production facilities in the US in late 2011.

Consumer Health: Top 10 Global Players by Value 2011