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

Eastern Europe is J&J’s most dynamic region in

2011, registering a 26% growth to reach value sales of US$313 million. The dynamic growth was largely attributed to its acquisition of the OTC division of India-based JB Chemicals & Pharmaceuticals Ltd during the year. The transaction includes the global rights to brands Doktor Mum, Rinza and Fitovit, among other minor brands in the fast-growing Russian market.

Russia is J&J’s largest value market in Eastern Europe and the company’s share in the core

OTC market advanced to 5% in 2011, challenging the third-ranked Sanofi in the country. The newly-acquired Doktor Mum and Rinza brands gave J&J the greatest share gain in cough, cold and allergy (hay fever) remedies in which Doktor Mum is a popular herbal/traditional remedy available offering cough and cold relief in the formats of syrup, ointment and medicated confectionery, while Rinza is a cough remedy which has also launched in medicated confectionery format in recent years.

J&J’s Performance in Eastern Europe 2011

% y-o-y growth

> 20% 11-19%  6-10%

 1-5%  0%

 < 0%

 Poland is J&J’s second largest market by value in

Eastern Europe, where sales recovered in 2011 with 8% growth after a fall of 7% in 2010, when J&J discontinued its digestive remedies due to fierce competition from global rivals.

Growth potential for OTC products is highest in Russia in terms of absolute value growth over the next five years, generating some US$507 million. Within this total, the most values sales will be generated from cough, cold and allergy (hay fever) remedies, followed by digestive remedies and medicated skin care, both of which will generate over US$100 million sales in absolute terms.

Doing business in Russia is complex. However, the JB Chemicals acquisition provided J&J an excellent opportunity to build a larger presence in the complex Russian and Commonwealth of Independent States consumer health environments.

The acquisition in Russia by J&J will complement its Eastern European portfolio with popular herbal/traditional brands. The demand for affordable OTC medication will rise as Russians look to disease prevention, more pharmacies open up in small towns and rural areas, and local production accelerates in the next decade to meet the goals of Health and Pharma 2020. J&J is creating a solid position to meet future demands in consumer health.

Key: CCA - Cough, Cold and Allergy (Hay Fever) Remedies

DR - Digestive Remedies, MSK - Medicated Skin Care, AN - Analgesics

Asia Pacific is J&J’s largest emerging market by value within its global consumer health business. The company sustained its strong 8% growth in its billion dollar consumer health business on the back of sustained strong performance in China.

As the second largest global economy, China continued its robust growth in 2011, with real GDP growth over 9% for the year. The continued expansion of the Chinese middle class, improved awareness on selfmedication, combined with further developing distribution infrastructure have helped to drive consumer health’s robust growth in the country, at 11% over 2010.

Japan is the most developed country in Asia Pacific, where the consumer health market is very mature compared to other countries in the region. Consumer spending on OTC products remained largely constant, with the Tohoku earthquake and tsunami having limited impact on OTC sales growth for the year, due to the small size of population directly affected by the natural disaster.

J&J’s Performance in Asia Pacific 2011

% y-o-y growth > 20% 11-19%  6-10%

 1-5%  0%

 < 0%

Being J&J’s second largest value market, the company’s presence in Japan is largely a result of its acquisition of

Pfizer’s consumer health unit in 2006, and NRT smoking cessation aids account for a large share of the company’s value sales in the country.

J&J’s sales in other developing countries such as India, the

Philippines and Indonesia are growing, albeit from small bases. Low per capita spending on OTC products in these countries means plenty of room for future development.

campaigns conducted by J&J.

 J&J’s cough, cold and allergy (hay fever) remedies registered the most dynamic performance in China, sustaining 13% growth in 2011. Its star brand Tylenol has become more familiar to Chinese consumers, backed by J&J’s significant investment in advertising. Despite product recalls in the US,

Tylenol’s sales in China were not negatively impacted during the year.

J&J Performance by Category in China 2011

Wound Care

Medicated Skin Care

Digestive Remedies

Cough, Cold and Allergy Remedies

Analgesics

% y-on-y value growth

CATEGORY AND GEOGRAPHIC OPPORTUNITIES

Underperforms in Latin America

Latin America is J&J’s second largest emerging market by value, where the company saw its position as market leader lost to Sanofi in 2009 as the latter aggressively expanded through acquisitions in the region, and then fall to third in 2011, when Brazilian local player Hypermarcas tookover Nycomed Group’s OTC business in Brazil. Despite strong value growth of 10% in the region in 2011, J&J’s value share eroded by more than one percentage point over the review period.

J&J’s continued underperformance in its largest value market Brazil contributed to its share erosion in recent years. J&J’s Tylenol, its leading brand in the largest analgesics category, was recalled in 2011, as a result of problems experienced at the company’s production facility in Pennsylvania, US. This partly resulted in Tylenol’s share erosion during the year. In addition, the Brazilian government’s stricter rules on dispensing OTC products, combined with stronger competition from generic products on the market have all negatively impacted J&J’s performance in the country.

J&J’s sales in the smaller markets of Argentina, Chile and

Venezuela were the most dynamic in 2011, registering strong double-digit growth on the back of growing consumer demand for established products such as analgesics, cough, cold and allergy remedies, and digestive remedies.

J&J’s Performance in Latin America 2011

% y-o-y growth > 20%

11-19%

6-10%

1-5%

0%

< 0%

J&J’s Top Growth Countries in OTC

in Latin America 2011

Chile

Venezuela

Argentina

Brazil

Uruguay

Dominican Republic

Costa Rica

Mexico

J&J has been losing its value share in Brazilian OTC market over the review period, despite continued sales growth. Aside from Tylenol’s product recalls, J&J’s other key brand such as Daktarin and BandAid are facing rising competition from local players offering cheaper alternatives to consumers.

Nonetheless, J&J’s strong performance in NRT smoking cessation aids partly offset its underperformance in Brazil. J&J held more than two thirds of market share in NRT smoking cessation aids, in which its flagship brand Nicorette benefited not only from the government’s anti-smoking campaigns and legislation, but also J&J’s wide distribution system and high penetration rate in parapharmacies/drugstores. Nicorette also presents the most extensive product line among NRT brands, and as such is able to gain larger shelf space.

NRT smoking cessation aids in Brazil is a lucrative market yet highly consolidated. There is still room for others to make a play despite J&J and GSK dominating nearly 99% of the market, evidenced by Novartis entering the market in 2011 by introducing its Nicotinell NRT patches.

Over the forecast period, the Brazilian economy is anticipated to grow robustly and disposable incomes will continue to increase, while the unemployment rate will stay low. Combined with greater access to medicines, OTC sales in Brazil are anticipated to post a 5% CAGR over 20112016.

J&J has established a very strong position in

Brazil’s OTC market to date. To fully realise the potential of its future growth in the country, as well as overcoming quality control problems at its manufacturing sites, the company needs to commit more by offering more value-added products to appeal to both brand followers and price-sensitive consumers in order to retain both sales and profits.

Growth Prospects in Key OTC Categories in Brazil 2011-2016

CATEGORY AND GEOGRAPHIC OPPORTUNITIES

UK drives performance in Western Europe

J&J’s OTC value sales in mature Western Europe grew by 2% in

2011. While some countries are still struggling to pull through the recession, such as Greece and Spain, J&J benefited from solid performance in the UK, its largest single market in the region, and Italy, where value growth registered over 2% for the year.

J&J’s OTC sales in the UK increased to US$429 million in 2011, driven by solid performance of analgesics and NRT smoking cessation aids. Paediatric analgesics was the most dynamic performing category, in which J&J’s key brand Calpol held 47% value share in 2011. Calpol competes with Nurofen owned by Reckitt Benckiser, and both are increasingly dominating the market due to strong brand innovation following recent MHRA guidelines in recommending dosage for various age cohorts of children.

J&J led the UK NRT smoking cessation aids market with a 38% value share for its Nicorette brand in 2011. J&J’s commitment to product development and consistent marketing activity has contributed to Nicorette’s strong position in the market.

In early 2011, J&J launched Nicorette QuickMist spray, which emits a fine nicotine spray to provide relief from nicotine cravings. The launch was supported by a £10 million advertising campaign across both TV, online and print media. J&J’s substantial media spend has already established QuickMist as one of the brand’s largest-selling products in NRT smoking cessation aids.

J&J Performance in the UK by Category 2011

Adult Mouth

Care

Analgesics

NRT Smoking

Cessation Aids

Digestive

Remedies

Medicated

Skin Care

Cough, Cold

and Allergy

Remedies

Wound Care

-3 -2 -1 0 1 2 3 4 5 6 7 % y-on-y value growth

CATEGORY AND GEOGRAPHIC OPPORTUNITIES

A pleasant surprise in Spain

Though a smaller market for J&J’s OTC products in value terms, Spain registered surprisingly strong value growth of 9% in 2011, increasing

J&J’s value sales to US$213 million, despite uncertain economic development in the country.

J&J posted the most dynamic performance in digestive remedies, in which it grew by 22% in 2011. The company is the third leading player in the overall digestive remedies category, where its strengths lie in laxatives with a 24% value share in 2011. J&J invested strongly in promoting the leading brand Micralax and this investment is paying dividends as the brand gained two percentage points while the company as a whole gained four percentage points with its other brands.

J&J’s sales in NRT smoking cessation aids grew strongly too in 2011 on the back of the government’s new ban on public smoking. J&J’s sales grew by 15% to reach a 46% value share in 2011, challenging the market leader Novartis by narrowing the share gap to just over one percentage point.

J&J Performance in Spain by Category 2011

Wound Care

NRT Smoking Cessation Aids

Medicated Skin Care

Eye Care

Digestive Remedies

Cough, Cold and Allergy

Analgesics

Adult Mouth Care

% y-on-y value growth

Competitive Landscape in NRT Smoking

Cessation Aids in Spain 2011

Novartis

J&J

Others