Porter’s Five Forces Analysis of Johnson and Johnson 

Johnson and Johnson is a medical technology and pharmaceutical business American multinational company. The pharmaceutical company started its operations in 1886. Today, we’ll discuss Porter’s five forces analysis of Johnson and Johnson; bargaining power of suppliers and buyers; threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management.

Substitute and Competitors of Johnson and Johnson

• Bayer
• Colgate Palmolive
• Merck
• SC Johnson
• AbbVie
• Procter and Gamble
• Unilever
• Pfizer

Unique and Differentiating Factors of Johnson and Johnson

• Strong finances
• Corporate social responsibility initiative
• Global expansion project
• Strong commitment to research and development
• Pharmaceutical innovation
• Innovative contributions to the pharmaceutical industry
• Recognized brand image and reputation

Porter’s five forces analysis of Johnson and Johnson would analyze the bargaining power of suppliers and buyers; the threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management. Here’s Johnson and Johnson Porter’s five forces analysis of medical technology and pharmaceutical business as follows;

Porter’s Five Forces Analysis of Johnson and Johnson

Let’s discuss Porter’s five forces analysis of Johnson and Johnson as competitive forces in strategic management and they’re as follows;

Bargaining Power of Suppliers in Johnson and Johnson

The bargaining of suppliers is lower in the medical technology and pharmaceutical business as competitive forces in strategic management. Some of the main factors impacting the bargaining power of suppliers in Johnson and Johnson Porter’s five forces analysis of medical technology and pharmaceutical business are as follows;

I-Large Suppliers Network

According to an estimate, Johnson and Johnson deals with approximately over 50,000 suppliers and vendors for medical salts, tech devices, and other tools and equipment. The large network of suppliers decreases the company’s reliance on a few suppliers, and it decreases the bargaining power of suppliers.

II-Suppliers Categories

Johnson and Johnson procure material and supplies from different types of suppliers and they’re as follows;

• Healthcare products
• Medicine raw material
• Medical devices
• Technical equipment

The pharmaceutical brand is always looking for new suppliers and vendors available in the market. It allows the company to decrease the bargaining power of suppliers.

Bargaining Power of Buyers in Johnson and Johnson

The bargaining of Buyers is moderate and higher in the medical technology and pharmaceutical business as competitive forces in strategic management. Some of the main factors impacting the bargaining power of suppliers in the medical technology and pharmaceutical business five forces analysis of Johnson and Johnson are as follows;

I-Major Customers and clients

Patients, clinics, hospitals, and medical device businesses are some of the major customers and clients of Johnson and Johnson. Whether they’re individual customers or companies, they are important to the pharmaceutical company

II-Multiple Brand Alternative

There are various companies operating their business in the pharmaceutical industry; they offer the same type of pharmaceutical drugs and medical devices with unique brand names. Their formulation and names may be different, but they all perform the same function of curing sick people and diagnosing diseases.

Threat of New Entrants in Johnson and Johnson

The threat of new entrants is lower in medical technology and pharmaceutical business as competitive forces in strategic management. Some of the main factors impacting the threat of new entrants in the Johnson and Johnson five forces analysis of medical technology and pharmaceutical business are as follows;

I-High Capital Investment

When it comes to entering the pharmaceutical industry; then it requires a license and registration from the government. Heavy investment would be in the form of mass-scale production of medicines and drugs, research and development, infrastructure, and supply and distribution networks. Any type of mistake would cost the company financial losses, and it pushes away many new potential entrants.

II-Regulations and Research

Johnson and Johnson invest billions of dollars in research and development for innovative tech medical devices and drugs. On the other hand, new firms can’t comply with the regulatory and legal requirements and conduct research due to limited funding and financial resources.

Threat of Substitutes to Johnson and Johnson

The threat of substitute products and brands is higher in medical technology and pharmaceutical business as competitive forces in strategic management. Some of the main factors impacting the threat of new substitutes in Johnson and Johnson Porter’s five forces analysis of medical technology and pharmaceutical business are as follows;

I-Alternative Brands

Many pharmaceutical and medical device manufacturing companies are operating their business in the market. They all offer the same type of product with minute differences. Customers could easily switch from one product to another without incurring any cost. It increases the threat of substitution rate.

Competitive Rivalry in Johnson and Johnson

The competitive rivalry among medical technology and pharmaceutical companies is very high in the competitive forces in strategic management. Some of the main factors impacting competitive rivalry in the medical technology and pharmaceutical business five forces analysis of Johnson and Johnson are as follows;

I-Tough Competition

Johnson and Johnson is facing tough competition from various pharmaceutical brands like GSK, AbbVie, Novartis, Medtronic, Pfizer, Roche, and others. They all have earned a significant market share with a strong brand reputation and image in the pharmaceutical market. It poses a great challenge to the pharmaceutical brand to maintain its customer market share in the presence of tough competition.

I-Research

In order to differentiate itself from its competitors, Johnson and Johnson invests a significant amount of capital resources in research and development. The objective is to develop innovative pharmaceutical products and tech medical devices for the customers. It helps the company to gain a competitive edge in the market.

Conclusion: Johnson and Johnson Porter’s Five Forces Analysis |5 Forces Analysis of Johnson and Johnson

After an in-depth study of Porter’s five forces analysis of Johnson and Johnson; we have realized that Johnson and Johnson is the world’s leading pharmaceutical and medical device manufacturing brand. If you are learning about the Johnson and Johnson five forces analysis of medical technology and pharmaceutical business; then you should keep in mind the abovementioned bargaining power of suppliers and buyers; threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management.