Question

In about 300 words, write an essay analyzing the below case study using the SWOT framework.

Johnson & Johnson Consumer Products, INC.

Johnson & Johnson is a household name in baby-care as well as medical products. Nearly every family in the United States has in its house at least one product made by this company. Founded in 1885, Johnson & Johnson is currently an international enterprise, with 170 affiliated companies in fifty-five countries. J&J enjoys a reputation for high-quality products and business integrity. Consumers feel that they can trust J&J products. Trust is a big issue for a firm that makes pharmaceuticals. Customers must believe that the products improve, not endanger, their health. J&J makes a big thing of its credo statement, a four-paragraph guiding philosophy that outlines a commitment to business integrity. According to its credo, the J&J company is required to place a high priority on the needs of customers. Protecting customers is the company’s first concern.

All was well until J&J received news that its leading product, Tylenol capsules, had been contaminated with lethal poison. In the United States, Tylenol and other mild pain relievers are sold in the pharmacies and other stores over-the-counter, that is, without a doctor’s prescription. Mr. David Clare, the president of J&J, said that someone had opened the capsules and poisoned them with cyanide.

The fact that seven people in the Chicago area died when they took Extra-Strength Tylenol, a common pain-relieving medicine made by J&J, shocked people all over the world. People all over the world were horrified by the deaths of seven innocent people who took Tylenol capsules laced with deadly cyanide. It seemed that anyone could have bought those deadly pills, and anyone could have died from ingesting them. This element of randomness was particularly frightening.

After seven innocent people died from taking contaminated Tylenol, sales of the painkiller fell dramatically. The non-aspirin drug’s share of the $1.2 billion painkiller market fell from 35 percent to 7 percent. In a poll, a majority of Tylenol users said they probably would never return to the capsule. But J&J responded to the frightening incident in a notable way. Its executives took a decision that turned out to be not only ethical but profitable, too. Going against all odds, the chairman of J&J decided to spend whatever millions it would cost to recall 31 million bottles of Tylenol capsules from store shelves across the United States. The day after J&J learned that some of its popular Tylenol capsules had been poisoned, the company started withdrawing 31 million bottles of Tylenol from country. They were afraid that other bottles might have been tampered with. Official at the Food and Drug Administration, the U.S. government agency that approves products for sale to the public, feared that the recall would increase the panic already touched off by the poisoning deaths of seven Chicago-area residents who had taken capsules that had been laced with cyanide. The FBI argued that such an expensive action would demonstrate to potential terrorists that they could bring a $5.9 billion corporation to its knees . But J&J chairman’s decision prevailed, and his move proved to be decisive in a remarkable and unparalleled win back of public confidence in his company’s product… Tylenol regained more than 80 percent of the market share it held before the still unsolved poisoning.

As a result of the seven deaths in Chicago, Illinois, J&J was able to play a significant role in affecting positive changes in the U.S. pharmaceutical industry and in government regulation of that industry. The company began redesigning the package to restore public confidence. Within twenty-four hours, J&J had contacted many of the companies that would be involved in the redesign. By the end of the week, J&J had decided that the new Tylenol bottle would have three barriers to prevent tampering: a glued box, a ‘shrink’ neckband and an inner seal. To get Tylenol back on the market, J&J spent $ 1 million on engravers to redesign 650 pieces of artwork for the product. Cartons and sealing equipment cost more than $ 5 million during the first few weeks. By the fifth week after the Chicago deaths, the first 500,000 units of the new tamper-resistant Tylenol package were produced. While J&J led industry efforts to protect consumers, the Food and Drug Administration began developing stronger packaging regulations. As a result, all capsules and liquid drugs must now come in tamper-resistant packages. These guidelines do not only protect the consumer but also the pharmaceutical companies such as J&J.

Four years after the first incident, another person died after taking poisoned Tylenol from so-called tamper-resistant package. J&J is faced again with the problem of winning back the public trust. To do this, it must get the media on its side.

Answer Notes:

• Students are required to identify 6 strengths, 3weaknesses, 1 opportunity, and 2 threats. Then to write an analytical text for the case study.
• Students are required to provide definitions for each SWOT factor by referring to different relevant external resources (use the AOU e-library).
• You may refer to session 5 for more information.  

Answer 1

Strength	1. Large reach in USA 2. Reputed co. with quality products 3. Trusted Brand 4. High Business Integrity 5. Trendsetters in the business 6. Ethical Decision Makers
Weakness	1. Old Dated Product Packaging 2. Face Government Interference 3. Huge costs involved with decisions like recall
Opportunity	1. Trusted Brand. Even after Tylenol case, could gain the people’s trust back. The regained trust was even higher.
Threat	1. Re-emergence of poisoning cases with use of Tylenol 2. Fear of loss of Trust by public

A large recognised, trust brand in the American continent, Johnson & Johnson, was the leading Tylenol producer. But it faced a major issue when 7 people died using the drug. Soon after the mishap, a countrywide product recall was launched by the company inspite of government resistance. It was due to this incident, some major changes in medicinal product packaging was undertaken by the pharma companies and as per the revised FDA regulations.

J&J incurred huge costs due to recall but in the end was a net gainer as it could garner people’s trust with a higher confidence in the brand. But the company is facing the same issue after some years where a similar death has happened due to the consumption of Tylenol. This time the problem maybe more severe as the company is facing the issue with same drug and the previously identified packaging issue then doesn’t seem to be the actual root cause of the problem the. Thus, the company in times like these need support from the media to ensure the have public trust intact in the brand.