Market Performance of Johnson & Johnson - Essay Example

However, despite the accolades and marked successes, Johnson & Johnson’s history was likewise met with a crucial crisis that threatened their global existence through the Tylenol incident in 1982. The survey hereby aims to present how Johnson & Johnson handled business before anything was even suspected from the potential scare of deadly cyanide incorporated into Tylenol capsules.

The origin of Johnson & Johnson was traced from the enterprising talents of three brothers, Robert Wood Johnson, James Wood Johnson and Edward Mead Johnson, who founded the organization in the year 1886 in New Brunswick, New Jersey, USA (Johnson & Johnson, 2012). The organization has acknowledged operating under the governance of a value system, termed ‘Our Credo’ which was designed and developed by Robert Wood Johnson in 1943 (Johnson and Johnson, 2012). Accordingly, their credo was reported to cover four significant areas of responsibilities, such as: “customers, employees, communities and shareholders” (Kahaner, 2012, par. 3).

The organization produces diverse healthcare products of which the most known remain “Johnson's Baby Powder, which was introduced in l893; Band-Aids, introduced in 1920, and Tylenol, in l960” (Kahaner, 2012, par. 2). More broadly, the products were categorized according to consumer products (baby care, skin and hair care, wound care and topicals, oral health care, women’s health, over the counter medicines, nutritionals and vision care) (Johnson & Johnson, 2012), medical devices and diagnostics, and prescription products (Johnson & Johnson, 2012).

Since the organization indicated that they manage more than “250 operating companies in 60 countries employing approximately 118,000 people” (Johnson & Johnson, 2012), their management structure necessitates the application of a decentralized approach where business segments are classified into consumer health care, medical devices and diagnostics, as well as prescription products, parallel to the products produced and marketed.

From information sourced from the Funding Universe (n.d.), the key developments for the organization before 1982 are as follows:
“1886: Johnson brothers begin producing dressings in New Brunswick, New Jersey.
1887: The company is incorporated as Johnson & Johnson.
1893: Johnson's Baby Powder is introduced.
1921: Band-Aid brand adhesive bandages make their debut.
1924: Overseas expansion begins with the establishment of Johnson & Johnson Limited in the United Kingdom.
1932: Robert Johnson, known as 'the General,' takes over leadership as president.
1943: Johnson writes the company credo.
1944: The company goes public on the New York Stock Exchange.
1959: McNeil Laboratories, Inc. (McNeil Labs) is acquired.
1960: McNeil Labs introduces Tylenol as an over-the-counter (OTC) pain reliever.
1961: Janssen Pharmaceutica is acquired.
1975: Through a significant price decrease, Tylenol is transformed into a mass-marketed product” (Funding Universe, n.d., par. 5).

From the information, it could be deduced that the organization operated in a simpler structure with only the major products such as baby powder, the band-aid, and Tylenol that were noted. Aside from that, other major management decisions included offering its stocks on the New York Stock Exchange and the acquisition of two major organizations, the McNeil Labs and Janssen Pharmaceutica.

Concurrently, at the helm of James E. Burke, whose tenure as Chairman and CEO of the organization was from 1976 to 1989, Johnson & Johnson was reported to enter “new areas of health, such as vision care, mechanical wound closure and diabetes management, and opens the first operating companies in China and Egypt” (Johnson & Johnson, 2012). Other significant events during Burke’s governance are the following: (1) “consumer products began to be promoted aggressively, and Tylenol pain reliever became J & J's number one seller; (2) in May 1977 Extracorporeal Medical Specialties, a manufacturer of kidney dialysis and intravenous treatment products was acquired (3) three years later, J & J acquired Iolab Corporation, maker of ocular lenses for cataract surgery; and (4) in 1981 the company acquired Frontier Contact Lenses” (Funding Universe, n.d.). As noted, Johnson & Johnson diversified in more areas outside their original core products, but within the healthcare spectrum.