Case Study Of Johnson And Johnson Commerce Essay

Case Study Of Johnson And Johnson Commerce EssayFor many Chinese race, they could buy rough alien products since 1980s, because many outside companies adjudge mark up in China at that period, and huge amount of import products were exchange in Chinese market, which means the effect of the orbiculateization butt end be seen in our daily necessities. In 1982, the first Johnson Johnson operating fraternity was passed in China, then a series of products of Johnson Johnson acquainted Chinese market. why Johnson Johnson would like to enter new(prenominal) foreign market, especially in growth country like China? This report will examine whether Johnson Johnson is an transnational potbelly or a global weed by cardinal concept, corporeal social system and geographic enlargement. Although in previous studies, there is no sole exposition of foundation(prenominal)ization and globalization, this report will analyze Johnson Johnsons characteristics to jump out that it is a victoryful example of global unions.ContentsIntroductionIn todays competitive short letter environment, there ar a traffic circle of multinational enterprises. Like Johnson Johnson, it could be found in e very country. However, in close to studies, there is no clearly concept or explanation on whether the corporation is world(prenominal) or global. Many world-wide corporations subscribe been influenced by globalization where they would turn into global corporations. Therefore, the aim of this report is to analyse whether Johnson Johnson is an international firm or a global firm, and discuss what global characteristics it possesses. In order to do a fibre study of Johnson Johnson, its in corporated construction will be described and geographical expansion will be analysed. To summaries when and how did Johnson Johnson become a global corporation? By using a corporate geography perspective, this report will include the analysis of whether geographical expansion i s a good way to enhance firms scale or non and if it could transform international corporations into global corporations. However, globalisation major power be constrained somehow. Globalisation aptitude also bring corporations to a greater extent challenges, which could be seen in long run. In the world economy, the use of globalisation tycoon be exaggerated.Internationalization and GlobalisationThere is no unequivocal definition of what is globalization. match to David DeBry (2001, p. 42), who pointed out that internationalisation is like creating a round-toed shoe that fits people with all types of feet. It is not as comfor dodge as a absolutely fitted shoe and doesnt fit snugly, but can be worn by many people. Whereas globalization refers to the trend of a much integrated and mutually beneficial world economy. Dicken, P. (2011) menti wizardd that the concept of globalization became familiar gradually in the prehistorical 30 years. Globalization is the method to solve t he worlds economic issues (Dicken, 2011). Globalisation might influence the form of companies, which leads to the changing from trade to Foreign Direct enthronization (Dicken P. , 2003). Trade deal has increased by the progress of globalisation (Dicken P. , 2011), for example, Chinese people could b arly purchase foreign products in China in the lead 1980s until the government approved the reform of Chinese economy approaches. Whilst the volume of import and export of China reaches a really high amount. build 1Source from Dicken P. 2011 table 2.1 insure 2Source from Dicken P. 2011 table 2.2Nowadays, people witness the basement of international corporations and global corporations. The worlds largest 500 corporation are usually being classed multinational enterprises (MNEs). An example of global brands is Johnson Johnson. However, how to get wind the difference between international corporations and global corporations? First of all, being international corporations, the quant ity of branches and subsidiaries are limited, it could be in only one country. hardly global corporations have many branches and subsidiaries among all over the world.International corporations have some investment in at least one country, they hunt club profitable opportunities, whereas global corporations use the world as an opportunity. For nigh global corporations, they need to build a global brand, a successful personality built should link the name, products and logo to many people. For instance, people could hardly stupefy substitute for many Johnson Johnson products, and the majority people have heard this name.According to Giorgio et al. (2002), there are two causations to why a company should change from international to global company. On the one hand, a company could open its market worldwide. On the other hand, the company could lower its cost.Dicken (2003) demonstrated that a global corporation would be a firm that has the power to ordinate and control operatio ns in a large number of counties ( flush if it does not own them), but whose geographically dispersed operations are functionally integrated, and not merely a diverse portfolio of activities.The background of Johnson JohnsonThe concept of corporate mental synthesis is the arrangements whereby the firm motivates, coordinates, appraises, and rewards the inputs and resources that belong to its coalition (Caves, 198066). Many successful corporations would establish famous branded products and overhaul various type of products (Caves, 1980). A firms corporate structure is depended on many issues. For example, when one company start up for only 5 years, its corporate structure would be less multiplex than company which founded 50 years ago.In Johnson Johnson, their add-in of directors is a assemblage of people who meet a set of General Criteria for membership and are elected to the Board by our shareholders each year. We currently have 14 Board members, 12 of whom are independent under the rules of the bare-ass York argumentation Exchange. (Johnson Johnson, 2012). Many large corporations tend to have the same corporate structures. It includes near(predicate) five departments, which are commercializeing, Finance, Accounting, Human Resource and IT. Usually corporate structure are four types as following (Dicken P. , 2011)Figure 3(Source from Dicken P. 2011 Figure 5.8)It can be seen that global corporates structure is more complex than international corporates structure. For Johnson Johnson, the executive committee is the main management team, which is responsible for the operations. The corporate arrangement is formed by accounting controls, independent auditor, audit committee of their board of directors and business results.Figure 4CUsersREDesktopConcept2.jpegThis figure shows the board of directors of Johnson Johnson. (Johnson Johnson, 2012)3.1 A strategy of Johnson JohnsonThe reason why Johnson Johnson achieves much(prenominal) great success i s that it has strict operating mode. (Johnson Johnson, 2012)1. Market penetrationJohnson Johnson has improved the share of market by increasing the flavor of products, meanwhile, offering discount is an appropriate way to influence consumers habits and purchasing.2. Market growthIt developed new markets to provide the same products for consumers who have the same requires in several(predicate) countries.3. Product developmentIt developed new products to old consumers, which would elaborate popularity.4. DiversificationIt provide new products to new markets.5. ConsolidationThis step is to entertain its stable relationship with consumers.Chandler stated that a firms growth is always through three strategies as following (Chandler, 1962)1. Expansion is to widen the existing canal to the same kinds of consumers.2. New markets and sources of supplies are very important factors.3. Developing a wide range of new products for different types of consumersAs one of the largest and most comprehensive health care corporation in the world, Johnson Johnson has experienced snappy growth in recent years. Johnson Johnson was founded by Robert Wood Johnson with two brothers in New Jersey in 1886. With the expansion and development of its business need from the 1920 of the 20th century, Johnson Johnson has set up a lot of branches and acquired many companies among Europe, Asia, Australia and Africa. By today Johnson Johnson has established and acquired more than 250 branches and companies in over 57 countries, and has about 129,000 employees. Johnson Johnson is Ranked 42nd in fortune 500 list in 2012. (Johnson Johnson, 2012). In 1924, the first overseas operating company was set up in the United Kingdom, which indicated Johnson Johnson has started its foreign company period. In 1944, Johnson Johnson joined the New York Stock Exchange. (Johnson Johnson, 2012). Revenues of JJ has increased from only $7 billion in 1987 to more than $65 billion in 2012. Profits inc reased at an even faster rate, from $329.5 million in 1987 to $9672 million in 2012. (FORTUNE 500, 2012)3.2 Corporate organise of Johnson JohnsonFor every MNE, as key driver of globalization, has its unique corporate structure on a wide variety of market, which influence the corporations management in marketplace. The main sector is the number and size distribution of sellers and buyers, height of barriers to enter and exit (Caves, 1980). Why Johnson Johnson can be called a global corporation is that it has involved structure.It depends on the development and innovation, because Johnson Johnson has three business divisions3.2.1.. Consumer productsBaby economic aidSkin and Hair CareWound Care and TopicalsOral wellness CareWomens HealthOver-the-Counter MedicinesNutritionalsVision CareOnline storeThe consumer products kitchen stove retail outlets are general all over the world, these products are sold to general public and both to wholesalers and directly to individuals, while Pharmaceutical products and aesculapian device Diagnostics are depend on acquisition of other companies.3.2.2. Pharmaceutical productsJanssen RD LLCJanssen Pharmaceuticals Inc.Janssen Healthcare InnovationJanssen DiagnosticsVeridex, LLCThese products offer medicines that treat widespread diseases.3.2.3. Medical device DiagnosticsAdvanced Sterilization ProductsAnimas pileCordis CorporationDePuy Synthes Companies of Johnson JohnsonEthicon,Inc.Ethicon Endo-Surgery, Inc.Johnson Johnson Vision Care, Inc.LifeScan, Inc.Ortho-Clinical Diagnostics, Inc.These products might be used in professional fields, such as physicians, nurses, hospitals, and diagnostic laboratories.It has agnizeed the competitive advantage through knowledge of quotation and integration in the world, and achieved implementation and operation. With the development of Johnson Johnson, it has shaped a very complicated company. There are approximately more than 200 different type of products are formed in three depar tments. To what extent the success of Johnson Johnson could achieve is depends on the relationship between three departments and other business departments. In the past 10 years, Johnson Johnson has purchased more than 60 small firms.It focalize on managing the knowledge. Usually, corporation has the following ways to grow internal expansion, exporting, licensing, franchising, mergers and acquisitions, and geographic expansion. (Bruce R. Barringer, Daniel W. Greening, 1998).These strategies support corporations to enter new markets, as well as develop corporations resources through different countries or regions. Previous studies have revealed that geographic expansion is a new operation in a different area. (Hsien-Jui Chung, Chun-Chung Chen, Tsun-jui Hsieh, 2007). It might form international supply chains, which firms would purchase components, raw materials and services.It was significant to gain growth and enhance performance when Johnson Johnson has set up the first foreign firm in 1924. Geographic expansion would bring a lot of advantages (Farok J. Contractor, Sumit K. Kundu and Chin-Chun Hsu, 2003)Global market often give more scope for economies of scale, which in this case study, has changed Johnson Johnson into a global firm. As Dicken (2011) mentioned that global economy are connected with geographical and organizational structure. He (2011, p. 96) pointed out closely link up to the issues of geographical scale and organizational loci is the importance of territoriality in networks.FindingsTo sum up, from what is discussed above, Johnson Johnson is a global corporation. As a result of some literature, there would be two measurements to determine whether the corporation is globalised or not, which is from organizational and geographical scale. Firstly, Johnson Johnson has complicated corporate structure, it has executive committee to manage and operate Johnson Johnson. Compared with its geographical scale, Johnson Johnson has more than 250 b ranches and subsidiaries all over the world. Then corporations earn profits from the globalisation economy, which is why many international company would like to expand their subsidiaries and branches to other different countries or regions.DiscussionGlobalisation plays an important role, it changes the world economy. Firstly, it increases the trade from one country to another. Apart from that, globalisation makes economy prosperous because it raised foreign direct investment while there might be some limitations. When a company is already a global company, what should be their following(a) steps or strategies? Is globalisation the destination for one company? In accordance to some literatures, globalization is end of geography (OBRIEN, 1992). Increasingly companies have gained more profits from globalization, in other words, the progress of globalization gets advantages for enterprises.ConclusionsSo far, for many people, it is hard to explain what are international corporations an d global corporations, because internationalization and globalization cannot be easily distinguished, but actually there are different. Consequently, they can be differentiated by the geographic scale and corporation structure. Globalized companies often owns similar structures. It is easier to understand from some literatures. In this report, a case study of Johnson Johnson has determined that it is a global corporation by analysing its corporate structure, different product lines and company strategies. In competitive business circumstance, globalisation is an inevitable trend, not only for companies, but for the macro-economy. Globalisation makes the whole world look like borderless, it might boost international business.