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Long Report

On

Johnson & Johnson

Siraj Haq

Professional Business Report Writing

Prof. Gordana Micevski

April 30, 2013

Long Report: Johnson & Johnson 2

One Johnson & Johnson PlazaNew Brunswick, New Jersey 08933

(732) 524-0400

April 30, 2013

Ms. Gordana MicevskiPrivate Investor

Dear Ms. Micevski,

I am writing this letter to present to you the enclosed report, Johnson & Johnson, which you had requested earlier to discuss the viability of investing in Johnson & Johnson. This report provides an overview of the company history, company profile, employee relations, financial analysis, and stock history. The report also contains information regarding the current state of the industry as well as the major competitors of Johnson & Johnson. As you will find through this report, it can be seen that Johnson & Johnson is a strong company with a broad scope, making it a good investment opportunity.

Johnson & Johnson is a diverse company, being comprised of 250 companies located across 57 countries. The company focuses on a broad range of products, specifically, consumer products, pharmaceuticals, and medical devices and diagnostics. The company’s products are very widely accepted in the market and the company has a strong pipeline to support its future endeavors. Although there has been some minor setbacks with the issue of recalls, the company is making constant progress in making necessary changes in limiting recalls, thus saving the company future lawsuits and money.

I hope that you find this report to be useful when making your investment decision regarding Johnson & Johnson. Please feel free to contact myself with any questions or concerns you have. I look forward to hearing your feedback and your final decision regarding your investing in Johnson and Johnson.

Sincerely,Siraj HaqFinance officerJohnson & Johnson


One Johnson & Johnson PlazaNew Brunswick, New Jersey 08933

(732) 524-0400

Siraj Haq

Report Prepared for:

Mrs. Gordana Micevski April 30, 2013


Table of Contents

Letter of transmittal……………………………………………………………………………..2

Title Page………………………………………………………………………………………..3

Abstract………………………………………………………………………………………….5

Company History………………………………………………………………………………..6

Company Profile………………………………………………………………………………...9

Management Structure………………………………………………………………………….11

Employee Relations Policies……………………………………………………………………13

Financial Analysis………………………………………………………………………………14

Stock History……………………………………………………………………………………16

State of Industry………………………………………………………………………………....18

Competition Analysis……………………………………………………………………………20

Current Issue to be addressed……………………………………………………………………22

References………………………………………………………………………………………..27


Abstract

This report provides information regarding Johnson & Johnson. The report discusses the corporate structure, company history, management structure, employee relations policies, financial analysis, stock history, current state of industry, and competition analysis.

Johnson & Johnson is a large American corporation that focuses in 3 main sectors: consumer products, pharmaceuticals, and medical devices & diagnostics. Although based in the United States and employing 180,000 people across the country, Johnson & Johnson is made up of over 250 companies located across 60 countries.

Johnson and Johnson faces its share of challenges in the marketplace, of which product recalls being the most significant. The current issue of product recalls is addressed in this report, along with discussing possible solutions in solving this problem.


Company History

THE BEGINNING

The Johnson and Johnson Company was founded in the year 1886 and has transformed as

one of the leaders in healthcare and consumer products. Johnson & Johnson (JNJ) was founded

by the Johnson brothers, Robert Wood Johnson, James Wood Johnson, and Edward Mead

Johnson, in New Brunswick, NJ. The brothers were dedicated to developing a successful

company that gave back to the community and was at the forefront of medicine and medicinal

advancements (“Our history,” 2013d).

One of the earliest projects of the company was publishing the text called “Modern

Methods of Antiseptic Wound Treatment” in 1988. This text served as the guide in antiseptic

surgery field for years to come. In 1894, the company made constant efforts to make the process

of childbirth safer by launching maternity kits. In the same year, the company introduced baby

powder to the market, which began the company’s movement into baby products. In 1924, the

company began to further grow and opened its first overseas location in the United Kingdom. By

1931, the company expanded further by spreading south into Mexico, and in the same year into

South Africa and Australia (“Our history,” 2013d).

THE GENERAL

In 1932, Robert Wood Johnson II, son of the original founder, took over the company and

moved the company towards a more decentralized approach of a family of companies. He served

as the chairman until 1963. Robert Jr. was a WWII Army General, and he believed in


decentralization; under his management, the managers were given substantial freedom, and

company believed and stuck to this way in conducting business to this day (“History,” 2013b).

In 1937, the company launched facilities in Brazil and Argentina. JNJ acquired Ortho

Research Laboratories, Inc. who specialized in women’s health products. In 1944, Dr. Philip

Levine, founder of the rH factor, joined the Ortho Research Laboratories, Inc. which established

and further progressed the company toward the field of diagnostics (“Our history,” 2013d).

CONSTANT GROWTH

In 1944, the company went public and joined the New York Stock Exchange. In 1949,

Johnson & Johnson launched another company: Ethicon, Inc. In 1957, the company launched its

first facility in India. In 1959, JNJ acquired McNeil Laboratories, as well as the rights for

Tylenol, located in the United States and Europe. JNJ renamed McNeil Laboratories to Ortho

McNeil Laboratories. In 1961, Janssen Pharmaceuticals in Belgium also joined the JNJ family

(“Our history,” 2013d).

In 1988, JNJ joined the Safe Kids Foundation as founding partner, an initiative to

decrease preventable and accidental injuries in children. Between 1989 and 2002, the company

further expanded with the acquisition of Neutrogena Corporation, Kodak’s Clinical Diagnostics

business, Cordis Corporation, Tibotec-Virco BVBA, and Centocor. In 2006, the company

acquired Pfizer Consumer Healthcare, thus, adding products like Listerine and Benadryl to the

company’s profile (“Our history,” 2013d).

COMMITMENT TO THE COMMUNITY

The Johnson and Johnson Company always valued the importance of giving back to the

community. The company’s core value is to always put the customer and patient first. The

company has many initiatives to give back to the community such as the preventing diseases,


supporting safety of children in developing countries, and protecting the environment (“Our

history”, 2013d).

In 2010, the company joined the United Nations’ Millennium Development Goals, to

help keep the mothers and children in developing nations healthy. The Johnson and Johnson

company currently sponsors free mobile health services for mothers and pregnant woman (“Our

history,” 2013d).

PRESENT

Today the Johnson and Johnson Family of Companies ranks as:

The world’s sixth-largest consumer health company

The world’s largest and most diverse medical devices and diagnostics company

The world’s fifth-largest biologics company, and

The world’s eighth-largest pharmaceuticals company

Although the headquarters are based in New Brunswick, New Jersey, USA, the company

employs over 180,000 people across the United States. Worldwide, Johnson & Johnson is made

up of over 275 companies located across 60 countries. (“Our company,” 2013c)


Company Profile

The company’s profile consists of three major market segments: Consumer Products,

Medical Diagnostics & Devices, and Pharmaceutical Products.

Consumer Products:

The consumer segment of JNJ’s profile consists of a vast variety of products. The

company states that they are dedicated to providing quality products utilizing the latest

technologies, research, and science. The consumer products are available to the general public

for purchase and can be found in grocery stores, drug stores, and other retail outlets. The first

component of the consumer segment is baby products, which consist of popular lines like

Johnson’s ® Destin ® Natusaun ® Penaten ® and Prim’age ®

The consumer segment also consists of cosmetic care product lines like

Neutrogena ® Aveeno ® Clean & Clear ® Bebe ®

Roco ® Rogaine ® and Lubriderm ® Visine ® and Acuvue ®

Consumer segement also includes wound care and topicals, Oral Healthcare products, Womens

products and Eye products. Examples of a few include big brands like

Band-Aid ® Bengay ® Neosporin ® Listerine ® Rembrandt ® K-Y ® Carefree ®

More importantly Over-the-counter medications such as

Tylenol ® Zyrtec ® , and Benadryl ®

and nutritionals such as

Splenda ® and Lactaid ®

are also a part of the consumer product line (“Company structure,” 2013b).


Medical Devices & Diagnostics:

Like the consumer segment of JNJ’s profile, Medical Devices & Diagnostics also

consists of a large variety of products supported by the company. For instance, the company

supports orthopedic products like implants, joint replacements, and sports medicine products.

Lifesaving medical surgery products include cardiovascular disease products, coronary disease

products, peripheral vascular and obstructive disease products (stents), and neurovascular

surgery products. Diagnostic tools include products for arrhythmias, diabetes products and blood

glucose monitors, insulin delivery devices. Surgical room products include general surgery

products, bariatric surgery tools, urologic surgery tools, hernia surgery tools, aesthetics products,

surgical instruments, and infection prevention products (“Company structure,” 2013b).

Pharmaceutical Products:

The last segment of the company is pharmaceutical products. The company invested $5.1

billion in 2011 for research in new drugs. The company focuses on a vast variety of therapeutic

areas including, cardiovascular, internal Medicine, immunology, central nervous system,

infectious diseases, and oncology. The company also has a robust pipeline of popular products

like

Aciphex ® Remicaide ® Risperdal ® Duragesic ®

Procrit ® and Topamax®

(“Company structure,” 2013b).


Management Structure

The management structure for JNJ is very complex since there is a lot of coordination

involved among the 3 segments as well as the individual franchises of each segment.

The Management Team, or also known as the Executive Team, consists of 5 members,

including the CEO, Alex Gorosky. This team assumes the responsibility of the operations of the

company as a whole as well as allocation of resources. This team is also responsible for

coordinating the 3 different business segments (“Board,” 2013a).

The company also consists of 13 Board of Directors, each of whom is selected by the

investors. Twelve of the thirteen board of directors have an “independent” status as per the New

York Stock Exchange. The role of the Board of Directors is to hold the ultimate authority, except

in cases where investors and stockholders have the final say. The Board of Directors are also

responsible for appointing senior management to the company, providing oversight of the

management, and serving on Board Committees to fulfill certain responsibilities.


The Board of Directors for JNJ include:

(“Board”, 2013a).

There are currently six Board Committees that work together:

Alex Gorsky, CEO

Mary Sue Coleman

James G. Cullen Ian E. Davis Michael M.

Johns

Susan Lindquist

Anne Mulcahy Leo F Mullin William

PerezCharles Prince

David satcher

A. Eugene Washington

Ronald Williams


(“Board,” 2013a).

The Consumer, Pharmaceutical, and Medical Devices & Diagnostic Segments are then each

managed individually and usually regionally. The specifics of the management for each segment

have not been disclosed by the company (“Board,” 2013a).

Employees Relations Policies

Compensation and denefits

Committee

Nominating and corporate

Governance Committee

Finance Committee

Regulatory, Compliance & Government

Affairs Committee

Science, Technology, & Sustainability

Committee

Audit Committee


JNJ acknowledges that its employees are the company’s greatest asset. The company

affirms in their belief that treating their employees well is one of their top priorities, because it is

the employees who help the company progress and flourish. Additionally, the company is big

supporter of diversity. On their website, the company acknowledges that it recognize differences

in gender, age, race, nationality, sexual orientation, physical ability, and thinking styles. The

company does not tolerate discrimination on the basis of these differences and in fact, celebrates

diversity and proclaim that diversity brings richness to the work environment. In order to educate

employees about the value of diversity, the company has established Diversity University, where

employees are required to complete training modules that demonstrate diversity and the

company’s commitment. The company also has established an Office of Diversity & Inclusion

for employees who may have any concerns (“Our people,” 2013e).

The company is strong believer in professional growth and thus offers programs and

activities to their employees. For example, there is an Employees Resource Group. This is a

voluntary, employee-led group based on similar interests and goals. It allows for a forum for

employees to pass ideas off of and further develop professionally. The company also supports

Mentoring Programs that pair employees with mentors, who help the employee further develop

both professionally and personally (“Our people,” 2013e).

For its supportive environment, the company has been recognized as a great workplace

for employees. JNJ sticks to its commitments by beings recognizes as one of the top 50

companies for Latinas, and one of the top 100 companies for working mothers for the past 26

consecutive years (“Our people,” 2013e).

Financial Analysis


Johnson and Johnson has grown tremendously over the years, sometimes exponentially.

Without the finances JNJ was able to keep up with, it would have been impossible for JNJ to

become the giant pharmaceutical company it has become. In 2012, the consumer industry grew

by 2.9%, pharmaceutical industry grew by 4.0%, and the medical devices/diagnostic industry

grew by 6.4% (“Industry,” 2013c). The financials of the company from past five years, 2007 to

2012, keeps up with the company history and demonstrate consistent growth within the

company.

Johnson & Johnson financial statements and ratios analysis show that the company is

doing well and profiting. The following charts from Hoover’s online business database shows a

quick overview of the company’s financial analysis.

Johnson & Johnson

New Brunswick, NJ United States • NYSE JNJ

Net Income of JNJ for past 5 years

Source : Hoover’s Online database http://eres.medaille.edu:2292/H/company360/overview.html

http://eres.medaille.edu:2292/H/company360/overview.html?companyId=10824000000000


The charts here help to understand the financial standing of JNJ. The bar graph in previous page

displays the Net Income of JNJ over the period of 5 years to be fairly consistent, fluctuating

slightly with the highest pay period being 2010, and lowest in 2011. The bar graph below shows

the total revenue of JNJ over the past 5 years to be consistent as well, actually even rising

through the years, which is a definite positive sign for the financial growth aspect of company.

Revenue for JNJ for past 5 years



The Financial ratios here convey a great deal about the financial standing of Johnson and Johnson.The price per ratios compare how well the company is related to the price of its shares. Having a high return on assets and on equity shows that the company’s management is utilizing its resources properly and efficiently. The current ratio, measures the liquidity and ability to pay off debts, and since anything over 1 is a good sign, JNJ is doing very well.

Financial Ratios

Price/Sales Ratio 3.41

Price/Book Ratio 3.52

Price/Earnings Ratio 21.14

Price/Cash Flow Ratio 14.90

Return On Assets 9.24%

Return On Equity 17.81%

Current Ratio 1.90




Stock History

Johnson & Johnson

New Brunswick, NJ United States • NYSE JNJ

Last Close 26-Apr-2013 $85.22

52-Week High $85.22

52-Week Low $61.71

60-Month Beta 0.55

Market Cap $227,902.36 M

Shares Outstanding 2,795.32M

Dividend Rate $2.44

Dividend Yield 2.94%


The current stock price for the company is $85.22. This demonstrates Johnson &

Johnson’s ability to grow, since the stock was valued at $65.17 in March of 2012 and $50 in

January of 2009. The stock provides a Price per earnings per share (P/E) of 20.64, An Earnings

per share (EPS) of 3.86, and dividend yield of 2.94%. According to Hoover’s online database,

the company is also able to pay a dividend of $2.44 for its 2,795,320 outstanding shares, and not

http://eres.medaille.edu:2292/H/company360/overview.html


many companies are able to accomplish these stats in today’s economic down times (“Stock,”

2013d).

Stock prices of Johnson and Johnson, over past 10 years (04-12)


The Chart above is customized chart to show the Stock prices of JNJ for the past ten years. This

chart demonstrates the company has been doing well over this period of time, and specially

demonstrates its ability to sustain hard times. As seen in the graph, after every significant drop in

the stock price, JNJ bounced back even bigger that before, thus proving its ability to sustain the

economic bad times, and somehow make it all work out by increasing the stockholders and the

company value.



State of Industry

The industry for pharmaceuticals and medical devices/diagnostics is currently going

strong since there are many advancements progressing in the industry and the need for

pharmaceuticals and medical devices is constant. The industry for consumer products is also

steady since customers use many of these products on a daily basis.

Consumer Personal Care Products

The consumer personal care products industry is made up of companies that manufacture

cosmetics, grooming products, and toiletries. The demand for personal care products is expected

to grow at a constant rate since the demand to look good is constant. In addition, the aging

population may help the company further grow as more money is spent on cosmetics and anti-

aging products. Industry research has demonstrated that the growth of this industry has remained

constant despite financial ups and downs, the credit crisis, and recession. However, the growth of

the industry is still someone what dependent on the health of the economy. Larger personal

income will increase sales of high end cosmetics and personal care products. Currently, it is

forecasted that the industry will grow at a compounded rate of 4 percent between 2013 and 2017

(“Industry,” 2013b).

Pharmaceutical Products

The pharmaceutical products industry is made up of companies that develop,

manufacture, and market pharmaceutical drugs. Currently, the demand for pharmaceuticals are

on the rise with a rise in cancer, HIV/AIDs, and other rare diseases. However, many

pharmaceutical companies are in a tight position with limited room for improvement with


regards to drugs in major disease states such as Hypertension and Hyperlipidemia. In addition,

the growth of this industry is contingent on FDA approval, FDA regulation, and approval from

insurance companies to pay. Many of the newer chemotherapy options are very expensive with

limited data and thus, may experience resentment from insurer companies to easily adopt them as

standard practices. Nevertheless, the industry is expected to grow as the demand to cure illness

will always be present. Thus, it is forecasted that the industry will grow at a compounded rate of

5 percent between 2013 and 2017 (“Industry,” 2013b).

Medical Devices and Diagnostics

Companies in the medical equipment and supplies industry manufacture surgical and

medical equipment, dental equipment, and surgical appliances. The demand for medical devices

is on the rise and advancements are made in medical technology. New technology helps ensure

that medical procedures are safer, more accurate, and easier in many cases. Thus, surgeons and

physicians are always open to new technology and thus, greater push is made to develop

equipment that will be longer lasting, more durable, and safer. However, the demand for these

products may be limited depending on the disease state and thus, the market may be limited in

certain cases. Nevertheless, the industry is expected to grow as new technology is developed.

The industry is forecasted to grow at a compounded rate of 5 percent between 2013 and 2017.

(“Industry,” 2013b).


Competition Analysis

JNJ faces competition in three different industry segments. Therefore, although, JNJ has

more competition it has a broader scope of products and thus, has larger gross revenues and

larger profits, although not necessarily the largest net profit margins.

In the consumer care products, JNJ competes with companies like Unilever and Proctor

& Gamble. In pharmaceutical products, JNJ competes with companies like Pfizer, Bristol-Myers

Squib, Novartis, and AstraZeneca. In medical devices and diagnostics, JNJ competes with

companies like Boston Scientific and Smith & Nephew. (“Competitive,” 2013b)

In order to successfully compete with its competitors in each of these industries, JNJ

offers a robust line of products and pharmaceuticals to help boost their sale. In addition, the

company has a strong pipeline in terms of pharmaceutical products that they are currently in the

process of developing and researching.

In the competitive landscape analysis, it can be seen that the gross profit margin median

for JNJ is 67.78%, whereas the industry gross profit margin median is 72.0%. JNJ’s net profit

margin is 16.14%, similarly, the industry’s net profit margin median is 16.01%. In terms of price

to earnings ratio, JNJ is valued at 21.14, compared to the industry’s median of 19.12.

(“Industry,” 2013c)


Comparison to Industry & Market from Hoovers Online Database:

Company Industry Median Market Median

Price/Sales Ratio 3.41 3.09 1.25

Price/Earnings Ratio 21.14 19.12 27.62

Price/Book Ratio 3.52 3.11 1.99

Price/Cash Flow

Ratio

14.90 12.85 8.70

Total Revenue Net profit margins

2012 Annual Sales and Net profit margins of JNJ and its biggest competitors.

Source : Hoover’s Online database : http://eres.medaille.edu:2292/H/company360/overview.html

As illustrated in the table above, the JNJ manages to keep all its financial ratios above industry

medians and its competition. Similarly, the bar graph demonstrates the annual sales of Johnson

and Johnson to be much higher than its closest competitors Pfizer, Novartis and Covidien.



Although the net profit margin shows Pfizer to be leading JNJ, JNJ still makes more money since

its annual sales are more than any of its competition.

Current Issue to be Addressed

Johnson & Johnson is a visionary company with a positive mission, vision, and core

values. The company strives to provide excellent products in the consumer, pharmaceutical, and

medical devices sector. Although the company is truly a model company, it has been under the

spotlight for numerous product recalls that pose a safety threat to its patients and consumers. JNJ

needs to make the necessary adjustments, as the numerous product recalls and associated

lawsuits has put the company in an unfavorable position as well has cost the company and its

investors billions of Dollars.

Product recalls for JNJ vary from Tylenol, Motrin, Rolaids, KY Jelly, glucose monitors,

insulin infusion pumps, and knee replacement devices (Silverman, 2013). With the ethics of care

due to its customers in mind, the company is prompt to recall products to ensure consumer and

patient safety. Although there is little guarantee of all defective products being pulled off

shelves, and the message is conveyed to all product users. According to the ‘due care’ theory, as

the manufacturer and being trusted/depended on by the consumers, it’s the duty of JNJ to take

care that consumers are not harmed by JNJs product. Not providing the ‘due care’ to its

consumers creates opportunities for lawsuits and loss of billions of Dollars.

The issue of recalls is not limited with Johnson and Johnson, it is actually an industry

wide problem. The Food and Drug Administration (FDA) defines a recall as “a firm’s voluntary

removal or correction of a marketed product that the FDA considers to be in violation of the

FD&C Act and against which FDA could initiate legal action” (Demian, n.d.). Keeping that in

mind, an issue/injury caused by a non-RPP consumer, does not prompt for a recall. A product is


recalled when the evidence is shown that the default was either in the manufacturing or the

design itself. The FDA plays an important role is the process of product recalls, as it provides

regulatory oversight of any recall, and comments on any proposed strategy by the company

whose product is being recalled. Further, the FDA reviews if effective Communication is

established with patients, physicians, hospitals, risk managers, Consignees, and the FDA. Lastly,

FDA is responsible for the audit effectiveness of the recall, witnessing if the recalled product is

properly destroyed or reconditioned using the approved reconditioning plan (Demian, n.d.).

There has been a constant growth in the number of medical device recalls in the past

decade. As seen in the graph below, the number of medical devices that has been recalled has

been constantly growing from year 2004 to 2011. There are many reasons why the number of

Source: http://blog.assurx.com/2013/02/11/study-fda-enforcement-growing-for-medical-device-companies/

of recalls has been on the rise, as Mr. Causey states “these rising numbers can be attributed to a

conscious FDA policy shift that includes more efficient review of warning letters, increased

prosecution of misdemeanors, creation of the “Bad Ad” program, and the increased role and

responsibility of FDA enforcement officials” (Causey, 2013)

Most recently, JNJ recalled DePuy ASR, a hip replacement device. The company

expressed concerns over early failure rates and severe complications suffered by patients already

http://blog.assurx.com/2013/02/11/study-fda-enforcement-growing-for-medical-device-companies/


implanted with the device. As a result of the complications, failure rates, and recall, the company

now faces over 10,000 lawsuits with regards to the DePuy hip replacement. In a recent hearing,

the company lost its first DePuY ASR lawsuit. The company is responsible for paying the

plaintiff $8.3 million in damages. Based on this hearing, it is estimated that the company will pay

billions and billions of dollars in response to the malfunction of the DePuy ASR hip replacement

device. It is estimated that over 30,000 patients were transplanted with this device. Additionally,

incriminating evidence was presented at the trial documenting that the company had considered

redesigning the product to correct for flaws but quickly abandoned the product due to loss of

sales (Lawson, 2013). It is believed that the company was aware of the poor design of the

product - the metal cup and ball components that would rub against each other, resulting in

metallic debris in the surrounding tissue, leading to tissue and bone damage. Thus, it is apparent

that the company is guilty of negligence, in its actions and deliberately avoiding the costs of

preventing patient hazards.

The management of JNJ should consider implementing the guidelines provided by the

FDA on preventing and correcting medical device errors. These guidelines should be reviewed

and instituted by the company to prevent future recalls. The FDA states that the first step in

preventing a recall should be adequate review of the product quality information. The company

should take time to look into the results of clinical trials and appropriate product quality

information before bringing the product to market. The FDA also stresses that the company

should ensure proper use of statistical methods and cross verification of the analysis in order to

analyze the true risk posed by the product. Additionally, the data should be cross referenced

across different data sources in order to identify the extent and quality of problem. If a problem

is identified, the FDA states that appropriate actions should be taken to correct the safety


problem. Once the corrective action has been instituted, the company should perform a re-

analysis of the product to ensure that the problem has truly been solved and the corrective action

will result in a better safety profile for the patient (Demian, n.d.).

According to active chief of the recall branch, Hany Demian, the FDA asks the recalling

firms to follow these guidelines to minimize further complications and losses:

Assess problem early and develop an efficient recall strategy

Contact suppliers and customers that ordered and/or received the recalled product.

If necessary, issue a press release clearly stating the risks associated with the recall.

Supply all necessary information to minimize health risks to consumers

Take action to prevent any future recalls

Keep the FDA involved and up to date regarding the current recall.

Based on the implementation of these strategies provided by the FDA, Johnson & Johnson can

help prevent medical device recalls and ensure their commitment to maximize patient safety.

Another effective way JNJ can implement to solve the recall problem is the “Root Cause

Analysis”. The first step in the root cause analysis process is to create a problem statement, and

identifying the device failure mechanism. Second step is brainstorming all the possible causes,

and narrowing down to identify the primary causes. Lastly, using the information gathered,

create causal chain to identify the root cause of the problem at hand. Identifying to root cause

using this analysis process has proved to be effective in the past, and prevented further recalls of

similar status (Demian, n.d.).

Currently, the company is in a bad position as it is subject to numerous lawsuits regarding

product recalls. Furthermore, the company continues to recall products on a regular basis,

although recalls can vary in severity of risk to the patient. The recalls have obviously negatively


impacted the company in terms of both reputation and financials. Therefore, it is imperative that

Johnson & Johnson implement strategies mentioned in this report and follow protocols to

prevent and better control the product recalls issue.


References

Causey, M. (2013, February 11). Study: FDA enforcement growing for medical device

companies. AssurX Blog. Retrieved April 27, 2013, from

http://blog.assurx.com/2013/02/11/study-fda-enforcement-growing-for-medical-device-

companies/

Demian, H. (n.d.). Preventing and addressing problems in the medical device recalls. Retrieved

April 8, 2013, from

http://www.fda.gov/MedicalDevices/Safety/RecallsCorrectionsRemovals/default.htm

Hoovers Online Database (2013a). Competitive landscape. Retrieved April 9, 2013, from

http://eres.medaille.edu:2292/H/company360/competitiveLandscape.html

Hoovers Online Database (2013b). History overview. Retrieved April 9, 2013, from

http://eres.medaille.edu:2292/H/company360/history.html

Hoovers Online Database (2013c). Industry overview. Retrieved April 9, 2013, from

http://eres.medaille.edu:2292/H/industry360/overview.html?industryId=1192

Hoovers Online Database (2013d). Stock quote and chart. Retrieved April 9, 2013, from

http://eres.medaille.edu:2292/H/company360/detailedStockQuote.html

Johnson & Johnson (2013a). Board of directors. Retrieved April 7, 2013, from

http://www.investor.jnj.com/governance/board.cfm

Johnson & Johnson (2013b). Company structure. Retrieved April 7, 2013, from

http://www.jnj.com/connect/about-jnj/company-structure/

Johnson & Johnson (2013c). Our company. Retrieved April 7, 2013, from

www.jnj.com/connect/about-jnj/

http://www.jnj.com/connect/about-jnj/

http://www.jnj.com/connect/about-jnj/company-structure/

http://www.investor.jnj.com/governance/board.cfm

http://eres.medaille.edu:2292/H/industry360/overview.html?industryId=1192

http://eres.medaille.edu:2292/H/company360/history.html

http://eres.medaille.edu:2292/H/company360/competitiveLandscape.html

http://www.fda.gov/MedicalDevices/Safety/RecallsCorrectionsRemovals/default.htm




Johnson & Johnson (2013d). Our history timeline. Retrieved April 7, 2013, from

http://www.jnj.com/connect/about-jnj/company-history/

Johnson & Johnson (2013e). Our people and diversity. Retrieved April 7, 2013, from

http://www.jnj.com/connect/about-jnj/diversity/

Lawson, A. (2013, March 19). DePuy hip lawsuits, Johnson & Johnson loses ASR lawsuit.

Injury Lawyer News. Retrieved April 7, 2013, from

http://injurylawyer-news.com/2013/03/johnson-johnson-loses-first-depuy-asr-lawsuit/

Silverman, E. (2013, April 5). A real false alarm: Johnson & Johnson recalls another product |

Pharmalive. Pharmalive | The Pulse of the Pharmaceutical Industry. Retrieved April 9,

2013, from http://www.pharmalive.com/real-false-alarm-johnson-johnson-recalls-

another-product

http://www.pharmalive.com/real-false-alarm-johnson-johnson-recalls-another-product

http://www.pharmalive.com/real-false-alarm-johnson-johnson-recalls-another-product

http://injurylawyer-news.com/2013/03/johnson-johnson-loses-first-depuy-asr-lawsuit/

http://www.jnj.com/connect/about-jnj/diversity/

http://www.jnj.com/connect/about-jnj/company-history/

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