Johnson and Johnson Competitors Analysis

Since the global pandemic, I’ve been keeping a watchful eye on the healthcare industry, which has seen an unprecedented level of growth. As a novel virus swept across the world, governments leaped into action to mobilize new health products and processes globally, saving many lives.

Consequently, many healthcare companies are in a stronger position in 2022 than ever before, as you’ll see throughout this Johnson and Johnson competitors analysis. Not that J&J needed the help of a pandemic; it is the world’s largest healthcare company.

J&J sells products in over 175 countries, and I suspect you’d find them in most households throughout the developed world. I have Tylenol, Neutrogena skin products, and baby products in my house alone – all from Johnson and Johnson.

In 2018, before the pandemic, the global healthcare industry was worth $8.45 trillion, having grown at a compound annual growth rate (CAGR) of 7.3% since 2014. In 2022, it is expected to hit $11.9 trillion.

Factors contributing to this growth include a rapidly aging global population, strong growth in emerging markets, health insurance reforms, and the Covid-19 pandemic.

Now is an exciting time in the healthcare industry, thanks to disruption from new tech, artificial intelligence, data, and other innovative tools. Johnson and Johnson is more than capable of taking advantage of these changes. But will more agile startups get there first and steal J&J’s market share? Only time will tell.

This Johnson and Johnson competitors analysis offers insight into the healthcare industry and the threats that J&J faces from rival firms.

The Bottom Line Up Front

If you’d asked me three years ago about Johnson and Johnson, I’d have been able to vaguely explain what the company does and name a few of its products. After the pandemic, it’s a different story. Awareness of the J&J brand has grown exponentially, and the company’s revenue has increased with it.

Today, Johnson and Johnson is one of the biggest healthcare companies globally, thanks to its extensive product portfolio and investment in R&D.

List of Johnson and Johnson’s Main Competitors

• Procter & Gamble
• Pfizer
• Unilever
• GlaxoSmithKline

Johnson and Johnson Business Strategy

Johnson and Johnson is an American multinational healthcare corporation founded in 1886. It develops pharmaceuticals (under its Janssen Pharmaceuticals arm), medical devices, and consumer packaged goods. The company’s headquarters are in New Brunswick, New Jersey.

J&J’s business strategy focuses on building long-term brand equity, sustainable customer loyalty, and shareholder value by providing high-quality healthcare products and services. It operates primarily using a production revenue model.

The J&J Corporation includes over 250 subsidiary companies – including household brand names like Tylenol and Clean & Clear – with operations in more than 60 countries. There are only two companies in America with an AAA credit rating, and Johnson and Johnson is one of them. Astoundingly, that’s a higher score than the US government.

In 2021, J&J came 36th on the Fortune 500 list of the largest US corporations, with total revenue of $93.77 billion. That’s a 13.6% increase year-on-year.

The company also announced in 2021 that it would split into two publicly traded companies, one focusing on pharmaceuticals and the other focusing on consumer products. It was probably the high-margin drug business, which saw accelerated growth during the global pandemic, that influenced this decision.

Notably, J&J is one of the companies that successfully developed a Covid-19 vaccination, though it saw less success than rivals like Pfizer. The vaccine was never given a name, despite being touted as a convenient one-shot alternative to the other double-dose vaccines.

Following a disappointing first quarter of 2022 for vaccine sales, Johnson and Johnson dropped its Covid-19 vaccine revenue projections. The company’s vaccine sales for Q1 were $457 million – considerably less than Wall Street’s estimate of $785 million.

Still, the strength of J&J’s business strategy is linked directly to its breadth. The corporation doesn’t just operate in one sector of the healthcare industry but many, which makes it less vulnerable to poor results in one area.

Johnson and Johnson also invested a record $14.7 billion in research and development (R&D) in 2021 – a 21% increase from 2020. This investment reflects just how crucial emerging technologies within the healthcare industry are. For big corporations like J&J that have been around for over a century, innovation is even more critical: staving off competition from startups with fresh and sometimes revolutionary ideas.

J&J’s mission statement focuses on helping people to lead healthier lives by promoting better healthcare access and care across the globe. Its vision statement is “for every person to use their unique experiences and backgrounds, together – to spark solutions that create a healthier world.”

Johnson and Johnson Competitors Analysis

J&J competes with the following healthcare companies.

Procter and Gamble

Procter and Gamble (P&G) is a multinational consumer goods corporation headquartered in Cincinnati, Ohio. The corporation was founded in 1837 by William Procter and James Gamble. Its mission is to “use every opportunity we have – no matter how small – to set change in motion.”

P&G specializes in consumer health, hygiene, and personal care products.

The chances are, you probably have a Procter and Gamble product in your house somewhere, if not several.

From selling the first fluoride toothpaste in 1955, to creating the first disposable diapers in 1961, P&G has been behind many significant leaps forward in consumer health care products.

P&G’s business model focuses on strategic acquisitions to diversify its product line, thereby increasing the corporation’s overall market share. Notable acquisitions include Richardson-Vicks for $1.2 billion in 1985 and Wella for a reported $7 billion in 2003.

Another vital pillar of P&G’s business strategy is research and innovation. The corporation has an annual research and development budget of over $2 billion, directed at creating products and processes that promote sustainability.

Over the past decade, P&G has undergone some serious restructuring. In 2014, it announced plans to streamline the company, dropping roughly 100 brands to focus on the 65 that were left. It sold 43 beauty brands to Coty for $13 billion and transferred Duracell to Berkshire Hathaway for an exchange of shares. This strategy proved successful.

In 2018, two key things happened. First, P&G unveiled a simplified corporate structure with just six business units. Second, it acquired the consumer health division of Merck Group for $4.2 billion, renaming it Procter and Gamble Health Limited.

This acquisition makes P&G a more direct competitor of J&J. In 2021, Procter and Gamble generated $76.12 billion in revenue.

Pfizer

Pfizer Inc., a multinational biotechnology and pharmaceutical corporation, was instrumental in the fight against Covid-19 thanks to the vaccine it created. The company was founded in 1849 in New York, and its headquarters are still in Manhattan, New York.

Pfizer uses a production revenue model. Its products treat various health conditions, including cardiovascular and metabolic issues, rare diseases, cancer, immune disorders, and inflammation. Pfizer also provides biosimilars, injectable pharmaceuticals, and active pharmaceutical ingredients.

It sells its products using hospitals, retailers, wholesalers, government agencies, and pharmacies. Pfizer’s business strategy emphasizes maintaining a solid and efficient distribution network and widespread manufacturing facilities. It has facilities in Italy, India, Japan, China, Belgium, Singapore, Germany, Ireland, and the US.

Pfizer ranks 43rd on Forbes’ Fortune 500 list. The company’s growth strategy focuses on diversifying its portfolio of products and services through strategic acquisitions, of which it has made 35 in total.

In 2022, for example, the company acquired Biohaven Pharmaceuticals, a leading manufacturer of innovative migraine treatments, for $11.6 billion. That same year, Pfizer also acquired Arena Pharmaceuticals, a company known for developing therapies for treating immuno-inflammatory diseases, for around $6.7 billion.

During the Covid-19 pandemic, Pfizer played an essential role in developing and distributing the Pfizer-BioNTech vaccine. In March 2022, the company joined the Covid-19 Therapeutics Accelerator funding vehicle, a $125 million initiative set up by the Bill & Melinda Gates Foundation.

However, some have accused Pfizer of pandemic profiteering; it made $37 billion from its vaccine alone in 2021 and backed the draconian use of a vaccine passport mobile app in Canada, eroding public trust.

In 2021, Pfizer reported a 92% operational growth in revenue to $81.3 billion, compared with $41.7 billion the year before.

Unilever

Unilever PLC is a multinational consumer goods company founded in 1929 with headquarters in London, England. It is the world’s largest soap manufacturer, but its product portfolio also includes vitamins, supplements, beauty products, food, beverages, and home care products.

With over 400 brand names in 190 countries, Unilever utilizes a production revenue model. Several of these brands bring over 1 billion euros annually.

Like J&J and Procter and Gamble, Unilever’s business model relies heavily on research and development. The company has development facilities in India, the UK, China, the Netherlands, and the US.

In 2018, Unilever spent $809 million globally on R&D, and in 2021, it announced plans to pursue fewer but bigger projects, with a 30% reduction in projects by 2022 while simultaneously doubling project size.

The company has shifted its business direction over the past few years to focus on sustainability through strategic partnerships.

In 2020, Unilever announced a partnership with Alegenuity, a company researching the potential uses of microalgae in foods. A year later, it announced another partnership with Glasgow-based company ENOUGH to create plant-based meat alternatives.

During the pandemic, Unilever played a vital role in shaping the global response to the virus. For example, Unilever partnered with the UK government to launch a hygiene campaign to tackle Covid-19. The campaign reached over one billion people in the developing world, providing soap, surface disinfectants, sanitizer, and advice.

Despite cultivating an ethically responsible outward appearance, Unilever’s track record for sticking to its morals isn’t squeaky clean.

In the Indian town of Kodaikanal in 2001, the state caught Unilever dumping toxic mercury waste in a highly populated area. Then, in 2014, Greenpeace accused Unilever of causing deforestation by buying unsustainable palm oil. The most recent blow came in 2019 when BreakFreeFromPlastic named Unilever one of the top ten global plastic polluters.

Despite these controversies, Unilever is in a strong financial position. In 2021, it generated 52.44 billion euros in revenue, an increase of more than 1.5 billion from 2020.

GlaxoSmithKlein

GSK PLC, formerly GlaxoSmithKline, is a multinational biotechnology and pharmaceutical company founded in 2000 with headquarters in London, England. According to its website, the company’s mission is to “unite science, technology and talent to get ahead of disease together.”

GSK is one of the world’s largest pharmaceutical companies (it was the sixth largest in 2019, according to Forbes). Currently, it is ranked 264 on Forbes’ Fortune 500 list, behind J&J and P&G.

When the pandemic hit, GSK was already in a strong position thanks to its previous work on vaccines and other vital medications. For example, several of GSK’s products are on the WHO’s list of essential medicines, including amoxicillin, pyrimethamine, and mercaptopurine. It also developed the first malaria vaccine.

In 2020, the UK government signed a contract for 60 million doses of GSK’s Covid-19 vaccine, which it developed with Sanofi. The US also ordered 100 million vaccine doses in a $2.1 billion deal.

Since then, GSK has unsurprisingly announced it will prioritize investment in R&D for vaccines, and other speciality medicines, which it expects will grow to roughly three-quarters of company sales by 2026.

To reinforce its investment in vaccine-based R&D, GSK announced in 2022 that it was acquiring clinical-stage pharmaceutical company Iffinivax, Inc., for a $2.1 billion upfront payment. Affinivax is pioneering the development of a novel class of vaccines to fight illnesses like pneumonia and meningitis.

In 2021, GSK hit £34.1 billion in revenue, putting it behind Johnson and Johnson.

Johnson and Johnson SWOT Analysis

I have included a SWOT analysis of J&J below, showing the corporation’s strengths, weaknesses, opportunities, and threats.

Strengths

• Investment in research & development helps J&J to stay ahead of rival firms
• High revenue allows the company to expand into new sectors and develop new solutions
• Exceptional credit rating proves the corporation is financially sound
• J&J owns some of the biggest household names, resulting in strong brand recognition and consumer trust
•  The corporation has a global reach; its products are sold in over 140 countries
• Stable market performance, as shown on the corporation’s investment sheet, which documents 58 consecutive years of a dividend increase

Weaknesses

• J&J’s revenue distribution is uneven: 50.7% comes from the pharmaceutical arm, and three drugs drive immunology sales
• A judge in Oklahoma found the corporation guilty of distributing false information about opioids, implementing it in unethical practices
• A former senior executive for Johnson and Johnson is reportedly suing the corporation for gender discrimination, which tarnishes its reputation
• A whistleblower has aimed kickback allegations of bribery at J&J

Opportunities

• The corporation could use mergers and acquisitions to broaden its scope and attract more business
• New technologies are the key to more revenue
• The telehealth industry is experiencing a boom which J&J could tap into
• Government contracts could be a vital source of revenue if another global health crisis arises

Threats

• The corporation had to pay $100 million to settle lawsuits regarding its talcum powder
• Government regulations within the healthcare industry can change rapidly
• J&J invests significant amounts in R&D, so corporate espionage is a considerable threat from employees who sell ideas to rival companies
• There are several other highly successful healthcare companies like Pfizer with which J&J must compete

FAQs – Johnson and Johnson Competitors Analysis

Conclusion

I’ve paid close attention to the global pharmaceutical industry over the past few years, and it’s been startling to see how a few companies have so much control over the health and wellbeing of people worldwide.

Thanks to its extensive product portfolio, Johnson and Johnson is one of these highly influential companies. Its decision to focus on research and development is wise, but as I’ve shown in this article, J&J’s rivals have the same idea.

At the end of the day, success in this industry often comes down to how much money you can invest in new technology and whether you can outbid your competitors for government contracts. Going forward, Johnson and Johnson is in a strong position to do both of these things.

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Maddy Chiffey

Maddy Chiffey loves one thing: results. She knows how thrilling it is to come up with a business idea and watch it take off. So, she now dedicates her time to working as a content creator to help other people learn how to become successful. All of the content she creates on Business Chronicler is aimed at helping you learn, grow, and thrive as a business owner.

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