Strategies are not simply plans that should be executed by the leaders in business, but a frame of mind of the leadership of a business. Success in business will only come if this was the mindset assumed by leaders in organizations. In the book, The Strategist: Be the Leader Your Business Needs, Montgomery (2012) challenges leaders by suggesting that “You and every leader of a company must ask yourself whether your strategy is a real system of value creation, which is a evidently defined purpose tightly backed by a set of mutually reinforcing parts” (78). There has been a problem in the world of business today, in that the leaders of business organizations are always seeking opportunities that they can pursue, focusing on the things they can control and not those that they cannot regulate. The reality as created serious problems for businesses, especially when the leaders are faced with challenges since they lack a purpose. In the book, the author emphasizes the need to have a purpose for your company; hence, it is from such a perspective that she explains in her book the elements of a purpose for business.
The Elements of a Purpose
By reading the book, it becomes evident that it is necessary for all businesses to begin with a purpose. Thus, there is a challenge for business leaders are challenged to formulate a purpose for their companies. To be effective in achieving this aspect, it is necessary to understand what the author means by a purpose and the important elements of it. The understanding and the clarity of the purposes play an important role in driving the company and helping it to deliver its promise to the stakeholders.
The four elements of a purpose are also the guidelines that should be used by leaders in business to formulate an effective purpose which will drive their business towards success. The first component is that the purpose should be ennobling, indicating that it should be able to make the company be dignified or noble. It is critical that the company is inspiring to all the important stakeholders of the business (Montgomery, 2012). The purpose should communicate, on an emotional level the most imperative things to all the persons involved in the business and should provide a meaning in life and work of the important stakeholders.
The second element of a good purpose is that it should put a stake in the ground (Montgomery, 2012). The idea presented in this case is that the purpose of the business should communicate what the company has been formulated to do. After all, there is an objective that each business is created to achieve and it should be communicated by the purpose. Therefore, the purpose will clearly state what should be expected of the company, and also, what should not be expected.
Another element is that a good purpose should make the company distinct by setting the business apart from others in the same industry or sector. For any business to succeed, it must be different from others, especially the competitors. Some of the sources which can be used by the business to set itself apart include technological innovation, models of business, insights into the needs that the company is expected to address, and its management among other sources (Montgomery, 2012). As such, the difference should be communicated to the customers given the reality that there are other competitors offering the same goods or services as the company.
The fourth element of a good purpose is that it should set the stage for the creation and capture value (Montgomery, 2012). In this case, the idea is that the purpose should create and communicate the value it is expected to offer the clients. Customers will only buy from the company because whatever the company is offering has value to them. To reach to this point, the value that the company is promising should be made known to the actual and potential customers.
Johnson & Johnson
The company selected for the analysis using the concepts provided by Montgomery (2012) is Johnson & Johnson. Some of the products this company manufactures and sells include medical equipments, pharmaceutical and consumer goods. Johnson & Johnson was founded in 1886 and is based in the United States, New Jersey’s New Brunswick, although it has operations across the world (Johnson & Johnson, 2011).
The Company’s Core Business
Montgomery (2012) suggests the importance of a company to state and understand its core business because this is the main driver of success. The leadership of Johnson & Johnson has publicly stated the core business of the company, as evident in its website and other information sources. The company is in the business of providing products for ensuring the health and well-being of its consumers. It has a responsibility to its clients who include patients, doctors, nurses, and the customers of its other consumer products (Johnson & Johnson, 2016). However, the main focus for the company is in the manufacturing and sales of health care products, ensuring the health and wellbeing of the consumers.
The Main Competitors
No company can succeed in its business without understanding its main competitors and developing strategies to counter the competition (Montgomery, 2012). Johnson & Johnson operates in an environment that is highly competitive leading to an emphasis on the drivers of growth in the future. To counter the competition, the company has committed itself to creating value through innovation. Merck, Pfizer, and Novartis are Johnson & Johnson’s main competitors. Besides, Boston Scientific (BSX) and Medtronic (MDT) are the main competitors within the medical equipment segment. Moreover, the company competes with Stryker (SYK) and Zimmer Holdings (ZMH) in the segment of orthopedic implants (Johnson & Johnson, 2016).
Geographical Location for Operations
Although Johnson & Johnson is founded and has its headquarters in the United States, it is a multinational company, which indicates that it has operations in different parts of the world. The leadership of the company is committed to extending its global reach by increasing its global operations. There are 250 subsidiary companies of Johnson & Johnson, and it has operations in 60 countries worldwide. The products manufactured by the company are sold in over 175 nations (Johnson & Johnson, 2016).
How the World Would Change Without Johnson & Johnson
Montgomery (2012) suggests the value of any company as evident in its ability to change the world. Johnson & Johnson has transformed the world, especially in its purpose of ensuring health and wellbeing of its clients. The company is founded with the purpose of caring for people’s health and wellbeing. It has always inspired the consumers of its products to live a longer healthier life. Johnson & Johnson is the firm that is positioned to achieve this purpose as it is hard to get well without the products offered by Johnson & Johnson. To a great extent, the world depends on these products for the health and well-being of diverse populations. The company is a diversified giant within the health care sector, which suggests that it adds a lot of value to the lives of its consumers, individual, and organizations. In fact, it has Medical Devices division “offers surgical equipment, monitoring devices, orthopedic products, and contact lenses while, the J&J’s Pharmaceuticals division makes drugs for an array of ailments” (Johnson & Johnson, 2011, n.p.). Finally, J&J’s Consumer business makes over-the-counter (OTC) drugs and products for baby, skin, and oral care, as well as first-aid and nutritional uses (Johnson & Johnson, 2011).
The Purpose of Johnson & Johnson
The purpose of the company drives its daily operations as the leaders show commitment towards achieving it (Montgomery, 2012). Johnson & Johnson is one company whose leaders has clearly identified a purpose and is working on ensuring that all the employees are working towards. The purpose of Johnson & Johnson is to build on the principles of strategic planning to guide its tactical alignment with the main objective of the company, ensuring the health and wellbeing of the people it serves (Johnson & Johnson, 2016). The current business approach of the corporation reflects the underlying design of innovative and strategic insight that is its long-standing priority on innovation and business success in the health sector. Such direction is evidenced in the recent permeation of Johnson & Johnson to use approximately 20 percent of its organizational business practice on projects, programs, and areas they believe would largely benefit the company (Johnson & Johnson, 2016).
Johnson & Johnson use a strategic business model to cement its market leadership in the market and continue gaining competitive advantage. With its huge infrastructure, Johnson & Johnson formulate a strategic focus that scales its business operations of the business process optimized framework (Johnson & Johnson, 2011). In fact, the diversification business strategy continues to position Johnson & Johnson as a market leader by moving away from unpopular and unprofitable products to the ones that are more competitive.
To achieve its purpose, the firm has generated strategic designs that include increasing its profitability, enhancing market share targets, emphasizing on customer satisfaction, and improving its brand awareness. Such deliverables guide the decision-making process based on the strategic alignment anchored on the training of employees, monitoring tips outlooks, as well as feedback scores (Johnson & Johnson, 2016). Thus, such actionable steps inform the tactical approach that Johnson & Johnson develops in achieving its decision-making goals.
One of the key organizational strategies for Johnson & Johnson that has made it to flourish is a vision. Even though Johnson & Johnson is a company growing at a rapid rate, it still assumes managerial structures, which ensures that it maintains direct ties with its clients in a bid to promote satisfaction. The culture of openness has stimulated Johnson & Johnson’s ability to manage its operations whereby the company has an open system of communication (Johnson & Johnson, 2016). Johnson & Johnson has benefited a lot from strategic planning principles, which allowed it to study the current market trends and what their competitors offer (Johnson & Johnson, 2016). Indeed, this strategy also helped Johnson & Johnson to identify their strength and weakness in the market; a fact that informed the company to come up with a program of diversification of products to suit different needs of the customers, thus making it have a higher competitive advantage compared to other players in the field.
References
Johnson & Johnson case study: Remicade, a Biotech Blockbuster (2011), European Pharmaceutical Review.1-16.
Johnson & Johnson SWOT Analysis, USP & Competitors. (2016).
Montgomery, C. A. (2012). The strategist: be the leader your business needs. New York City: Collins.
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