Cynthia Montgomery challenges leaders in business to think about the strategy, not a plan that needs to be executed but as a frame of mind. Success in business would come if this were 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). The problem has been that the leaders of business organizations are always seeking opportunities they can pursue, focusing on the things they can control and not those they cannot regulate. The problem emerges when they are faced with challenges because 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 the elements of a purpose for business in her book.
The Elements of a Purpose
Montgomery (2012) begins by suggesting that any business should begin with a purpose. Hence, it means that 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 this purpose (Montgomery, 2012). The understanding and the clarity of the purposes plays 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 the purpose. The first component is that the purpose should be ennobling, indicating that the purpose should be able to make the company be dignified or noble. The firm should be inspiring to all the 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 provide 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. Indeed, this means that the purpose should communicate what the company has been formulated to do. It should also communicate what the company does not do (Montgomery, 2012). Therefore, the purpose will clearly state what should be expected of the company.
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. There are many sources of the difference by a company, including 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.
Johnson & Johnson
The company selected for the analysis using the concepts provided by Montgomery (2012) is Johnson & Johnson. The company manufactures and sells medical devices, pharmaceutical, and consumer products. Johnson & Johnson was founded in 1886 and is based in the United States, although it has operations across the world. The headquarters of Johnson & Johnson is in New Brunswick, New Jersey (Johnson & Johnson, 2011).
The Company’s Core Business
Johnson & Johnson is in the business of providing products to ensure the health and well-being of its consumers. The company is responsible 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, with a focus on managing the effects for the long-term basis.
The Main Competitors
Johnson & Johnson operates in an environment that is highly competitive, leading to an emphasis on the drivers of growth in the future. The company has committed itself to creating value through innovation to counter the competition. Some of the major competitors of Johnson & Johnson are Merck, Pfizer, and Novartis. The opponents of the company in the medical device space are Boston Scientific (BSX) and Medtronic (MDT). In addition, Stryker (SYK) and Zimmer Holdings (ZMH) are the main competitors within the orthopedic implants segment (Johnson & Johnson, 2016).
Geographical Location for Operations
Although Johnson & Johnson was founded and headquarters in the United States, it is a multinational, 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. Currently, the company has 250 subsidiary firms where it is operating in 60 countries around the world, with its products being sold in more than 175 countries (Johnson & Johnson, 2016).
How the World Would Change Without Johnson & Johnson
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 only firm that is positioned to achieve this purpose. 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 much value to the lives of its consumers, individuals, and organizations.
Getting well without Johnson & Johnson (J&J) would be difficult. The diversified healthcare giant operates in three segments through more than 250 operating companies located in some 60 countries. Its Medical Devices division offers surgical equipment, monitoring devices, orthopedic products, and contact lenses, among other things. In essence, the J&J’s Pharmaceuticals division makes drugs for various ailments, such as neurological conditions, blood disorders, autoimmune diseases, and pain. Top sellers are psoriasis drug Remicade and cancer medication Velcade. Finally, J&J’s Consumer business makes over-the-counter (OTC) drugs and products for baby, skin, oral care, and first-aid and nutritional uses (Johnson & Johnson, 2011).
The Purpose of Johnson & Johnson
The purpose of Johnson & Johnson is to build on the principles of strategic planning to guide its tactical alignment with decision making. By utilizing the objectives, tactics, and strategies, the company should engage measures that address the primary objective of achieving its mission on the basis of short and long-term objectives (Johnson & Johnson, 2016). Evidently, to demonstrate the holistic focus of its strategy, the corporate value of Johnson & Johnson should move from merely encouraging innovation to undertake a unique initiative of enshrining the ethical practices in every aspect of its business operation, performance management, and organizational strategy.
The current business approach of the corporation reflects the underlying design of innovative and strategic acumen, that is its long-standing priority on innovation and business success. 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 should use a strategic business model to cement its market leadership in the market and continue gaining competitive advantage. With its huge infrastructure, Johnson & Johnson should formulate a strategic focus that scales its business operations of the business process optimized framework. In customizing the business process, the company has scaled down its operational expenditure, collaborating with another strategic service provides for exceptional business systems (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 products that are more competitive.
Johnson & Johnson should purpose to align its capabilities to business strategy. In this case, 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 deliverable guide the decision-making process based on the strategic alignment anchored on the training of employees, monitoring tips outlooks, and feedback scores (Johnson & Johnson, 2016). Such actionable steps inform Google’s tactical approach in achieving its decision-making goals.
For an organization to overcome internal and external threats including globalization and changing needs in the market demands, it is critical to put in place a well-thought framework that lays down strategies for overcoming the future threats (Johnson & Johnson, 2011). In addition, the initiative prepares the organization to execute its mission by laying a framework for decision-making and modalities to be used in allocating resources and how to minimize challenges.
A vision is one of the key organizational strategies for Johnson & Johnson that has made it flourish. Even though Google is a company growing rapidly, it still assumes managerial structures, which ensures that it maintains direct ties with its clients to promote satisfaction. The culture of openness has stimulated Google’s ability to manage its operations, whereby the company has an open system of communication (Johnson & Johnson, 2016). Each employee views are valued, a situation that informs why the Google developed a policy that allows employees to use 20% of their working hours to participate in personal projects. In essence, the aspect explains why the company has varied products.
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 Google 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 giving it have a higher competitive advantage compared to other players in the field.
In essence, Johnson & Johnson decided to diversify its products by venturing into new lines of units of business so as to overcome unattractive market environment by coming up with a strategy intended to make the business venture into partnership with other companies in a bid to ensure that they expand their product base (Johnson & Johnson, 2011). In that aspect, the concept makes Google’s products the most sought since it has opened up to new markets beyond what it originally offered.
Johnson & Johnson. (2011). Johnson & Johnson case study: Remicade, a Biotech Blockbuster, 1-16.
Johnson & Johnson SWOT Analysis. (2016). Johnson & Johnson SWOT analysis, 1-9.
Montgomery, C. A. (2012). The strategist: be the leader your business needs. New York City: Collins.