Tylenol and Duracell Strategic Management

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Bad reputation: everyday Tylenol consumption lead to liver failure + 5 more Advil production plants were built = Hostile takeover

Threat 2:

Weak cultural bonds within the organization + Minimum wage drop to $6.50 = Corruption, selling secrets of the company to the competitors

Duracell:

External Factors:

5- New legislation that forbids to use lead acid in the battery production

6- New Social trend – help the environment!

7- Minimum wage drop to $6.50

8- 5 more Energizer production plants were built

Strengths:

3- Patent for a new battery model (assets)

4- A lot of cash on hand for development purposes (capital – resources)

Weaknesses:

3- Bad reputation: there were accidents when Duracell barberries exploded when used in a TV remote controls

4- Weak cultural bonds within the organization

Opportunity 1:

Patent for a new battery model + New Social trend help the environment! = Enhanced Reputation

Opportunity 2:

A lot of cash on hand for development purposes + New legislation that forbids to use lead acid in the battery production = High profits from a new product

Threat 1:

Bad reputation: there were accidents when Duracell barberries exploded when used in a TV remote controls + 5 more Energizer production plants were built = Hostile takeover

Threat 2:

Weak cultural bonds within the organization + Minimum wage drop to $6.50 = Corruption, selling secrets of the company to the competitors

5. Recommend long-term objectives for Johnson & Johnson’s Tylenol business. (5 points)

Tylenol and Duracell:

Opportunity 1 enhanced reputation: LTO1 – Take part in at least 15 non-profit organizations campaigns by year 6.

Opportunity 2 High profits from a new product: LTO2 – sales of at least $100 million within 5 years

Threat 1 Hostile Takeover: LTO3 – create a shareholders’ rights plans by year 6 (see justification below)

Threat 2 Corruption, selling secrets of the company to the competitors: LTO4 – create internal code of ethics and increase employee morale by 60% within 6 years

6. Justify your answer to the previous question. (10 points)

LTO1 – Take part in at least 15 non-profit organizations campaigns by year 6:

Companies that are socially involved has better reputation, more successful and have higher profits and sales, which also will help to reach LTO2 (sales of at least $100 million within 5 years).

LTO3 (create a shareholders’ rights plans): this plan will allow shareholders to purchase additional company stock at an attractively discounted price, making it difficult for another company to take control.

LTO4 (increase employee morale) – employee loyalty is even more important than customers’ loyalty. Happy employee is more productive and successful. High ethics is a strength of any company.

If the company will become more socially involved, create good conditions for shareholders and increase employee morale, the company will be able to achieve all opportunities and avoid all threats.