Strategic Management in Corporate Business Discussion Board

Johnson & Johnson is leader in health care products and current assets of the company is about $5.4 billion per year. There are 149 companies owed by this group including maker of Tylenol McNeil consumer products. At the time of crisis, all other companies were facing deficit in their business but Johnson & Johnson was still making steady growth. The reason behind this was the strategic control systems used by the company to rectify this problem. (Mitchell, 1989)

Tylenol faced a huge crisis in 1982 which is a leading pain killer produced by McNeil consumer products. Seven people in Chicago were declared dead because of taking heavy dose of Tylenol. It was mentioned that there was found 65 mg quantity of cyanide in the capsule of Tylenol. This quantity was more than sufficient to kill a human being. There was a decline in the market share of the company because of this crisis. (Mitchell, 1989)

Upon reporting of the death with the consumption of the Tylenol capsules, Johnson & Johnson was put in a problem of getting out of this mess without losing its reputation among the customers. As the product was removed from the market, Johnson & Johnson thought to re introduced the products with some new innovation. (Mitchell, 1989)

∙         They introduced the product with tamper resistance packaging and became first drug Producer Company introducing this type of packaging. They did not stop here and further introduced caplets capable of resisting more tampering. (Mitchell, 1989)

∙         They provided discount offer on the products and used the telephony marketing to reach to more customers and to motivate them to buy the product. (Mitchell, 1989)

∙         A new pricing program was introduced by the company to recover the loss of stock because of crisis. They provided 25 % off to the purchase of the product. (Mitchell, 1989)

∙         Several of the salesperson was engaged in giving presentation to medical facilities to restore the negative effects because of crisis. (Mitchell, 1989)

In the fall of 1982, someone or some people replaced Johnson and Johnson’s leading painkilling product, ‘Tynelol’ with cyanide-laced capsules, resealed them and put them on the shelves of some pharmacies and food stores in Chicago which caused the death of seven people.

Even though the crisis was serious enough to bring down any organization, Johnson and Johnson’s showed exemplary leadership and management in the containment of the crisis and the reintroduction of the product back in the market.

However, we want to speculate on the ways strategic control systems was utilized to rectify their problem and from the incident reaction of the organization, one can confidently say that the organization had a pretty good strategic control system even at that time.

Page 169-170 of the textbook talks about a type of strategic control system called concurrent controls (also a type of feedback control), which is essentially employed for ‘real-time feedback’. According to the Johnson and Johnson’s Tynelol story, immediately the match between Tynelol products and the deaths were established, the organization recalled all Tynelol products from the shelves, stopped all forms of adverts for the products, set up Toll – free numbers and sent messages to the health community.

...