Johnson & Johnson And The Product Essay

Unlike fixed cost variable cost you have some room to play, variable cost is all about changing inputs around to change output. Or as defined by Thomas and Maurice “variable input is one for which the level of

For the purpose of this assignment, I have chosen an article from the New York Times website about global marketing strategy of Listerine. This piece of news, written by Rachel Abrams, highlights how Listerine has adapted their products to the international market in order to counter the drop in the sales of their variety of products. In the article she explains how the market share of the most popular mouth rinse brand has dropped following the economic decline and what measures Listerine is taking to battle that slump. The author mentions that despite it being the world leader in mouth rinse sales, its competition globally is fiercer. In face of this competition, companies like Johnson and Johnson have to respond to consumer

Johnson & Johnson, a 130 years old famous multinational healthcare company through its family of companies is involved in the research and development, manufacture and sale of a wide range of products in the healthcare. Product that related to human health and well-being has always been their main interest over the years and also presently. Johnson & Johnson was incorporated in the State of New Jersey in 1887 by three brothers; Robert Wood Johnson, James Wood Johnson and Edward Mead Johnson.

According to this method, every unit of the product is assigned all direct, fixed, and variable costs. This method includes the cost of direct materials and labor as well as a portion of the overhead costs associated with it in the final costing of every unit of the product.

In the long run an organizations fixed costs must be covered in order for the company to continue to operate and continue to make profits. If these fixed costs fail to be covered, an organization will ultimately run out of money (and most likely go out of business). In utilities some costs are often ‘sunk’ costs. Sunk costs are defined as a cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business may face, such as inventory costs or R&D expenses, because it has already happened. Sunk costs are independent of any event that may occur in the future (Investopedia) and must not be confused with other costs. The latter (sunk costs) are not considered in price and output calculations; so it is important to determine the nature of a cost to ensure it is accounted for the relevant fixed costs in pricing decisions.

Variable costs, on the other hand, are explicit expenses that vary with production output levels. As production output increases, variable expenses also increase. Variable costs that could be included in the manufacturing of dealybobs are the cost of the materials used in production. For example, if demand

Johnson and Johnson is a very well known brand name, which many people connect to medical and hygiene products such as soaps. To fulfill a lot of their projects and designs, engineers are needed. Most of the engineers that they hire are mechanical to work on machinery and manufacturing, industrial to streamline production and manufacturing, and chemical to know the essence of their products. Johnson and Johnson also hire biomedical engineers, which would be any number of bachelors degrees carried on into a hire level. Seeing as Johnson and Johnson are a medical and hygiene based company, a lot of the projects the engineers’ work on would involve making sure that products are manufactured in their safest and most effective way possible. Some of the projects that they have highlighted are the utilization of new and innovative technology to improve body systems, such as the circulatory system. They are also creating new technology to replace joints and replicate human organs. Engineers are also in charge of making sure that pharmaceuticals are created and sold safely and efficiently. Because of their large contribution in these projects, Johnson and Johnson would be considered a large contributor to the medical industry. The company is based out of more than 60 countries and has a headquarters in New Brunswick, New Jersey.

Fixed costs are constant and have an impact towards profits despite the number of items sold. Reducing the fixed cost amounts is a sustainable way to make more profits and increase operating leverage (Edmonds & Tsay & Olds). Suggested by Reiss, outsourcing is a way of turning fixed costs into variable costs. Variable costs have a dependence of cost based on production or sale of the product (Reiss, 2010).

Johnson & Johnson (NYSE: JNJ) is the world’s second largest and mostly broadly based manufacturer of health care products. The company holds a significant share of the consumer and pharmaceutical markets, and is the world's largest developer and manufacturer of medical treatment and diagnostic devices.

When seven people in Chicago died from cyanide-laced Tylenol tablets in 1982, Johnson & Johnson (JNJ) responded in a manner that not only saved the company’s future, but also saved lives (Knight, 1982). JNJ reacted to the shocking news of the over-the-counter drug-related deaths with compassion, urgency and honesty. JNJ aimed at showing the public that the company was as much of a victim as the consumers were, and vowed to resolve the issue and keep the media and consumers involved and aware, as per the company credo (Our Credo; Rehak, 2002). JNJ’s timely response set a precedence by which public relations practitioners would model and businesses would strive to achieve.

Johnson & Johnson is a valuable company to invest in. Its great increase in stock prices this year shows that other investors believe so as well. With a 52 week range from 68.6 to 96 showing and increase of 27.4, an approximate percent change of 40%, it shows that there is great hope in this company. Also back to back positive quarterly sales make the company more appealing. The third quarterly sales showed an overall increase of 3.1% compared to last year’s third quarter sales, beating projected expectations for the company.

Although emergencies are unexpected by nature, the true character of a company is revealed by how they react and handle a crisis. In 1982, seven individuals died in Chicago from taking Extra-Strength Tylenol capsules, which were laced with cyanide. Tylenol became one of Johnson & Johnson’s most successful products, accounting for 17 percent of the company’s profits. Extra-Strength Tylenol constituted 70 percent of all Tylenol sales (Lazare). Johnson & Johnson also enjoyed an incredible amount of trust and goodwill from the public, nurtured in part by its allegiance to the company credo of responsibility to employees, consumers, stockholders, and the community. Johnson & Johnson took full accountability for the crisis even though they were

Fixed overhead are costs that remain constant when production output changes (Rose, 1964). They continue to occur of whether production has decreased, increased or haven’t taken place. For instance, depreciation of plant and machinery, rent, salaries and legal and accounting costs are fixed costs. Fixed overheads are constant in the short run and the costs of all factors of production are variable in the long-run. Therefore, overheads that are fixed in the short run are usually not fixed in the long run thus proposing that in the long run there may still be fixed overheads although some of the then fixed overheads become variable overheads. (Fess). For example, labour may be fixed in the short run, but it transforms to be variable in the long run.

One type of cost is called fixed cost. This type of cost is the expense of a business that does not change and are always constant in a business. When money is made, debts are the first initiative to be paid off. Fixed costs include rent, wages to employees, and equipment needed to produce you good and or service. In for example a Flower shop, the fixed costs would be the rent on the building, the payment of the delivery vans, and employee salaries. The other type of costs is called variable cost. This type of cost is one that is ever changing. Again in a Flower shop the variable costs would be a dozen roses. One week a dozen roses may cost the flower shop five dollars to buy them and then they sell them for forty-five dollars. Then the next week the price of the roses my rise by five dollars now costing the flower shop ten so in order for the florist to make the same amount of money as last week he needs to increase his price to the consumer with the increase on price he is paying. The basic main idea of cost is to keep it as low as possible to gain the highest profits.

In other words, the direct cost is a direct relationship with the production process, while the indirect costs are not a direct relationship with the production process, the cost of services in the production process. Within a period of total indirect costs are essentially constant, it is also known as fixed costs and indirect costs. Although its total output within a certain range does not substantially change with production, but allocated to indirect costs per unit of product decreases with the increase in production. For example, a company produced can food. Each food cans have direct costs, including the cost of ingredients, pots, you can label, wages involved in the production of canned food, canned and tag content of workers and machinery in the process of actual power consumption. There are also indirect costs including multi pack packaging; administrative costs, including salaries of administrative and management personnel, equipment, etc.; premises rented; total power utility costs and other buildings, as well as marketing and