Porter's 5 Forces J&J

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Porters Threat of Entry force applied to Johnson & Johnson Consumer Segment The threat of new entrants into Johnson & Johnson’s consumer segment is medium to low as represented by Michael E Porter’s Five Competitive Forces. I will concentrate in Porters force “Threat of Entry” applied on J&J’s consumer segment division. Porter notes the “Threat of entry” has a final effect on the pricing ability determined by the amount of competitors who want to enter the industryi. I will touch on key strategies of how J&J can maintain its key advantages by adhering to the “Threat of entry” principle and evaluating if a particular force is “strong” or “weak” as applied on the consumer segment division. J&J enjoys a vast portfolio of well-known consumer products produced in state off the art production facilities distributed throughout key markets worldwideii. J&J’s brand recognition is strong, and as a result it is able to command prime shelf space from distributors, providing ample availability of products to consumers. Nonetheless, J&J is not immune to external forces created by aspiring new entrants to the industry. Our challenge is to discourage new entrants to the industry by maximizing on core strengths and capitalizing on the company’s well established brands. J&J has a strong economy of scale. J&J’s cost efficient production facilities act as deterrents to new entrants looking to enter our consumer segment industry. New entrants are deterred by the amount of capital needed to build new factories capable of mass production. Confronted by J&J’s economy of scale, new entrants are relegated to seek niche market segments. Niche markets can allow for higher margins; however new entrants effectively position their product to a low volume high price model limiting their sales volume. Consequently, J&J should not overlook the low end segment of the consumer market,
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