Johnson and Johnson 2009 Annual Report Download - page 4

     
JOHNSON & JOHNSON 2009 ANNUAL REPORT2
· In addition to advancing pipelines through internal develop-
ment, we continued to acquire, invest in and collaborate
with other companies to generate new platforms for growth.
Since the beginning of , we have made eight major acquisi-
tions and invested in several strategic transactions.Recent
highlights include the acquisitions of Cougar Biotechnology, Inc.
for oncology, and a key compound from Elan Corporation, plc
for Alzheimer’s disease. We formed strategic alliances with
Crucell NV for vaccines and Gilead Sciences, Inc. for HIV
therapies. In we acquired Acclarent, Inc. for minimally
invasive sinus surgery.
· We also continued to expand our global presence, including
building operations and expanding our reach in the BRIC
countries—Brazil, Russia, India and China—and other
fast-growing developing markets.
· And we continued to play a role in helping to shape health
care policy around the world, given our broad perspective on
the sector.
The future of health care is promising and exciting.It is not,
however, without ongoing challenges that must be addressed.
Development costs are increasing.Changes in patient and con-
sumer behaviors, as well as constrained health care budgets, are
lingering eects from the economic downturn.
As we assessed this evolving global environment in , we
concluded that restructuring our organization was needed to
ensure sustainable growth.This included the necessary plan to
eliminate approximately , positions, by far the most dicult
decision of the past year.However, our actions will increase
eciency and make additional resources available for investment
in long-term growth platforms and new product launches.We
began implementing these restructuring plans shortly after our
announcement in November  and are continuing in accor-
dance with the required consultation procedures in each market.
Every dicult period brings with it a correspond-
ing opportunity for growth.Despite a challenging year, we are
stronger today than we were a year ago.We have outstanding new
products, robust pipelines and talented people working in a
streamlined organization with more resources for growth.
In addition to our strengths, we see favorable trends in the
health care market:
· The global health care market is expected to grow almost
 percent per year over the next five years. With our broad base
of businesses, we participate in about one-third of this overall
market. And we are focused on some of the fastest growing seg-
ments in health care. In fact, many segments where we compete
are growing as fast as, or faster than, the overall market.
· Many nations, such as China, India and Brazil, are increasing
access to care for their citizens. While progress is still under
way, there are sizable growth opportunities for companies like
Johnson & Johnson that are deeply immersed in these markets
and the health care needs of their people.
· And finally, our expertise and business strategies are aligning
with many evolving trends in health care—including
personalized medicine, comparative eectiveness, wellness
and prevention, companion diagnostics and biomarkers—
many of which you will read about in the following pages.
Of course, we must meet additional challenges ahead.The
eects of the economic downturn, such as high unemployment
rates and decreased access to health care, shrinking hospital
budgets and avoidance of out-of-pocket costs for discretionary
health care purchases, present hurdles for our industry.These,
coupled with the rising costs of regulatory requirements—
such as larger and more costly clinical trials—create a dynamic
health care environment that requires disciplined action
for success.
I believe that the brightest and most innovative health care
companies—with dedicated, focused people who care about the
business of caring—will thrive in this evolving and still-changing
environment.Johnson & Johnson is one of these companies.
Johnson & Johnson has tremendous assets
for growth: our people, products, pipeline and global presence.
At the foundation is Our Credo, a common set of values unifying
our approximately , people around the world, and an
operating model that has served us well for decades.Our unwaver-
ing operating model includes a commitment to being broadly
based in health care, a decentralized management approach that
keeps our people close to customers, managing for the long term
and a focus on people and values.Our businesses rely on Our
Credo and our operating model to provide a consistent framework
for decision-making while leaving specific strategies to local
business or franchise leaders, who are closest to the customer.
Within our strategic framework we galvanize our organization
around high-level business priorities that reect the changing
global environment.These provide leaders with a common set of
growth priorities.For , these include:
·InnovativeProducts: Our growth has always been based on
scientific innovations that serve unmet patient and customer
needs in a meaningful way. This has created market leadership
positions in many of our businesses. We will stay focused on
bringing forth innovative, accessible and eective products—
and entirely new business models—that address the most
prevalent health care needs.
·RobustPipelines:Johnson & Johnson has one of the most
robust product pipelines in our history.The multitude of
opportunities necessitate that we target, invest in and manage
its development.A mix of internal and external sources will
sustain a ow of new products that provide a competitive
advantage.We fully expect the new products coming from
today’s pipeline to accelerate the proportion of our sales driven
by newer products.
·GlobalPresence:As a global health care leader, we must
continue to expand our presence and execute strategies in an
appropriate way for diverse markets and customers.Our
approach will be strategic, eective and cost-ecient to
address local needs.This may mean relating to customers in
new ways, tailoring product innovation to market needs or
building health care capacity.For Johnson & Johnson, this
also means a special focus on high-growth emerging markets
such as the BRIC countries.
·TalentedPeople: The hallmark of Johnson & Johnson is our
talented people.They are passionate about winning in the
marketplace and making a dierence in people’s lives.I believe
we have some of the best talent in the health care industry.