IV.

Decision Criteria and Alternative Solutions

Johnson & Johnson shall make a variety of practical decisions regarding their
experience, such as when to meet and how often, as well as instrumental decisions,
determining what their task is and how they would know if they had completed their task
and deciding on evaluation criteria for determining how well they have performed on
their task. Many groups are specifically designed to enhance the learning of their
members. Work teams frequently engage in team development and training to ensure
that they have the knowledge skills and abilities to meet their performance goals. Such
activities are designed to help team members develop shared mental models, mutual
trust, and team orientation and learn to monitor their performance.

To provide guidelines for the design, decision criteria are like a football end-zone,
without them you have no idea what direction you should go. Here are the following
alternative solutions:

1. Develop new products after making the company’s profit stable and in an
increasing manner.
Creating new products is good since it will benefit the company. But then before
putting some fund on the development of this product, make sure that the profits and
income are stable. Since there is a declining of profits happening from 2006 up to 2008
in Pharmaceutical division, it is better to manage it first and put it back to its business
line. Therein we can secure the increase of profits or stableness before using a great
amount of money in a new product.
Determine who will head the effort. This person essentially owns the product
development process. He or she is responsible for taking the product from concept to
market. If you are an owner of a small company, you may want to lead the effort. This
may mean that you will have to entrust others with some of your current duties while
you champion the new product. If you have a larger organization, then you may want to
assign the position to someone on your staff. Be aware that this can be a full-time job.
Don’t take on too many other responsibilities or your new product development effort
may suffer.
If you have the available resources within your organization, you should charter a
small team to help you develop the new product. Always stay focused on the customer’s
needs. If possible, involve your customers in the design phase of your product
development. They can help you stay focused on their needs as you design the product.
Make sure you document your development process. This information will be very
useful during and after the process. By periodically reviewing your progress, you can
determine if you are headed in the right direction. Reviewing this information at the end
of the process will also help you to streamline and improve future product development
efforts. The documentation will also be important if you ever need evidence that you
developed the new product when you did.

Pros
 Increase market share
Innovating a product that alleviates customer "pain points" and disrupts the target
market can greatly improve market share, which can enable economies of scale and
increase a company’s market power.
 Increase profit
Developing an innovative product that’s unique and superior to what the
competition offers can lead to profit growth. In fact, more than 90% of the world’s 100
most innovative companies have experienced positive sales growth due to innovation,
according to a recent Forbes report.
 Success in Failure
The "failed" result of innovation for one target market can end up being a
disruptive and profitable innovation that can be applied to other markets. Penicillin,
plastic, saccharin, WD-40, and the pacemaker are key examples of “successful”
innovation failures/mistakes.

Cons
 Innovation is Costly
While the amount of time and resources invested in product innovation varies,
companies can expect to spend around 3.5% to more than 20% of their total revenue in
R&D, with the pharma and technology industries spending the most to innovate.
 Unwanted Market Cannibalization
Introducing an innovative “new” product to expand market share can backfire if a
company’s product ends up eating into the market share of its other products, which can
reduce product life cycles and lead to little or no sales growth.
 Wasted time and Resources
A company can spend months and a 5- to 7-figure budget developing a new
product only to see it fail because competitors went to market faster or the market was
simply uninterested in the product.
 Employee Dilemmas
Developing an innovative product that improves efficiency and saves costs can
also render employees redundant, leaving companies with the tough dilemma of either
having to retrench staff, or invest time and resources retraining them for other tasks.

2. Establish product line through promotion.

Since competition is getting tough and they are worried that they might lose in
their field of business when 2009 comes, it is good to establish some marketing with
their consumers. It is a good way to surpass their competitors by showing that their
products are much greater and more effective than the others by doing some
promotions.
Promotional goals include creating awareness, getting people to try products,
providing information, retaining loyal customers, increasing the use of products, and
identifying potential customers, as well as teaching potential service clients what is
needed to “co-create” the services provided.

Pros
 Market Share
If you increase advertising and promotion expenditures, you stand a good
chance of capturing market share, especially if your competition is cutting back on ad
spending. You let the buying customer know that you are maintaining a robust effort to
remain vital in the marketplace.
 Higher Sales Growth
If you increase advertising and promotion expenditures, you stand a good
chance of capturing market share, especially if your competition is cutting back on ad
spending. You let the buying customer know that you are maintaining a robust effort to
remain vital in the marketplace.
 Increasing Value to the Customer
Increasing your advertising and promotions forces to think about offering more
value to the customer, you need something to advertise that is better value. If you can
find a way to put goods and services on sale, bundle services to customers who spend
more and promote special offers, you can increase value to the customer and drive
sales higher.

 Improved Reputation
Your visibility through advertising and promotion builds your reputation with the
customer. You draw customers to you, because they read the signal of increased
advertising and promotion as increased success of your business. Although most
advertising is through word of mouth, that word of mouth starts with awareness that
customers have gained about you through your advertising and promotions.
 Innovation
Trying to increase your advertising and promotions can be an inspiration to get
more creative, especially if money is tight. For example, you could add labels to your
products with your contact information. This allows the customer to contact you or pass
your name along to potential customers. You can also write articles online, participate in
community fairs and hold drawings. These relatively inexpensive advertising and
promotion methods arise out of your desire to increase advertising when you don't have
the budget for it.
Cons
 Failure
An obvious cons to a promotional strategy is its potential for failure. For example,
you could invest time and money designing and advertising a sale, and sacrifice normal
profits during the promotion, only to achieve moderate results. Worse, your long-term
benefits might not offset the costs of the promotion. Careful research and expert advice
from a marketing consultant can help maximize your chances for success, but nothing’s
guaranteed.
 Decreased Value
The longer a sales promotion lasts, the more likely you will decrease the
perceived value of your product or service. For example, if a restaurant offers a steep
discount for children’s meals to attract families, parents might balk at paying more after
they get used to the low prices. Keep promotions short to prevent long-term damage to
your overall pricing strategy.
 Predictability
If your promotions occur in a predictable pattern, potential customers might wait
for a sale rather than buy the product or service at full price now. For example, if a retail
clothing store offers a sizable discount on most holidays, sales will be low between
holidays, and relatively few customers will ever pay full price.
 Bargain Hunters
New customers might learn to love your product or service and become long-
term clients. Or they might abandon you as soon as the promotion is over and continue
to hunt for bargains. Converting bargain hunters to permanent customers depends on
developing brand loyalty. For example, if your excellent customer service or high-quality
products impress them, they are more likely to stay with you after prices return to
normal levels.
 Celebrity Endorsements
The benefit of using celebrities to endorse your brand is you can capitalize on the
goodwill they elicit from the public. The disadvantage is your brand identity is vulnerable
to their public relations problems. Research celebrities carefully to increase the chances
their public images will always be worth your investment.

3. Strengthen research and development.

Failing of products is quite alarming. They failed two consecutive times and if
we’ll think about it, why are we having some failure? It’s a problem that we need to
solve. Is it because there is a lack of researches and resources? We need to hire better
and qualified workers for the job, we can recruit them from the other companies. We
can also have some training in order to enhance and develop more ideas and skills of
the workers. They need to have division of expertise, one for the new products and
another one for developing and upgrading the existing products. In that way it may be a
win-win situation for the company.
Pros
 Tax Breaks
The federal government has allowed businesses to use up to 20 percent of their
R&D; expenses as tax deductions. The company has the option of taking the expense
as a lump-sum deduction in the year in which the research took place, or the write-off
can be spread out over the course of five to 10 years. The company cannot start using
the write-off until the first month that financial gain is realized from the research. Not all
R&D; activities are deductible. Activities such as market research, advertising, quality
control and the study of historical information associated with a current project are not
deductible.
 Costs
One way a small business can reduce the cost of manufacturing a product is to
use R&D; to uncover cost-effective manufacturing methods. New ways to manufacture
existing popular products can allow the company to realize the revenue associated with
the sales of the product but reduce the costs of getting the product out to the public.
 Financing
Potential corporate investors are often interested in companies attempting to
become industry leaders. When you invest in an R&D; program, you can start to
develop technologies and solutions that may open up entirely new markets to your
organization. This proactive approach to business can help attract investors and lenders
who can supply you with the financing you need to reach your business goals.
 Recruiting
Developing new technologies can open up new business opportunities within
your organization. The chance to be challenged by a company that is investing in
developing new technologies to reach new markets can help you to attract qualified and
talented employees.

Cons
 High Costs
It will be very costly.
 Long time scale
It typically takes long years to bring a new product to market.
 Uncertain Outcomes
There are always uncertainties about whether the product will meet the original
brief and customer requirements. For example, pests may develop resistance to the
product over time.
 Difficulties in anticipating conditions
 Difficulties in anticipating how conditions will change in the market and whether
customer needs will change during the long R&D process. Competitors may come up
with a rival product that is just as effective.