Executive Summary
This report was commissioned to examine which future actions J&J needs to take within
the Brazilian Market and to recommend specific steps in order to turnaround business,
restoring profitability by the end of 2000, and position the company for future growth.
J&J’s performance has deteriorated in recent years with sales, profitability, and market
share falling significantly due to increased competition and a changing market
environment. The new challenges require a swift turnaround and major restructuring.
The following findings and recommendations are based on numerous analyses, including:
5-Forces, SWOT as well as an analysis of the internal organization.
Various issues contributed to the troublesome present situation.
Major external causes for the deteriorating situation are on one hand the new competitive
reality, on the other hand the strong customer dissatisfaction, which contributed to the
shrinking market share.
Internally, market potential was not developed and exploited fully. For example, the
company did not manage to utilize product and customer potential.
Furthermore, the company’s current processes are inefficient and chaotic. Due to the lack
of coordination between individual sales representatives, J&Js distributors and retailers
have no clear contact person. Additionally, the marketing and sales departments are
lacking an efficient transfer of customer information. Moreover, even the simplest
decisions are discussed in several hierarchical levels, being heavily influenced by financial
factors and preferences of management. In addition, decreased motivation among the
employees caused by a lack of empowerment, let the organization be ill prepared to deal
with new competitive intensity. These factors appear to be the major causes of the
deteriorated performance of J&J Brazil.
To ensure a successful turnaround, the following is recommended:
Short-term actions (immediately – 3 years)
– Training of marketing and sales representatives in the field of product knowledge.
– Merge the sales and marketing departments, in order to ensure cooperation and making
use of synergies, which will result in efficient CRM.
– Change to only one sales representative per key account (Carrefour and Wal-Mart) and
divide Brazil into geographic regions.
– Communication of new vision through newsletters, guiding team, courses and Q&A
sessions and monthly team meetings.
– Divert promotion funding from large retailers to distributors and consequentially to
mom-and-pop stores by 15% in order to reach lower-income classes.
– Negotiation with headquarters about internal loan to finance new machinery.
Long-term actions (3+ years)
– Investing in new state-of-the art machinery
– New product line
– Long-term relationships with initiatives to support children
For a better understanding of the recommended actions a timeline can be found in the
Annex.
Introduction
The purpose of this business plan is to provide a solution on how to turn the business
