The company, Actelion, is a leading biopharmaceutical player, focused on the discovery, development and commercialisation of drugs for diseases with ‘significant unmet medical need’. J&J has acquired it for USD 30 bn.
Building its standing as a healthcare leader in Europe can only strengthen J&J’s brand identity across its entire offering, according to Euromonitor International.
The research firm suggests that it could have a knock-on effect onto the company’s standing among beauty and personal care (BPC) consumers too.
“J&J sees itself as a healthcare operator, and the bulk of its BPC offer sits, more or less, in alignment with this pharmaceutical positioning. This gives it strong consumer credibility, and is in line with trends towards functionality,” the firm says.
J&J as a personal care player
According to Euromonitor, J&J’s total net revenue in BPC amounted to US$11.8 billion in 2015, up 3% over 2014, thanks in particular to a strong performance in baby and child-specific products.
However, this was not reflected in the company’s market share in BPC, which remained stagnant at around 2.8% over 2010-2015.
Nicholas Micallef, senior beauty and personal care analyst at Euromonitor International comments that using its health positioning, J&J may be able to leverage new opportunities across markets.
Credibility: health and wellness
Micallef notes: “The company should use this health positioning, especially following the Neostrata acquisition, to build a greater portfolio of dermocosmetics, based on hi-tech products.
”J&J’s mass-market position means it risks being dragged into price wars with increasingly sophisticated retail operators. This limits value development, despite the fact that the company has an exceptionally good portfolio of brands whose quality justifies stronger price positions.”
At the present time, despite the opportunities, J&J’s focus on pharmaceuticals means the potential within BPC remains mostly untapped.
“Investment in product development would also help; however, the company’s primary focus appears to be away from its BPC products,” Micallef concludes.