Organizational investments to maximize returns and minimize risk.

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Scenario
You work at Johnson & Johnson in the Accounting & Finance Department. You recently got promoted to CFO. Upon stepping into your new role, you have decided to clean your new office and remove what is not needed. You come across a financial proposal that the previous CFO was working on to purchase or merge with Bayer Pharmaceuticals. You know this is your major competitor which makes you wonder if the old CFO may have been on to the next profitable move. You decide to look at Johnson & Johnson’s current portfolio to decide if this would be an investment that would maximize the company’s returns and minimize the company’s portfolio risk even more.

Using Microsoft Word, create a portfolio analysis that addresses the following:

Explain how current investments have made Johnson and Johnson successful
Analyze Johnson & Johnson’s portfolio as a whole to include price-to-earnings ratio, dividend yield, and earnings per share compared against a major stock market index.
Critique each industry holding as a stand alone
Evaluate Johnson and Johnson’s risk level from their current Beta.

Sample Solution

Johnson & Johnson (JNJ) is a multinational pharmaceutical, medical device, and consumer health products company that has experienced significant success since its founding in 1886. Over the years JNJ has made various investments to ensure their sustained success and wide portfolio of offerings. These investments have included: expanding into new industries; investing in research and development; utilizing mergers and acquisitions; entering new markets; leveraging technology; and implementing strategic cost-cutting initiatives (Gomez et al., 2020).

This strategy has allowed JNJ to achieve strong overall financial performance with a price-to-earnings ratio at 35.1 times compared to 23.4 for the S&P 500 index, an earnings per share of 8.44% over the past year versus 5.2% for the S&P 500 index, and a dividend yield of 2.7% compared to 1.9% for the S&P 500 index (Safal Niveshak, 2019). This indicates that JNJ’s stock is relatively expensive but still outperforming other major market indices.

Overall, Johnson & Johnson’s successful investments demonstrate why it remains one of the most popular companies on Wall Street today – a position it will likely maintain as long as they continue to invest strategically while diversifying their product offerings.

The utilization of sentimentality assists a brand with empowering the client to experience passionate feelings for, as Picard states “All that we do is intended to make individuals go gaga for our image. Every one of the decorations of our industry – the shows, the promoting the VIPs, the media inclusion” (M.Tungate 2014). Wistfulness has related itself in design with ‘In vogue 20-year-olds stroll around seeming as though they jumped out of a vast wormhole from the 1963 or 1944 or 1922, or even 1890’. (Matchar p. 2 2015) The current highstreets is taking motivation from all periods, making a half and half time from “A-line dresses, specked swiss covers, grassland skirts”.(Matchar 2015) With A-line dresses, dabbed swiss covers and grassland skirts all creating nostalgic recollections of the homegrown housewife.

A reason for sentimentalities developing fame is the dematerialization in items in the public eye. .’This work to make up for dematerialization likewise happens on different degrees of society: in day to day existence, we frequently see the arrival of past qualities epitomized objects, for instance in the dress of those style peculiarities known as ‘trendy people’ (Neiyemer 2014 pg44) Youthful teenagers and grown-ups like to wear one of a kind dress with a significance and story to them. With an interest into their parent’s past, giving a “worth of coolness its music, its garments and its frill”. Through this one of a kind peculiarity brands are embracing this tasteful for the dress and giving another life to past patterns and pieces of clothing. Huge brands, for example, Nike and Pepsi are reusing one of a kind plans and logos from earlier years, “reporting them as legacy or retro” things. Alongside style, shows and motion pictures are additionally applying “old plan highlights and procedures to stimulate the nostalgic nerves of their watchers.” (Harvey 2017). From style to film, sentimentality is being utilized as a key offering point to draw in clients and make a profound association with their crowd. Brands know how significant wistfulness and a ‘story’ are to clients, to such an extent brands make a set of experiences for themselves. Through making a set of experiences to the brand, the client acquires a feeling of solace, as commonality and dependability is produced. As Van Dyck states ‘according to the shopper, the historical backdrop of a brand – regardless of whether it has vanished from the scene for a period (like the Smaller than normal Cooper) or regardless of whether the set of experiences is ‘phony’ (like Hollister) – addresses a sort of dependability. These nostalgic brands summon different affiliations and every affiliation has its own personal association. Along these lines, there is potential for the more effectiv

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