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Rumors indicate that medical giant Johnson & Johnson is once again looking to acquire a medical equipment manufacturer. The suspected target is Swiss-based Synthes. Johnson & Johnson’s medical equipment sales appear to be at a plateau, so the company would like to acquire a company that offers some protection against competition.

QUESTIONS:

  1. Should Johnson & Johnson acquire Synthes, what level of strategy would this represent?
  2. Conduct a SWOT analysis on Johnson & Johnson. What are the arguments for and against this acquisition?
  3. Which of Porter’s Five Forces support a move to acquire Synthes?
  4. Which grand strategy does the potential acquisition of Synthes indicate? What are your reasons?

SOURCE: D. Cimilluca, A. Das, & G. Chon, “J&J in Talks to Buy Device Maker Synthes,” Wall Street Journal (Retrievable online at http://online.wsj.com/article/SB10001424052748704495004576265224168611148.html?mod=WSJ_hp_LEFTWhatsNewsCollection)

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