Should Kenvue prioritize expanding its Tylenol product line or focus on improving existing formulations to enhance efficacy?

Introduction

The trade-off we're examining today is whether Kenvue should prioritize expanding its Tylenol product line or focus on improving existing formulations to enhance efficacy. This decision involves balancing potential market growth against product quality improvements. I'll analyze this trade-off by considering market dynamics, consumer needs, and Kenvue's strategic objectives.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm thinking about Tylenol's current market position. Could you share Tylenol's current market share and growth rate in the OTC pain relief category?

Why it matters: Helps assess the urgency of expansion vs. improvement Expected answer: Stable market leader with moderate growth Impact: Low growth might favor efficacy improvements, high growth could support expansion

• Business Context: Based on industry trends, I'm considering if there's a shift towards more specialized pain relief products. How does Kenvue view the balance between general and targeted pain relief in its portfolio strategy?

Why it matters: Informs whether to expand into niche markets or enhance core products Expected answer: Growing interest in targeted solutions Impact: Would lean towards expansion if confirmed

• User Impact: Considering changing consumer behaviors, I'm curious about recent shifts in how consumers choose OTC pain relievers. Have you noticed any significant changes in purchase drivers or brand loyalty?

Why it matters: Helps prioritize efficacy vs. variety in product strategy Expected answer: Increasing emphasis on effectiveness and natural ingredients Impact: Strong efficacy focus would support improving existing formulations

• Technical: Thinking about Tylenol's formulation, I'm wondering about the current state of R&D. Are there any promising new compounds or delivery methods in the pipeline that could significantly enhance efficacy?

Why it matters: Assesses potential for meaningful improvements in existing products Expected answer: Some advancements, but nothing revolutionary Impact: Limited potential might favor expansion strategy

• Resource: Considering the scale of either option, I'm thinking about resource allocation. What's the current split of R&D budget between new product development and improving existing formulations?

Why it matters: Indicates organizational readiness for either strategy Expected answer: 60/40 split favoring new product development Impact: Might need to realign resources based on chosen strategy