Procter & Gamble Saturday, 17 July 2010 Presentation by Michael Rajendra Sai Tunde Yinka Saturday, 17 July 2010 Aim of Presenta. on • To cri. cally analyse P&G from the strategic management perspec,ve using various models . Saturday, 17 July 2010 Purpose of P&G • To provide large variety of consumer products at an a? ordable price without compromising quality. •To con. nually an. cipate consumer needs and develops a product to meet their needs. Saturday, 17 July 2010 Pro? le • LAUNCHED in 1837. Incorporated as a company in1890 . • Started with manufacturing soaps and andles. Developed 300 brands in more than 180 countries. •Employee strength is about 138,000 people . •HEADQUARTERS: Cincinna. , Ohio, USA Saturday, 17 July 2010 PRODUCTS BRANDS are clustered in following Categories •Personal & Beauty -? Cosme,cs, Oral Care, Hair Care •House & Home -? Laundry care, Dish Soap, Snacks & Co? ee •Health & Wellness -? Prescrip,on drugs, Health Care •Baby & Family •Pet Care & Nutri,on Saturday, 17 July 2010 CORPORATE & BUSINESS STRATEGY • To win the biggest and strongest retail customers in di? erent countries through di? eren,a,on. •ShiR usiness porSolio to more beauty and personal care businesses. •To extend the availability and a? ordability of P&G brands to •Research and development leading to innova,on and development of new products more low incomes consumers, par,cularly in developing markets. Saturday, 17 July 2010 ACHIEVEMENTS •P & G is a market leader in Consumer Goods with sales of US $ 80 billion. • Received Edison Innova. on Award in 2010 •P&G was added to the Global list of the world’s 100 most sustainable corpora. ons in 2009. Saturday, 17 July 2010 INTERNAL ANALYSIS 1. Structure 2.
Cultural Web Saturday, 17 July 2010 1. STRUCTURE Saturday, 17 July 2010 CULTURAL WEB SYMBOLS Colour blue, STORIES Best maker of consumer products POWER STRUCTURE PARADIGM House name in consumer products the world. P&G does what they say, say what they mean. Employees ROUTINES/ RITUALS Ongoing restructuring. Innovation. ORGANISATIONAL STRUCTURE CONTROL SYSTEM Matrix FDA Saturday, 17 July 2010 Core Competencies ?Innovation ?Patents ?Marketing ?Brand Management ?Brand Leadership Saturday, 17 July 2010 EXTERNAL ANALYSIS PESTEL Analysis Poli. cal • Sta? s wages in i? erent countries • Poli. cal Interven. on on produc. on of product by countries. • Poli. cal stability and instability in various countries. Economic •Recession affects buying power of Consumer •Exchange rates of the dollar Saturday, 17 July 2010 External Analysis (Cont’d… ) Social •Increase in awareness of products •Product cuts across demography •Improved attitude towards health issues Technology: High technology required Innovative Technologies through development programme. Environment: Green house effect environmental sustainability. product recycling.
Legal/Regulatory: Food and Drug Administration/EU regulations. Mergers and acquisition policies Saturday, 17 July 2010 FIVE FORCES ANALYSIS THREAT OF NEW ENTRANTS Economies of Scale Experience and market leaders Patent on some products Highly capital intensive Distribu. on Channels Requirement High industry growth rate Bargaining power of Buyers Sensi. ve to price Low switching cost Brand is extremely important. Informa. on in Purchasing decisions Ver. cal Integra. on of products Subs. tutes are readily available Saturday, 17 July 2010 FIVE FORCES ANALYSIS (Cont’d)
BARGAINING POWER OF SUPPLIERS(LOW) Few large manufacturing supplier Medium bargaining strength Quality of inputs is critical to the finished products Alternatives available Forward integration difficult Switching costs are high. THREATS OF SUBSTITUTES(HIGH) Substitutes are readily available Substitutes perform well also Switching costs is low RIVALRY AMONG EXITING COMPETITORS(LOW) Industry is growing Exit Barriers is high Competitors are of comparable size Competitors are not diversified as P&G Saturday, 17 July 2010 STRATEGIC METHODS •ORGANIC DEVELOPMENT; ? Innova. n/R&D, ? Market development •Merger And Acquisi. ons ? MDVIP ? The Art of Shaving ? Nioxin research Labs ? Fredric Fekkai ? The Gillebe company($50billion) •STRATEGIC ALLIANCES ? Compe. tors ? Companies ? SMEs ? Government Saturday, 17 July 2010 Sustainability Strategy Company has embarked upon the following Sustainability Strategy: 1. Sustainable Innova,on. 2. Reduce nega,ve impact of P&G opera,ons on Environment. 3. Social responsibility 4. Equip and engage employees towards developing Sustainable thinking. 5. Working with stake holders to enable con,nued freedom to nnovate responsibly. Saturday, 17 July 2010 Conclusion ? P&G is the most progressive ,futuris. c ?exible ,customer focused and well managed corpora. on ? P&G strategy has caused the organisa. on to thrive and it is evident that their culture, strategy and structure has given them the edge in the business environment. Saturday, 17 July 2010 Recommenda,ons ? In future it has to maintain a balance between di? eren. a. on and cost e? ciency. ? To sustain its success it should Capitalise on its Strengths like :Human Resources, Research & Development, Innova. on, Financial
Resources, Technology and developing Partnerships. ? It has to ?nd the alterna. ve and cheap resources for its inputs and relocate its manufacturing facili. es in the world markets keeping logis. c costs minimum. Saturday, 17 July 2010 RECOMMENDATIONS P&G is well aware of the Consumer Needs and Enjoys ‘Compe.. ve Advantage’ in innova. ve product development, marke. ng and developing the long las. ng rela. onship with various Stake holders. The ‘Proac. on Strategy’ will help P&G in following Ways: ? Extra and/or more sa. s? ed customers ? Employees engagement & commitment. Long-? term investment which bene? ts corpora. on Saturday, 17 July 2010 References ? Laudon, K. C and Laudon, J. P. (2007) Management informa. on systems, 10th edi. on, New Jersey: Pearson Educa. on. ? Porter, M. (1980) Generic strategies, [Online], Retrieved from: hbp://www. marke. ngteacher. com/lesson-? store/lesson-? generic-? strategies. html [2 July 2010]. ? Richard Lynch. (2005) Strategic management, 5th edi. on. ? hbp://www. uk. pg. com/company/aboutPG/inTouchWithOurPartners. html Saturday, 17 July 2010 Thank you Any Queries Saturday, 17 July 2010