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Sangeeta answered on
Aug 01 2020
Case Analysis of Procter and Gamble (P&G)
Contents
Introduction 3
Background of P&G 3
Key Resources and Capabilities- VRIN Test 5
Porter’s Five Forces Framework of P&G 6
Existing Strategic Objectives of Procter and Gamble (P&G) 10
Five Generic Strategies for P&G 10
Components of Strategy Execution 11
Conclusion and Recommendations 12
Introduction
Over the period of last few years, it has become essential for businesses and organizations to regularly evaluate business policies and strategies based upon the market competition (Porter, 2007). Each organization today has its own unique business policies and features which act as a best strategic fit. According to Porter (2007), the key elements of differentiation for a company include nature of the business, vision and mission statement, dynamic market conditions, competitor’s business strategy, business approach etc. Further, from external point or investors view, financial performance of an organization should also be noteworthy as it is a vital component to analyze before investing in a firm’ stocks (Porter, 2007; Richard et. al., 2008). This helps investors evaluate the associated business risks.
Also, the industry sector plays a critical role in the functioning of a firm. For example, an electronic firm like Apple Inc or Nokia, involved in the production of electronic devices and mobile phones, is often faced with intense market competition. This in turn is associated with a lot of pressure due to rapidly changing business environment. As a result, firms need to plan strategic cost-efficient approaches to produce excellent quality products well in time. According to Shaw and Ha
ald (2004), it is essential for an organization to constantly exercise control over its business policies and operations to ensure that primary business objectives are fulfilled. Taking the above thought into consideration, this reports attempts to explore and analyze the case of Procter & Gamble Co. from different perspectives. The group Procter & Gamble Co. which is today recognized as one of world’s top consumer goods manufacturer, started years ago as a family owned candle shop (Huston and Sakkab, 2006).
Background of P&G
To begin with, the business named P&G is today regarded as one of the top
ands within the consumer markets segment all over the globe. The group was found in 1837 in Cincinnati, Ohio by William Procter and James Gamble. It is a principal producer of household items within the US and around the world. The company operates in more than 80 different countries across the globe and markets its almost 300
ands in over 160 distinct countries. The
and produces a wide variety of items which include fa
ic care, home care, family care, beauty care, baby care, health care and even beverages. Enthusiastic to continue as the winner in the marketplaces, P&G is one amongst the most dynamic sellers and is treated to be one of the principal promoters across the globe. As a latest act, the group sold its line of snacks i.e. Pringle to Diamond Foods for approximately $1.5 billion. The
and produces and promotes consumer packaged goods in the US and a
oad, but the group, with its diverse production line, mainly ends up in the food business with focus upon personal care and beauty product range. In the past, the group has also owned Crisco shortening, Jif peanut butter, Sunny Delight orange drink and even Folgers coffee but no more. As per the results of the recent survey conducted by HBR (2011), the CEO of P&G A.G. Lafley mentioned that “P&G learns much more from failed new products and
ands such as Dryel at-home dry cleaning and Fit Fruit & Vegetable Wash than we do from huge successes like Fe
eze and Swiffer”.
Also, P&G has ranked number one in the Soaps and Cosmetics sector based upon the results of Fortune’s Most Admired Company rankings 2011. P&G also changed its CEO in July 2010, from Lafley (Who always focused on innovation) to McDonald who now aims to produce lower-end products targeting customers looking for discounts. The group reported sales and total earnings of $7.89 bn and $12.7 bn in 2010.
Cu
ent Mission, Objectives and Strategies
Based upon the cu
ent literature, a firms goals must be strategically aligned and in accordance with the SMART method (Porter, 2007). The SMART approach is a tool used to analyze company’s settings and goals, and includes five main components i.e. S-Specific, M-Measurable, A-Achievable, R-Reasonable and T-Timeline.
As per the P&G annual reports, the group does not have a vision statement but has long term mission to:
“To provide excellent quality goods and services to the consumers in order to perk up their living standard and lives” (P&G Annual Report, 2017, P&G Annual Report, 2016).
The above stated statement meets the criteria of the SMART approach as well, as it explains what will be completed, for whom, by who and why. Also, other aims of P&G are stated below (Huston and Sakkab, 2006; P&G Annual Report, 2017):
· Improve the global market share across different business units
· Build bundling strategies with worldwide firms and thereby, increase the
and awareness
· Enhance the overall annual growth rates for goods across different sectors
· Develop winning business strategies to improve the value of stocks
Being a worldwide corporation, P&G has always had very high competition not just from other powerful multinational organizations such as Kraft, Unilever and Nestle but also from many regional sellers. Porter’s Five Forces framework is one amongst the most renowned techniques for the examination of competitive atmosphere of a company.
Key Resources and Capabilities- VRIN Test
Continuous Innovation
Innovation at P&G occurs at each and every stage including production, marketing, selling, HR, R&D etc. For instance, it has been found from interviews that P&G produces only those goods, which are not present in the market. The firm analyses what the consumer really needs and then, starts production. As part of HR, the firm is open to employee resource from any part of the world and from any level. As part of marketing, the firm involves in highly eye catching and attractive commercials and TV advertisements. Moreover, as part of R&D, the group invests in top class infrastructure and technology to produce excellent products. The table below summarizes the innovation at P&G.
High Presence for Social Causes
P&G has...