Procter and Gamble Market Analysis

Topics: Balance sheet, Revenue, Financial ratios Pages: 20 (7274 words) Published: April 1, 2011
procter and gamble market analysis

Executive Summary 3
Swot Analysis4
Cash Assessment 5
Profitability Assessment8
Target marke10
customer profile11
major competitors and participants12
market segmentation12
research and development16
Patent and trademarks16
summary of key findings17

Executive summary
The Procter & Gamble Company (P&G) began its operation in downtown Cincinnati, Ohio in 1837. The company operates in a very competitive industry where the low priced local competitors and store brands are competing in most of the categories of P&G. As a result the company faces intense competition in most of its product categories. P&G trades under the symbol PG on the New York Stock Exchange. This report consist of two diverse analysis, the first part examines the financial position of P&G over the two consecutive-year end 2009 and 2010 with specific emphasis on its cash, profitability assessment and EPS. To interpret the ratios we intend to briefly describe what the ratio means, then explain how well the company is doing with ratio compare to prior years’ financial results and industry average, also to suggest what the company needs to do if they are underperforming with that specific ratio. The second part of this report provides the details of market analysis with twelve distinct topics and objective strategic decisions for the company. Based on our analysis of the findings, the key areas of enhancement that are necessary for P&G to take into consideration include; * The company would have to invest more capital than its own earnings by using debt or equity financing. If the company pays part of its earnings as dividends, it would have a lower potential growth rate without issuing new debt or equity. * P&G should be consistent in meeting their loyal customers’ needs and attract new customers so to maintain their successfulness at all times. * The company needs to improve its product and adapt to the external environment continuously so that the products are still reliable for the costumers. A summary of the P&G is provided on page 17 of this report.

SWOT analysis

Strengths * Leading market position garnered on a strong brand portfolio * Significant R&D and marketing investments * Robust cash productivity| Weaknesses * Increasing instances of product recalls * Excessive dependent on Wal-Mart * Higher product prices translated into sales| Opportunities * Future growth plans—increasing concentration on its core attractive businesses and enhancing its customer base * Increased investment in manufacturing capacity in developing countries * Acquisitions to expand portfolio| Threats * Counterfeit goods * Changing global retail scenario and rise of private labels * Commodity cost and currency exchange rate|

Cash Assessment
Working Capital
The working capital tells us the current assets that would remain if all the company’s current liabilities were paid immediately. This figure shows how well a company is able to pay its current debt. The working capital for P&G for 2010 presented -0.25, compare to 2009 with slight increase by 10%, which indicates that the company needs 25% of working capital for every $1 of annual sales. If annual sales increase by $100,000 of then the company will have to invest $25,000 in working capital to be able to meet this. P&G is lower than their industry overall, and significantly lower than the companies in the S&P 500 for the working capital. The decrease in working capital was primarily due to the impact of lower net sales and their ability to adequately adjust production to better meet unit volume requirements. The best approach that P&G must take in...
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