Team Research Paper
Case # 22
Procter & Gamble's Acquisition of Gillette
Professor – Dr. Lisa Eshbach
Procter & Gamble Co.
One Procter & Gamble Plaza
Cincinnati, OH 45202
Synopsis – Procter & Gamble's Acquisition of Gillette
Where would the world be without Procter & Gamble? No Ivory soap, no Oil of Olay, no Jif peanut butter, no Tide detergent, no Crest toothpaste. Though there would probably still be soap, skin conditioner, peanut butter and toothpaste, we'd be bereft of the brands that have earned our love and loyalty over the years. And for Procter & Gamble, loyalty is what it's all about. P&G is a company that trades on loyalty, thrives on loyal customers and strives to put out products that merit that devotion. Procter & Gamble is the world’s largest manufacturer of household products in the areas of beauty care; health, baby, and family care; and household care, with a substantial presence in pet food and water filters. Founded in 1837 by James Gamble, a soap maker, and William Procter, a candle maker, joined forces at the suggestion of their mutual father-in-law, Alexander Norris, who was also a candle maker. Procter & Gamble (P&G) is one of today’s fortune 500 companies; P&G is based in Cincinnati, OH which manufactures a wide range of consumer goods. P&G is currently the 10th “Most admired Companies list” and they are also the 25th largest US Company by revenue.
Procter and Gamble created one of its first products in the late1880’s which begin Procter and Gamble’s road to a new product market. The item that was created was a bar of soap which was inexpensive and floats in water. The soap the floats in water is what we now call soap Ivory which is still in used today. Procter and Gamble also became known for its environmental work in the late nineteenth century. The grandson of Procter establish a profit-sharing program in hopes that the workforces would less likely to go on strike and from their company began to focus most of its time on producing more soap items by 1890 P&G had thirty different soaps. During this time electricity became more popular and candle were becoming obsolete and P&G discontinued manufacturing candles in the early 1900s. [pic]
Famous Products from Procter & Gamble
The company began to build factories in other locations in the United States, because the demand for products had outgrown the capacity of the Cincinnati facilities. The company's leaders began to diversify its products as well and, in 1911, began producing Crisco, a shortening made of vegetable oils rather than animal fats. In the early 1900s, Procter & Gamble also became known for its research laboratories, where scientists worked to create new products. Company leadership also pioneered in the area of market research, investigating consumer needs and product appeal. As radio became more popular in the 1920s and 1930s, the company sponsored a number of radio programs. As a result, these shows often became commonly known as “Soap Operas”.
P&G’s businesses are organized into three product based segments which includes 1) Household Care 2) Health, Baby & Family Care and 3) Beauty Care. They had 10 billion dollar (in sales) products. Over the second half of the twentieth century, Procter & Gamble acquired a number of other companies that diversified its product line and increased profits significantly. These acquisitions included Folgers Coffee, Norwich Eaton Pharmaceuticals, Richardson-Vicks, Noxell, Shulton's Old Spice, Max Factor, and the IAMS Company, among others.
In 1994, the company made headlines for big losses resulting from leveraged positions in interest rate derivatives, and subsequently sued Bankers Trust for fraud; this placed their management in the...
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