Proctor and Gamble: Organization 2005
Proctor and Gamble’s problem does not lie within the structure of the company but the strategy which it exhibits. Although Proctor and Gamble was built through strong innovation, it is not still in the growth part of the company’s life cycle. Over 300 brands are offered by P&G, some for 100 years, yet revenues have not met targets quarter after quarter. These brands have lost market share and have not been acclimated into global markets well. Instead of focusing on the company’s organizational structure, P&G should focus on maintaining its established brands as well as creating markets for the brands internationally. Advertising and consumer relations should be a major part of P&G’s strategy because the only region where profits are above sales is the North American market. If P&G maintains market share with its blockbuster products, and integrates these products overseas without a system of organizational overhead they will return to a flourishing company. Stock prices have stayed stagnant since 2000 because P&G focuses more on maintaining profit centers than maintaining an established brand. Jager focused more on the top line of Proctor and Gamble rather than the bottom line. Profits are more important than sales, so focusing on perennial blockbuster products with high margins is important. P&G needs to focus on cutting costs through a streamlined production and distribution system and promoting proven brands in international markets.
Overall the Organization 2005 is a good way of organizing the Proctor and Gamble and should be kept. Although there are bigger strategic problems with the company, Organization 2005 has produced innovative, successful products, helped integrate P&G products in international markets, and organized profit centers as Global Business Units. Through Organization 2005’s effort, P&G developed products like Febreeze, Swiffer, and Dryel which have...
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