P&G is the world's largest consumer goods company that markets more than 300 brands in over 180 countries. Many of its products are non-discretionary; however, some are considered premium purchases and their sales suffered during the recession as cheaper, generic purchases rose. P&G has some of the strongest brands in the world that usually provide it a significant competitve advantage. It cut prices up to 10% on a wide swath of products to blunt any potential loss of market share. Below is a summary of the company's competitive position.
P&G focuses on its core businesses and leading billion-dollar brands for growth. Nearly 80% of sales and growth this decade has come from 10 businesses, including baby care, blades and razors, fabric care, family care, feminine care, home care, oral care, prestige fragrances, retail and skin care. P&G has shifted the business portfolio to more beauty and personal care products. During this time, the percentage of sales in these higher-margin businesses has increased from 18% to 33%. In the past eight years, beauty, personal care, and health care products have accounted for 60% of sales and growth. At the end of FY 09, Proctor and Gamble had expected net sales growth of between 5-7% for 2010 with free cash flow equaling to 90% or more of net earnings. Now, it expects sales to be roughly flat over 2009. P&G also had just 32% of sales coming from developing markets, compared to almost 45% for its global competitors. Consequently, P&G should have a lot of room for global sales growth, as it catches up to its competitors global sales figures. Proctor and Gamble’s strategies to win include its extensive expenditures in consumer and product research, product innovation, brand-building, go-to-market capabilities and economies of scale advantages.
Leading market position - P&G competes primarily in 22 global product categories and is a market leader in over two-thirds of these categories. In '09, P&G was the global market leader in beauty segment with a market share of 20%, the hair care segment with a market share of 33%, the fabric care segment with a share of 33%, baby care with a share of over 32%, and the manual blades and razors segment with a dominant share of 70% of the market. It is also the leader in the nonprescription heartburn medications, oral care, and personal health products segments.
Another strength is the effective employment structure. Due to the fact that the plan is going to use the normal hiring and retirements, hiring reductions, relocations, job retaining and voluntary separations to help reduce the number of potential involuntary separations.
The use of Information Technology (IT) is also one of the advantages of this plan. With the use of the said technology it’ll be much easier to maintain the flow of data and information inside the company. The main target of the plan is to recapture the market that they have lost and to improve their marketing strategy for the sake of competitive edge against the growing competition in the market.
Highly-diversified product portfolio - P&G’s portfolio includes 23 brands that generate $1 billion in annual sales and 20 more brands that generate at least $500 million. The billion-dollar brands accounted for 85% of the company's sales growth over the past decade and 90% of the company's profits. This strong portfolio of brands enables the company to deliver consistent, reliable top- and bottom-line growth. P&G also spends nearly $7 billion a year in advertising, making it one of the world's leading advertisers.
Strong brands - P&G competes primarily in 22 global product categories and is a market leader in over two-thirds of these categories. In '09, P&G was the global market leader in beauty segment with a market share of 20%, the hair care segment with a market share of 33%, the fabric care segment with a share of 33%, baby care with a share of over 32%, and the manual blades and razors...
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