P&G Business Strategy Analysis

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P&G OUTLOOK

Three billion times a day, P&G brands touch the lives of people around the world. This happens because P&G provides branded products of superior quality and value to improve the lives of the world’s consumers. This results in leadership sales, profit and value creation, allowing employees, shareholders and the communities in which we operate to prosper.

In 1837 William Procter and James Gamble formed a humble but bold new enterprise. What began as a small, family-operated soap and candle company grew and thrived, inspired by P&G's purpose of providing products and services of superior quality and value.

The power of P&G's Purpose is the one factor above all others that have contributed to the Company's long heritage of growth. It is an essential part of who they are, who they have been and who they will be for generations to come.

The Procter & Gamble Company (P&G) is a brand behemoth. The world's #1 maker of household products courts market share and billion-dollar brands. Its business is divided into three global units: beauty, health and well being, and household care. It also makes pet food and water filters and produces soap operas. Some 25 of P&G's brands are billion-dollar sellers, including Gillette Fusion, Always/Whisper, Braun, Bounty, Charmin, Crest, Downy/Lenor, Folgers (which it reportedly plans to spin off), Gillette, Iams, Olay, Pampers, Pantene, Pringles, Tide, and Wella, among others. Acquisitive P&G bought Clairol in 2001 and a majority of Wella in 2003. Its biggest buy in company history was Gillette in late 2005.

The P&G community consists of over 138,000 employees working in over 80 countries worldwide. What began as a small, family-operated soap and Candle Company now provides products and services of superior quality and value to consumers in over 180 countries.

In an effort to reinvigorate growth, P&G announced a corporate restructuring program, named Organization 2005, in September 1998. The goal of the program was to improve P&G’s competitive position and generate operating efficiencies through more ambitious goals, nurturing greater innovation and reducing time-to-market. This was to be accomplished by substantially redesigning the company’s organizational structure, work processes, culture and pay structures. .

In the late 1990s, growth was hard to come by for P&G. In an attempt to spur growth in mature markets, P&G CEO Durk Jager initiated the Organization 2005 program amidst high expectations. But, he fumbled mid-way. Lafley, who took over the mantle, seems to be on the right path but it remains to be seen whether his moves will pay off in the long run. .

Procter & Gamble’s (P&G) Organization 2005 was conceived as a set of far-reaching initiatives to accelerate the company’s growth. It involved comprehensive changes in organizational structure, work processes and culture to make employees stretch themselves and speed up innovation. Organization 2005 also sought to leverage P & G’s global presence. The program was intended to boost sales and profits by introducing an array of new products, by closing plants and by eliminating jobs. This initiative, spearheaded by P&G CEO Durk Jager (Jager) who became CEO in 1999, was to be a 6-year, $1.9 bn effort. Jager believed that rapid restructuring was necessary to create new growth opportunities for P&G. .

Jager indicated that the cultural changes he planned to introduce would create an environment that produced bolder, more stretching goals and plans, bigger innovations and greater speed. As part of the exercise, Jager redesigned the reward system to strengthen the link between executive compensation and results.

INDUSTRY SNAPSHOT

FMCG

Fast Moving Consumer Durable Good (FMCG) also known as Consumer Packaged Goods have a huge potentiality in India.In 2007-08 Indian FMCG Industry was...
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