Question 1 : What are firm’s most important external opportunities and threats?
External opportunities and threats are events and trends that are beyond the control of the organization. It can be divided into five broad categories which are economic forces; social, cultural, demographic, and natural environment forces; political, governmental, and legal forces; technological forces; as well as competitive forces. From this article, there are some external opportunities that can be pointed. One of the opportunities is P&G desires to accelerate its growth in developing markets, such as Brazil and India. This activity will create job opportunities and at the same time, it also helps to reduce unemployment rate at the countries involved. Every percentage point less in unemployment makes good economic sense by not only reducing the budget deficit, but also reducing the human deficit that we see in the economic insecurity, growing poverty, hunger, homelessness and many more. Other than that, made Asia as a primary target for growth. Asia consists of Japan, China, and ASEAN/ Australia/ India/ Korea (AAIK). Asia is a good for choice because over three billion consumers populate Asia, representing more than half of the world’s population. It will contribute more benefits and opportunities for the growth, profitability and productivity of the P&G Company and at the same time, it helps in changing the fundamental structure of the economy of that country. However, there are also some threats that might affect the company. When entering the new market, a company needs to be aware that the gains may not be seen in the short term. It may be many years before they start reaping the rewards of their efforts. Besides, they have to hire additional staff to help launch their company in the new markets they expand into.
Apart from that, company need to know the regulations and tax laws in foreign countries, which takes time and money, and they may need to hire professionals in those countries to help with legal and financial issues. Also, a company usually has to modify their products and packaging to suit the local culture, preferences and language of the new market. Question 2 : What are the organization’s major strengths and weaknesses? The organization’s strengths and weaknesses are under control of the organization that could be practiced well or poorly. In case of P&G Company, there is a main strength of having three different sectors which could increase the company’s market share by reducing the risk of default. Besides, the other strength of the company is being in the market of approximately 180 different countries around the globe. That could lead revenue to increase better in the countries which are having large size of population. Furthermore, ranking as number one in the Soaps and Cosmetics industry, being number one company in the top ten advertisers during the first quarter of 2010 and holding a slight market share advantage also could be considered as strengths of the company. On the other hand, being in the market of three different sectors could be a weakness of the company as it is not really possible to focus on only one of them and improve it better. For instance, Apple Company focuses on only one sector and it is the number one within its competitors. The other weakness of the company is shutting down the industry which most probably causes P&G Company to lose a lot of money in terms of liquidation charges.
Question 4 : What are the firm’s existing strategies and objectives? Objectives
I. To diversify in terms of products and markets.
II. To increase sales 1 percent to 2 percent faster than market growth in all categories and geographies. III. To deliver earnings per share (EPS) growth of high single digits to low double digits. IV. To generate free cash flow productivity of at least 90 percent. V. To attaining more consumers to diverse products range. VI. To broaden the...
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