MBA Fall 2009
The Evolution of Strategy at Proctor & Gamble
Proctor and Gamble was established in 1837 and was one of the largest manufacturers of customer products. It has operations in 80 countries and employs 100,000 people globally. It established its first foreign plant in 1915 in Canada and the company’s first subsidiary was established in 1930s in Britain. The business expanded to many countries by 50s and 60s. By the late 1970s, P&G had a decentralized market with the production units in many countries, which served as a profitable strategy to the company until 1990s. The company had to reorganize their strategy with the goal of transforming P&G into a truly global company.
Case Discussion Questions
1. What strategy was Procter & Gamble pursuing when it first entered foreign markets in the period up until the 1980s?
P&G established its first foreign factory in 1915 in Canada to produce Ivory soap and Crisco. The company’s first foreign subsidiary was established in 1930 in Britain. Since then till the 50s and 60s, the pace of international expansion became very quick. P&G entered a nation by acquiring an established competitor and its brand and then promoted its business through that company. But it many cases, it started everything from the scratch. By 1970s, the strategy for the company was well established. They developed new products in Cincinnati and then relied on semi autonomous foreign subsidiaries to manufacture, market and distribute those products in different nations. The foreign subsidiaries had their own packing, brand name and marketing message to local tastes and preference. But as the company continued to move on, the growth of the company gradually was slowing down which was indicated by a decrease in the profit growth. They had the strategy of decentralized market, that is, every nation had its own production unit. Having the production unit in each country was justified, as the import tariffs rates...
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