Moving Forward To Globalization:
A Case Analysis Report for Procter & Gamble
MET AD 655 A2 International Business, Economics and Cultures Professor Jung Wan Lee, Ph. D.
March 20, 2013
The Procter & Gamble Company (P&G) is focused on providing consumer packaged goods. The Company's products are sold in more than 180 countries primarily through mass merchandisers, grocery stores, membership club stores, drug stores and high-frequency stores. As of June 30, 2012, P&G was organized into two Global Business Units (GBUs): Beauty and Grooming and Household Care. The GBUs contain a total of five segments: Beauty; Grooming; Health Care; Fabric Care and Home Care and Baby Care and Family Care. Sales to Wal-Mart Stores, Inc. and the affiliates represent approximately 14% of the total revenue during the fiscal year ended June 30, 2012 (fiscal 2012). On December 30, 2011, Helen of Troy Ltd. acquired PUR water purification products business (PUR) from the Company. Effective June 1, 2012, P&G announced that it has completed the sale of the Pringles business to Kellogg Company. (P&G.com) Procter & Gamble (PG) is a multi-national company that produces hundreds of products in a variety of industries. In the last decade, the stock returned 55.84%, excluding dividends. The company sells products all over the world, and many investors think that P&G is done growing. The fact is, P&G is far from done with growing. (Jocab) Company Overview
William Procter, a candle maker, and James Gamble, a soap maker, emigrated from England and Ireland respectively. They settled in Cincinnati initially and met when they married sisters, Olivia and Elizabeth Norris. Alexander Norris, their father-in-law, called a meeting in which he persuaded his new sons-in-law to become business partners. On October 31, 1837, as a result of the suggestion, Procter & Gamble was created. (P&G history) After quickly finding its footing, P&G managed to reach the $1 million sales mark in 1859 and soon after hit the big time with the introduction of Ivory soap in 1879. Today, Procter & Gamble is over 100,000 employees strong with on the ground operations in more than 80 countries. P&G remains the world's largest manufacturer and marketer of household products and reaches across a spectrum of more than 250 products that it markets in 140 countries worldwide. (P&G.com) P&G market environment is highly competitive with global, regional and local competitors. In many of the markets and industry segments in which we sell our products, P&G compete against other branded products as well as retailers' private-label brands. Additionally, many of the product segments in which we compete are differentiated by price (referred to as super-premium, premium, mid-tier and value-tier products). P&G are well positioned in the industry segments and markets in which we operate - often holding a leadership or significant market share position. (Annual Report 2012) In the last decade, the company increased its annual net sales from $39.2 billion to $82.6 billion. It increased its net earnings from $3.12 per share to $3.93 per share. In total, 65% of the company's revenue came from developed nations and 35% came from developing nations such as China, Russia and Brazil. Two years ago, only 33% of P&G's revenues came from developing nations. More specifically, 25% of the company's revenues came from Asia and South America. Currently, the company's customer base is 4 billion people, 58% of the World population. Annually, the company sells 40 billion products every year. (Jocab)
P&G Company Mission
1. Our Purpose
We will provide branded products and services of superior quality and value that improve the lives of the world’s consumers, now and for generations to come. As a result, consumers will...
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