A Critical Analysis of P&G’s Chinese Competitiveness

Topics: Strategic management, Management, Cross-cultural communication Pages: 17 (6365 words) Published: March 1, 2013
2.0 P&G’s Competitive Operation in China2
3.0 P&G’s Competitive Position in Markets6
3.1 Using Porter’s five forces model6
3.2 SWOT analysis8
3.3 Strategic group Analysis8
4.0 Cross-Cultural Management9
4.1 Hofstede framework9
4.2 Trompenaars' cultural dimensions11
4.3 Edward Hall' cultural dimensions12
5.0 Corporate Social Responsibility of P&G13
5.1 Triple bottom line of P&G’s CSR13
5.2 Carolls pyramid of P&G’s CSR14
5.3 Michael Porter Model of Value Chain Analysis14
6.0 Conclusion15

A critical analysis of P&G’s Chinese competitiveness

This article analyses P&G, one of the largest fast moving consumer goods provider in China. The article firstly offers the achievements of the company as well as the brief history. There are also tough times for P&G in the development history and the strategies adopted by the company help P&G to get through these difficulties and give birth to today’s distinguished international company. The success of P&G’s international business cannot be isolated from the success of Chinese marketing. Therefore, the article makes analysis on P&G’s competitive operations in Chinese marketing with its success factors. Also, the completive positions of P&G, the CSR, corporate social responsibility of P&G is to investigate the situation of P&G with the usage of SWOT, Porter’s five forces model and strategic group analysis. As one of the international corporation, the cross-cultural management is another perspective to be studied with the usage of Hofstede frame. Finally, the article summarizes the achievements of P&G and its experience in the enlargement of business. 1.0 Introduction

P&G is the short term for Procter & Gamble, one of the most distinguished international daily consumer goods companies. Since the establishment in 1937, P&G has experienced rapid development in both the hometown, USA and the abroad marketing. Right now, P&G has established its branches in more than 80 countries and regions with 127, 000 employees. It has more than 300 different brands covering the fields such as beauty & grooming, household care and so on. It is stated that in 2011 P&G has achieved the net sales of $82.6 billion and net earnings of $11.797 billion. For the different segments of the total net sales, the beauty takes on 24%; grooming is about 9%, health care is 14%; snacks and pet care is 4%, fabric care & home care is 30% and the baby care & family care takes on 19%. Though the net sales has increased in 2011, the operating cash flows and the diluted net earnings, both decrease. For the operating cash flow, it is $13.2 billion; while in 2010 the operating cash flow is $16.1 billion. For the diluted net earnings, it is $3.93 per common share; while in 2010, it is $4.11 per common share(P&G Annual Report,2011,15). The looking back of P&G’s development history shows that the company has encountered many challenges during its grown-up procedures. The year of 1837, the founding year of P&G, was not considered to be a good year for launching business. It is the year that American was hovered by the panic of economical slowdown and the breakdown of banks. Though Cincinnati, the birth place of P&G’, was still the business centre, the economical condition was in the same shoes with the national economical condition, the economical crisis. However, Procter and Gamble insisted to open their own business to compete with the other candle and soup production companies. The history shows that Procter and Gamble succeeded even in this tough period. Another time that P&G has encountered challenges from 1919 to 1920. During this period of time, due to the seasonal purchasing of the wholesalers, P&G had to reduce the quantity of the employees to copy with the unstable of demanding and the...
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