P&G Strategic Analysis

Topics: Economic growth, Brand, Procter & Gamble Pages: 15 (4477 words) Published: August 29, 2012
Strategic Analysis
Procter & Gamble:
The Beauty/Feminine Care Segment of the
Consumer Goods Industry

Executive Summary3
Company Overview4
Internal Analysis5
External Analysis7
Competitive Forces8
Macro Environment8
Strategic Options10
Strategy 1: Market Penetration10
Strategy 2: Product Innovation and New Product Development10
Strategy 3: Status Quo11

Executive Summary

Procter & Gamble (P&G) is a world-leading producer of consumer goods. Today, it consists of over 20 million dollar brands (like Gillette) and operates in 42 countries (Wikipedia, 2012).

The company has achieved success by creating high quality brand recognized products that are sold on multinational level. It has found the necessary efficiencies to be able to satisfy its consumers better than the competition.

Despite its success, the future of P&G as an industry leader will depend on strategies they adopt. The industry having matured, rivalry among the existing competitors getting more intense and the cost of raw materials continually rising makes it imperative that P&G adopt practices that will maintain their competitive advantage. Introduction

This strategic analysis of Procter & Gamble (P&G) will focus on the Beauty/Feminine care segment of the Consumer Goods industry in which P&G operates. The aim of this analysis is to develop strategic options for P&G focusing on the resolution of how to differentiate the company from its competitors within intensely competitive, rapidly changing immediate, intermediate, and long-term time frames.

With 130 manufacturing facilities in over 40 countries, P&G’s world headquarter is located in Cincinnati, Ohio, U.S.A. P&G has a large scale of product differentiation in a way to make a better life for people. P&G segmented its products into five global business units (GBU), which are Baby/Family care, Fabric/Home care, Snacks & Beverage, Health care, and Bauety/Feminine care (Mockler, 2007).

This report reviews P&G’s history and current state, and will go into detail of strategic options. It begins with a brief history of the company followed by a review of its external and internal environments.

In reading this document it is important to note that it is mostly based on the information contained in “Procter & Gamble: The Beauty/Feminine Care Segment of the Consumer Goods Industry” (Mockler, 2007), with some independent industry data. P&G’s website was also used for various sections.

Company Overview

In 1837, a small company started in Cincinnati, Ohio, USA, created by William Procter of England, and James Gamble of Ireland. As Procter recognized himself as a candle maker, and Gamble as the soap maker, it was their father-in-law’s suggestion to them to become business partners. As a result of that suggestion, in 1837 a company was born: Procter & Gamble (Wikipedia, 2012).

In 1862 During the Civil War, P&G got a great opportunity by sign a number of contracts to supply soap and candles to the Union armies. The factory was extremely busy during that time, as it has to supply many of soap and candles to the armies. The most important benefit that P&G gained was the enormous reputation as many soldiers started to know more about P&G products as well as its families.

In 1879, P&G expanded a reasonably priced white soap be the same as to high quality, which resulted as Ivory soap. In 1882, P&G made the decision to advertise Ivory for the first time. They allocated $11,000 to advertise Ivory soap in many newspapers in the country (Wikipedia, 2012).

In present state, P&G remains a global manufacturing, distribution, and marketing company focusing on providing branded products with superior quality and value. P&G...

References: Ailawadi, K., Lehmann, D. and Neslin, S. (2009) “Market Response to a Major Policy Change in the Marketing Mix: Learning from Procter & Gamble’s Value Pricing Strategy”. Journal of Marketing. Vol. 65 (January 2001), 44-61
Bartlett, C., Beamish, P
Baxter J. (2010) “Market Report Plus 2010: Cosmetics & Fragrances”.23rd Edition March 2010. Key Note Ltd.
Galbraith, J (2009) Designing matrix organizations that actually work: how P&G Procter & Gamble, and other design for success. San Francisco. Calif: Jossey-Bass
Holt, D
Henricks, S (2010) “Procter & Gamble, Unilever and the Personal Products Industry”. University of Maryland, University College.
Mockler, R.J. (2007). “Procter & Gamble: The Beauty/Feminine Care Segment of the Consumer Goods Industry” In C.W.L. Hill & G.R. Jones, Strategic Management: An Integrated Approach, 6th Edition. Boston: Houghton Mifflin.
Peng, M. (2009) Global Strategic Management (2nd ed). South-Western.
P&G. (2011). Procter & Gamble: Our Foundation. Retrieved from: ttp://www.pg.com/en_US/company/purpose_people/pvp.shtml. Retrieved on June 9, 2012.
Unknown. (2011, January 14). P&g 's market share play a winning strategy. Forbes ' Investing, Retrieved from http://www.forbes.com/sites/greatspeculations/2011/01/14/pgs-market-share-play-a-winning-strategy/
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Wikipedia. (2012). Procter & gamble. In Retrieved from http://en.wikipedia.org/wiki/Procter_&_Gamble
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