Case Study of Proctor & Gamble
Case Study of Proctor & Gamble
There is no question whether or not Proctor & Gamble is a strong company and a prominent force in the consumer goods market segment; but what sets them apart from their competition? What makes them such a power house in their market? When determining a companies strengths, such as P&G’s you must take a look at the companies resources. A companies resources are often what sets them apart from their competitors and what one would consider their strengths. The following are some of Proctor & Gambles more prevalent strengths: 1. The History 2.
Brand Awareness 3. Innovative Employees 4. Large financial pad ($6 bil. ) 5. Diversification 6. Access to capital 7. Outside resources When looking at this list of P&G’s strengths it is easy to pick out certain ones that other companies also posses. The three on this list that are Proctor & Gamble’s strongest resources would have to be their history, brand awareness and their diverse product line.. From an outsiders prospective, the fact the P&G has been around for over 150 years has to be some kind of sign that they are doing something right.
A company doesn’t last as long as P&G if they are not producing quality products. This history also plays a major role in one of P&G’s other strengths, their brand awareness. Although outside of the business world Proctor & Gamble may not be that familiar of a name, the products they produce, such as Pampers, Tide, and Crest are relatively well known across the nation. It is not question that when a consumer recognizes a brand it relates some sense of quality to that consumer. The third major strength from the list is P&G’s diverse product line.
Proctor & Gamble have a strong presence in several product segments in the consumer goods market,, such as fabric and home care, beauty care, baby & family care, healthcare, and snack & beverages. With so many different successful products in their arsenal, it is no wonder why Proctor & Gamble has been so successful to date. Along with their resources P&G also posses several capabilities, some of which consider with their resources. Three of these capabilities are : 1. Good Advertising. 2. Brand Recognition. 3. Diversification.
When presented with the question of whether or not P&G should innovate existing products or create new ones I would have to say that innovating their existing products is the smarter choice. After reading the case I think this choice is relatively obvious. When the company was under the leadership of Jager, their focus was on creating new products. The numbers the case gives shows that this plan did not work out for P&G at all. Not only were they losing money on the products they were creating that were not gaining success in the market, but they were also losing ground with their older, more popular products due to neglect.
When Jager was relieved and the new CEO, Lafley, took over, P&G’s strategy did a complete 180 degree turn around. Lafley shifted the focus back to their already established products. Lafley believed that is was easier to sale more of the existing products than it was to invent new ones. This strategy proved to be successful as P&G’s numbers have once again increased and they have regained the majority of their leadership status in the markets. On the other hand I do not think it wise to completely neglect the creation and implementation of new products.
It is always important to stay ahead of your competitors and to always be making attempts to break into new markets first, I just think the majority of P&G’s resources should be devoted to existing products so that the same problems that occurred when Jager was CEO will not happen again. Under their current CEO, Lafley, Proctor & Gamble are continuing to increase their numbers and market shares. Lafley and his executives seem to be very optimistic about the future of Proctor & Gamble and show no signs of fear that an occurrence such as the one under the leadership of Jager will ever happen again.
Subject: Procter & Gamble,
University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 27 September 2016
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