Since the end of World War II, business organizations in the United States are becoming closer together with businesses in the European region. There are several reasons of this business behavior. First is the geographical location. Geographically speaking, Europe is the next logical step for foreign expansion after the North American continent has been fully explored. Second is the cultural and technological situation in Europe. Reports indicated that some nations in Europe has became more Americanized in technology and more importantly, culture (Hilger, 2006).
Procter and Gamble, one of the most acknowledged companies in the United States have also had a significant presence in the European market today, particularly in Germany. In this paper, we will discuss Procter and Gamble’s decision to expand their business into the European continent and how the decision relates to Procter and Gamble’s corporate strategy.
II. P & G Corporate Culture
In the company’s annual report and reports from external observers, there are actually various traits in Procter and Gamble’s operations that define their uniqueness in the global market.
However, some of those corporate cultures are more in line with the European expansion strategy, compare to the others. Some of them are:
In the company’s official website, it is mentioned that people at Procter and Gamble are united by the commonality and of corporate values and goals. Diversity is considered as the uniqueness of each of them that will help fulfilling corporate goals. The company has a human resource system that is designed to ensure that everything works for everyone and as the company became more diverse, the company encourage collaboration even more and stresses the importance of fully utilize individualities of people at Procter and Gamble. This culture should work well to support Procter and Gamble’s decisions to perform international expansion.
The group also relies heavily on its capability to innovate and create new things from merely ideas. The group applies about a dozen core technologies to amplify this particular competitive advantage. Furthermore, the group has connected its internal innovation capability to vast external network of scientists, technology problem solvers and corporate inventors. Procter and Gamble treat innovation as a process that can be refined continuously to produce more robust and reliable results. This particular capability to inn ovate has also been a contributive factor to Procter and Gamble’s decision to expand abroad. By tapping into this capability, the company can adapt to local environments and create new and innovative products.
· Market Leadership
Spokesperson of the company has once said in the middle of a launching campaign that Procter and Gamble put forth many competitive advantages like consumer oriented strategy and innovation, but most importantly, the company also stresses heavily on market leadership. In its annual report, it is repeatedly stated that the company is designed to win in various aspects of the global business competition. The company spends huge percentages of their earnings each financial period on marketing campaigns because they believe in being a winner in every market they get themselves into. Analysts believed that this value also makes it more appealing for Procter and Gamble to expand their business into Europe, especially after the war was over and created a more positive atmosphere for international expansions.
· Focus on Growth
Procter and Gamble also stated in its annual report that the company as a whole, is designed for growth. In other words, corporate management is always looking for growth opportunity whether internally or externally. Thus, a chance to develop business into a new market will obviously be perceived as another way to secure growth.
III. Strategy by P&G
III.1. Human Resource Management Investments
Despite the cultures of the company that supported corporate expansion into Europe, the group must still adapt to the changes between American business culture and European. One of the greatest changes in Procter and Gamble is within the human resource department. As the company entered the new market, management has formed a project team to compare between the current employee services and the expectations of Procter and Gamble. In the case of Europe expansion, Procter and Gamble has also developed a strategic alliance with IBM and transferred this value into corporate competitive advantage.
Procter and Gamble also uses their HR account managers to organized how the business is performed within the company. Across the whole Europe, management have organized the HR business accounts to mirror the way the business is organized, and the HR account manager is responsible for ensuring that the team delivers business results in a way that generates growth. Overall, Procter and Gamble has made huge investments in its Europe HP structure, but the new model has now become a significant source of operational and strategic competitive advantages within the continent (Mandiese, 2006).
III.2. Communication strategy changes
Along with the European expansion, Procter and Gamble has also invested heavily in changing its information technology. One of the changes Procter and Gamble has made is shifting from media planning to communication planning. This was as much as an industry effort as it is an internal initiative. Procter and Gamble might not be the only company embracing the consumer-centric approach to the media, but Procter and Gamble did it in quite a high-profile fashion that the marketing world surrounding the company must pay attention to the new philosophy. The company maintained a consistent focus on media creativity and also pushed to develop a broadband video upfront marketplace.
IV. The Vizir Launch
V. Change Management Model
The change management model that can be suggested to Procter and Gamble is the three step change model. This change model basically contains three steps, which are: unfreezing, moving and re-freezing. These steps however, can be modified according to the extent of change that must be performed. For small projects, companies generally go for the light model. The Medium-Sized Model on the other hand is created for the majority of project. For complicated projects, people generally use the Complex Model. When the element of time is crucial, then the suitable modification is the quick model. The last variation is the one designed for a slow type of change, which is the Day-by-day model (Baekdal, 2006).
For Procter and Gamble on the other hand, which contains various products for various customer segment, the Complex model is the most suitable. In the Complex model, the unfreezing step contains phases like: analyzing the problem to understand what is really going on and the reason of it, and then understanding the cost and benefits of a change. Afterwards, the company should explain the situation to members of the company and listen to their comments.
The next phase includes invalidating the present rules and policies and defines new visions, new goals and finally generate a plan. The move step in the Complex model includes explaining the logics of the new vision, mission and goals and getting everyone on board. Afterwards, the team should listen to everyone’s comment, evaluate the plan and adjust the plan based on the feedbacks. In the re-freezing step, management should define new rules and policies and define the new way of living for the company. This step includes constantly renewing the energy and evaluating the results (Baekdal, 2006).