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This case study examines Procter and Gamble, analyzing the key external and internal factors that significantly impact the company's operations. P&G was founded in 1837 by William Procter and James Gamble as a candle and soap manufacturer and seller (David, 2013). Over time, it has grown into a multinational corporation involved in manufacturing, distribution, and marketing with a portfolio of 50 brands (David, 2013). Currently, Procter & Gamble is the world's largest consumer products company with sales exceeding $78.9 billion (David, 2013). The company offers a diverse range of products known for their exceptional quality, practicality, and value.
Procter & Gamble prioritizes improving the lives of consumers globally through impactful actions.
The company's daily operations and decision-making are driven by principles like integrity, trust, and respect for others. These principles are upheld by a code of ethics that guarantees high moral standards and quality. P&G is seizing opportunities from trade barriers being eliminated, technological advancements such as the Internet and IT, as well as the expansion of new markets and consumer segments.
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Despite facing challenges such as stagnant products, unsafe ingredients, a competitive market, strong buyer power, and rising raw material costs, P&G maintains its top position in the market with a diverse product portfolio and strong brand image. The company's core strengths lie in consumer understanding, brand-building, innovation, market capability, and scale. By leveraging these strengths, P&G is able to execute growth strategies across various areas. This enables the company to overcome its weaknesses and continue its mission of creating consumer understanding, brand-building, innovation, and market capability.
P&G presents their current mission, vision objectives and strategies.
The primary goal of Proctor and Gamble is to offer customers exceptional products and services that significantly improve their lives.
Their present mission statement has earned multiple consumer accolades and fostered greater customer loyalty towards their offerings, ultimately resulting in their dominant market position in terms of sales and profit due to their substantial market share.
Our Vision Statement
According to a case study, Procter & Gamble has multiple areas of focus that they plan to pursue. However, it is mentioned that P&G currently does not have a vision statement (Davids, 2013). To address this issue, I propose that P&G creates a vision statement that is practical, reliable, appealing, and forward-thinking. The suggested vision for P&G is: "We strive to achieve environmental sustainability and social responsibility while empowering our employees and stakeholders to implement our environmental and social initiatives."
Objectives
Procter & Gamble's goal is to become the fastest growing, most profitable, and most respected consumer goods company worldwide. They also aim to promote sustainability thinking and habits among all P&G employees, making it a company of winners. In addition, P&G strives to establish itself as a leader and compassionate organization. The 2011 Sustainability Overview Report highlights Procter & Gamble's Live, Learn and Thrive initiatives which focus on assisting underprivileged children globally. These programs aim to provide opportunities for children to have a healthy start, access education, and develop lifelong skills.
According to pg.com, over 315 million children have had their lives positively impacted by P&G since 2007. Procter & Gamble strives to be a dynamic and innovative organization. Bob McDondals, the Chief Operating Officer, stresses the importance of innovation in enhancing global quality of life. Innovation is essential in addressing challenges faced by companies, institutions, nations, societies, and the planet. However, there is currently a lack of bold innovation in various areas where it should exist. Furthermore, innovation plays a crucial role in driving business, financial, and economic growth. The long-term success and progress of companies and countries rely on their leadership in innovation.
According to McDondals (2008, p3), leaders with strong qualities are necessary in various sectors to emphasize the important role of innovation. This includes leadership in laboratories, universities, businesses, legislative and policy roles, and non-profit organizations. Procter and Gamble's objective is to become a preferred partner for customers and suppliers by establishing a culture of dynamism and innovation. They aim to achieve their financial goals by surpassing market growth across all categories and geographic regions. Additionally, they strive for high single-digit to low double-digit earnings per share growth while generating at least 90 percent free cash flow productivity (Davids, 2013).
Strategic
P&G employs the following strategies in their company's operations:
Fast moving Customer Goods
P&G Corporation is a company specializing in the production of Fast Moving Consumer Goods (FMCG), which encompass various widely consumed products like food, beverages, and household items. These goods have gained immense popularity among billions of customers globally due to their everyday use.
2. Enhanced Customer Relationship
P&G uses various promotional tactics, such as sales promotion, public relations, personal selling, and others to promote their products. They have also created Integrated Marketing Communication (IMC) Strategies that take into account factors like being proposition driven and values driven.
P&G has implemented strategies to enhance brand proliferation.
Procter & Gamble utilizes this strategy primarily for its hair care products, which include Pantene, Rejoice, and Head and Shoulders. As a result, both new and established competitors face limitations in their market shares. Additionally, P&G employs this approach for other items such as Ivory, Tide, as well as paper towels like Bounty and Charmin in the U.S. market.
Market targeting, also known as target audience, is the act of identifying and choosing particular groups of individuals or organizations that a company aims to engage with through its marketing endeavors.
According to Lindquist D. and Sirgy M. (2009), it is crucial in marketing to identify the target market for a product by categorizing individuals with similar characteristics and needs. P&G employs this approach by tailoring its marketing promotions for specific audiences based on different age groups, demographics, and geographic locations. P&G focuses on various age groups and demographics with products like Pampers for children, Gillette and Mach for men, as well as Beauty products such as Olay, Pears, and Camay for women.
Assessment of the external influences
In the upcoming section, we will discuss industry analysis, which involves evaluating various factors that impact P&G corporation. These factors encompass economic, social, cultural, demographic, environmental, political, governmental, legal, technological, and competitive elements. Although these factors go beyond the company's reach, they significantly affect it. In a SWOT analysis, these external factors are typically identified in the opportunities and threats section.
Opportunities
1. The acquisition of Gillette by P&G allows them to broaden their range of health and beauty products for men, facilitating growth within this market segment.
2. With its profitable status, P&G has the opportunity to invest in various market segments such as electronics and medicine, utilizing its additional capital. This diversification would strengthen their business portfolio.
3. Technology offers P&G the chance to enhance sales through online social networks and internet marketing platforms like Facebook, MySpace, and Yahoo. By leveraging these platforms, they can significantly improve their marketing efforts.
4. Operating in 180 countries worldwide, P&G actively seeks new countries to introduce their products to in order to further expand their presence (David, 2013).
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Threats
1. P&G faces a major challenge in the fast-moving goods market with the emergence of big companies like Kimberly Clark and Unilever.
2. P&G's competitors are using various advertising and marketing strategies to consistently target their market.
3. In today's market, P&G needs to be cautious as there are cheaper substitute products available that could potentially capture their market shares.
4. The recent recession has globally decreased customer purchasing power significantly, while also leading to an increase in raw material prices due to fuel surcharges.
5. There is concern that if P&G continues to overpay for assets, its goodwill value of 95 billion may become a serious problem as it might require quick liquidation at a depreciated value to repay debts (David, 2013).
Assessment of Internal Factors
In this case study, the subsequent action is to examine the internal factors that P&G has control over. These factors consist of marketing, finance, accounting, management, management information systems, and production/operation. The company determines these internal factors by considering the strengths and weaknesses identified in their SWOT analysis.
The text below highlights the advantages of something.
Procter & Gamble (P&G) is a multinational company that excels in operating on a large scale. They offer a wide range of products, including home goods, fabric care, baby and beauty products, health products, and personal care items. P&G ensures the availability of their products in most countries around the world, making them accessible to customers from all economic backgrounds. Their renowned brand name is associated with affordable pricing. In addition to this, P&G invests approximately $1.8 billion in research and development to enhance existing products and introduce new ones to the market (David, 2013).
Weaknesses
1. Increased competition from rivals such as Unilever, Johnson and Johnson, and others is causing a decrease in market share for leading brands of P&G. 2. By not producing personal brand products for their retailers and customers, P&G is missing out on an opportunity to expand its market share. 3. The challenges faced by P&G are a result of its size, which makes effective operations difficult. 4. P&G's slow response to change can be partially attributed to their ingrained culture and reluctance towards embracing new ideas that could benefit the company. Additionally, their perspectives on how things should be done contribute to this resistance towards change.
Only product performance.
Recommendation
After analyzing this case study, it has been determined that Proctor & Gamble's success relies on clearly defining their objectives and goals. To achieve these objectives, they must continuously update their mission statement and vision to align with their desired direction in the implementation stage. It is crucial for the mission statement to be closely linked to the objectives and goals as it facilitates the development of a business model focusing on bottom-line success, including ongoing profitability, market share growth, industry leadership defense, and employee welfare advancement. By examining P&G's Mission Statement and Strategic Management process, we can conclude that P&G is one of the top leaders in the FMCG industry. Additionally, sustaining success can be accomplished by expanding its global product offerings.
This paragraph highlights the importance of employees in the company's mission statement. It emphasizes that the HR department and customer services are the most crucial assets as they directly impact the consumers. The HR department plays a critical role in recruiting caring individuals who prioritize the company's interests. These dedicated employees contribute to the production of high-quality goods and services. Similarly, customer service employees need problem-solving skills and good interpersonal abilities to effectively deal with consumers. To optimize decision making, P&G should implement three strategies: 1. Utilize advanced technologies to enhance product quality; 2. Capitalize on brand name to enter new markets; 3. Attract more business by offering competitive prices.
4. The company can increase their sales by expanding their distribution centers.
5. They can use their brand name to overcome pricing competition.
6. In order to overcome political instability, they can lower their prices.
During the Implementation Stage, P&G should undertake various activities to promote their brands such as Pantene, head & shoulder, Vicks, Camay, Hugo boss, and other products. This is primarily done through advertising in newspapers, TV, radios, and magazines with the help of agencies like Darcy and Saatchi and Saatchi. Additionally, P&G utilizes sales representatives and retailers to further advertise their products in pamphlets and newspapers.
The Implementation stage also involves planning for achieving objectives and goals, as well as structuring and developing the organization.
C. The purpose is to create a budget and list the financial resources of the company. D. Additionally, the goal is to motivate employees and establish a reward structure. E. Furthermore, the objective is to establish and sustain a first-class work environment that is relevant and successful.
References
McDonalds, B. Touching Lives, Improving Life: Why Innovation Matters and How to Make it Work: retrieved September 29 ,2012 from www.pg.com/en_US/.../company/purpose_people.
David, Fred R. Strategic Management Concepts and Case: A Competitive Advantage approach 14th Edition. Upper Saddle River, NJ: Pearson Education, Inc., 2013.
Lindquist, J.D, Sirgy, J.M. Shopper, Buyer, and Consumer Behavior: Theory, Marketing Application and Public policy Implications 4th Edition. Mason, OH: Cengage Learing, 2009.
Analyzing Procter & Gamble's Operations. (2017, Jan 21). Retrieved from https://studymoose.com/procter-gamble-case-study-essay
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