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2. P&G focus on providing consumer packaged goods
Founded in 1837 by William Procter and James Gamble.
Operates in over 180 countries today primarily through mass
merchandisers, grocery stores, membership club stores, drug stores and
high-frequency stores.
P&G is organized 3 Global Business Units:
1) Beauty and Grooming,
2) Health and Well-Being and
3) Household Care
3. “We will provide branded products and services of
superior quality and value that improve the
lives of the world’s consumers, now and for
generations to come. As a result, consumers will
reward us with leadership sales, profit and
value creation, allowing our people, our
people, our shareholders, and the communities
in which we live and work to prosper.”
5. STRENGHTS
1.Diverse range of business segments
2.Large amount of customer based.
3.Most products are not highly seasonal
WEAKNESSES
1.Price paid for commodities for the products subject to fluctuation
2.Previous CEO has focused the strategy on innovation without
concern the customer demands
6. OPPORTUNITIES
1.Research and development efforts to develop technology
2.Capturing market share from competitors through advertising
3.Accelerate its growth in developing markets such as Brazil and India
THREATS
1.A material change in consumer demand or products could have a
significant impact on business
2.Business is subject to legislation, regulation as well as enforcement in the
U.S and abroad
7. BACKGROUND OF COMPANY
• SO
Customer in developing market Brazil and India have the chance to use P&G
products (S2, O3)
• WO
• P&G products can get into Brazil and India markets as there are customer
demand.(W2, O3)
• ST
• Increase the number of products that can meet the consumer demands (S3,
T1)
• WT
• Reduce the number of products that cannot give profit in order to cut the cost
(W1, T2)
8. FINANCIAL POSITION STABILITY POSITION
(FP) (SP)
COMPETITIVE
INDUSTRY POSITION
POSITION
(IP)
(CP)
10. BACKGROUND OF COMPANY
BACKGROUND OF COMPANY
P&G is located in competitive strategies. The strategies used by
P&G:
1- Market penetration
- P&G will able to increase market share through advertising.
- P&G spend a lot on advertising compared to the others
2- Product development
- Can enhanced market share and sales of the company.
- P&G can improvised their current products or develop new
products to retain old customers and obtain new customers.
11. Sales
Profit Net sales
Division /Revenue ($ % % RMSP
($ millions) growth %
millions)
Beauty
1 19,491 24 2,712 23 0.60 3
Grooming
2 7,631 10 1,477 13 0.20 3
Health Care
3 11,493 14 1,860 16 0.30 2
Snacks and
4 Pet Care 3,135 4 326 3 0.10 1
Fabric Care/
5 Home Care 23,805 30 3,339 28 0.80 3
Baby Care/
6 Family Care 14,736 18 2,049 17 0.40 4
Total
80,291 100 11,763 100 3
13. The division beauty and fabric care/home care is located in
Quadrant II which is “Stars”.
Quadrant II – the organization’s best long-run opportunities for
growth and profitability. Divisions with a high relative market
share and a high industry growth rate should receive substantial
investment to maintain or strengthen their dominant positions.
Other 4 divisions located in Quadrant I which is “Question
Marks”.
Quadrant I represents the divisions that have low relative
market share position, yet they compete in a high-growth
industry.
14. Internal Factor Evaluation (IFE)
Strength Weight Rate Score
Diverse range of business segments 0.3 4 0.12
Large amount of customer based 0.4 2 0.8
Most products are not highly seasonal 0.2 3 0.6
15. Weaknesses Weight Rate Score
Price paid for commodities for the 0.2 1
products subject to fluctuation 0.2
Previous CEO has focused the strategy 0.3 2 0.6
on innovation without concern the
customer demands
Total Score IFE= 2.32
16. External Factor Evaluation (EFE)
Opportunities Weight Rate Score
0.3 2 0.6
Research and development efforts to
develop technology
Capturing market share from 0.2 2 0.4
competitors through advertising
Accelerate its growth in developing 0.5 2 1.0
markets such as Brazil and India
17. Threats Weight Rate Score
A material change in consumer 0.3 1 0.3
demand or products could have a
significant impact on business
Business is subject to legislation, 0.15 3 0.45
regulation as well as enforcement in
the U.S and abroad
Total Score EFE = 2.75
19. RAPID MARKET GROWTH
Quadrant II Quadrant I
1. Market development 1. Market development
2. Market penetration 2. Market penetration
3. Product development 3. Product development
4. Horizontal integration 4. Forward integration
5. Divestiture 5. Backward integration
WEAK 6. Liquidation 6. Horizontal integration
STRONG
COMPETITIVE 7. Related diversification
COMPETITIVE
POSITION
POSITION
Quadrant III Quadrant IV
1. Retrenchment 1. Related diversification
2. Related diversification 2. Unrelated diversification
3. Unrelated diversification 3. Joint ventures
4. Divestiture
5. Liquidation
SLOW MARKET GROWTH
20. Procter & Gamble could be considered in quadrant IV, between slow
market growth but have strong competitive position.
This firm has characteristically high cash flow levels and limited
growth needs and often pursue related diversification successfully.
The reason is, in July 2010, P&G had changed their CEO from Mr.
Lafley, who focused on innovation to Mr. McDonald who focuses on
lower-end products aimed at consumers looking for discounts.
Even P&G’s revenue increased to $78.9 billion compared than
previous year, their profits declined $12.7 billion compared than
previous year.
