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Procter & Gamble’s Generic Competitive Strategy & Growth Strategies

The Procter & Gamble Company (P&G) applies its generic competitive strategy to achieve competitive advantage in the consumer goods industry. Michael Porter’s model for generic competitive strategies focuses on business approaches that lead to competitiveness and resilience amid competition. In the case of Procter & Gamble’s generic strategy, the emphasis is on product quality and value. These factors are significant in supporting P&G’s efforts to achieve and maintain a leadership position in the consumer goods industry. It is worth noting that quality and value are also included as major points in Procter & Gamble’s vision statement and mission statement . Moreover, the company applies intensive growth strategies alongside its generic strategy. These intensive strategies facilitate Procter & Gamble’s growth in terms of market performance. Considering the tough competition in the consumer goods market, it is essential that these intensive growth strategies are effective and relevant to the current market conditions affecting Procter & Gamble.

Procter & Gamble’s generic competitive strategy (Porter’s model) defines the main approach of the business to achieve competitiveness. This competitiveness relates to the business competencies described in the SWOT analysis of Procter & Gamble . In this regard, the generic strategy also influences managerial decisions, in terms of marketing, research and development (R&D), and innovation. On the other hand, Procter & Gamble’s intensive growth strategies depict the strategic approach of the business in addressing consumer goods markets. These intensive strategies affect the company’s growth and expansion plans.

Procter & Gamble’s Generic Strategy (Porter’s Model)

Procter & Gamble uses differentiation as its generic strategy for competitive advantage. Differentiation involves developing the uniqueness of the business and its products to attract target customers. In this case, Procter & Gamble highlights quality and value in its consumer goods. For example, the company offers high quality cleaning agents, like Tide laundry detergent, at affordable prices. Based on this generic competitive strategy, a suitable strategic objective is to maintain P&G’s high investments for R&D to ensure high-quality and valuable products. Another strategic objective based on Procter & Gamble’s generic strategy of differentiation is to maintain effective marketing strategies that emphasize the uniqueness of such products. Such product uniqueness determines pricing and promotional activities. These considerations are included in Procter & Gamble’s marketing mix or 4Ps .

The cost leadership generic competitive strategy (also known as the low-cost provider strategy) is partially applied to some of Procter & Gamble’s products, focusing on cost or pricing to achieve competitive advantages. For example, Pantene hair care products are priced relatively lower compared to competitors, like Unilever ’s Dove hair care products. Procter & Gamble’s marketing mix also considers this generic competitive strategy. A strategic objective based on the cost leadership generic strategy is to develop Procter & Gamble’s competitive advantage based on cost-minimization approaches. For example, automation is increasingly used to minimize cost and maximize efficiency in Procter & Gamble’s operations management and production processes.

Procter & Gamble’s Intensive Strategies (Intensive Growth Strategies)

Market Penetration (Primary Intensive Strategy) . The Procter & Gamble Company’s primary intensive growth strategy is market penetration. In this intensive strategy, the main aim is to increase the company’s market share. Procter & Gamble does so through marketing campaigns to increase consumer awareness about the company’s consumer goods. This strategy is especially significant for low-performing products in the market. In addition, Procter & Gamble implements this intensive strategy through beneficial agreements with retailers. For example, P&G grows its market share by offering higher retail profit margins for some large retailers. In return such retailers display Procter & Gamble’s products in prominent locations or shelves in their stores. The differentiation generic strategy creates competitive advantages that help increase success in applying the market penetration intensive strategy. A strategic objective based on this intensive growth strategy is to increase Procter & Gamble’s market share through aggressive marketing.

Product Development (Secondary Intensive Strategy) . Product development is used as a secondary intensive growth strategy in Procter & Gamble’s business. This intensive strategy involves design and production processes for products that attract target customers. Procter & Gamble applies product development to support continuous business growth, while addressing competition. For example, P&G develops new products to increase its share of the global consumer goods market. In addition, Procter & Gamble increases its competitiveness by continually enhancing current products. The differentiation generic competitive strategy directly determines the kinds of products that the company develops, especially in terms of competitive advantage based on quality and value. A strategic objective associated with this intensive strategy is to grow Procter & Gamble through continuous innovation.

Market Development . The Procter & Gamble Company uses market development as a supporting intensive growth strategy. Market development contributes to the company’s growth through entry into new markets or market segments. For example, Procter & Gamble could enter new market segments when it creates an entirely new product line or when it changes its market focus. In this way, Procter & Gamble can expect a new revenue stream. The generic competitive strategy of differentiation makes it easier for P&G to enter new markets or market segments when implementing this intensive growth strategy. Also, a strategic objective based on market development is to increase Procter & Gamble’s R&D investment in new product lines, or to reform its marketing strategies to enter new segments in a growing or stable consumer goods market.

Diversification . Diversification is one of Procter & Gamble’s supporting intensive growth strategies. This intensive strategy involves establishing new business operations. For example, every acquisition and corresponding business diversification in Procter & Gamble’s history has led to considerable growth. However, this intensive growth strategy is considerably difficult to implement because of its large-scale effects on P&G’s business organization. For instance, each acquisition leads to adjustments in Procter & Gamble’s organizational structure (business structure) . The differentiation generic strategy helps build competitive advantage the company needs to succeed in new business operations. Also, this intensive strategy leads to the strategic objective of using an aggressive approach to acquire other firms to grow Procter & Gamble’s business.

• Ali, B. J., & Anwar, G. (2021). Porter’s Generic Competitive Strategies and its influence on the Competitive Advantage. International Journal of Advanced Engineering, Management and Science, 7 (6), 42-51.
• López, D., & Oliver, M. (2023). Integrating innovation into business strategy: Perspectives from innovation managers. Sustainability, 15 (8), 6503.
• The Procter & Gamble Company – Form 10-K .
• The Procter & Gamble Company – Innovation .
• U.S. Department of Commerce – International Trade Administration – Consumer Goods Industry .
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A Winning Strategy

Our integrated strategy was delivering strong results before the crisis, it is serving us well during the pandemic, and we believe it will continue to serve us well after the crisis through a portfolio of daily-use categories where performance drives brand choice; superiority across product, package, brand communication, retail execution and value; productivity in all areas of cost and cash; constructive disruption in all facets of our operations; and a more agile, accountable and empowered organization.

These are not independent strategic choices. They reinforce and build on each other, and when executed well, lead to balanced top- and bottom-line growth and value creation. There is still opportunity for improvement in every facet of this strategy, and we continue to raise the bar to deliver sustained excellence.

Integrated Growth Strategy

Our strategic choices are the foundation for balanced top- and bottom-line growth. We believe they position P&G well to continue to serve the heightened needs and new behaviors of consumers and our retail and distributor partners.

INTEGRATED GROWTH STRATEGY

PORTFOLIO performance drives brand choice

SUPERIORITY to win with consumers

PRODUCTIVITY to fuel investments

CONSTRUCTIVE DISRUPTION across our business

ORGANIZATION empowered, agile, accountable

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How P&G Tripled Its Innovation Success Rate

• Bruce Brown
• Scott D. Anthony

Inside the company’s new-growth factory

Reprint: R1106C

In the early 2000s, faced with an alarming gap between its growth goals and what its innovation pipeline was delivering, Procter & Gamble created a “new-growth factory”—a network of novel structures and capabilities to rapidly shepherd new products and even business models from inception to market. The resulting innovations range from a 33-cent razor for customers in emerging economies to Tide Dry Cleaners—establishments with drive-through windows and 24-hour drop-off and pickup.

Brown, who is P&G’s chief technology officer, and Anthony describe the factory’s components and practices: new-business-creation groups, entrepreneurial “guides” to help them, an innovation manual, a disruptive-innovation “college,” and more. They also offer six lessons for leaders seeking to set up new-growth factories of their own.

Although the factory is still ramping up, its early successes suggest that collective creativity can be managed—and can generate sustainable sources of revenue growth no matter how big a company becomes.

Back in 2000 the prospects for Procter & Gamble’s Tide, the biggest brand in the company’s fabric and household care division, seemed limited. The laundry detergent had been around for more than 50 years and still dominated its core markets, but it was no longer growing fast enough to support P&G’s needs. A decade later Tide’s revenues have nearly doubled, helping push annual division revenues from $12 billion to almost $24 billion. The brand is surging in emerging markets, and its iconic bull’s-eye logo is turning up on an array of new products and even new businesses, from instant clothes fresheners to neighborhood dry cleaners.

• BB Bruce Brown is the chief technology officer of Procter & Gamble.
• Scott D. Anthony is a clinical professor at Dartmouth College’s Tuck School of Business, a senior partner at Innosight , and the lead author of Eat, Sleep, Innovate (2020) and Dual Transformation (2017). ScottDAnthony

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How Procter & Gamble Went From Soap And Candles To Multinational Giant

Table of contents.

The Procter & Gamble Company (P&G), a small American family-owned business that began in 1837, is now a multi-billion-dollar company that’s regarded as the world’s largest consumer packaged goods company.

Very few brands in the world are as renowned and admired as Procter & Gamble, which operates in five main segments, including beauty, grooming, healthcare, fabric, and home care, and baby, feminine, and family care.

From living rooms, nurseries, and kitchens to bathrooms, laundry rooms, and utility rooms, P&G has made its way in millions of homes worldwide and is improving lives in small yet meaningful ways, one product at a time. No wonder it has endured and continued to grow exponentially.

P&G's market share and statistics:

• P&G market share of 8.74%
• Net sales of $80.2 billion in 2022
• Market cap of $331.45 BillionFeb 2023
• Products sold in more than 180 countries
• Over 65 individual brands trusted by 5 billion people
• Number of P&G's employees in 2022: 106,000

A global leader in the fast-moving consumer goods industry, P&G has always challenged norms and shaped the future.

Let’s now take a look at the exciting growth journey of P&G from an idea born in Cincinnati, Ohio, to a multi-national company that’s second to none in the world right now.

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Procter & Gamble Join Forces

William Procter, an emigrant from England, and James Gamble, an emigrant from Ireland, both were settled in Cincinnati, Ohio. While the former was a candlemaker, the latter was a soap maker. They married sisters, Olivia and Elizabeth Norris, becoming a family. But they were no ordinary family. They took their personal relationship and turned it into a professional one as well, thanks to the suggestion of their father-in-law, Alexander Norris, who highlighted that both their trades included the use of lye that was made from wood ashes as well as animal fat, which way readily available in the hog-butchering center of Cincinnati and maybe they should consider becoming partners. And just like that, Proctor and Gamble was established in 1837.

The Initial Years

Procter took charge of the store they set up on Main and Sixth Street, while Gamble oversaw the manufacturing operations just behind their outlet. Candles were the primary product of the company, which saw stiff competition from over a dozen other companies. 

The enterprising partners with a knack for business expanded their business throughout Hamilton and Butler counties. Making the most of the various transportation channels, including waterways and rail, Proctor and Gamble continued to grow by supplying its products to different regions by 1851.

This is when the famous moon-and-stars symbol was created as a trademark to help distinguish P&G's products from others. While the symbols were initially created to help identify the products at their shipping destinations, they became a symbol of quality to P&G's customers, who would only purchase if and only if the container had the moon-and-stars symbol.

Throughout the 1850s, Proctor & Gamble continued to grow. In the early half of the decade, operations were moved to a larger factory and a different location that provided the company better access to shipping routes, as well as warehouses. Plus, an office building was leased in downtown Cincinnati to give the company proper office space and corporate image. Proctor took control of sales and bookkeeping while Gamble continued to run the manufacturing arm of the business. Such was the growth that the company reached sales of $1 million by 1858-1859, with around 80 employees working full-time.

Thriving Even During The Civil War

A key raw material in Proctor & Gamble's products was rosin, which was procured from the south. In 1960, just before the American Civil War, the sons of Procter and Gamble traveled to New Orleans and purchased as much rosin as possible. This proved to be crucial as when wartime shortages disrupted competitors' supply chains, Procter and Gamble continued to prosper. The company even provided candles and soaps to the Union army. Not only did this prove to be lucrative for the company but it also widened the customer base and made the moon and stars a symbol that was revered.

While Procter and Gamble had managed to avoid being a victim of wartime scarcities skilfully, but with the course of time, its stock of raw material shrank. Taking matters into its own hands, the company began experimenting and exploring new ways of manufacturing. From producing stearic acid using tallow instead of lard stearic, which was expensive and short in supply, to substituting rosin with silicate of soda, the company found better ways of doing things. Such was the success of these innovative techniques and ingredients the company came up with that they were later even used in modern detergents and soaps.

Ivory Soap Catapulting Procter and Gamble To The Top

As soon as the war ended, Procter and Gamble invested in expanding to new markets as well as updating its facilities. At the same time, the company hired a chemist to work alongside James Gamble and develop new products, including a new soap. The idea was to develop a premium-quality soap inexpensively, and they did just that in 1878. The White soap, later renamed Ivory soap, soon made a name for itself and helped Procter and Gamble cement its position in the industry.

At this crucial moment, Harley Proctor, William Procter's son, put forth the idea of advertising the product in newspapers and convinced the board of directors to leverage marketing. Back in the day, advertising was not at all common and even risky as it was believed that only disreputed manufacturers advertised. After extensive debate, a budget of $11,000 was allocated to advertising in 1882, and the slogan of "99% pure" bode well with the public given all the other ads has outlandish claims. While the company embraced advertising, it left no stone unturned in ensuring the excellence of the products and carefully analyzed as well as improved the products before launching them. This is said to be the beginning of Procter and Gamble's superior product development practices, which continue to this day.

Ivory was a huge success – there's no doubt about it. It, in combination with the company's newfound ability to spread its message using advertising, helped it grow in the 1880s. More people were hired, additional plants were set up, and new products were launched, including the yellow soap, which helped drive sales to $3 million by 1889. 

Key Takeaway 1: Grab Opportunities & Make Iterative Improvements

When their father-in-law highlighted that both Procter and Gamble should merge, rather than laughing out at the idea, both considered it seriously, and well, the rest is history.

While Procter handled sales, Gamble took over the manufacturing side of the business, and they began expanding to new regions, selling soaps and candles. From carving out a unique identity for themselves through moon and stars symbols to experimenting with the ingredients and coming up with innovative new products as well as embracing advertising, the company did it all in its quest to grow. Its product development process, advertising, and commitment to quality helped it achieve a competitive advantage and set it up for success.

Taking The Company To Unprecedented Heights

Yes, the company was growing rapidly, market sentiments were positive, and customers couldn’t get enough of the products. But it wasn’t all sunshine and rainbows. In the 1880s, labor unrest began adversely impacting companies all around the United States, and Procter & Gamble, too, suffered at the hands of it.

Doing Right By The Employees

The company understood the importance of averting labor problems and stopping them from escalating into a crisis. Procter’s grandson, William Cooper Procter, who has just joined the company in 1883, was put in charge of drafting P&G’s labor policies. In 1885, the proposal to give employees Saturday afternoon off was approved. A couple of years later, a profit-sharing plan was implemented to align the interests of the employees with the company's interests. Then in the subsequent year, employee bonuses were tied to their performances. All of these helped improve employee performance incrementally.

After The Procter & Gamble Company was incorporated in 1890 and William Alexander Procter was made the president, an employee stock-purchase program was implemented and linked to the profit-sharing plan, giving employees an even greater incentive to perform well and elevate the company as well as themselves. Down the line, a highly acknowledged sick-ness disability program and eight-hour workday were also announced to further ensure the well-being of employees.

All these steps made P&G a pioneer in employee benefit programs while ensuring higher productivity and performance of the company.

Onwards & Upwards

Expansion and diversification of the products portfolio was a continuous process that P&G stuck to through thick and thin. New products such as the P&G White Naphtha was launched in 1902, and it too proved to be a success and helped P&G solidify its position as the market leader in the cleaning industry. Moreover, P&G invested in building factories in different regions of the United States, including Kansas City, Missouri, and Port Ivory, New York, given that the demand was high, and it had to expand capacity to cater to it.

After years of experimentation with hydrogenation and extensive research, P&G launched Crisco, a first-of-its-kind shortening made solely from vegetable oil, in 1911. With that, P&G took a bold risk of delving into a different market altogether – that of food products. Courtesy of strong advertising, Crisco soon took off and became the go-to choice of shortening for consumers.

World War 1 did bring shortages of raw material and gave way to supply chain bottlenecks, but thanks to proactive management and stockpiling of resources needed, P&G remained shielded and went on its merry way to grow.

With the wide usage of light bulbs, the demand and, in turn, the sales of candles declined. However, the company never looked back and launched an array of products in the 1920s. Ivory Flakes, Chipso Soap, Camay, and Oxydol were some of the products the company came up with, and with these, the company had an extensive and diversified line of soap, toiletries, and food products.

While the Great Depression proved to be a menace for most companies, P&G remained immune to it. In the first half of the 1930s, synthetic soap products were launched. These were followed by a synthetic detergent, Dreft, and synthetic shampoo, Drene. All along, different forms of advertising were leveraged, including newspapers, radio, and television broadcasts, and a huge chunk of the overall budget was allocated to it in order to boost sales.

Changing The Way Business Is Done

P&G redefined the way business is done. The company invested heavily in research and development, hiring chemists to develop new products and economists to study consumer behavior.

Extensive market research was conducted in which P&G toured kitchens and laundry rooms around the U.S to see how the products are practically used and how improvements can be made. This was complemented by studies on consumer behavior to understand the pain points of customers and address their needs with new products.

In addition to this, P&G introduced brand management to the world in 1931. The company emphasized the concept of standalone brands that would compete not just against products of other companies but also with those of P&G itself. Since then, brand management has not remained a permanent fixture at P&G but also at other leading companies in the world.

Playing An Integral Role In World War 2

During challenging times of the Second World War, P&G stood with the government and did all in its capacity to help. P&G oversaw the construction and operation of ordnance plants, catered to government contracts for mortar shells, and supplied Glycerin, which was used in medicine and explosives. 

Key Takeaway 2: Don’t Be Afraid To Take Bold Risks & Make Big Bets

By giving employees a piece of the pie and taking care of their overall wellbeing, P&G quelled frustration and any plans to strike against the company.

Moreover, P&G continued to diversify its product portfolio, introducing new products such as P&G White Naphtha, Crisco, Ivory Flakes, Chipso Soap, Camay, and Oxydol, Dreft, and Drene while expanding its production capacity and harnessing the power of advertising. All of these, in conjugation with the company’s commitment to research and development and brand management, helped P&G prosper in good as well as bad times.

Innovative and bold steps such as introducing the profit-sharing plan, delving into the food market with Crisco, advertising on radio and television, and debuting brand management worked wonders for P&G.

Post-World War 2 To The End Of 20th Century

New products driving sales to $1 billion & beyond .

Just as World War 2 ended, P&G stepped on the gas to achieve growth. With the availability of raw materials and change in consumer sentiment for the better, P&G wasted no time in upping the ante.

In 1946, P&G introduced Tide, a miraculous synthetic detergent that redefined the way people washed clothes. The quality of the product was backed by a $21 million advertising budget, and the result was quite extraordinary. Tide became the number 1 laundry detergent in just 2 years after launching despite its high price. Over the years, P&G launched several laundry products, including Cheer in 1950, Dash in 1954, Downy in 1960, Bold in 1965, Ariel in 1967, and Era in 1972. Tide, however, remained the best laundry detergent even in the 21st century.

In 1955, P&G launched Crest toothpaste, establishing itself in the toiletries industry. After years of research, the company came up with a breakthrough product that had the potential to significantly reduce cavities, and hence, it was even endorsed by the American Dental Association.

P&G never limited itself and was always on the lookout for opportunities and diversification. In the 1950's1950's, P&G entered into the paper-goods market and introduced White Cloud toilet paper in 1958 and Puffs tissues in 1960. The following year, P&G launched Head and Shoulders and Pampers disposable diapers and used smart pricing strategies as well as advertising to win market share. 

The diapers were a huge success and a testament to P&G'sP&G's ability to churn out innovative products. In 1976, P&G launched a premium diapers brand called Luvs.

Throughout the late 20th century, P&G continued its rapid growth. It consistently improved its previous products and added new ones, including Bounce fabric softener, Coast Soap, and Sure antiperspirant. Rely tampons were introduced and quickly became a hit due to their absorbent properties. Later on, Always pads were launched, and they became the sanitary napkin of choice, winning market share and trust of women.

A-List of Acquisitions & International Expansion Fuel Growth

P&G had gone international in 1930 when it acquired the British firm, Thomas Hedley and Company, the makers of fairy soap.

Beginning in the 1950's1950's, P&G began aggressively acquiring smaller companies in its quest to expand to new markets and regions. W.T. Young Foods, a Kentucky-based nut company, and Nebraska Consolidated Mills Company were purchased in 1955 and 1956.

In 1957, P&G bought Charmin Paper Mills and began producing toilet and tissue paper. In the same year, it also acquired Clorox Chemical Company, the leading American liquid bleach manufacturer.

In the early 1960's, P&G set its eyes on the food industry and strived to expand its footprint. The 1963 acquisition of Folgers coffee brand and launching of Pringles potato chips allowed them to do just that.

However, contending the charges put forward by Federal Trade Commission, P&G had to divest Clorox in 1967 and agree to not make any groceries and coffee acquisitions for a decade. P&G made further inroads into the groceries industry by acquiring Ben Hill Griffin citrus products in the 1980’s. It also purchased Pantene and Oil of Olay skincare products in 1985.

Given the boom in the healthcare industry in the 1980’s, P&G left no stone unturned in trying to capitalize on the opportunities. It entered into the over-the-counter (OTC) drug market by acquiring Norwich-Eaton Pharmaceuticals, the manufacturer of Pepto Bismol and Chloraseptic, and Richardson-Vicks Company, the manufacturer of Vicks and Nyquil. It also purchased Dramamine, the motion-sickness treatment, and Metamucil, a laxative, from G.D. Searle & Co, becoming a leader in the OTC market. It also partnered up with a number of companies, including Syntex Corporation, Gist-Brocades Company, UpJohn, and Triton Bioscience, and Cetus Corporation, to formulate various OTC drugs that had huge potential.

P&G was a very versatile company and never narrowed its focus. This was clear when P&G entered into the cosmetics business in 1988 with a billion-dollar acquisition of Noxell Corporation, maker of Noxema products and Cover Girl cosmetics. In the same year, P&G also acquired Blendax, a European health and beauty-care goods producer, as well as Bain de Soleil sun care-product line. In 1990, P&G purchased Shulton's Old Spice, an American brand of male grooming products. The very next year, P&G also bought Max Factor and Betrix lines from Revlon, Inc. In 1992, Pantene Pro was launched, and it soon became the best shampoo in the world.

Some Crucial & Much-Needed Changes In the Late 20th Century

In 1985 P&G witnessed its first decline in earnings after more than 30 years. This didn't go down well with the analysts, who claimed that P&G was slow to respond to changes in consumer preferences and its mass marketing practices were not yielding results anymore. It was clear that some fundamental changes were needed.

Hence, P&G diversified its advertising. Rather than solely relying on network television, it changed its marketing strategy by adopting micro-marketing techniques across a broad spectrum of marketing channels. Plus, market research was computerized. P&G also changed its brand management structure and opted for a matrix system in which category managers were put in charge of leading several brands, increasing the efficiency by cutting down layers of management. Moreover, P&G, for the first time, began focusing on profits rather than settling for market share.

P&G was threatened by the weak economy and increased interest of consumers in value. Hence, the company came up with "Every Day Low Pricing" (EDLP) for the majority of its products. This bode well with the consumers but brought criticisms from wholesalers. Additionally, P&G embraced the going green bandwagon and began taking sustainability quite seriously. This was followed by divesting a few of its holdings, including one-half of its Cellulose & Specialties pulp business, the forestry business, and an Italian coffee business.

While sales stood at a whopping $30 billion in 1993, the company decided to undertake a major restructuring of the business to streamline it. The primary goal was to boost the company's private-label brands by making them more price-competitive, bringing products to market faster, and improving profitability. It was a difficult yet much-needed step. 13000 jobs were cut, and 30 plants were closed worldwide. Resultantly, P&G improved its bottom line by $600 million.

Even during the restructuring period, P&G continued to expand internationally and acquire new companies at a brisk pace. P&G acquired Vereinigte Papierwerke Schickedanz AG's European tissue unit in 1994, marking its entry into Europe's tissue and towel market. In the same year, it also acquired the fragrance line of Giorgio Beverly Hills, Inc. Moreover, the company reorganized its management structure around four regions, North America, Latin America, Europe/Middle East/Africa, and Asia. A couple of years later, P&G bought Eagle Snacks brand line, Baby Fresh, and Lavan San household cleaner, and Magia Blanca bleach. The very next year, P&G acquired Tambrands, Inc. and the Tampax line of tampons, becoming the leading provider of feminine products.

1998 brought with it a major restructuring initiative named Organization 2005 to boost innovation, launch new products faster, and increase revenue as well as profit. The significant change that the restructuring brought to the fore was increasing focus on brands rather than geographies, and this helped P&G significantly in the years to follow.

Just before the close of the century, P&G made two significant acquisitions: one of Iams Company, the leading pet food maker in the US, and Recovery Engineering, Inc., which had the PUR brand of water-filter products. Safe to say, both these acquisitions worked out quite well.

In 1999, P&G went on to launch Swiffer, a dusting mop for quick cleaning, and Febreze as well Dryel, fabric care, and household cleaning products.

Key Takeaway 3: Adapt With Changing Times

P&G has never limited itself. From launching an array of quality products and entering in toiletries, paper goods, food, OTC drugs, and cosmetics industry to expanding internationally with an endless list of acquisitions, P&G continued to grow.

In the process, it faced numerous challenges, such as charges by FTC and a decline in earnings in 1985, but the company bounced back stronger than ever. It even took the difficult yet much-needed step to restructure the business in order to enhance efficiency. Being flexible and proactive enabled P&G to stay a step ahead and remain resilient in the face of adversities.

P&G In The 21st Century

Further restructuring, launching of new products, and acquisitions continued into the 21st century.

The restructuring that began in the 1990s was completed in the early 2000s. While operational problems were fixed, more than twenty-thousand jobs were shed. It was a difficult yet much-needed step to re-direct P&G on the growth path.

Some notable acquisitions included purchasing the Clairol haircare business from Bristol-Myers Squibb Company, which augmented P&G's positions in the fast-growing and profitable beauty and haircare industry. In addition to this, the acquisition of Dr. John's SpinBrush, a battery-powered toothbrush, and the launch of Crest Whitestrips, a tooth whitening product, gave a boost to the Crest brand, propelling sales.

In 2003, P&G made another successful acquisition of Wella AG, a leading producer of haircare products, entering into the growing salon market. Two years later, P&G became the largest consumer good company by acquiring Gillette.

Here Comes The Growth Factory

It's a well-documented fact that by the early 2000s, P&G was losing steam. There was a stark difference between the company's growth goals and what it was able to achieve due to its innovation pipeline. Something had to be done. The company launched Connect + Develop program to bring in innovation from outside and build on the. While it remains a success even today, it was soon realized that more had to be done.

This was when P&G came up with the unique idea of setting up a "new growth factory." It consisted of a network of structures and enhanced capabilities to quickly introduce new products from ideation to market. From business groups, entrepreneurial guides, a novel innovation manual, and a disruptive college, among other things, the growth factory had it all to strengthen the core business and capitalize on innovation opportunities faster than ever before.

It was a remarkable strategy that took a leaf from the book of Thomas Edison and Henry Ford, combining inspirational ideas with mass production in an age of cut-throat competition and shrinking product lifecycles.

Transformational-sustaining innovations to deliver breakthroughs in existing innovations strengthened organization support for forming and running disruptive businesses, and effective revamping of strategy development and review process enabled P&G to increase its innovation success rate significantly.

More Restructuring & Acquisitions

By 2012, P&G exited the food industry, having sold Jif Peanut Butter, Crisco, Folgers Coffee, and finally Pringles. By 2014, it also left the pet food business.

The company decided to restructure once again in order to streamline the company and enhance its focus on the main brands that were driving growth and contributing to the majority of the profits. From Vicks and the numerous beauty brands to Duracell, various brands were divested. At the same time, acquisitions such as that of the consumer health division of Merck Group, among others, laid bare the fact that P&G has not cast aside its main strategy to grow by acquisitions.

Key Takeaway 4: Never Stop Innovating

P&G came into the 21st century whilst still in a restructuring mode. It was clear that the company's growth was slowing. From new acquisitions and product launches, the company was continuing to do what had served it well.

But there was one main change: focus on innovation. It became crystal clear that P&G could only continue to grow in a vastly competitive world and changing consumer preferences as well as market dynamics by innovating. Hence, the company doubled down on its flagship program Connect + Develop and then came up with this revolutionary concept of "Growth Factory." It not only helped the company make the most of new opportunities but also re-invent the culture of the company, which in turn continued to deliver desirable results.

Core P&G Strategies Fueling Growth

How can a company as large and as diverse as P&G operates successfully and continues to grow? Through well-defined and clear-cut strategies that reinforce as well as build on each other and lead to substantial value creation.

P&G’s winning integrated strategy includes five key aspects, and they are as follows:

A Strong & Focused Portfolio

Superiority across the entire value chain, productivity an integral part of dna, constructive disruption, empowered & agile organization.

Let’s now take a look at each of the core strategies in detail to better understand how P&G does what it does so successfully time and again.

P&G product’s portfolio consists of ten categories of daily-use products, including personal healthcare, oral care, fabric care, home care, skin, and personal care, haircare, grooming, baby care, feminine care, and family care. In each of these categories, P&G has a market-leading share, and the company strives to leverage its position to scale up.

P&G pursues excellence in its products, packaging, communication, retail execution, and value offerings. The company is well aware that superiority matters and is an unparalleled opportunity that can give it a competitive advantage. Hence, it has set the superiority bar quite high and continuously tracks the underlying metrics, including category growth, market share, household penetration, sales, and profits.

Boosting efficiency across all business operations is part of the P&G DNA. From reinventing the way it works, figuring out economical ways of doing things, and delivering cost and cash efficiency to harnessing the power of technology to automate, going digital, and deriving insights from data, P&G continues to take numerous steps to do things better.

Leading with constructive disruption to create positive outcomes is something that P&G continues to do. Combining around 180 years of experience and expertise with the leanness and agility of a startup, P&G comes up with creative solutions to create value for all its stakeholders. To stay on top of the changing customer preferences and market dynamics, P&G goes the extra mile to innovate.

From enabling and engaging employees to creating a strong, driven culture, P&G has created an organization that’s accountable and supportive of each other to deliver desired results. This is done through strong leadership, empowering people to accelerate growth, committing to being a force for good, ensuring sustainability, equality, and inclusion while abiding by ethics and corporate responsibility.

Key Takeaway 5: Craft An Effective Business Strategy

P&G continues to grow due to its highly specific business strategy consisting of action plans that drive the company forward. 

A versatile and strong products portfolio followed by the pursuit of excellence, focus on enhancing efficiency, continuous innovation, and empowerment of the employees help P&G post balanced top and bottom-line growth.

What’s even better is that P&G continues to make iterative improvements in its core strategies in the quest to achieve even better results, continuing to raise the bar for all.

P&G Today & Key Strategic Takeaways

Today, P&G remains committed to improving the lives of 5 billion people in around 180 countries and continues to innovate and lead in each and every aspect while supporting good causes and protecting the environment.

Growth By Numbers

Key strategic takeaways, don’t wait for opportunities. create them.

From delving into new industries and geographical regions to launching new products ahead of time, P&G created growth opportunities for itself. Rather than getting bogged down with problems at hand, such as growing competition, supply chain disruptions, and high risks associated with expanding, P&G constantly explored new and better ways of doing things. This has continued to serve the company quite well.

Hire The Right People For The Right Work & Take Care Of Them

Investment in human capital pays high returns, and it’s the only way companies can make it big. P&G knew this. Right from its profit-sharing plans with employees in the 19th century to beneficial human resources policies today, P&G has continued to be the top employer of choice today. It has always empowered employees and encouraged them to contribute more in order to help the company grow. This has proven to be a master-stroke that separated P&G from the rest of the companies.

Craft A Business Strategy For Today & Tomorrow

P&G has evolved its strategy a number of times, restructured its business more often than it would have liked to, and never hesitated to take risks. Why? Because P&G understands that if you worked a certain way in the past and that delivered results, there’s no guarantee that it will continue to work in the future. This is why it is imperative to stay on your toes and think ahead. Being bold and taking risks in what you believe is crucial; otherwise, you’ll find yourself lagging behind.

Encourage Collective Creativity

Individual creativity can be uncontrollable, but collective creativity can be managed and encouraged. P&G did just that. The company firmly believes that breakthrough innovations improve lives and can win the company decades instead of just quarters. This is precisely why the company spends on average $2 billion on R&D to come up with new offerings that are simpler, easier to access, affordable, and deliver better results.

Award winner: Big Data Strategy of Procter & Gamble

This case won the Knowledge, Information and Communication Systems Management  category at The Case Centre Awards and Competitions 2020 .  #CaseAwards2020

Author perspective

Who – the protagonist.

Linda W. Clement-Holmes , Procter & Gamble (P&G) Chief Information Officer (CIO).

P&G is a leading consumer packaged goods company, regarded as a pioneer in extensively adopting big data and digitization to understand consumer behaviour.

Former Chairman and CEO, Bob McDonald , and CIO, Filippio Passerini , were responsible for the push on big data, which had resulted in P&G becoming more nimble and efficient.

However, some experts were sceptical about P&G’s obsession with digitization, and how it could slow the speed of decision making.

It was in June 2015 when Linda replaced Filippio.

P&G is headquartered in Cincinnati, Ohio, but its brands are sold worldwide.

“ Change movement is one of the biggest challenges of big data implementation. Analytics need to be integrated with processes. We had to educate and train our field force over and over again in order to make analytics a part of their daily routine.” A head of analytics at a leading logistics company

Linda had the big responsibility of continuing and leveraging the big data initiatives started by Filippio.

In order to achieve this, a culture of data-driven decision making within the organisation needed to be implemented by the leadership team.

Linda’s job was to convince them of her vision.

AUTHOR PERSPECTIVE 

Vinod said: “I am extremely honoured to receive such a prestigious award from The Case Centre, popularly dubbed the Case Method Oscars!

“I am earnestly grateful for the recognition I have received for my effort which would not have been possible without the guidance and support of my Dean, Debapratim Purkayastha, who gave me an opportunity to associate with him in writing this case.”

Predicting the future

Debapratim commented: “Big data analytics has always been a key strategy for businesses to have a competitive edge and achieve their goals. Now, predictive analysis through big data can help predict what may occur in the future.

“The topic is very contemporary to current business trends and the case helps the students to be updated with the organisational readiness to welcome latest changes in technology for better performance. The case discusses in detail how Procter & Gamble adapted the big data through different tools like Decision Cockpit and Business Sphere.”

Vinod commented: “The case helps understands many strategic, as well as technical aspects of big data and business analytics, and how they are implemented in a fast-moving consumer goods (FMCG) like Procter & Gamble.

“Not only does it help understand the opportunities and challenges in implementing a big data strategy, but also the significance of accessibility to information in an organisation and how its functioning can be transformed through the availability of real-time data.

“The case enables a discussion on ways in which big data could be productively employed in an organisation in some of the key business functions.” 

Debapratim added: "Educators may like using our other case,  Consumer Research at Procter & Gamble: From Field Research to Agile Research , as a follow-up, as it shows how the pioneers of marketing research is now leveraging big data for agile research.

Identifying the right information

Debapratim explained: “Understanding of the concepts that are going to be taught through the case study is a prerequisite of writing a case. Finding the relevant information, and presenting the case in an understandable manner to students is also equally important.

"Most importantly, people new to case writing should work with more experienced case writers to hone their skills in case writing.”

The authors

Celebrating the win

Unfortunately, due to the Coronavirus pandemic, we were unable to present the authors in person with their trophies for winning the Knowledge, Information and Communication Systems Management category in 2020.

We are delighted to celebrate Debapratim and Vinod's win by sharing these pictures of them with their awards - congratulations!

The protagonist

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Home » Business Analysis » Case Study of Procter and Gamble (P&G): Structure and Culture

Case Study of Procter and Gamble (P&G): Structure and Culture

Three billion times a day, P&G brands touch the lives of people around the world. This happens because P&G provides branded products of superior quality and value to improve the lives of the world’s consumers. This results in leadership sales, profit and value creation , allowing employees, shareholders and the communities in which we operate to prosper. The Procter & Gamble Company (P&G) is a brand behemoth. The world’s first maker of household products courts market share and billion-dollar brands. Its business is divided into three global units: beauty, health and well being, and household care. It also makes pet food and water filters and produces soap operas. Some 25 of P&G’s brands are billion-dollar sellers, including Gillette Fusion, Always/Whisper, Braun, Bounty, Charmin, Crest, Downy/Lenor, Folgers (which it reportedly plans to spin off), Gillette, Iams, Olay, Pampers, Pantene, Pringles, Tide, and Wella, among others.

The P&G consists of over 138,000 employees working in over 80 countries. It began as a small, family-operated soap and candle company now provides products and services of superior quality and value to consumers in more than 180 countries. In P&G, they are focusing their efforts on where they can make the most meaningful difference in both environmental and social sustainability. Their commitment begins with P&G’s Purpose, values and principles, in which sustainability is embedded, and manifests itself in a systemic and long-term way. They try to make their company better.

Business Structure

The Procter & Gamble Company (P&G) is divided into three main worldwide units, which are household care, beauty and grooming and health and well-being. Every units’ report is sent to president of global business units. P&G has restructured its hierarchy of top executives in order to meet the changing needs of their larger, more flexible and faster-paced global business. Lafley, who is the chairman of P&G , announced that ‘P&G has nearly doubled its business since 2000 with the acquisitions of the Clairol, Wella hair care businesses and Gillette. The change in structure is designed to meet the needs of a larger business that is also developing new initiatives faster than in the past’.

Initially, P&G managed its international operations through an international division of foreign expansion, in the same manner many other multinational enterprises. A variety of products were identified to match national differences and preferences. Consequently, a portfolio, consisting of subsidiaries, run by country general managers was established. However, this management structure may result in two basic problems. Firstly, the cost of operating these subsidiaries is high, and secondly the ferocious autonomy of national subsidiaries prevented the global roll out of new products and technology improvements. Therefore, P&G needed innovation in the subsidiaries management structure. It concluded that the matrix structure , in which subordinates report to more than one superior, is a better alternative for P&G, as it allows authority to be kept at lower levels. However, most firms would have some difficulty implementing this Matrix structure into their organization because it is difficult to organize multinational activities through this complex structure. For example, dual reporting can lead to disagreements and confusion and a possible overlap of responsibilities. This may result in a loss of accountability and wastes time. Through time P&G has been trying to optimize its structure. The current structure resulted in a culture within P&G, which was viewed as slow, conformist and risk-averse. This led to a decrease in productivity and an increase in inefficiency in the organization. Moreover, these factors would slow down the decision making process and reduce the competitiveness of the company. Although, the management structure of P&G seems imperfect at the moment. However, the Procter & Gamble Company is still a giant in the area of consumer goods and the leading maker of household products in the United States. P&G operates its business in over 80 countries around the world and has approximately 300 brands in more than 160 countries. The matrix structure helps P&G develop its global business structure into more specific areas. As a result, the company has become more flexible to change within market competitions and the different expectation of P&G.

The final stage of completing the innovation process of management structure is to transform the formal structure and responsibilities of the company. For example, the global business units of P&G were established in order to manage product development, manufacturing and marketing of their respective categories all around world. Furthermore, global business service units were established to organize with the transactional activities such as Accounting, HR, IT, etc. Eliminating bureaucracy and increasing accountability is another main objective of structure change.

The Procter & Gamble Company’s corporate structure has been mainly dependent on worldwide subsidiaries and merging. During this time of restructuring, P&G has continued its active acquisitions pace. For instance, P&G entered the European tissue and towel market through the purchase of Vereinigte Papierwerke Schickedanz AG’s European tissue unit and added the luxury fragrance business of Giorgio Beverly Hills, Inc. In the same year, P&G returned to the South African market following the lifting of U.S. sanctions. The company has altered its geographic management structure gradually. As a result, P&G has divided its operations into United States and International, which is would now managed around four regions, North America, Latin America, Asia and Europe/Middle East/Africa.

Procter & Gamble announced a new restructuring initiative in September 1998. A key factor of this restructuring was a shift from an organization centered around the four geographic regions to one centered on seven global business parts based on product lines: Baby Care, Beauty Care, Fabric & Home Care, Feminine Protection, Food & Beverage, Health Care & Corporate New Ventures and Tissues & Towels. P&G has continued to restructure and adapt to different markets and different financial situation worldwide. According to a firm press release announcing the new structure, ‘This change will drive greater innovation and speed by centering strategy and profit responsibility globally on brands, rather than on geographies”.

Business Culture

Culture plays an important role in any organization to run their organization well in this fast growing business world. Culture is defined as a pattern of shared basic assumption that the group learned as it solved its problem of external adaptation and integration that has work well enough to be considered valid and therefore to be taught to new members as a correct way to perceive, think and feel in relation to those problem. Organizational culture is the acquired outcome of group experience, as it is to a large extent unconscious. The organizational culture comprises of three layers first one is the artefacts, espoused values and underlying assumption.

• Artefacts:   Innovation culture is the mission statement of Procter and gamble organization in which they state that “the consumer is boss”, consumer should be the heart of all P&G do from ideation stage through the purchase of the product. For example if 15 seconds with a deodorant or two minutes with a disposal diaper have made a small part of your life a little bit better then P&G made a difference. P&G policies made the company a unique one that respect of governments and law, respects in workplace and respect in the market place. P&G is a multinational company and it is widely spread geographically. They maintain open work system in lots of work places around the world. Executive offices do not have doors. Leaders do not have a secretary cordoning them off. All the offices on the executive floors at Procter and gamble are open the conference room is an open round space. They made it round as a small symbol of the new approach.
• Espoused values:   P&G is having hierarchy of company ethics principles. PVP(Purpose, Values and principles) , corporate policies, worldwide business conduct standards, operating policies/procedure/practices. For over 170 years P&G purpose values and principles has been guiding the way they do business. There purpose is to provide branded products and services of superior quality and values that improves the lives of the world’s consumer. P&G lives with its people and values, they recruit the finest people in the world who built organization by promoting and rewarding people without regard to any difference related to performance. For example Procter and Gamble pioneered a technician based system in its manufacturing plants during the 1960’s and 70’s. In this system they avoided the approach in which one person assigned to do only one job. The technician system still operates today. To get the highest evaluation rating in P&G factory, you learn how to do all the jobs on line and once you have that rating, company expect you to be capable of problem identification, problem solving, and innovation. This background has made it easier for us to plug manufacturing and engineering in to the innovation culture. P&G CEO Lafely said in one conference that once people in our organization have succeeded at innovation you can see the energy in the company changing. People routinely says that we can do this is feasible and the change of attitude of the people in P&G is incredible to watch. Integrity, leadership, ownership, passion for winning and trust are the main asset values of P&G. By considering purpose and values they made their principles like the show respects for individual, interest of the company and individual are inseparable and innovation is the cornerstone of P&G success. These are the officials objectives which had been espoused by the company head and it is common for P&G organization all over the world.
• Underlying Assumptions: It consists of unconscious, taken for granted beliefs, perception, thoughts and feelings. P&G are having problem relating to external adaption and internal integration. P&G keep refining their products, launch model from ideas, to prototype, to development, to qualification and to commercialization. Applying this sequential practice on large scale and replicate them does not mean to eliminate judgment, that’s why P&G needs active leaders and a strong innovation culture. Therefore P&G introduces the inclusive culture for leaders and they expected to build inclusive work environment that welcomes and embraces diversity an environment where people feel comfortable. Forced diversity training/learning process are utilized to equip leaders to values and nurture difference in management experience, style of leadership and problem solving approaches.

By analyzing the P&G’s culture it is seen that P&G is having a strong and dominant culture and that culture follows in every part of the world. Innovation is the main theme of P&G’s success and to bind organization culture together.

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Procter and Gamble (P&G): Strategic Management

Introduction, organizational methods, strategic change management.

Bibliography

Procter and Gamble (P&G) is a global company, which operates in 160 countries around the world. Most products of P&G became universally recognized brands such as itsHead & Shoulders, Pantene, Tide, Ariel, etc. Today, P&G is dynamically evolving corporation operating within a rapidly evolving global environment. Marketing around the world allows P&G to reach global target audience and increase sales. Founded in 1837 by William Proctor and James Gamble, Proctor & Gamble (P&G), is one of the top U.S. makers and developers of household goods. P&G has branded many common popular household products from Charmin toilet paper. With products in more then twenty categories, there isn’t a household across the world that does not have at least one product made by P&G. P&G’s mission statement states, “We will provide branded products and services of superior quality and value that improve the lives of the world’s consumers.” (P&G Home Page 2009) Their mission statement has contributed greatly to the success of their organization. P&G objectives and goals have been set to obtain their main purpose. By obtaining these goals they will be rewarded by increased consumer brand recognition and profits.

P&G believes that they attract the finest people to work for them. Per P&G’s website, As previously mentioned above P&G focuses on five main values for their employees. The first one is leadership, they believe that are all leaders in our area of responsibility, with a deep commitment to delivering leadership results. Also, as an organization they can develop the capability to deliver strategies and eliminate organizational barriers Ownership is the next trait looked for in an employee, P&G wants an employee who will treat the company assets as their own and acting in the best interest of the company. Next, there is integrity, P&G looks for those individuals who are straightforward with others and always trying to do the right thing, A passion for winning is something P&G is known for they take pride in their accomplishments and want employees who are always working to improve themselves and the company.

And finally, there is trust (Daft, 2003). Trust plays a key factor in everyday roles at the organization, a level of respect to colleagues, customers, and consumers at all times needs to be upheld (P&G Home Page 2009) P&G is focused on being successful in every niche of their everyday business. From their manufacturing plants to their corporate offices and consumers, P&G demonstrates and upholds the same level of quality service. Many of P&G’s principles and values seem to be redundant in their use, which has caused them to come across as being overpowered but also boring due to repetition. As a company, they have clarified in a great deal what they are looking for from applicants and what they expect you to uphold as an employee (Dobson and Starkey 2004).

P&G could present their long-term goals and objectives more clearly and openly for knowledge. However, based on their rankings and profits for the past couple of years, they seem to be heading in the right path. Also, in regards to their values and principles wanting a mutual respect for all individuals, this seems as if it would cause a problem in respect with communication between management and fellow employees. As a company, you would want employees to be respectful of one another, however, hold management to a higher level of respect.

The business world of the past few decades has been more focused on the largest multinational corporations and their effects upon the international markets as well as upon consumers. Motivated by the desire to become among the strongest competitors, several medium-size companies have developed strategic plans to increase their customer numbers, profits, and revenues as well as commercial and competitive position. Procter and Gamble have always been the American leader regarding the manufacturing and selling of consumer products, anything from personal hygiene products to detergents. However, on the international scale, Proctor and Gamble were only the second-best, being outrun by the Anglo-Dutch company Unilever. Influenced by the international trend started by corporations wishing to become the best in their domain, P&G developed a strategic plan to gain its international leader position (Dobson and Starkey 2004).

Their plan to expand regarded a merger with another American leader manufacturer and seller of consumer goods, but highly specialized in a complementary field, Gillette. In 2005, the two major companies merged into the world’s number one leader organization specialized in consumer products, therefore, dethroning Unilever. Procter and Gamble were generally specialized in family and women’s care products, whereas Gillette was specialized in men’s care products. By combining the knowledge and information acquired by P&G and Gillette, the newly formed company added to their line of internationally acknowledged products (such as Ariel or Pampers) another set of renowned products such as Gillette razors, Duracell batteries, Oral-B dental hygiene products, and Braun (Daft, 2003).

Globalization involves contracting workforce from abroad and the reasons for doing so are various, the most eloquent being highly specialized personnel and lower costs. However, criticized for increasing the unemployment rate in the country of the outsourcer, off-shoring is an international trade that has influenced numerous companies. Like with several other large corporations, the possibility to reduce costs and motivated P&G to launch the outsourcing process. Moreover, in the particular case where Procter and Gamble deliver products to 160 countries, the necessity to collaborate with the abroad workforce could not be neglected (Daft, 2003).

In this order of ideas, by 1999, P&G had already opened headquarters in 81 different states. To cope with the immense demand for P&G products all over the world, it becomes more efficient to produce some of the products in the countries they were being sold, instead of producing them within the United States then exporting them abroad. Moreover, in 2003, the website news.com announced that Procter and Gamble had sealed an outsourcing deal with Hewlett-Packard. Since most of the production, finance, and accounting processes had already been distributed worldwide to the 81 headquarters, P&G needed HP to “outsource transactional accounts payable in regions across the globe.” In other words, HP’s main objective was to maintain and improve the quality of P&G services across the globe through developing and sustaining a viable information network. It’s generally accepted that technology has drastically changed humanity’s existence by introducing new concepts, ideas, information, and gadgets to sustain a certain kind of lifestyle. Technology has also had major influences upon the domain of business and economics by resizing consumers’ demands and obliging companies to develop at a rapid pace (Drejer, 2002).

From the economic perspective, P&G’s current position is marked by stable development and growth. It is one of the most important industry requirements, which is essential for the expansion of opportunities and plays an important role in making or breaking the competitive positioning. It allows P&G to receive input from those who are involved in this business, giving a “real world” perspective. This essential input often gives us insider accounts of a contemporary world which companies are not normally privileged to see. Strategic alliances include Clairol in 2001 and German haircare giant Wella in 2003. This brought P&G US$100 million includes Axion and Gama in France, Dinamo in Italy, Ajax in Sweden, and Dynamo in Denmark. P&G has several joint ventures in China, primarily domestic firms. P&G has also realized rapid expansion through capital injections. To protect themselves, local and international companies are constantly against international acquisitions policy. This year, P&G was claimed in anti-competitive action. This strategy helped to save about $25 million for P & G and maintained more close relations with national partners and customers. In recent years, P & G has shifted its global focus to core brands and price reduction measures. This strategy has helped P&G to maintain high-speed growth through optimization of its facilities and constant technological innovation. Changes to one area of the value chain have knock-on effects in other parts of the business (Dobson and Starkey 2004).

Mergers and acquisitions have a substantial impact on P & G market performance. The process of globalization and mergers has a major impact upon the future structure of the consumer goods retail industry, but many regulatory and ownership barriers remain in force worldwide. Organizational ‘type’ has been dramatically influenced by the rise of globalization, and in this changing environment, P is seeking to maximize its ‘global reach, in the belief that those that offer a global service and products will be in the strongest competitive position. The nature of competition can be characterized through the structure of competition namely the number and types of competitors and the action of competitors (Kotler and Armstrong 2005).

For P&G, outsourcing is as much an attempt to regain some sense of corporate focus, as it is a means to reduce costs. The market is so large that specialists have arisen at all stages of computer design, manufacture, operation, and maintenance. Many companies are choosing to outsource the set-up, operation, and maintenance of their computer systems and networks, accessing the equipment and expertise of a specialist provider. Also, globalization affects the business itself opening new opportunities for growth and expansion. P&G contracts out workforce from abroad to avoid cultural and national differences (Kotler and Armstrong 2005).

Strategic change is important for every company as it helps it to improve market position and respond effectively to new environmental conditions and competition. In P & G, the need for strategic change is caused by an economic crisis and a crucial need to introduce new and innovative technology into practice. The retail industry needs an effective change management strategy to save costs and time on implementation and void failure. Although plans for programs can be developed fully, the description of the change will be less prescriptive than those in project plans. The change management was introduced in production facilities: new methods of transfusions and absorption. These proposals for change stated the general objective as it was conceptualized at present, establish the criteria of both the final change and the decision-making process leading to it, recommended the types of sources to be used in gathering information, and put into place a date-specific procedure for activating the program. Many activities lend themselves to this kind of planning: for instance, employee benefits programs, public relations, and customer service. Change systems used this kind of improvement in matters about curriculum, safety, and staff development. In short, any undertaking that is intended to generate a continuing change –that is, it was not subject to completion– naturally took the form of this kind of proposal for change (Jouve, 2002).

The change will take place in production facilities and will be based on new technological improvements and the introduction of environmentally friendly technologies. The change model selected for implementation is Lewin’s change model. This model is the most appropriate one because it stipulated the main steps of change and meets the organizational objectives and structure of the pharmaceutical industry. This model will help P & G to solve problems and new environmental demands imposed on the pharmaceutical industry. To some extent, this model is simple and is easily applied by the company’s management team.

Also, it covers all important areas of change allowing the pharmaceutical industry to prepare the ground for change, introduce change, and level resistance to change. The complexity of the model does not often lead to better outcomes and results: a simple model allowed P & G to develop state-of-the-art solutions to its current problems and weaknesses. The intent is to follow some of Lewin’s approaches on (1) unfreezing and (2) refreezing. The industry staff is motivated to formulate what the differences were (unfreezing) and try to replace irrational assumptions with a more rational understanding of differences with the help of a trained facilitator (refreezing). When one initiates such training in an indigenous organization, it is across the board instead of with isolated groups within the organization (Jouve, 2002).

The main benefits of the proposed change approach are that it helps P & G management to prepare employees for change and overcome possible difficulties in communication and performance. In general, all employees are motivated and very enthusiastic about new changes and their positive impact on the company’s production. The four frames are not only sustained an organization of the company, the frames provide the capacity for growth and change. The strategic changes in P & G have the obligation both to ensure the adequacy of resources for achieving the stated purpose and to appropriate the resources within the system for optimal results. In P & G, resources are typically categorized as financial, physical, human, and intellectual, almost everything begins and ends with economics. Possible difficulties posed by the change are a lack of skills and knowledge among workers. So P & G while managers invest in physical capability–if for no other reasons than to qualify for a tax break or to remain competitive–are reluctant to reduce the bottom line by direct expenditure for acquiring or, even more crucial, developing human or intellectual capacity. And change systems, which live by probation and priority, seldom can fund the last few items in the financial plan. The average investment in human capacity is less than 1 percent of the total revenues.

The use and implementation of the Balanced Scorecard will help P&G to evaluate resources and make a complex analysis of current needs and demands. Most modern organizations, therefore, are seriously incapacitated; even the routine business operations are marginal. And, worse still, there is no capacity for expansion. Quite often the impetus comes to form misguided management practices. An overemphasis on efficiency, a term borrowed from manufacturing, not only prevents current effectiveness but also forecloses any hope of future development. In extreme instances, the depletion of capacity is equivalent to self-cannibalization (Levy and Merry, 1986).

Top-down and bottom-up designs will help P&G to develop the information processing and knowledge structure required by the change management. Focusing their activity on the latest innovations in the fields of care products as well as technological innovations, P&G realized the magnitude of the technological involvement in the business actions and made continuous efforts to sustain the development of technology and particularly information technology. For instance, when acquiring Gillette in 2005, P & G declared that the merger of the two leaders would dramatically change the industry, especially the manufacturers of IT. IT specialists expect P&G actions to influence other multination corporations and aid them to realize that “new tech initiatives contribute to product, service, and process innovation” driving them towards investing in the field of IT (Levy and Merry, 1986).

The strategy followed by Procter and Gamble to support technology and technological innovations is that of making available within the company jobs in careers in technology. Moreover, Procter and Gamble organize Research and Technical Careers in Industry Conference where they inform the public about the latest technological innovations and their importance. The corporation also emphasizes the “science behind the brands” and encourages the audience to apply to the technical positions available within the corporation.

The case of P&G shows that successful and effective marketing depends upon efficient organizational methods and management tools that meet the needs of the time. The business strategy of P&G is “value pricing strategy” during which it boosted advertising and performance. The stronger each of these forces is, the more P&G is free in its ability to earn greater profits. This strategy is successful because the bargaining power of buyers had a strong influence upon the business. P&G, producing differentiated products, is brand loyal, and potential new entrants encounter resistance in trying to enter the industry. This strategy is also an important factor in increasing the costs for customers of switching the products of new competitors. The opportunity of this strategy is further growth and competitive position; Technological forces including support technology and technological innovations, which has changed the nature of business relations and interaction with customers. Technological change also affects production methods, requiring the implementation of new processes for companies to stay competitive.

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Daft, R. L. 2003, Organizational Theory and Design . 9th Edition. South-Western College Pub; 8 edition.

Drejer, A. 2002, Strategic Management and Core Competencies: Theory and  Application . Quorum Books.

Jouve, B. 2002. Innovation without Change? German Policy Studies , 2 (1), 1-4.

Kotler, Ph., Armstrong, G. 2005, Principles of Marketing . Prentice Hall; 11 th edition.

Levy, A., Merry, U. (1986). Organizational Transformation: Approaches, Strategies,  Theories . Praeger Publishers.

Proctor and Gambler Home Page. 2009. Web.

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P&G Business Model Analysis

P&G has a portfolio of brands that resonate with consumers spanning five main units and it focuses on their growth , while also innovating by the creation of new products. P&G generated over $80 billion across these brands. Its strength stands by implementing a growth strategy focused on five pillars: portfolio, superiority, productivity, constructive disruption and organizational design.

Table of Contents

Quick glance at P&G Business Model

To understand P&G business model, its critical to grasp the fact it moves in two opposite directions:

• On the one hand it focuses on the growth and success of existing brands and products which have become successful categories in the minds’ of consumers.
• On the other hand, it focuses on innovating, by creating new products, brands, and focusing on making them into new categories

From this combination, P&G business model evolves.

Revenue Model

The company operates five divisions which it calls sector  business  units (SBUs):

• Baby, Feminine & Family Care.
• Health Care.
• Grooming, and
• Fabric & Home Care.

This year Procter & Gamble generated over $80 billion in revenues and almost $18 billion in operating income through five operating units:

• Fabric & home care: $27.5 billion
• Feminine and family care: $19.7 billion
• Beauty: $14.7 billion
• Health care: $10.8 billion
• Grooming: $6.5 billion.

P&G today is worth $340 billions.

P&G Growth Strategy

It comprises a huge portfolio of consumer products acquired via an integrated growth strategy comprising five pillars :

• Portfolio: performance drives brand choice.
• Superiority to win with consumers.
• Productivity to fuel investments.
• Constructive disruption across its business.
• Organization: empowered, agile, accountable.

How does Procter & Gamble selects its portfolio of products?

It looks for “what’s needed?” and “what’s possible” and it combines that to build its products’ portfolio:

Superiority

How does P&G measure superiority?

Through five elements:

• Products that needs to be so good to be differentiated in the minds of consumers.
• Packaging that needs to attract consumers, convey brand equity (demand generation via packaging).
• Brand communication that amplifies product and packaging through advertising that is meant to make consumers think, talk, laugh, cry, smile, act and buy (advertising serves to amplify the brand to create a differentiated category in consumers’ minds).
• Retail execution via store coverage, product forms, sizes, prices points, shelving and merchandising. While the online is driven by content, assortment, reviews, search and subscription revenues.
• Consumer & customer value presented in a clear and shoppable way at a compelling price.

“ A Constructive Disruption Mindset “

A willingness to change, adapt and create new trends and technologies that will shape our industry for the future.

Dawn Powerwash Dish Spray Case Study

One example that P&G mentions is the Dawn Powerwash Dish Spray addressed a changing consumer need.

As consumers look for products that help them clean dishes as they go (instead of waiting until the end of the meal), this product enables direct application, which enables consumers to clean as they go, speeding up the process, and saving also water.

Pampers Rewards app Case Study

Another example, that P&G mentions as constructive disruption is Pampers Rewards app, which helps parents receive helpful information.

Here the challenge is to reach parents, at different stages of their journey, through smart audiences built over the app in order to enable these parents to find useful information.

Smart audiences help P&G reach a niche audience, like that of parents at various stages of growth of the baby (newborn, crawling, potty training), so that they can also receive very targeted advertising.

P&G Organizational Structure

Procter & Gamble’s organizational structure moves along a few key pillars.

The whole organizational structure is designed to enable speed and focus, while also managing challenges and headwinds as consumer needs change.

The three pillars are:

• Empowered: P&G follows a product-based organizational structure, where each product line management can make decisions based on its vertical.
• Agile: the company can make quick iterations to product designs, and adapting consumer needs.
• And accountable: as each management line will have its own core metrics to assess success.

The  organizational structure  of Procter & Gamble is predominantly  product -type divisional. This means decision-making,  strategy , and  management  are determined by  product -based divisions headed by autonomous CEOs. 

The company has six divisions, with each headed by a President:

• North America.
• Asia Pacific.
• Greater China.
• India, Middle East and Africa (IMEA).
• Latin America.

Various Presidents and Chief Officers head functional groups related to:

• Research, Development and Innovation.
• Human Resources. 
• Equality & Inclusion.
• Product Supply.
• Ethics & Compliance.
• Analytics & Insight.
• Global Walmart. 
• Legal and Secretariat. 
• Sustainability. 
• Communications.

P&G Key Growth Driver? Its Acquisition Strategy!

P&G sweet spot stands in the ability to acquire products, and further enhance their distribution , by enhancing the supply chain (availability of that product) and its demand generation (via ad hoc branding campaign, both off and online).

Thus, P&G finds brands that are compelling for consumers and it further scales them up through a distribution playbook that it has built over the decades.

For the same token, P&G also moves quickly in divestitures of brands and products that might not resonate anymore with its business strategy .

Value Proposition:

• Quality and Trusted Products : Procter & Gamble (P&G) offers a wide range of consumer goods known for their quality, reliability, and efficacy. With brands like Tide, Pampers, Gillette, and Crest, P&G provides products that consumers trust to deliver consistent performance and meet their needs.
• Innovation and Research : P&G invests heavily in research and development to innovate and create new products that address evolving consumer preferences and market trends. By constantly introducing new formulations, features, and technologies, P&G demonstrates a commitment to innovation and staying ahead of the competition.
• Brand Portfolio : P&G boasts a diverse portfolio of brands across multiple product categories, catering to various consumer segments and lifestyles. This broad assortment allows P&G to reach a wide audience and maintain relevance in different markets worldwide.
• Customer-Centric Solutions : P&G focuses on understanding consumer needs and preferences to develop products that offer meaningful solutions and benefits. Whether it’s household cleaning, personal care, or baby products, P&G aims to enhance consumers’ lives by addressing their everyday challenges and concerns.

Revenue Model:

• Product Sales : The primary revenue source for P&G is the sale of its consumer goods products. P&G distributes its products through various retail channels, including supermarkets, drugstores, convenience stores, and e-commerce platforms. Revenue is generated through the sale of individual units or bulk shipments to retailers and distributors.
• Brand Licensing : P&G may generate additional revenue through brand licensing agreements, allowing other companies to use its brand names and trademarks on complementary products. By licensing its brands, P&G can extend its brand presence into new product categories and markets while earning licensing fees or royalties.
• Subscription Services : In some product categories, such as personal care and grooming, P&G offers subscription services where consumers can sign up for recurring deliveries of their favorite products. Subscription models provide a recurring revenue stream for P&G while offering convenience and value to consumers.
• Joint Ventures and Partnerships : P&G may engage in joint ventures or strategic partnerships with other companies to expand its product offerings or enter new markets. These collaborations can generate revenue through profit-sharing agreements, royalties, or equity stakes in joint ventures.

Distribution Strategy:

• Baby, Feminine & Family Care
• Health Care
• Fabric & Home Care
• These business units manage the distribution and marketing of products within their respective categories.
• P&G generated over $80 billion in revenue in a single year, with each business unit contributing to this total.
• The revenue breakdown by business unit includes Fabric & Home Care, Feminine and Family Care, Beauty, Health Care, and Grooming.

Marketing Strategy:

• P&G’s marketing strategy leverages nostalgia to connect with consumers emotionally.
• Nostalgia marketing aims to evoke feelings of connection, safety, hope, and joy in customers, strengthening their bond with P&G brands.
• P&G’s marketing emphasizes the importance of product superiority and storytelling.
• Superiority is measured through product quality, packaging attractiveness, effective brand communication, and a compelling value proposition .
• Storytelling in advertising aims to engage consumers on emotional levels, making them think, talk, laugh, cry, smile, act, and buy.
• P&G’s marketing efforts target a wide demographic range, appealing to both children and adults.
• The company’s brands and stories have a cross-generational appeal, creating lasting emotional connections with consumers of all ages.

Organizational Structure:

• P&G’s organizational structure is built on three key pillars: Empowered, Agile, and Accountable.
• It enables speed, adaptability, and effective management in response to changing consumer needs and market dynamics.
• P&G follows a product-based organizational structure, where each product line management can make decisions autonomously.
• This structure allows for quick iterations in product designs and adaptations to evolving consumer needs.
• The company has six divisions, each led by a President, responsible for specific regions, including North America, Europe, Asia Pacific, Greater China, India, Middle East and Africa (IMEA), and Latin America.
• P&G also has functional leaders overseeing key areas such as Research, Development, and Innovation, Human Resources, Product Supply, Ethics & Compliance, Analytics & Insight, Global Walmart, Branding, Legal and Secretariat, Sustainability, Communications, and Finance.

Growth Strategy:

• Portfolio: Focusing on performance to drive brand choice.
• Superiority: Creating standout products, packaging, and brand communication.
• Productivity: Efficient processes fuel investments.
• Constructive Disruption: Embracing change and innovation in various aspects of the business.
• Organizational Design: Establishing an empowered, agile, and accountable organizational structure.
• P&G excels in acquiring compelling brands and enhancing their distribution .
• The company focuses on improving supply chain efficiency and generating demand through branding campaigns.
• P&G is also quick to divest brands that no longer align with its business strategy .
• Dawn Powerwash Dish Spray addresses changing consumer needs with a lean innovation approach, saving time and water.
• The Pampers Rewards app helps parents receive valuable information and targeted advertising through smart audience targeting.

Mission and Impact:

• P&G’s mission is to create products and brands that make everyday life better for people around the world.
• The company aims to enhance the lives of consumers through its consumer goods and brands.
• P&G’s focus on quality, storytelling, and emotional connections has had a significant cultural impact.
• Its brands and products are integral to global culture and have shaped the way people experience consumer goods and advertising.

Key Highlights

• Superiority: Creating products, packaging, and brand communication that stand out.
• Productivity: Utilizing efficient processes to fuel investments.
• Enhancing existing brands and products to maintain consumer success.
• Innovating by creating new products, brands, and categories.
• P&G generated over $80 billion in revenues and almost $18 billion in operating income.
• The company’s divisions contributed to revenues as follows: Fabric & Home Care, Feminine and Family Care, Beauty, Health Care, and Grooming.
• Portfolio: Selecting products based on what’s needed and possible.
• Superiority: Measured by differentiation, packaging, brand communication, retail execution, and consumer value.
• Constructive Disruption: Focusing on lean innovation, brand building, supply chain, and digitalization.
• Examples: Dawn Powerwash Dish Spray and Pampers Rewards app as cases of constructive innovation.
• Empowered: Product-based structure enables vertical decision-making.
• Agile: Allows quick adaptations to product designs and changing consumer needs.
• Accountable: Each management line has its own core metrics for success.
• P&G’s strength lies in acquiring compelling brands and enhancing their distribution .
• Focuses on supply chain enhancement and demand generation through branding campaigns.
• Quickly divests brands that no longer align with the business strategy .

Read Next: P&G Brands And Products , Constructive Innovation , P&G Organizational Structure .

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Case Study: P&G’s Global Diversity Goals Set and Communicate Priorities

Steps to Success 1. Ensure there is representation from all functions in your council 2. Have an agenda that includes annual targets and checkpoints to see how they are being met 3. Clearly communicate the council’s goals, progress and plans

How does a huge corporation like Procter & Gamble (P&G), with 95,000 employees and operations in about 70 countries, get its diversity and inclusion messaging heard and acted upon? It starts very clearly with the Global Diversity Council.

The council is chaired by CEO David S. Taylor and led by William Gipson, President, End-to-End Packaging Transformation and Chief Diversity &Inclusion Officer. Gipson’s role, he notes, is very important because at P&G, the Chief Diversity Officer is a functioning line executive. “We have chosen (the last two) CDOs that are not from HR. I have other responsibilities and bring a level of credibility that allows us to test ideas. It adds weight to the position and, in my case, brings ideas of experimentation that lets us see if things work.”

The 26-member council consists of each of the function heads, executive sponsors of employee resource (affinity) groups and HR practice experts within the functions. The addition of the function heads has been recent and is important, Gipson says, “because they are the ones that source, develop and advance the talent.” The creation of the HR practices happened about nine years ago “and it is important to bring that skillset to we focus on what is actually executed.”

The council meets quarterly, mostly in person but some members dial in. The agenda is established by Gipson’s office and includes annual targets. “At P&G, everything is based on target projections and business targets and D&I targets are set the same way,” he says.

This year, for example, a big focus is on advancement of women globally. “We have really done a great job at retaining and recruiting women but advancing them to the senior levels of the organization has not occurred as quickly.”

Another focus this year in the United States is with employees of African ancestry. “We want to drive more consistency in retaining, developing and advancing them,” he says.

The council has six other focus areas – Hispanic, Asian Pacific, people with disabilities, American Indians, LGBT and U.S. veterans but for this year, the big emphasis is on global women and employees of African ancestry.

The council sets organizational goals, usually for 18 months. “We are really clear and transparent,” he says and cites the organization’s recent Staff to Win initiative, which emphasizes hiring more mid-career professionals from outside the organization and less shifting of talent between brands. The program’s stated objective is to “build a pipeline of outstanding diverse talent that delivers outstanding business results.” Goals have been set to be accomplished by 2020.

So how does P&G gets its D&I messaging out across the company? There are quarterly webcasts to all employees and D&I and cultural change is one of the big callouts. It in the company’s annual Citizenship Report, D&I is featured prominently. There is an annual D&I awards event and an annual D&I newsletter as well. And executives throughout the company have local town hall meetings and discuss culture and D&I related issues. The company’s annual survey allows employees to comment on how they feel about cultural and “diversity and inclusion are front and center,” says Gipson who notes that we have “lots of touch points through the year.

Gipson is eager to share what P&G has learned with other corporations. “People leading this work should be humble in terms of openness and willingness to learn from others. Corporations shouldn’t be in competition with each other. This has a higher order.”

This case study will appear along many others in Diversity Best Practices’ upcoming publication, The D&I Strategist Playbook. The Playbook will be your KEY resource for developing and executing your D&I strategy for impact and progress against the critical levers that drive diversity and inclusion. Be sure to be on the lookout for an opportunity to pre-order this book, coming out later this year!

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Procter & Gamble’s Supplier Relationship Management: A Model for Collaborative Success

Introduction, a. brief overview of procter & gamble (p&g).

Procter & Gamble, commonly known as P&G, is a multinational consumer goods corporation founded in 1837. With its headquarters in Cincinnati, Ohio, P&G has grown to become one of the world’s leading companies in the fast-moving consumer goods sector. The company’s diverse portfolio includes well-known brands in categories such as personal care, home care, health care, and baby care. With a strong commitment to innovation and sustainability, P&G continues to make a significant impact on consumers’ lives worldwide.

B. Importance of supplier relationship management in today’s competitive market

In the increasingly competitive global market, companies are constantly seeking ways to improve efficiency, reduce costs, and drive innovation. One key aspect that plays a significant role in achieving these goals is supplier relationship management (SRM). Effective SRM enables organizations to create mutually beneficial relationships with their suppliers, leading to better collaboration, increased value, and streamlined processes. By fostering strong supplier partnerships, businesses can enhance their product offerings, adapt to changing market conditions, and maintain a competitive edge.

C. Overview of P&G’s supplier relationship management program

Recognizing the immense potential of SRM, Procter & Gamble implemented a comprehensive program to strengthen its relationships with suppliers. This program focuses on identifying and nurturing strategic partnerships, streamlining the supplier base, and promoting collaboration and innovation. As a result, P&G has been able to improve efficiency, reduce costs, and bring more innovative products to market faster. The success of P&G’s supplier relationship management program serves as an inspiring example for other companies looking to optimize their supply chains and foster a collaborative environment with their suppliers.

Streamlining P&G’s Supplier Base

A. identifying strategic partners.

• Criteria for selection – Procter & Gamble recognizes the importance of carefully selected strategic partners to optimize its supply chain. Key criteria for selecting suppliers include their ability to deliver high-quality products, cost competitiveness, expertise in the relevant industry, commitment to sustainability, and capacity for innovation. Additionally, P&G values suppliers that demonstrate a strong cultural fit, aligning with the company’s values and vision for the future.
• Benefits of strategic partnerships – Strategic partnerships with suppliers offer numerous benefits for P&G. These partnerships enable the company to leverage the expertise, resources, and innovation capabilities of its suppliers to drive growth and create value. By working closely with strategic partners, P&G can improve its responsiveness to market changes, reduce lead times, and capitalize on opportunities more effectively. Additionally, strategic partnerships foster a collaborative environment that can lead to joint problem-solving, shared risk management, and continuous improvement.

B. Reducing the number of suppliers

• The rationale behind consolidation – P&G’s decision to consolidate its supplier base stems from the understanding that managing a large number of suppliers can be complex and resource-intensive. By reducing the number of suppliers, the company can focus its resources on nurturing meaningful relationships with strategic partners, leading to better alignment, more effective communication, and improved collaboration. This consolidation also simplifies the supply chain, making it easier to monitor supplier performance and ensure consistent quality across all product categories.
• Impact on efficiency and cost savings – The reduction of P&G’s supplier base has had a significant impact on efficiency and cost savings. With a streamlined supplier base, the company can negotiate better terms, reduce transaction costs, and optimize procurement processes. Additionally, a consolidated supplier base allows for improved visibility into the supply chain, enabling P&G to identify bottlenecks, redundancies, and opportunities for further improvement. Ultimately, this approach to supplier management has led to lower costs, enhanced operational efficiency, and a more agile supply chain that supports P&G’s growth and innovation objectives.

Fostering Collaboration and Innovation

A. joint business planning with suppliers.

• The process of developing shared goals – Procter & Gamble places great importance on developing shared goals with its strategic suppliers. This process begins with understanding each other’s objectives, priorities, and capabilities. P&G and its suppliers then collaborate to create a joint business plan that outlines mutual goals, identifies opportunities for growth and innovation, and establishes performance metrics. This collaborative approach ensures that both parties are working towards common objectives and helps to build a strong foundation for a long-term partnership.
• Aligning strategies and resources – Once shared goals have been established, P&G and its suppliers work together to align their strategies and resources to achieve these objectives. This includes aligning procurement, product development, and manufacturing processes, as well as sharing knowledge, expertise, and best practices. By working together and leveraging each other’s strengths, P&G and its suppliers can drive innovation, improve efficiency, and create value for both parties.

B. Open communication channels

• Regular meetings and information sharing – Open communication is vital for fostering collaboration and innovation between P&G and its suppliers. To facilitate this, regular meetings are held to review progress, share updates, and discuss challenges and opportunities. These meetings provide a platform for both parties to share information, gain insights, and collaborate on solutions. By maintaining open lines of communication, P&G and its suppliers can work together more effectively and adapt to changes in the market.
• Addressing challenges and opportunities – In addition to regular meetings, P&G encourages its suppliers to proactively communicate any challenges, risks, or opportunities that arise. By addressing these issues together, P&G and its suppliers can jointly develop solutions, mitigate risks, and capitalize on new opportunities. This collaborative approach helps to strengthen the relationship between P&G and its suppliers while driving continuous improvement and innovation.

C. Incentivizing supplier innovation

• Rewarding suppliers for new ideas – Procter & Gamble understands the value of supplier innovation and encourages its suppliers to contribute new ideas and solutions. To incentivize this, P&G recognizes and rewards suppliers for their innovative contributions. This can include public recognition, financial incentives, or opportunities for increased business. By rewarding innovation, P&G fosters a culture of continuous improvement and encourages its suppliers to think creatively and take calculated risks.
• Collaborative product development – P&G actively engages its suppliers in the product development process, leveraging their expertise and capabilities to create innovative products that meet customer needs. By involving suppliers from the early stages of product development, P&G can access new technologies, materials, and ideas, leading to more innovative and competitive product offerings. This collaborative approach to product development strengthens the relationship between P&G and its suppliers while driving growth and value creation for both parties.

Enhancing Product Offerings and Reducing Time to Market

A. leveraging supplier expertise.

• Utilizing supplier knowledge in product development – Procter & Gamble recognizes the immense value of its suppliers’ knowledge and expertise in product development. By actively involving suppliers in the development process, P&G can tap into their specialized skills, industry insights, and innovative ideas. This collaboration allows P&G to create products that are better tailored to consumer needs, while also incorporating the latest advancements in materials and technology.
• Access to new technologies and materials – Suppliers often have access to new technologies, materials, and manufacturing techniques that can help improve product quality and performance. By working closely with its suppliers, P&G can gain insights into these innovations and incorporate them into its product offerings. This not only enhances P&G’s products but also helps the company stay ahead of its competitors and maintain its reputation for innovation.

B. Accelerating product launch timelines

• Streamlined supply chain processes – A key benefit of P&G’s strong supplier relationships is the ability to streamline supply chain processes. By working closely with suppliers, P&G can identify and eliminate inefficiencies, optimize inventory levels, and reduce lead times. These improvements help accelerate product launch timelines, ensuring that P&G’s innovative products reach consumers as quickly as possible.
• Improved coordination between P&G and suppliers – Effective coordination between P&G and its suppliers is crucial for reducing time to market. Open communication channels, joint business planning, and shared goals all contribute to improved coordination and alignment. This close collaboration enables P&G and its suppliers to work together more effectively, respond to changes in the market more rapidly, and bring innovative products to consumers faster.

Measuring the Success of P&G’s Supplier Relationship Management Program

A. key performance indicators (kpis).

• Cost savings – One of the primary objectives of P&G’s supplier relationship management program is to reduce costs. By streamlining the supplier base, improving collaboration, and optimizing procurement processes, P&G can achieve significant cost savings. Monitoring cost reductions over time is a crucial KPI for measuring the success of the program and ensuring that these savings are sustained.
• Efficiency improvements – Efficiency improvements are another key metric for evaluating the success of P&G’s supplier relationship management program. These improvements can be measured by assessing factors such as lead times, inventory levels, and production throughput. By tracking these metrics, P&G can gauge the effectiveness of its supplier relationships and identify areas for further optimization.
• Innovation rates – The rate of innovation is an essential KPI for P&G, as it indicates the company’s ability to maintain its competitive edge and meet evolving consumer needs. This can be measured by tracking the number of new products launched, the speed of product development, and the adoption of new technologies and materials. By monitoring innovation rates, P&G can ensure that its supplier relationships are contributing to the company’s growth and success.

B. Long-term benefits

• Strengthened brand reputation – P&G’s supplier relationship management program contributes to the company’s strong brand reputation. By collaborating with suppliers to develop innovative, high-quality products, P&G demonstrates its commitment to meeting customer needs and staying at the forefront of industry trends. This, in turn, enhances the company’s brand image and increases consumer trust and loyalty.
• Increased market share – A successful supplier relationship management program can also help P&G increase its market share. By accelerating product launch timelines, improving efficiency, and reducing costs, P&G can bring innovative products to market more quickly and at a competitive price. This enables the company to capture a larger share of the market and expand its presence in existing and new product categories.

Lessons Learned and Best Practices

A. the importance of trust and transparency in supplier relationships.

One of the key lessons from P&G’s supplier relationship management program is the critical role of trust and transparency in building strong supplier relationships. By maintaining open communication channels, sharing information, and jointly addressing challenges, P&G and its suppliers can build a foundation of trust that enables them to work together effectively and achieve mutual benefits. Companies looking to improve their supplier relationships should prioritize trust and transparency as cornerstones of their approach.

B. Adapting supplier relationship management strategies for different industries

P&G’s success demonstrates that supplier relationship management strategies must be tailored to the unique characteristics of each industry. By understanding the specific needs, challenges, and opportunities within their industry, companies can develop a more targeted approach to managing supplier relationships. This involves identifying the most relevant criteria for selecting suppliers, aligning strategies and resources, and adapting communication and collaboration methods accordingly.

C. Fostering a culture of continuous improvement

Another important lesson from P&G’s supplier relationship management program is the value of fostering a culture of continuous improvement. This involves encouraging suppliers to contribute new ideas, learn from each other, and seek out opportunities for optimization. By creating an environment in which both the company and its suppliers are committed to ongoing improvement, businesses can drive innovation, enhance efficiency, and strengthen their competitive advantage. To achieve this, companies should incentivize supplier innovation, collaborate on problem-solving, and regularly review performance metrics to identify areas for further improvement.

A. Recap of P&G’s supplier relationship management program’s impact on collaboration, innovation, and product offerings

Procter & Gamble’s supplier relationship management program has had a significant impact on the company’s collaboration, innovation, and product offerings. By streamlining its supplier base, fostering trust and transparency, and promoting a culture of continuous improvement, P&G has built strong relationships with its strategic partners. These relationships have enabled P&G to leverage the expertise and resources of its suppliers, accelerate product launch timelines, and bring more innovative products to market. As a result, the company has experienced cost savings, efficiency improvements, and increased market share.

B. The potential for other companies to adopt similar approaches to strengthen their supplier relationships and achieve greater success

P&G’s success demonstrates the potential benefits of implementing a robust supplier relationship management program. By adopting similar approaches, other companies can strengthen their supplier relationships, improve collaboration, and drive innovation. This, in turn, can lead to greater operational efficiency, cost savings, and a more competitive product portfolio. The key to achieving these benefits lies in prioritizing trust and transparency, tailoring strategies to the unique needs of each industry, and fostering a culture of continuous improvement. By following P&G’s example, companies across various industries can unlock the full potential of their supplier relationships and achieve greater success.

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P&G Strategic Management: A Detailed Analysis

Task: Conduct a detailed analysis on P&G strategic management and write a report under 6500 words.

Executive Summary The report focuses on the P&G strategic management which is one of the largest consumer goods companies that operates in world market. The company has more than 165 brands that are sold through retail and departmental stores. P&G uses different channels of communication for advertising its products. It uses Noticeable Superiority Strategy for gaining competitive advantage in the industry. By the year 2030, 80% of its operations will adapt sustainable practices. The external environment of the UK is uncertain due to Brexit and Covid- 19 while the industry rivalry is high- moderate. The products of P&G are segmented nearly too all market segments while the company targets high- and middle-income earners of the society. Positioning of the products is related to advertisement that appeals to the customers. The company maintains customer relations through “customer impulse” and online magazine for 50 plus women. The global approach through its various product categories forms one of its strengths while inefficient customer relationship strategy is the internal weakness of P&G. The customer has uplifted many lives through its social responsibility and aims at global upliftment by 2030. It is recommended that the company should build strong P&G strategic management for maintaining its relationships.

Introduction Business organizations manage their objectives and achieve their targeted goals through P&G strategic management. In recent times, market changes frequently unlike the earlier periods. Thus, it implies that companies should be flexible for implementing changes in alignment with the demands and preferences of different stakeholders (Ansoff et al, 2018 P3). Aspects like skills, organizational culture, and employee base are some of the important factors that influence the achievement of targeted objectives. Proctor and Gamble (P &G) are one of the companies that have successfully adapted P&G strategic management for attaining organizational objectives. William Proctor and James Gamble founded the corporation in 1837 with its headquarters at Cincinnati, Ohio. In recent times, David. S. Taylor has been the CEO of the company from 2015 to till date. The company produces, manufactures, and markets different product categories and operates in various continents like Asia, Europe, India, Middle East, Africa, Latin, and North America. P & G operates in 180 countries with 5 billion customer base that contributes to the net sales of $65 B (Proctor & Gamble, 2020b).

The company has 165 brands that are divided into product categories of fabric, home, baby, feminine, family, grooming, oral, personal, and skincare. At the initial stages, the company was established to sell soap and candy but in recent times, the company has diversified into different categories. Therefore, P &G has become one of the largest consumer goods companies in the world (Proctor & Gamble, 2020b). The company has a clear vision of creating value through in different products categories.

It has incorporated sustainable practices thereby adopting social-environmental techniques for providing its customers with huge product categories that have raised living standards in many emerging markets of the world. P&G strategic management reaches its world customers by marketing and advertising through different media channels (Proctor & Gamble, 2020b). Therefore, marketing is a strong component that helps the firm to reach its broader audience in less time. This report will analyse the P&G strategic management through various theoretical models.

Figure 1 : P& G product Categories (Source: Proctor & Gamble, 2020a)

Role of Strategic Marketing, Marketing process P&G strategic management involves planning, development, and implementing strategies for attaining long and short-term objectives (Dhir, 2019). In planning the marketing strategies, the companies aim at satisfying the customer needs that further increases the profitability. Strategies can be planned through 4ps of marketing that are product, promotion, place, and price (Murer and Bonati, 2010).

Product The product or the services are aspects through which the companies conquer new markets/ old markets with new products. In this view, P&G strategic management has developed more than 165 products in 10 different categories (Proctor & Gamble, 2020a).

Baby care- Diapers like pampers, Luvs, and All good.

Fabric Care- Laundry Detergents like Ace, Ariel, Tide, Bounce

Family care- Paper towels like Bounty, Charmin, and Puffs

Feminine care- Sanitary napkins like Always, Always Discreet, and Just.

Grooming- Personal grooming like Gillette and Braun.

Haircare- Haircare products like Aussie, Head & Shoulders, and Herbal essence.

Home Care- Home cleaning products like Cascade, Comet, Ambi Pur

Oral care- Dental care like Crest, Fixodent, and Oral-B.

Personal Health care- Personal health care products like Vicks, Pepto Bismol.

The company has been planning to innovate new products that will use artificial intelligence for its operations and shapes the P&G strategic management.

Price- Manufacturing companies that produce FMCG products often target premium and value customers and thus, sets the prices to meet the requirements of both income classes. In the UK market, the company sells both premium and value products that are priced at economic and premium prices.

Place- P&G sells its products through different distribution channels like retailers, small shops and sampling in market places. Since the company has a large variety of products, it is difficult to sell it directly to its customers. Thus, big retail outlets, small departmental stores, and sampling are used as channels for reaching to its customers.

Promotional – Promotional activities forms the basis of the market strategy, thus it can be evaluated through promotional mix strategies of P&G strategic management. The company uses different aspects of the promotional mix for brand awareness amongst its customers located in the UK.

Advertising- Television, online marketing like Google Ads and the use of Social media as well 

Sales promotion- Discounts and promotional offers

Public Relations- Trade fairs, exhibitions, customer relations.

Personal Selling- Deploying staffs in a big retail store for boosting sales

Direct Marketing- Direct marketing is done only through sampling in market places and retail outlets.

The P&G strategic management is based on three objectives that are innovation, product development, and improvement in life.

Product Development- the Company aims at product development thereby enhancing the lives of customers located in various regions.

Innovation- Innovation is the heart of the P&G strategic management through which new methods in operations are integrated and products are developed every year to gain higher brand awareness. In recent times, the company has been investing in the manufacturing of FMCG products that will operate through Artificial Intelligence, for instance Lumi- smart diapers.

Improvement in Life- The products are developed in each category, at prices affordable by all classes to uplift the living standards of the regions.

Marketing Process The P&G strategic management process revolves around the Noticeable Superiority Strategy through which the company builds a competitive advantage over its competitors (Proctor & Gamble, 2018). The strategy involves five elements that are

Products- They produces superior products through which the customers recognize the differences.

Packaging- The products are packaged in superior quality material through which brand equity and values are conveyed to the customers. The attractive packing enhances sales of the products.

Brand Communication- Brand communication is done through advertisements and promotions through various media channels. The promotions and advertisements involve different emotions of the customers like happiness, motivation, talking, and others. This helps the customers connect with company and thus, contribute in brand awareness and increased loyalty amongst customers (Proctor & Gamble, 2018).

Retail execution- The Company has a clear vision of reaching a huge customer base. Thus, retail execution is done by displaying the right products, appropriate coverage, merchandising and pricing. The online content is also sorted with offers, reviews, right content while also designed for user-friendly search.

Customer Value Equations- the P&G strategic management aims at providing superior products to its entire customer thus; pricing is maintained considering requirements of income classes.

Figure 2 : Noticeable Superiority Strategy (Source: Proctor & Gamble, 2018)

Thus, the firm aims at achieving all five elements in Noticeable Superiority Strategy for achieving growth in P&G strategic management and creating value amongst the customers.

Figure 3 : Noticeable Superiority Strategy (Source: Proctor & Gamble, 2018)

Linking of Market Strategy to Corporate Strategy Linking marketing strategy with the corporate helps in developing sustainable living patterns. The corporate strategies involve sustainable practices in production and manufacturing that benefits both the environment and social communities (Dornyo, 2020 P34). The company has envisioned new strategies for adopting sustainability for improving living patterns in the UK and around the world.

In the environmental strategy of 2030, P&G strategic management has planned to create value with positive impacts on the environment and society. It has aimed to address two important issues that is diminishing natural reserves and growing consumption (Proctor & Gamble, 2020d).

Improving the livelihoods of Farmers- Palm oil is a key raw material for the majority of its products. P&G strategic management is implementing local programs for encouraging responsible agricultural practices thereby improving the livelihoods of farmers.

Ending Plastic wastes- Collaboration with companies to produce environmentally friendly packing materials. They are also planning for sustainable discharge of industrial wastes.

Protecting water: They partnered with many companies to promote water-saving and storage in various regions of the UK and worldwide. In this strategy, P&G strategic management addresses to solve residential energy consumption, GHG emissions while managing water crisis in urban areas (Proctor & Gamble, 2020d).

Recycling products: Pampers recycles the used diapers for making bottle caps and viscose. The company has partnered with German companies for producing Head and Shoulder bottles that are made with 20% of beach plastics. P&G has integrated plastic-free packaging for old spice and secret deodorants (Proctor & Gamble, 2020c).

Power consumption: P&G has planned to use 100% renewable sources of energy while adapting processes that will increase water efficacy by 35% (Proctor & Gamble, 2020d).

Saving energy consumption through efficient products: It was noticed that household activities like washing and cleaning requires high energy consumption in many urban areas of the UK and worldwide. Thus, Ariel and Tide contain ingredients that reduce time, energy, and money.

Therefore, the company is aiming to adopt 3Rs of sustainability like recycling, reduce, and reuse.

Strategic Marketing Planning- Porter’s Five forces Model and PESTLE Strategic Market Planning helps in analyzing the external market environment for surviving in the market and reflects on the P&G strategic management. Thus, external market environments include PESTLE and Porter’s Five Forces Model that analyses the competitive environment and other external factors that might impact the survival of the company

PESTLE PESTLE analysis refers to social, environmental, political, technological, legal, and economic that forms the physical external environment that might impact the profitability of the organization.

Figure 4 : PESTLE (Perera, 2017 P 2)

Political- There is two major aspects like Taxes and Political stability that forms the political environment of the company (Perera, 2017 P 2). In this scenario of P&G strategic management, governments can increase or decrease corporation tax and implement employment laws that impact the profit margins of the firms (Thomson Reuters, 2020). In this view, Brexit implementation at the end of 2020 might impact the supply chain of P&G. As a part of the European Union, the company does not pay taxes on the imports and exports of goods across the nations (Hilton, 2017). If Brexit is implemented with NO- Deal then P&G’s cost of operation will increase.

Economic- The economic factors for P&G strategic management relate to the levers that drive the nation towards path of growth and development. These economic levers include growth, interest, unemployment, inflation, and exchange rates (Rastogi and Trivedi, 2016 P385). It was noticed that economy of the UK was slowed down from 2016 and contracted in the second half of 2019. After the Brexit decision, the economy has managed to increase its GDP by 1.4% in 2019 compared to 1.3% in 2018 (Verdict media, 2019). However, the economy is expected to fall negatively by -6.5 % due to the outbreak of COVID-19 while it might grow at 4% by the end of 2021 (Nordea Trade, 2016a). Thus, it can be said, due to Brexit and Covid-19, the business environment of the UK is uncertain and may impact the survival of many companies.

Social- The social factors include taste and preference patterns, demographic structure, education, and other aspects that reflect the lifestyle of individuals (Vallati and Grassi, 2019 P67). The companies align their products and services according to the social factors for surviving and earning profits in the region. In Feb 2019, it was noticed that Pound fell due to which demand for FMCG products was also impacted. The outbreak of Covid-19 has resulted in demand fall while only essential commodities are purchased by residents due to lockdown in the country. Thus, changes in the economic pattern, the demand for some of the products along with the P&G strategic management will be impacted.

Technological- The technical advancements in the country impact the operations of the companies. Some companies gain operational efficiency due to high technological advancement in the nation (Vallati and Grassi, 2019 P67). In the view, the technology of the UK is high as compared to the EU. Thus, Brexit will not impact the tech sector so P&G will gain technical assistance for developing its smart FMCG products (The Telegraph, 2020). The company has planned to develop smart toothbrushes, diapers, skin treatment devices, and many others.

Legal- The legal factors relate to the laws and regulations by the government like taxes, employment laws that increase the cost of operation whiles lower the profit margins of the commercial units (Rastogi and Trivedi, 2016 P385). In the UK, there are laws like The Equality Act 2010, National Minimum Wage law, Value Added Tax Amendment Regulations 2018, and Payment Regulations Services 2017 which have to followed by the commercial units for surviving in the country. However, P&G is a bigger brand and abides by the legal policies for its success (Nordea Trade, 2016b).

Environmental- Many commercial units pollute the environment in which it operates. Thus, environmental laws and policies of the region should be followed for sustainable operations (Rastogi and Trivedi, 2016 P385). However, P&G strategic management has already adopted environmentally friendly techniques and plans to develop sustainable operations by 2030. As mentioned above, many activities have been planned by P&G strategic management that will promote water storage, zero use of plastic, and products that consume less energy (Proctor & Gamble, 2020c).

Thus, by analyzing the PESTLE, we conclude that uncertainties like Covid- 19 and Brexit might hamper the profitability of P&G strategic management in the short run. The majority of the factors in PESTLE will be impacted after Brexit and end of the pandemic, thus, P&G should be prepared for managing the after-effects of the uncertainties.

Porter’s Five Forces Model Porter's Five forces model for P&G strategic management helps in determining the competitive strength in the industry.

Figure 5 : Porter’s Five Forces Model (T. Pham., D.K. Pham, and A. Pham, 2018 P 37)

Threats of New Entrants- In the industry technology advancements and introduction of new products pressure the existence of other firms in the market. The technical innovations by firms helps in reducing costs and adopting new pricing strategies that impacts the profitability of the existing companies thereby increasing the competitiveness in the industry (Perera,2020 P2). In this view, P&G strategic management has been investing in the innovation of new products and provides the customers will value pricing, Thus, it becomes difficult to replace the brand loyalty of P&G products.

Bargaining power of Suppliers: In the industry, where the raw materials are scarce and only a few suppliers are present the bargaining power of suppliers is high. On the contrary, in the industry like FMCG, suppliers in huge numbers are present in the region (Perera,2020 P2). Moreover, Companies like P&G strategic management procures products in large quantities that also awakens the bargaining strength of suppliers. As mentioned, the presence of suppliers sufficiently also weakens their strength.

Bargaining Power of Buyers: The bargaining of power is strong when the industry is dominated by many firms selling similar products. In current times, in retail outlets, consumers purchase products that have high discounts (T. Pham., D.K. Pham, and A. Pham, 2018 P 37). Thus, P&G sells and produces similar products to Unilever, therefore, Unilever may offer a lower price than P&G. In this scenario, pricing strategies should be altered and provision of free sampling can be included for some of the products that will boot brand awareness. Pampers provide free samples to infants due to which sales have increased. The bargaining power of buyers is moderate.

Threats from Substitutes: The availability of similar products in the same or more price increases the threats from the substitute products. In the FMCG sector, the many brands are available that sell similar products thus, raises the competition. P&G can increase the switching cost of the customers by understanding the needs and requirements. P&G strategic management should focus on building customer relations that will be beneficial for surviving in the highly substitute markets. Thus, the threats from the substitute products are moderate.

Rivalry: Highly competitive market increases the rivalry amongst the competitors (Humphries and Gibbs, 2015). In other words, the products of P&G are sold by other brands with more or less the same discounts and offers. Thus, occasional discounts on personal products will help in differentiating its products from other competitors. In the FMCG industry the rivalry is high.

The five forces of the model by Porters' have analyzed that moderate to the high competition is prevalent in FMCG markets of the UK. Thus, P&G has planned new strategies to sustaining its customer base in the long run.

Segmentation, Targeting, and Positioning (STP) Figure 6 : Segmentation, Targeting and Positioning (Dolnicar, Grün and Leisch, 2018)

Segmentation Segmentation for P&G strategic management refers to the segregation of the consumer base based on demographics, Psychographics, Geographical and Behavioural factors. P&G has segregated its market on all the different types (Dolnicar, Grün, and Leisch, 2018). In the market of UK demographics, Psychographics and Behavioural are majorly dominated. In the demographics, aspects like age, gender, income, family, and many other factors are included. P&G has produced goods for each section, for instance, for infant and kids, pampers diapers, Crest (a type of toothpaste) are available. The company offers different brands of sanitary napkins for women while male perfumes are manufactured for men customers. Products like Puff Plus tissues and detergent powder are available in all sizes and packs are manufactured for satisfying family and individuals need. It can be said that P&G strategic management has a clear vision to reach a larger customer base thus; it has designed and created products to meet the requirements of all customers.

Targeting In the targeting strategy, markets that provide higher profits are largely targeted. The companies target those market segments that will provide a faster return on investments (Padgett and Loo, 2019). In markets like the UK, daily use products offer volume sales as it is used by the majority of the population. In this view, the P&G strategic management has targeted customers from the middle and upper classes. Thus, product categories like personal, home, fabric, oral care suffice the needs of the entire population belonging to higher middle- and low-income classes. However, some premium products like Gillette and Boss are created to target high-income classes. The company was established only to sell soaps and candies but has invested in diversified products for each market segment. 

Positioning Positioning in P&G strategic management refers to the presentation of the products in a way that the customers are attracted to. In other words, marketing and packaging are essential after segmentation and targeting are done (Padgett and Loo, 2019). In the FMCG industry, high competition prevails in the market, thus, the companies should emphasize on unique selling proposition for attracting the customers. In this view, P&G products are advertised with emotional stories providing solutions to the problems of the customers. This helps in boosting sales as many of the competitors lack creative marketing advertisements techniques. The company donates some portion of its profits to less privileged classes. They invite consumers to also donate by purchasing the commodity. Thus, the technique helps raise funds and sales volume for its products. Additionally, the company FMCG giant that innovates its products and presents the same to its customers. For instance, Ariel is manufactured with ingredients that will save time, money, and energy (power) of the customers. This USP is advertised for increasing its customer base.

Benefits of Relationship Marketing The companies initiate strategies for maintaining customer relationship that helps in building brand awareness and increases loyalty amongst the consumers. (Putz, 2019 p6). Multinational firms need to keep pace with changing customers' demands and requirements. Many firms have developed CRM for gaining in-depth knowledge about customer requirements while also encouraging consumer suggestions (Steven and Richard, 2018). Since, technology is the heart of P&G, it maintains customer relationships through digital platforms. The company obtains data through "Consumer Pulse" which acquires customer analytics from social media, blogs, direct conversations which further impacts the sales and brand values of P&G strategic management (Smart Data Collective, 2019).

To enhance its customer relationship, P&G launched its digital magazine named "women of a certain age" for the women customers that are aged above 50 years. To embrace the confidence of 50 plus, the platforms share beauty tips that can be followed by using P&G products like Olay and Pantene (Brunsman, 2016). The magazine operates under Victoris.Co.UK that advises tips for beauty and health for women aged 50 or above. To increase participation by the customers, the company provide discounts and coupons through registration scan be increased.

The company uses digital platforms like social media for encouraging customer participation. Thus, customer involvement in the quizzes and activities organized by P&G helps in building long-term relationships and boosts the P&G strategic management. In 2019, the company had rolled out new perfumes named Secret. It launched a campaign for the product that invited the 10 women customers to share their stories in advertisements (Brunsman, 2019). Therefore, advertisement and campaigns that invite customer interactions also help in building relationships that further increases sales volume and brand value.

Growth Opportunities in Specific Market Using Ansoff Matrix The Ansoff Matrix is also known as the product or market expansion grid. There are four quadrants of the matrix that include Market development, Diversification, Market penetration, and Product development (Planellas, 2019 P4).

Market Development refers to targeting new markets with exiting products. In this strategy, the companies may use different media channels for marketing and advertising its product in a new market (Mukherjee, 2016 P75).

Diversification refers to investment in new lines production in new markets. This strategy for P&G strategic management has many risks and opportunities for the company (Khan, 2018 P 130).

Market Penetration refers to the development of a market strategy for strengthening the growth of existing customers. In this strategy, the company might introduce loyalty programs or introduce price cuts for higher brand awareness in the same market.

Product Development refers to the development of product strategies that may include repacking or adding some new flavours and variants to the existing products (Khan, 2018 P 130).

In the Ansoff Matrix, diversification strategy will be beneficial for the P&G strategic management. the company has already planned in producing innovative products with Artificial intelligence. Thus, the introduction of new products to new customers will help P&G in gaining higher competitive advantage in the retail industry.

Marketing Strategy Options using BCG matrix BCG matrix based on the P&G strategic management is the product portfolio matrix by Boston Consulting Group. The matrix was designed to help companies in reaping growth opportunities by reviewing its product portfolio. There are four quadrants of the matrix (Planellas, 2019 P102).

Figure 7 : BCG Matrix (Planellas, 2019)

Dogs : These are products or services that have slow growth or low market share. The DOGS should be removed as they drain the resources of the company while increasing their costs (Curuksu, 2018 139). In this view, many products pet food, Zest, Camay, Pringles, Crisco vegetable oil was sold by P&G as these products have a lower market share as compared to other brands of the company (Morgan, 2015).

Question Mark : These are the products with a high growth rate but placed in low market share. These products can be a star or dog depending on the firm's strategy for increasing the brand value of these products. In this view, many premium products of P&G are placed in low market share due to which sales of other categories are also impacted. It can be said that P&G strategic management focused on strengthening the growth of premium products. Due to this, the focus from home cleaning and personal care was diverted which impacted its sales volume. P&G should place premium products high market share for strengthening its profitability in the premium range.

Stars: These are the products with high growth and are placed in high market shares. The star products generate a high Return on Investments as compared to other product categories (Curuksu, 2018 139). Tide and Gillette is the star products of P&G strategic management. in markets of the UK, Italy, and Spain, these products are placed with high prices and earned huge profits for the company.

Cash Cow: These are the products that have low growth but with high market share (Hague, 2019 P 9). These are mature and established products through the company earn steady profits. In this view, many products like Pampers, Lynx Deodorants, and paper towels are some of the mature products of P&G. These products are demanded and sold to a large extent thereby help the firm in building a competitive advantage.

Strategic Marketing Objectives P&G strategic management thrives over innovation for differentiating its products from that of competitors. However, many of the products like home and personal care have similar substitutes in the UK market. It should expand its innovative strategies in product development for gaining higher brand preferences. They should increase their loyalty programs that will also increase the customer base in the UK as well as other emerging markets. The company can include more products in its 10 categories that will widen its market base.

The company has innovative strength that can be used in gaining a low cost of operations. This will help the company to introduce some of the categories at a low price that will attract valuable customers. Their oral products can be samples in rural and underdeveloped areas that will help improve hygiene in less privileged societies. As an activity of Corporate social responsibility, the company can manufacture small packets of detergent and other cleaning products for improving living standards in underdeveloped societies of the UK.

Analysis of Internal and External Environment In the external environmental political, economic, and social factors are included. They play a major role in the sustainability and profitability of the companies (MacLennan, 2017). In the UK, Brexit is one of the political and economic factors that have impacted many firms and retail companies.

Economic Factors : After the Brexit vote, the British pound dropped that further impacted purchasing power capacity. Therefore, the demand full had major impacts on retail products P&G. Since the customer base is comprised of mostly value customer, regular product categories ate impacted more than the premium range.

Political and Social : UK is experiencing a fall in GPD due to the Brexit vote. It is estimated that with No- deal between EU and UK will impact the supply chain of P&G as tariffs and taxes will impose during imports and exports across the boundaries of Europe (BBC News, 2019). Much small business and retail outlets will be shut due to import duties. This will also impact the distribution channel of P&G strategic management.

The outbreak of Covid -19 has also impacted the business of many big retailers and small departmental stores. The government has locked down commercial activities and only essential services are operative. Thus production, manufacturing, and transportation of the P&G strategic management are highly impacted by the pandemic (PWC UK, 2020). It is assumed that the GDP of the country will fall negatively during the pandemic situation and the economic crisis will remain at the end of 2020.

Analyzing Internal Strengths and Weakness (SWOT) SWOT helps in analyzing the internal and external factors that impact the success of the firms. SWOT is an acronym for Strength, Weakness, Threats, and Opportunities (Kohne, 2019 P9). However, internal aspects like Strength and Weakness will be discussed concerning P&G strategic management.

• P&G has high brand awareness in regions of the UK and the world Market.
• It is engaged with more than 165 brands that cater to different requirements of the customers.
• It has huge capital and resources that help market expansion.
• It has a customer base for more than $5 billion.
• Its products have a global reach that increases their customer base.
• Diversified product categories help to target each market segment.
• Customer relationships are weak.
• Employee engagement activities are Low.
• Presence of market substitutes that threatens brand visibility of P&G.
• Food categories are still not explored by P&G.

Marketing Themes (Local, National, and Global) The marketing strategies of multinational firms are aligned with local, national, and global themes.

Improving Living Standards of less privileged : P&G has designed a program named Child's Safe Drinking Water (CSDW) through which it provides clean water billion of children and communities. The P&G strategic management has innovated purification packet in the UK through which dirty water can be used for drinking purposes.

Figure 8 : Purification Packet (Proctor & Gamble, 2020e).

In the year 2004, it delivered 13 billion liters of safe drinking water to many households, schools, and colleges. By the year 2020, approximately 15 billion liters will be delivered to rural and urban areas. The company launched a campaign named "1 pack Pampers + UNICEF= 1 vaccine" through millions of newborn children who were saved in 20 countries (Proctor & Gamble, 2020e).

Relief programs in Disasters: P&G strategic management has contributed £750,000 to organizations like CARE, Red Cross, Save the Children, and many other non- profit units. In 2017, approximately 5000 hygiene kits were provided to flood-stricken areas in Malaysia (Proctor & Gamble, 2020e).

Sustainable development: the company has planned to use 100% renewable source for fulfilling its energy consumption. It has partnered with many companies to innovate practices through which residues from the factories will not be discharged into rivers. Additionally, pampers have been recycling used diapers for producing bottle caps and viscose. The company has planned to use 20% bleach material for Head & Shoulder Bottles. 

Conclusion and Recommendations  The report has analyzed the P&G strategic management suing different theoretical marketing concepts. Large Multinational companies adopt unique strategies for market expansion in local and global markets. P&G uses a Noticeable Superiority strategy for gaining a competitive advantage in the retail industry. Innovation is one of the major strengths due to which the company has produced energy-efficient products. Technology is extensively used for manufacturing, designing, and also maintaining customer relationships. Additionally, P&G has planned to adopt many sustainable practices that will benefit small communities and big corporate societies. In its operations from 31 years the company has divested in many nonperforming categories while also earned huge profits by placing high priced products in emerging countries. It is recommended that P&G strategic management should plan new strategies for direct building customer relations who help in retaining the present customer base. It is also recommended that food categories should also be explored by the company for increasing brand awareness in the UK and other emerging markets. It is concluded that P&G follows a sustainable corporate strategy due to which it has conquered the global market.

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Bessière, D., Charnley, F., Tiwari, A. and Moreno, M.A., 2019. A vision of re-distributed manufacturing for the UK’s consumer goods industry. Production Planning & Control, 30(7), pp.555-567.

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Dolnicar, S., Grün, B., Leisch,F., 2018. Market Segmentation Analysis: Understanding It, Doing It, and Making It Useful. Springer. P 245

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Faculty & college.

Faculty of Business, Law and Arts

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BUSN6005 - Strategy and Case Analysis

Unit description

Examines the key principles of strategic management, with particular focus on the strategy process and its individual components – analysis, choice, action and evaluation. This unit makes use of the case analysis method so that students can apply their understanding to real-world problems across a range of professional contexts.

Unit content

Part 1 – Strategy Development

• Outside-in: Strategy as positioning, Porter’s 5-forces and positional matrix, PESTEL
• Inside-out: Resource-based view of strategy, VIRO/VIRN, developing resources/capabilities
• Emergent view of strategy, experiments, strategy innovation, the three views and bringing them together

Part 2 – Strategic Analysis and Fit

• Analysis models and frameworks such as McKinsey7-Ss, MIT90s, CAGE, and how to use them
• Fit and sustainability, strategy-structure-processes, Miles and Snow, structural options

Part 3 – Strategy Implementation

• Strategy implementation and organisational change

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2025 unit offering information will be available in November 2024

Learning outcomes

Unit Learning Outcomes express learning achievement in terms of what a student should know, understand and be able to do on completion of a unit. These outcomes are aligned with the graduate attributes . The unit learning outcomes and graduate attributes are also the basis of evaluating prior learning.

On completion of this unit, students should be able to:

demonstrate an understanding of strategic management tools, frameworks and processes

apply strategic management theories to the analysis of real-world case studies

critique the strategic management approach of a contemporary organisation

apply a formal strategy process to diagnose and address a strategic business problem.

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Courses that offer this unit

Graduate diploma of information technology management (2024), graduate diploma of information technology management (2025), graduate diploma of project management (2024), graduate diploma of project management (2025), master of business administration (2025), master of business administration (2024), master of information technology management (2024), master of information technology management (2025), master of project management (2025), master of project management (2024), any questions we'd love to help.

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May-aug24 management pre-seen material.

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Case Study (Optimal Pricing Strategy) (1)