As Procter & Gamble expanded across the globe, it faced several issues with resp

ect to its operations. The primary issues that P&G faced are as follows:
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Continuous expectations to innovate
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Decisions about the retention of selected brands
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Customer satisfaction
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Keep a check on costs
Talk on Global issues and their impact on the company s product/s or service/s to
the executives
Path Making:
1.
Anticipating bumps and detours even if you do believe that the world wil
l eventually become much more integrated
a.
P&G has always maintained its position ahead of its time and ahead of it
s competition. This can be seen with the introduction of Tide and the constant f
ocus P&G has maintained in this segment. The Tide formulation has been redesigne
d 60 times till now catering to the unsaid needs of its customers. P&G came up w
ith Tide with Bleach for white clothes, Tide coldwater filled with void for envi
ronment friendly purposes, Tide free without dyes and perfumes for consumers wit
h sensitive skin. Now P&G aims at launching Tide that is pocketbook friendly athome solutions to take care of delicate apparel.
b.
Since P&G was always diligent with the attention it paid to its customer
s it was able to come up with these solutions and stay ahead of the market. Tide
was undergoing the fiercely competitive and never ending wash innovation cycle
because of which it was called the washday miracle .
c.
For Tide specifically P&G had anticipated the changes in the washing beh
aviour of its customers like from washboards and wringer washers to the automati
c washing machines and so was proactive enough to change its strategy to adapt t
o these shifts. Due to this vision of P&G it was able to maintain its loyalty qu
otient among its customers and acquire more at the same time.
2.
Pay attention to other predictable surprises as well
a.
P&G has always focussed on sophisticated products as against its competi
tors who have played in a relevant geographical setting. The reason for P&Gs pro
ducts being so is its diverse globalization and tapping into a new set of market
s continuously. P&G overcame this challenge as well by recruiting fresh talent f
rom the new markets it had venture into.
b.
P&G had always tried to cater to the upper strata of the society when it
had introduced its products in the countries it was launching. But when it ente
red into India and other developing countries it realised that these strategies
won t work and adjusted all as per the requirements and the conditions in these co
untries.
3.
Add to predictive power by taking things down to the industry and compan
y level
a.
P&G has always been on a spree of expanding its business and introducing
its products in the different parts of the countries. A decentralization of the
management is necessary to manage the expectations of the customers in these pa
rts of the world since these managers can make the firm more locally responsive.
b.
P&G realised soon that its major revenues were generated by 80 of its ma
in brands and so it decided on phasing out the others so that it could concentra
te on these brands and increase its revenues by allocating its resources and fun
ds.
4.
Recognize the importance of business in shaping broad outcomes including
those related to the future of globalization
a.
P&G being a global giant which has majorly invested in innovation has ch
anged the way the world functions on a daily basis. For example in the case of W
almart, P&G has a strong Information System setup that informs it of the smalles
t SKU that gets sold from the shelves of Walmart that helps them in the collecti
on of the revenues and also inventory management.
5.
Don t let a focus on the future crowd out consideration of the here and no
w
a.
P&G has stayed relevant to the global scenarios around the world especia

lly when it is operating in a sector like FMCG which caters to all the classes i
n the society. It has therefore always adapted its strategies as per the changin
g economic and global situations.
b.
In the rising era of ecommerce P&G has again bagged the firs mover advan
tage by grabbing this market through it rewardmeapp.com website which sells and
promotes P&G products exclusively thus reaching out to the masses through the mo
st sought after media.
Performance Review
P&G s revenue in the first quarter stood marginally lower at $20.79 billion than t
he same period in the previous year.
The performance was disappointing as volume and pricing growth, and cost savings
as well was wiped out by a volatile global currency market.
Brand Shedding Continues in Earnest
P&G holds market-leading positions in several of its product offerings and in a
bid to reduce overheads and improve management, the company has been focusing re
sources on its 40 best-selling brands. I would consider those products as best s
ellers that generate more than $500 million annually and represent approximately
85% of our sales; we have decided to strip down our business and sell-off brand
s that fall below this metric.
In November last year, we sold off Duracell, our leading battery brand, to Berks
hire Hathaway in a $3 billion dollar deal. Having sold off the China-based batte
ries joint venture, the sale of Duracell marks our exit from the batteries busin
ess.
In December we announced the sale of Camay and Zest soap brands to Unilever.
We are also exploring our options for divesting the hair care unit Wella and als
o the electric razors and toothbrushes making unit Braun.
Industry and Competitive analysis
P&G has always focussed on quality and innovation. Many local and international
brands, including Colgate-Palmolive offer substitutes, such as Colgate, for Oral
-B.
P&G has higher shares & revenue in North America and China, while Unilever does
better in India and Nestle in Western Europe.
P&G is the leader in 7 of the 10 product categories we serve and number two in t
he remaining three categories. Geographical concentration is also expected to be
higher, as the top 5 countries of each category will account for 54% to 98% of
total global profit of that category.
We look forward to investing in developing markets such as India. We are happy t
o announce that Procter & Gamble has topped Nestle and ITC to become India's thi
rd-largest consumer products maker. We have nearly doubled our sales volume in t
he country in the last three years. Our combined revenues were Rs 9,274 crore fo
r the year ended March 2014, ahead of Nestle India's Rs 9,197 crore and the FMCG
business of ITC that had sales of Rs 8,099 crore.
P&G s business model is not flawed because of the number of brands that it has, ra
ther it is the innovation expectations of the consumers that the company needs t
o fulfil.
After establishing itself well, P&G seemed to perform magnificently in every dom
ain it entered. For decades, they expanded into razors, batteries, beauty, healt
h care and several other consumer goods categories. As P&G grew in size, its rev
enue quadrupled between 1980 and 2000 from $11 billion to $40 billion. P&G follo
wed a centralized structure, this enabled them to succeed and outmarket their co
mpetitors.
Few of the issues were:
1.
Cartel formation
P&G was fined for forming a cartel with Unilever and He
nkel in Europe. P&G had to pay 211.2m Euros, this was after a 10% discount on ad
mitting the cartel formation
2.
Toxic shock syndrome
TSS is caused strains of a particular bacteria. You
may find these bacteria living in human bodies as harmless entities. In 1980, 8

14 TSS cases were reported and 38 deaths were registered. Most of these women we
re reported to be users of P&G s super absorbent synthetic tampons mainly the Rely
tampon. In mid-1980, Centers for Disease Control released a report stating that
Rely was one of the primary reasons behind most of the registered cases. P&G wa
s forced to withdraw Rely subsequently
3.
Reduction in animal testing P&G claimed to reduce animal testing of the
ir food and drug products (~ 80% of their portfolio) in mid-1999. They made inve
stments over $275 million to develop alternate methods
4.
P&G was sued in 2002 for conveying false message that their drug Prilose
c could cure heartburn in 24 hours
5.
The company s biggest problem was the number of brands P&G owned. In 2014,
P&G decided to drop 100 brands under it and retain only 80 of them. This was be
cause these 80 brands generated 95% of P&G s profits. We can apply Pareto s rule her
e where 80% of the revenue is generated by 20% of the product portfolio