Pestle Analysis

P&G unveiled a comprehensive plan to accelerate climate action. In addition, P&G has set a new
goal of reaching net zero greenhouse gas (GHG) emissions across its operations and supply chain
by 2040, as well as intermediate 2030 goals to make considerable progress this decade. Climate
change affects every home and family on the planet. The majority of customers around the world
today want the brands they buy to assist them in leading a more environmentally conscious
lifestyle, and the latest science has revealed that immediate action is essential to avoid the worst
effects of climate change [ CITATION Bus21 \l 1033 ].

P&G has expanded on existing solutions while also seeking for game-changing new ones that
aren't yet available to achieve these goals. This will need collaboration across the commercial,
nonprofit, and public sectors, and it will affect all aspect of our business, from the beginning to
the conclusion of the lifecycle of our products."
Political

As a brand operating globally, P&G has to face several challenges to adapt itself to different
political dynamics of governments and local rules and regulations. To attain its sustainability
initiative, the company has developed an action committee which ensures all work practices are
in line with SOPs.

The P&G Political Action Committee (P&G PAC) is an exclusively volunteer-run, nonpartisan
political action committee. P&G employees can pool personal, voluntary financial contributions
to support candidates at the federal, state, and local levels who support issues important to the
company and the quality of life in the communities where they live and work through the PAC,
which is registered with the Federal Election Commission and appropriate state offices
[ CITATION Doc14 \l 1033 ].

P&G PAC's operations are transparent and compliant with all applicable regulations. A
diversified board of top executives from the corporation, U.S. Government Relations employees,
and legal counsel oversees the PAC, which is governed by a set of bylaws.
P&G's social responsibility programs aim to improve the environmental profile of the company's
operations as well as the lives of children. Encourage and empower all P&G workers to think
about and practice sustainability in their daily work. Finally, shape the future by working openly
with their stakeholders to guarantee that they can continue to develop responsibly in the future.
Personal, voluntary financial donations to support federal, state, and local politicians who
support issues essential to business and the quality of life in the communities where they live and
work.

Economical

The global economy continues to impact sustainability initiatives as companies face a major
dilemma of finding the right balance between making profit and ensuring environmental
stability. P&G has taken several initiatives to reduce its carbon footprints despite bearing loss on
multiple fronts. The company has potentially given up 2% of its annual revenue by giving up
production sources that are harmful for the environment [ CITATION Hou11 \l 1033 ].

P&G has now acquired 97 percent renewable electricity worldwide, moving us closer to our
2030 goal of acquiring 100 percent renewable energy. In 2021, the US Environmental Protection
Agency ranked P&G #5 on the National Top 100 list of green power users and #2 on the Top 30
list for on-site renewable power generation, putting us first in the consumer products category.

P&G employed innovation and continual consumer education to lower the largest component of
our carbon footprint: the energy consumed to heat water during product use. P&G's Tide and
Ariel brands have been assisting consumers in increasing their use of low-energy laundry cycles
since 2015, saving around 15 million metric tonnes of CO2. Tide and Ariel are continuing to
promote cold water washing through new education activities in order to help avoid an additional
30 million tonnes of carbon emissions by 2030, which is more than 10 times the amount
produced each year by P&G's global operations [ CITATION Dob14 \l 1033 ].

In 2014, the company amended their supplier sustainability scorecard to ensure it was not
contributing to the loss of rain forests, making data management more effective and responsive.
In order to lower the company's overall environmental footprint, P&G seeks to strengthen data
collection and coordination with key strategic suppliers.
Social

To successfully aim, follow and achieve and objective, an organization is dependent upon each
and every employee and therefore it is essential that right practices are ingrained from top to
bottom and followed religiously. In order to strive on its mission for global sustainable
development, P&G has created a culture where employees are empowered to take initiatives that
drive and prioritize environmental stability [ CITATION Gru06 \l 1033 ].

P&G leaders are supposed to establish an inclusive workplace that welcomes and fosters
diversity – a place where people can be themselves regardless of their own quirks, abilities, or
qualities. This is a setting in which everyone has equal access to information, opportunity, and
involvement, allowing each individual to learn, grow, prosper, and maximize their own
contributions. Training, policy, and sensing systems are utilized to encourage the formation of an
inclusive culture.

To educate leaders with the ability to value and encourage variations in experiences, leadership
styles, and problem-solving/decision-making processes, a variety of training and learning
methods are used. To increase work/life integration and personal productivity, all workers have
access to supporting and enabling policies and practices in the areas of flexible work
arrangements, family care, resource/referral services, and wellness management. Employee
surveys and cultural sensing, as well as the different leadership networks, provide top
management with advisory data and leanings on how to effectively exploit local
customer/employee practices and viewpoints [ CITATION Gra17 \l 1033 ].

P&G reduced the main component of our carbon footprint - the energy used to heat water during
product use - by combining innovation and continuous consumer education. Since 2015, P&G
brands Tide and Ariel have been encouraging consumers to adopt low-energy washing cycles,
resulting in a CO2 reduction of roughly 15 million metric tonnes. Tide and Ariel are pushing
cold water washing through new teaching programs in order to help avert an additional 30
million tonnes of carbon emissions by 2030, which is more than ten times the amount produced
by P&G's global operations each year.
Technological

Procter & Gamble's management team strives to provide a healthy and safe working environment
for its workers. P&G's market share is boosted by keeping up with technical developments on a
regular basis. Innovative products and services contribute to the company's success. P&G seeks
to improve people's lives through "innovating" and "enhancing" products and services. The
company updated their supplier sustainability scorecard in 2014 to ensure that it was not
contributing to the destruction of rain forests, making data management more effective and
responsive. P&G is working to improve data gathering and engagement with key suppliers in
order to reduce the company's overall environmental impact [ CITATION Gre09 \l 1033 ].

Legal

Measures to ensure legal compliance in the consumer goods business are part of Procter &
Gamble's strategies to improvise on its sustainable development initiatives. This component of
the PESTEL/PESTLE Analysis paradigm assesses the impact of laws and regulations on
businesses and the macro-environment. The following legal external elements influence Procter
& Gamble's strategies:

 The regulations for product safety are growing more stringent (opportunity)

 Environmental legislation is being strengthened (threat & opportunity)

 The requirements for business sustainability are growing stricter (threat & opportunity)

As health and hygiene regulations for consumer-based products become stricter, P&G has the
opportunity to increase its internal standards to assure exceptional quality. Procter and Gamble
might claim that its products are better than those of its competitors, allowing it to expand its
market. All of the company's plants are subject to emission limitations established by several
countries, and any violations could result in enormous litigation and tarnish the company's name.
Avoiding lawsuits is a major concern for a company of this magnitude. Patents owned by P&G
have been infringed on in several circumstances [ CITATION Sha14 \l 1033 ]. A recent example
is Unilever's Dollar Shave lawsuit, which was just settled. It's vital to maintain track of all such
instances in order to avoid losing market share.
Supply chain and logistics emissions are roughly ten times those of P&G’s activities from raw
material to store, and we've set a goal to reduce emissions by 40% 2 by 2030. They plan to
increase the transportation efficiency of exporting finished products by 50% by 2030. Pampers
has been aggressively engaging with suppliers to reduce their carbon footprint, saving an
estimated one million metric tonnes of GHG from material manufacturing over the previous five
years. The Product Supply Innovation Center (PSIC), created in Kronberg, Germany, that will
act as a hub for a network of local suppliers, tech companies, and leading institutions to develop
global and scalable solutions that will help decarbonize their supply chain [ CITATION Bra10 \l
1033 ].

The next logical step on P&G's path to sustainability is to confirm that its sourcing process is
ethical. In 2010, P&G created the Supplier Environmental Sustainability Scorecard to lower its
environmental footprint throughout its supply chain. At the same time, P&G started working on a
clear and dedicated sustainability plan with mid- and long-term goals. Palm oil production and
concomitant deforestation, as previously indicated, represent a critical turning point in the
company's sustainability journey. P&G collaborates with both large and small palm plantation
companies in Malaysia. As a result, in 2010, P&G teamed up with the Malaysia Institute for
Supply Chain Innovation to start tracing its entire supply chain [ CITATION Bra10 \l 1033 ]. In
addition, the company has joined the Closed Loop Fund, which aims to spend $100 million in
recycling infrastructure to strengthen the US recycling system and make recycling accessible to
all Americans.

Environmental

P&G’s mission to accomplish its sustainable development goals are majorly aligned with it its
environmental practices. The company has taken several measures both at production and supply
end to provide its consumers with a healthy and fulfilling environment Growing opposition to
forest conversion to oil palm farms could jeopardize Procter & Gamble's supply chain. This
external environmental factor, for example, affects the supply of palm oil, which is used in
several of the company's consumer products. Changing weather patterns and their effects on
agriculture might further affect Procter & Gamble's supply chain, particularly the availability of
vegetable oils and other raw materials used to create soaps, detergents, and other consumer
goods. P&G, on the other hand, can lower its carbon footprint by using easily available
recyclable materials. Incorporating this initiative within Procter & Gamble's CSR strategy can
assist the company improve its brand image, as well as customer perception and loyalty. Such
activities may also encourage a broader improvement in corporate responsibility in the remote or
macro-environment of the consumer products business[ CITATION Gru06 \l 1033 ].

Between 2010 and 2020, we reduced absolute emissions by 52% through energy efficiency and
renewable electricity across our global operations. While we continue to cut emissions, we're
looking into natural climate solutions to balance any leftover emissions from our operations that
won't be eliminated by 2030. New projects are being developed to help maintain and restore
forests and other ecosystems that are important to humans and wildlife.

They want to create a cycle process for all of their products so that waste is minimized. In order
to do so, P&G along with Teracycle and SEUZ created the first recyclable shampoo bottle from
beach plastic. A majority of its packaging material is now recyclable, and their target is to 100%
recyclable with packaging material by 2030[ CITATION Gre09 \l 1033 ]. Procter and Gamble
created history when they launched Tide Preclean, which is 65% bio based and is made in a plant
that produces zero waste. In fact, even the packaging material used for the product is 100%
recyclable[ CITATION Sha14 \l 1033 ].

They believe in ethical sourcing, particularly when it comes to wood-based raw materials.
Because it is able to meet the majority of its clients across varied countries, P&G sees the
necessity to fulfil a sustainable development of the company in these countries[ CITATION
Bra10 \l 1033 ]. P&G has set several goals for itself based on the Sustainable Development
Goals of the United Nations, along with timelines. Switching to 100 percent renewable energy
sources is their key target for reducing GHG emissions. The company's second purpose is to use
water efficiently in all of its processes.

Their purpose is to promote the expansion of certified forests while also strengthening the
policies that accompany them. They have designed things that require fewer quantities and so
conserve paper as compared to competitors. Through a range of objectives and projects, P&G is
aiming to make a significant change in the state of the environment in the numerous countries
where it operates.

Porter Five Forces Analysis

The importance of the intensity of competitive rivalry in effecting the business is shown in a Five
Forces analysis of the Procter & Gamble Company. Other forces in the industry environment, on
the other hand, have an impact on P&G's success in the consumer products market. It's critical
for Procter & Gamble to continue to be effective in dealing with all of these forces and the
external variables that influence them. Competitive rivalry, on the other hand, must take
precedence. In order to compete effectively, Procter & Gamble must strengthen its business and
other sustainability initiatives to compete with players such as Unilever.

Competitive Rivalry

A huge number of businesses work in the consumer goods industry. This puts a lot of pressure on
Procter & Gamble, which must compete against a number of other companies to prosper in a
sustainable way. On the other side, the wide variety of businesses makes it difficult to compete in
the industry. This external factor intensifies the competitive rivalry between Procter & Gamble
and its rivals. The competitive dynamic is reinforced even further by the low switching costs,
which relate to the low degree of negative effects of switching from P&G's brands to those of
other businesses. Consumers can easily switch from Tide laundry detergent to Surf laundry
detergent from Procter & Gamble, for example. Such a move has no influence on consumer
views of product effectiveness, for example. Procter & Gamble's strong competitive force is
highlighted by the external aspects in this portion of the Five Forces Analysis. Hence P&G has to
focus its effort on environmentally friendly initiatives to ensure that its customers that are highly
driven by sustainable solutions, are satisfied with their products and services.

Bargaining Power of Procter & Gamble’s Customers/Buyers

Consumers can readily transition from one consumer goods brand to another, resulting in cheap
switching costs for Procter & Gamble. With customers more aligned with brands with stronger
social and corporate values, P&G faces competition with other brands to excel its sustainable
development. However, the scarcity of substitutes reduces the intensity of P&G's consumers'
bargaining power. Many of Procter & Gamble's personal care products, for example, are difficult
to locate natural or homemade replacements for. Furthermore, because of the strong overall
market demand, the impact of individual consumer purchase decisions on the company's
business success and the state of the consumer products industry environment is minimized.
Customers' or purchasers' negotiating power is weak in affecting Procter & Gamble as a result of
these external variables. Consumer bargaining power is a low-priority strategic aspect in the
Procter & Gamble Company's actions, according to this facet of the Five Forces study.

Bargaining Power of P&G’s Suppliers (Weak Force)

Suppliers with a moderate level of forward integration have significant but limited influence over
how their products are distributed and sold to firms like Procter & Gamble. The flow of
commodities from suppliers to P&G's operations, for example, is managed by many third-party
intermediate entities. This external element has a moderate impact on Procter & Gamble's
consumer goods division. On the other hand, the high total volume of supply limits the impact of
individual suppliers on the organization. Individual suppliers' impact on Procter & Gamble and
the industrial environment is reduced as a result of the huge number of suppliers. When
compared to huge international consumer products corporations, these external constraints
highlight suppliers' relative inadequacy. In this Procter & Gamble Five Forces Analysis, supplier
negotiating strength is only a minor factor in strategic decisions.

Threat of Substitutes or Substitution against the Procter & Gamble Company (Weak Force)

The intensity of the danger of replacement against Procter & Gamble is exacerbated by low
switching costs. An external element is the negative consequences of consumers migrating from
P&G's brands to those of other competitors. The threat is mitigated by the scarcity of substitutes.
Furthermore, the restricted number of replacements reduces Procter & Gamble's impact. Personal
care products created at home, for example, are frequently limited to one or two types. As a
result of the combination of these external pressures, Procter & Gamble and the industry
environment are subjected to a weak force. According to this section of the Five Forces analysis,
the threat of substitution is a minor concern in the consumer products business. Other forces are
more powerful than Procter & Gamble.
Threat of New Entrants or New Entry against Procter & Gamble (Moderate Force)

Because of the cheap switching costs, consumers of the Procter & Gamble Company can easily
switch to other consumer goods brands. This external aspect gives new entrants the ability to
exert a powerful force against the company. The moderate capital costs, on the other hand,
minimize this danger to Procter & Gamble. Given the company's organizational size and
capitalization, new enterprises find it challenging to compete directly. Furthermore, the mild
economies of scale limit Procter & Gamble's impact from new entrants. P&G's capabilities tied
to its global scale of operations, for example, are difficult to match for typical new entrants.
Based on external conditions in the consumer products market environment, new entry is a
significant strategic challenge, according to this section of Procter & Gamble's Five Forces
research.

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