Final Proctor and Gamble Strategy Case Analysis Final

Running head: PROCTOR AND GAMBLE STRATEGY CASE ANALYSIS 1
Proctor and Gamble Strategy Case Analysis

Debra Boydston, Trevin McLeod,
LaTonya Miller and Alandra Parker
Texas A&M University-Central Texas
BUSI 4359.135, Business Strategy
Dr. Vivien Jancenelle
July 26, 2018
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PROCTOR AND GAMBLE STRATEGY CASE ANALYSIS 2
Introduction
Headquartered in Ohio, Proctor and Gamble Company is a transnational consumer goods
organization that majorly operates in America. It was instituted in the year 1837 by one William
Procter and James Gamble hence its name. The firm specializes primarily on cleaning agents,
personal care as well as hygiene products. The business opted to sell off some of brands in its
product portfolio in a bid to streamline it. They sort to focus on their remaining 65 brands that
were seen to be the most profitable for the company. This, as indicated by the then CEO and
chairman, would simplify the company and make it easier to manage and operate. The firm’s
sales grew to reach a million dollars between the years 1858 and 1659.
The American civil war saw Proctor & Gamble be awarded a tender to supply soap and
candles during the entire period for the union’s use. This further elevated the company as these
contracts also let them have unlimited access to other soldiers all over the country. The firm
further introduced an expensive soap that could float on water in the 1880s. It also later started
building plants in other locations around the US owed to the increased need for its products.
Additionally, its leaders started diversifying by the introduction of such products as Crisco made
from vegetable oils. It also resorted to sponsoring radio programs with the popularization of
radio in the 1920s. This, in turn, led to the programs being referred to as ‘Soap Operas’.
Vision and Mission
P&Gs vision reads, ‘Be and be recognized as, the best consumer products and services
company in the world.’
It is key to note that a company’s vision spells out its future as it streamlines the path it
has chosen to take. Every company strives to be successful in business and thus requires a clear
strategy for this. Proctor and Gamble’s vision does not however touch on their financial success
but rather the recognition it requires in the consumer products sector. In my view, the vision
should be improved to include its financial aim for the future. It is every company’s aim to be the
best in what they do and be recognized as being so. With such a vision, P&G is thus just stating
the obvious.
Though financial growth might stem from popularity, there first must be a clear picture
drawn by the firm on where they require to be financially in the future. Shareholders want to see
their firm generate financial value. The mission statement and vision need to be specific and
clear as they spell out their strategy and play a key role in the day to day running of the firm. The
two also inform the decisions and actions made by a particular firm. The firm should not thus
underestimate the power of the two statements and thus improve it to be more specific and clear.
The vision also need to be broad enough to allow for future changes to suite the dynamic world
we operate in.
Proctor and Gamble’s mission statement reads, ‘We will provide branded products and
services of superior quality and value that improve the lives of the world’s consumers. As a
result, consumers will reward us with leadership sales, profit and value creation, allowing our
people, our shareholders, and the communities in which we live and work to prosper’.
We can clearly deduce five key things in the statement; the community, employees,
consumers, products and shareholders. This statement however, also lacks specificity just like the
vision. It is not clearly outlined on how the firm will invest in a better financial future. We have a
mention of prosperity but no financial position is pointed at. In business, financial value is very
key as it is primarily why people and firms engage in business. The firm should thus include
issues like future market position, financial strengths and competition in this statement.
Proctor and Gamble’s Competitive Position
Strengths and Competitive Assets
The first and most key strength of the firm is the understanding they have for their
consumers. P&G is one of the firms around the world that has heavily invested in market
research in a bid to understand the needs and preferences of its consumers and prospective
clients (P&G Core Strength, 2018). The company prides itself in interacting well with above five
million buyers yearly in the more than 100 nations they conduct studies in. This in turn, helps
them identify and explore new opportunities. Secondly, P&G leads globally owed to the
innovations they invest in. Most of their successful sales have come from new and improved
brands. This is done through their partnerships with research firms that have proved to be really
beneficial in the development of new products and improvement of the existing ones. In fact, the
firm has severally earned honors in the industry for its innovations.
The third competitive aspect by P&G is the brand building strategy they employ. They
have in the past, strived to create strong brands that their consumers can identify with. The strong
brands have seen them generate more than one billion dollars in sales annually. Lastly, P&G
ensures there are go-to-market capabilities. The firm is ranked as the most trusted supplier by
retailers in the industry. This is owed to the high number of innovations and dynamic marketing
programs which have gone an extra mile in convincing more consumers.
Weaknesses and competitive deficiencies.

The first key notable weakness is the structure of the company which renders decision
making slow. P&G is an old firm and thus has many portfolios to take care of. This renders
decision making slow as managers need to invest time in analysis before reaching a decision.
The second most important weakness is their low organic growth. The rate by which P&G grows
its customer base is a bit sluggish as saturation arc is reached. This has led the firm to undergo a
slow organic growth that requires unique marketing strategies to overcome. Lastly, is the need
for all firms to change frequently owed to the global market changes and the nature of the
products they deal in which requires that they often be rebranded or new ones introduced. As
pointed out, the firm has a slow decision making process thus hampering changes required.
Market Opportunities
P&G’s first market prospect is the unexplored countryside potential clients who are
however more concerned with prices and resistant to adverts. With proper marketing strategies,
the firm has a viable opportunity in these areas. Secondly, the company has the ability of
increasing its organic growth with proper leadership. This may be done through the launch of
better products and if focus is put on proper marketing practices. Organic growth assures an
optimistic future for P&G. Lastly, the firm has a real potential in tapping into the increases
purchasing power by its consumers who are increasingly embracing their products. Studies have
also predicted that purchases in this industry will increase in the future. the rising nations in
matters economy will further give rise to better and more markets (Bhasin, 2018).
External Threats to P&G’s Future Well-being
External threats can greatly impact the performance of any given company. Identifying
such issues will help Proctor & Gamble insulate themselves to alleviate negative influences. The
first main threat, and which faces nearly all firms around the globe, is global and local
competition. These threats have been heightened by globalization which has allowed firms to
compete for customers anywhere in the world, their location notwithstanding. Businesses are
always searching for opportunities to gain a higher market share. A gain in another firm like
Unilever means a loss for P&G. This thus, calls for proper strategy enactment to always ensure
they are beyond competition. Studies carried out by the firm indicate that their biggest threat is
external competition but can be managed through proper policies.
The second most key threat to Proctor & Gamble is the counterfeiting and imitation of
their products by other companies. Small and localized firms are increasingly developing
products that are similar to those of P&G. This greatly rivals the firm as the products are cheaper
and readily available to the consumer. It has however been an issue for many organizations even
in other industries including big giants like Gucci who have worked really hard to eliminate such
in vain. The threat is however, based on the imitate nature of such firm’s products, which is a
weakness in itself.
There also exists trade barriers in certain nations which inhibit the growth of P&G
globally. This, coupled up with people’s perception of foreign companies and products, has been
the biggest hindrance of the firm’s venture into some nations. Nations have protectionist policies
that hinder imports while some have questionable policies on the operations of foreign firms
(Thompson, 2017). This threat is however becoming less of a concern with the increased trade
agreements between nations. There is need for the firm to understand how this threat impacts
them and therefore recognize the global and local interworking of the economy, their trends and
subsequent marketing efforts to employ. While marketing your products especially abroad, one
needs to have a clear picture of the prospective clients. This means understanding and being
conversant with people’s cultures, beliefs and their preferences which calls for proper
investments in research.
Strategic Improvement Approach
Use of P&G’s Strength as a Foundation for its Strategy
Procter & Gamble’s strengths enable the business to maintain its market position despite
high levels of competition with other consumer goods firms, such as Unilever. Strong consumer
goods brands ensure Procter & Gamble’s competitive advantage. For example, Tide and Pampers
are household names that contribute to consumer loyalty and P&G’s stable market share. On the
other hand, economies of scale are a strength based on Procter & Gamble’s global scale of
operations. As one of the biggest firms in the market, the company benefits from high process
efficiencies and high cost effectiveness based on its organizational size. In relation, Procter &
Gamble maintains a high-efficiency global product distribution network. This network involves
company-owned facilities as well as third-party service providers (Thompson, 2018). The
Procter & Gamble Company applies its generic strategy to achieve competitive advantage in the
consumer goods industry and 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. Procter & Gamble’s generic competitive strategy (Porter’s model)
defines the main approach of the business to achieve competitiveness. 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 (Thompson,
2018).
Innovation has long been the backbone of P&G’s growth (Harvard Business Review,
2018). Building a strong brand through innovation has seen major firms grow as people like
being associated with strong and popular brands. P&G has managed to create a unique product
brand and name that many people around the globe would want to associate with. The firm
should thus strive to use this to overcome the weaknesses and further efforts by other firms like
Unilever to have a bigger market share. They should thus develop their competitive advantage
through innovations and use of technology. They also could use their strong brand name to
explore into more online market growth.
Proctor& Gamble’s Strategic Actions
Market Penetration
Due to the current state of P&G and the changing market trends, the best development
strategy to explore is market penetration. Their aim now should be to increase the market share
as they have satisfied the market in nearly all aspects through their innovations and based on
their strengths highlighted above. This should be done through intensive marketing strategies to
create more awareness about the firm in new areas and nations. It should specifically be done to
the low performing P&G’s products in the market. It is common knowledge that the biggest
hindrance to people using a particular product is lack of adequate information about it. This
could also be done through beneficial agreements with retailers and other firms so that they
display P&Gs products in prominent locations.
Procter & Gamble uses differentiation as its generic strategy. for competitive advantage.
Differentiation is used for competitive advantage and involves developing the uniqueness of its
products to attract target customers for the business. Procter & Gamble is now for emphasizing
both quality and value to its customers. Tide is one of the leading products of P&G and is offered
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 products because it
determines pricing and promotional activities (Smithson, 2017).
P&G has a presence that is known worldwide. P&G main competitors globally is Unilever and
Colgate Palmolive. All three of these companies depend on innovation and pricing for growth.
Tin order for P&G to get ahead of their rival competitors they products produced should be
customized to a particular market. Another strategy would be to develop unique products and
services, increase sales per unit and encourage premium prices. Proctor & Gamble is in a very
ideal position to factor in on their strengths and the fact that they fully understand their prospects
to execute this plan.
Product Development
The development of new products is very important to growth and profitability for
Proctor and Gamble and should be the contingency improvement strategic plan if the main plan
does not yield the required results in the next three years. If this contingency plan is executed
properly, the introduction of new and better products that conform directly to their client’s needs
will elevate P&G. Recent studies show that that will be the outcome with a bid carried out to
understand the market. This has also been tested to work in the firm with majority of its growth
attributed to sales from the many products they continue to develop. The explosion of new
technologies also calls for such firms to always come up with better products to rival their
competitors and further strengthen the grip on their market.
Strategy execution
Staffing
In staffing for innovation, we are looking for employees who are able to make
incremental innovations for our products and packaging and employees who can provide radical
innovation ideas we can implement in products and processes. For our already successful
products, we are looking to improve upon these products and packaging to maintain our
competitive advantage with a focus on exceeding customer expectations. As technology
continues to advance, we need to utilize these advancements to improve upon the efficiency of
our processes in order to cut costs to keep our competitive advantage of keeping our prices low
on our quality products.
In staffing for strong marketing, we are looking for employees who are able to
communicate effectively with our consumers and push for effective product placement, market
penetration, and entrance into new market segments to increase sales (Smithson, 2017). Procter
& Gamble will be improving upon our products and packaging and we need to be able to
communicate these improvements in a way that proves to be beneficial to the consumer. The
marketing team should provide attractive and viable incentives to consumers to grow our
customer base.
Training
We will develop our capabilities through several employee training opportunities. We
will provide leadership training that will educate employees on organizational goals, motivation,
team building skills, and the use of IT equipment. Training opportunities such as on the job
cross functional training will be offered to all employees as a way to assist in career development
and utilize employee skills more efficiently. We will provide negotiation skills training and
finance training in order to make better deals with suppliers and partners so that we can keep our
costs low (Zulfiqar et al., 2015).
Sustain Effective Corporate Culture
As business strategies change, our organizational culture must also shift to embrace our
new strategic goals. With the goal to focus on our strengths and continue to improve and
innovate, our culture needs to foster a forward-thinking mentality. The current corporate culture
characteristics include integrity, leadership, ownership, passion for winning, and trust. A current
disadvantage to our existing company culture is a “limited emphasis on technical enhancement”
(Smithson, 2017). We want our employees to continue to improve in their technical skills and to
embrace a passion for innovation to improve our products and processes. We want a company
culture that reflects the current five characteristics and we want to add the characteristic of
innovation.
Rewards and Incentives
As a way to motivate employees to work towards achieving our strategic goals, we will
tie rewards and incentives to strategic action performance. Rewards and incentives can be
earned though innovations in products, packaging, and processes. All employees have the
opportunity to earn these rewards, regardless of their job title or department they work in.
Improvements to products and packaging can boost sales, but we also have a focus on reducing
costs. It is through these process innovations that P&G will be able to reduce costs through
efficiency.
Monitoring Performance
With market penetration, P&G should be able to rise up again from the slow organic sales
witnessed in the past two years. This strategy should see a growth of 14% in beauty products and
8 percent in healthcare products in the next three years. The revenue should witness an upsurge
from the current $17.4 billion to $18 billion by the year 2020. Proper marketing should enable
the firm deliver strong productivity savings in terms of costs and cash flow. Research will also
go a big way in gauging the extent of P&G’s competition and thus inform policy enactments to
deal with it. Much focus should be placed on the advertisement of baby care and family care
products such as pampers to realize a growth of 5% in the three years.
With the plan, core earnings per share should also increase to $1.50 by the end of the
third year. The cumulative sales by the end of the year 2018 is projected to be at $70 billion. Our
projected market penetration is at 70% in developed economies and 40% in the developing ones
by the end of the period. The sanitary napkin industry has been one of the least penetrated around
the globe which would mean a lot if the market penetration plan is adequately executed. We thus
plan to put much focus into this market and push its market penetration to more than 70% in the
developing countries that have witnessed a slow growth. If not realized by the third year, then the
contingency plan will be executed to salvage the situation.
Through our strategic action plan we expect an 10% increase in overall sales and we
expect to reduce costs by 10 billion dollars by 2023, this is based on recent past performance
(P&G, 2017). More recently, P&G has struggled with a decrease in market share, so we are
setting a target of 1% increase in market share by 2023. If we have not reached our target goals
by the end of fiscal year 2023, we will implement our contingency plan.
Ethics, CSR, and Sustainability for P&G

Philanthropy and Community Service
P&G has in the past, put much focus on employee welfare and thus the venture into
community service would bring new additional initiatives onto the table. There also is need to
note that the firm has sought to touch people’s lives through their brands in a bid to improve
lives. The firm should however take up such initiatives as caring for the less fortunate in the
society and environmental management schemes. This era has seen a number of governments
and companies push for the adoption of environment friendly business plans through the
elimination of such materials as plastic. P&G should thus run campaigns to enlighten the masses
about the destructive nature of such materials and be at the fore front in fighting against its
usage. We also have noted earlier that the penetration of sanitary napkins is low especially in
developing nations. The firm also should aim at increasing this with donations in the
underdeveloped nations that need help in this.
We also take note of the firm’s initiatives like the Always School’s Program in Kenya and
the rest of East Africa. An analysis on the same indicates that more children and even older
people require such help and thus the need for P&G to invest more in this social issue. In Kenya,
for instance, it is estimated that three out of ten girls stay at home during their monthly periods
for lack of proper sanitary towels. This is especially rampant in the eastern parts of the nations
that has many of the poorest people of the nation. P&G has a unique opportunity to reach out to
such communities and champion for not just the girl child but also the boy child., Firms should
aim at bettering lives for the boys in the same way they have done to girls in the past which has
seen boys being neglected. The community service initiatives should also spread out to such
areas as safe deliveries for pregnant women and caring for the elderly (Rashid, Kaskeen and
Javaid, 2017).
Conclusion
It has clearly been elucidated that Proctor & Gamble enjoys a vast market dominance
across the globe in many consumer product categories. The recommendations herein thus will
just act to push it up the economic ladder in the industry. This can, however, be interpreted to
mean the firm has no potential of further growth. Actually, P&G currently are in a very unique
position to factor in on their strengths to further elevate them. The firm just requires a keen eye
to note the investment opportunities highlighted in this paper and a good managerial team to
steer it to success. The leadership at the company has shown great potential in the past which
only acts to their advantage. P&G needs to embrace the rapid technological changes and
perceptions around the word to tailor their products to suite their client’s needs and even surpass
expectations in the projected three years. This is much of a requirement for all firms going by the
current changes in markets around the globe.
References
Bhasin, H. (2018). SWOT Analysis of P&G - Procter & Gamble SWOT Analysis. Retrieved
from https://www.marketing91.com/swot-analysis-procter-gamble/
Gwynn, S. (2017). P&G: Superiority Strategy is saying off. Retrieved from
https://www.campaignlive.co.uk/article/p-g-superiority-strategy-paying-off/1440698
Harvard Business Review. (2018). How P&G Tripled Its Innovation Success Rate. Available at:
https://hbr.org/2011/06/how-pg-tripled-its-innovation-success-rate
P&G Core Strength Focuses on Consumer Understanding, Innovation and Brand Building.
(2018). Retrieved from https://www.pg.com/en_PH/company/core_strengths.shtml
Procter & Gamble. (2017). P&G 2017 Annual Report. Retrieved from
http://www.pginvestor.com/Cache/1001226614.PDF?
O=PDF&T=&Y=&D=&FID=1001226614&iid=4004124
Rashid, R., Kaskeen, M., & Javaid, F. (2017). Corporate Social Responsibility and Corporate
Financial Performance: Case Study of Pakistan. Universal Journal of Management,
5(10), 457-476. doi: 10.13189/ujm.2017.051001
Smithson, N. (2017). Procter & Gamble’s Generic Strategy & Intensive Growth Strategies -
Panmore Institute. Retrieved from http://panmore.com/procter-gamble-generic-strategy-
intensive-growth-strategies
Smithson, N. (2017). Procter & Gamble’s Organizational Culture of Mission Fulfillment.
Panmore Institute. Retrieved from http://panmore.com/procter-gamble-organizational-
culture-mission-fulfillment
Thompson, A. (2017). Procter & Gamble SWOT Analysis & Recommendations - Panmore
Institute. Retrieved from http://panmore.com/procter-gamble-swot-analysis-
recommendations
Thompson, A. (2018). Procter & Gamble SWOT Analysis & Recommendations - Panmore
Institute. [online] Panmore Institute. Available at: http://panmore.com/procter-gamble-
swot-analysis-recommendations
Zulfiqar, A., Ali, M., Afzal, F., Dev, S., Fareed, & Barkat. (2015). Training & Development at
P&G: Report on Strategic HRM at P&G. Retrieved from
https://www.slideshare.net/AmbreenZulfiqar/pg-training-and-development-
56465773https://www.slideshare.net/AmbreenZulfiqar/pg-training-and-development-
56465773
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Running head: PROCTOR AND GAMBLE STRATEGY CASE ANALYSIS 1

Proctor and Gamble Strategy Case Analysis

Texas A&M University-Central Texas

BUSI 4359.135, Business Strategy

Dr. Vivien Jancenelle

July 26, 2018

Weaknesses and competitive deficiencies.

Ethics, CSR, and Sustainability for P&G

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