PROCTER & GAMBLE-

GILLETTE MERGER

By: Christine Cruell

Kamika Hemphill
Antjuan Seawright
Jonathan Toney
EXECUTIVE SUMMARY
PRODUCTS
 Three main product lines:
 household and personal care
 food consumer
 heath care products

 Recent merge with Gillette

 Competitive advantage
DOMINANT FIRMS
 Procter and Gamble, Nestle, Unilever, L’Oreal, Colgate-
Palmolive, Revlon, Bic, PepsiCo, Sara Lee, and
Kimberly Clark.
 Success factors:
 positive brand image
 availability of products
 the ease of access
VISION AND MISSION
 Vision
 “Be, and be recognized as, the best consumer products
and services in the world”
 Mission
 “Procter and Gamble will continue to serve consumers
by continuously innovating products that will allow us to
be leaders in household and personal care, health care,
and food products. To produce products with the utmost
care to give nothing but quality to our communities. And
to continue to grow so that we can maximize our
shareholder’s wealth.”
EXTERNAL ENVIRONMENT
EXTERNAL ENVIRONMENT
 Economic Factors
 Social Factors

 Technological Factors

 Political Factors

 Ecological Factors
ECONOMIC FACTORS SOCIAL
FACTORS
 Concerned with nature  Concerned with beliefs,
and direction of economy values, opinions, and
in which the CP industry lifestyles of people
 Threat/Opportunity  Threat/Opportunity
TECHNOLOGICAL FACTORS
 Focus on technological changes affecting the industry:
New Products, improvement in existing products,
manufacturing and marketing techniques
 T hreat/Opportunity
INDUSTRY ANALYSIS
CONSUMER GOODS INDUSTRY
5 FORCES MODEL
 Buyers: large impact on industry
 Large retailers-Wal-Mart, Kmart, Target
 Rivalry: keeps industry thriving
 Differentiation, advertising, promotions, price, customer
service and quality
 Threats to Entry: heavy impact on industry productivity
 Mergers and acquisitions
CONSUMER GOODS INDUSTRY
5 FORCES MODEL CONT…
 Substitutes: no huge impact
 Competitive products replacement
 Private label brands and small label brands-only real
substitutes
 Suppliers: no threat to the industry
 Raw materials can be obtained anywhere
COMPANY PROFILE
VALUE CHAIN ANALYSIS
 Primary Activity
 Marketing and Sales=Brand Recognition
 Support Activities
 Research
 Technology-RFID
FINANCIAL ANALYSIS
FINANCIAL ANALYSIS
 Key Data from Bal. Sheet
 Total Assets

 138,014.00
 135,695.00

 61,527.00

 57,048.00

 43,706.00
FINANCIAL ANALYSIS (CONT’D)
 Key Data from Income Statement
 Net Income

10,340.00
 8,684.00

 6,923.00

 6,156.00

 5,186.00
FINANCIAL ANALYSIS (CONT’D)
 Key Ratio’s
 Gross Margin

 Debt/Equity Ratio

 Current Ratio

 Quick Ratio

 Return On Equity

 Return On Assets

 Return On Capital
RATIO ANALYSIS
 PG Nes Uni Ind
 Key Ratio’s  51.8 30.8 14.5 20
 Gross Margin  .54 .67 .78 .84
 Debt/Equity Ratio  .9 .8 .7 .98
 Current Ratio  .6 .11 .4 .7
 Quick Ratio  16.8 30 32.3 30.9
 Return On Equity  7.9 8.3 10.9 9.6
 Return On Assets  10.2 13.4 17.6 13.4
 Return On Capital
SWOT SUMMARY/CORE ISSUE
SWOT
 Strengths  Weaknesses
 product variety and  Constant innovation=
diversification higher prices for
 Line of shaving consumers
/grooming products
 Supply chain technology
 Opportunities  Core Issues:
 Globalization  Overlap in management
 Overlap in P&G-Gillette
products (I.e. Old Spice
 Threats deodorant and Right
 Private labels Guard deodorant)
 Expensive products
LONG TERM OBJECTIVE AND
STRATEGIC SCENARIOS
LONG TERM OBJECTIVES
 Generic Strategy: Differentiation
 Grand Strategies:
 Innovation
 Conglomerate diversification

 Concentric diversification

 Strategic alliance
SCENARIOS
 Best  Likely

 Worst
CORPORATE LEVEL STRATEGIC
ALTERNATIVES
CORPORATE LEVEL STRATEGY
 Stay in same SBU’S  Keys to success
 Get into new SBU’S  Proper asset mgmt

 Possible change of
mission statement
CORP LEVEL STRATEGY
 Best Case  Worst Case
 Expand to new mkts  Lose Mkt share

 Grow by 30%  Fail to expand

 Most Likely
 Grow by 10%

 Continue current
corporate strategies
BUSINESS LEVEL STRATEGIC
ALTERNATIVES
BUSINESS LEVEL STRATEGY
 Generic Options
 Low Cost Leadership
 Differentiation
 Pros/Cons of both
 Rivals
 Unilever
 Colgate-Palmolive
GRAND STRATEGIES
 Low Cost Leadership
 ConcentratedGrowth
 Market Development

 Differentiation
 Product Development
 Innovation
STRATEGIC CHOICE
STRATEGIC CHOICE
 Corporate level strategy: Get into new SBU’s.