A strategic analysis of Proctor and Gamble

The path that leads them to achieve their goals every company has to follow And objectives which could be achievable by research, reexamine, data analysis, planning and carrying out. And to do all these, a business concern has to implement certain tools to fig out the existing scheme or and to do all these, a business organization concern has to implement certain tools to fig out the existing scheme. This procedure known by strategic analysis, acts like a light house to the organizations. Proctor & Gamble is one of the pioneer names in the consumer commodity epoch. They have been reigning in this sector for last 173 old age with rely. This written report is produced to review their strategic position and this report is produced to reexamine their strategic position

PURPOSE AND PREFACE:

Understanding of the environment in which an organization is operating strategic analysis is a theoretically informed,

Of the organizations interaction with its environment in order to ameliorate organizational efficiency together with an understanding and

Effectiveness by increasing the organizations capacity to deploy and effectualness by increasing the organizations capacity to deploy. Strategically added value to the carrying out of a concrete scheme to gain sustainable competitive advantage by analyzing.

This report is carry owed to applying appropriate tools of strategic analysis to appraise

‘Proctor & Gamble’s

Industrial environment and fig out the competitive position and operational.

Proctor & Gamble Of their wide ambit of consumer commodity an American company which is globally renowned because

HISTORY OF “Proctor & Gamble”

Nearly serving the human beings for about 173 old. 4 billion consumer’s in the globe today where about 135,000 people are working for them they are serving and P&G has their own organization system in 80 countries in globe. They acquired the biggest broadened manpower in the human beings where about 140 nationalities people are working for them

PROCTOR AND GAMBLE – BACKGROUND

In 1887 they came up wad Innovation of earnings sharing program and later 1940’s they started carrying outs of consumer relations department. And in 1980’s IN the consumer relations department carrying out of e mail and IN 2002 they Developing feminine aggrandizes “naturella’ and later 2005 they came up around the high globally frequence stores.

METHODLOGY

In various fashion strategic analysis differs. But the various ascribes that are commonly accepted are as follows.

-To formulation of scheme relevant data identification that is related.

-Internal environment and analyzing the external. In the analysis different methods that are applied.

-To apply to analyze the organization are as follows different methods that’s going to be

SWOT Analysis

Ansoff matrix.

Generic strategies

Value chain

The uses of these analytical strategic tools will be used later on to see the organization’s trading operations and the applies of these analytical strategic tools will be used later on to see the organization’s operations

Proctor and gamble – swot analysis:

Swot analysis is the strategic tools to understand the strength, weaknesses, opportunities and menaces of an organization or dweeb analysis is the strategic tools to understand the strength, failings, chances and menaces of an organization. Swot analysis of proctor and gamble are as follows:

Strength:

Proctor and gamble economically strong position and they strong fund levels in market.

Acquired about 300 brand names where they hold about 27, 000 patent of inventions right, because of their huge operations, there in a strong position in the market.

Huge brand value

Proctor and gamble Main strength is there innovative draw near.

Proctor & gamble There sustainability they are always developing market infrastructure.

Their unique strength is the recruitment process where we can see that they acquired endowment pool of skilled and their unique strength is the enlisting procedure in June 2006, the corporate director of peg cited that they acquired about 9000 R&D associates where about 1,100.

Broadened manpower and high quality merchandise.

JIT (jet in time) services

Weakness:

Brand enlargement is limited.

They don’t have any own label merchandises which confused the consumer groupings.

Though peg acquired distribution channel all over the globe, they acquired deficiency of distribution channels in some countries which is not effective and they got lack of distribution channels in some countries which is not effective.

Some of the regional offices were based in some country where the people don’t have the experience and the cognition of foreign business functions which is a problem for the communicating and the enlargement of market.

Behind in the arena of on-line as a market leader they are still lacking.

OPPURTUNITIES:

Selling their own brand label merchandises

Applying on line media to apply it as a chance to increase the market share.

Acquainting peg to the social networking which could be an effective media of ad.

If they could remove them trade barriers from those country that could give them the chance to develop their market as the first acquaint, in some country they acquired the trade barriers

Developing more products for men’s.

THREATS:

In stable political situation and new Laws.

The self in the house hold market which is a great menace to peg new companies are acquainting.

Merchandise competitive cheaper substitute.

Lay on the line involves in pharmaceutical segment.

Resurrecting new trade barriers in some countries.

Sub Conclusion for P&C -SWOT ANALYSIS:

Swot analysis shows some features of peg which cold act as strength at the same time it could be a failing as well, dweeb analysis demos some features of peg which cold act as strength at the same time it could be a failing as well. P&g can fig out the menaces into chances and the failings into strength by applying the ANS off matrix, which explained below.

PROCTOR & GAMBLE -ANSOFF MATRIX:

Ansoff matrix is a process by which an organization furbishes ups its ontogenesis and it is a process by which an organization bushels its growing. By analyzing the market and the environment it bushels its merchandise development, identify the market, develop the market and create new chances by diversification.

Of four stages which are described below according to the P&G ANSOFF growing matrix is consists.

Market penetration:

In market penetration stage an organization centering on existing merchandise into existing market. Recently peg set upped a new merchandise in INDIA “tide natural’ A bring down cost version of tide detergent which is already existed in the market of INDIA before. The bring down degree of the people where cost effects to arrive at ,And 50% of people in India earn very low , In that sector that’s why peg were losing their market, To capture that component part of the society peg connotes market penetration to increase the market share. Recently they introduced product called “mach3” in Asia and Latin America to regain advantages for competition in market. P&g also expand their brand 1 in Latin America where the income degree is low.

Where in Brazil when they launched oral-B product in beginning of the year, they expand their merchandise to the center class comparatively at a low price and to the center social class comparatively at a low price they expand their wares.

That by taking those staircase they already recover their market position peg claims.

MARKET DEVLOPMENT:

Where existing merchandise introduced into a new market development is a process.

“We’re certainly seeing greater strength in developing than in the developed markets,” (Mc Donald, CEO of P&G, 2010)

This CEO MC Donald demos the aggressiveness of developing market to be on the race by saying. To develop market peg acquainting their merchandise ambit in Africa where they don’t have market. Especially in family merchandise where they hold the global market leadership.

Recently peg holds 36 merchandise categories in USA where as in China they hold only 16 merchandise categories. That’s why for the marketplace ontogenesis peg take a scheme ‘10,000 villages’. China is one of the biggest consumer groups where every organization desires to spread their business. By this scheme means peg with the aid of the Chinese authorities they desires to create their market into the rural areas of China where people are not aware of their brand. They wanted to customers and introduce themselves, for does not exist.

DIVERSIFICATION

This is the most risky scheme, in this process a business has to develop a new merchandise into a new market. This is a risky scheme because of the uncertainness.

Before take this scheme an organization has to do the market research and Has to be the cognition what they going to acquire and In the market what are the risk involved and what are the lay on the line involved in the market.

Acquisition of Gillette demoes the diversification capabilities of proctor and gamble,and they have good market and aqusation on Gillette

SUBCONCLUSION ON ANSOFF MATRIX:

P&G has about 300 brand, but they are the market leader in house hold and Baby care products in the world where they made their most of the innovation. One of the bad effects of acquiring a business concern is the job cut, especially in the acquired company part.

Proctor and gamble has 300 brands and they are leaders in market for house hold items and baby care items and they r mostly made by innovation, apparently one of disadvantage of proctor and gamble which effect on job lost and acquires campany part.

Generic stragies:

In 1980s the people were used to generic strategies in order to accomplish the competitive advantages and became popular day-day. Generic Strategies are divided into three categories and are as follows.

Cost leadership

Differentiation

Focus

Cost Leadership

The product’s low price might gain the required competitive advantage for it to be the leader in the market. P&G could become the leader in the markets because of its low prices and quality products. Even during the global recessions all the companies have lost their sales but P&G stood by its mark due to the efficiency in its strategy to market the products with minimal resources and get maximum response. They have reduces the prices of the products existing and those which have good demand.

To gain more advantages in its sales P&G introduced ” Tide Natural” at 30% lower cost than the existing ones which is intended to target the mid-class markets and those who were neglected by other companies.

P&G focused on marketing in the developing countries where approximately 50% population fall under the scale of low income rates. It is concentrating to expand its markets in India, Chain, Bangladesh, Philippines etc due to the growing population and more needs growing day by day. They have managed to get a strategy with minimal cost and better quality so that people get attracted and buy them. Its beneficial for them in terms of cost and brand value. It has also come up with MACH3 razor with triple blades with latest technology and marketed in the low class parts of Latin America and Asia.

Differentiation

Every organization would like to be a leader in the market and they have it as their main motto. But in order to achieve this they have to follow proper strategy and deliver the best quality products along with good and efficient customer service. It is like a competitive advantage for the companies to rise in the market and mark their presence felt.

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P&G is way ahead of most of the companies and they have approximately close to 300 different brands across the globe where they have made their presence felt with their innovation. They are the very first company to bring the baby diapers into the market and with the new technology called “dry max” they have increased their sales in the baby care segments due to its tremendous demand.

During the year 2008, out of the 25 products that were launched newly, 10 were from P&G in comparison with J&J, L’Oreal Colgate etc.

Focus

Focus strategy is the strategy that tends the company to focus on small sectors in the market to achieve competitive advantage. This is a very common strategy followed by the small firms who cannot survive in the long run. As a result they have to focus on the differentiation strategy or the lower cost strategy to keep its business safe. It is popularly known as Niche strategy.

Stuck in the Middle

As per Michael Porter’s opinion any organization or the concern for business should follow only a single strategy because it makes it easier for the smooth running os business else it might get stuck half way yielding a dent in the business which costs the brand value and the share in the market.

Subconclusion

P&G has been in the market for about173 years and along with time they gained more expertise in terms of strategies and business formula compared to any other organization in the world. They are very much following the strategy of Cost Leadership and Differentiation. They are following it in the household segments and baby care sectors which they claim to take the leading position in the market

Value Chain (Appendix: 04)

With the help of value chain any organization acquires the competitive advantages and the value of the company is originated. Value chain can be defined as a process of different activities of the organization that projects the relation of every activity. An activity could be the service of the product. This is otherwise known as Michael Porter’s Value Chain analysis. It is subdivided into 2 categories, Primary activities and Support activities.

Primary Activities

Inbound Logistics

P&G has come up with a new strategy to serve customers in a turn around time of 72 hours i.e. called “Product-to-customer” cycle. In this cycle third party takes the responsibility of storing the products and deliver them based on the customer requirements.

Operations

This department takes care of assembling, maintenance, testing, packaging, and maintenance of equipments. Products take their final shapes in the operations section of P&G.

Outbound Logistics

There are authorized suppliers for P&G to supply the products to the customers when required by the customer.

Marketing & Sales

Marketing and Sales is mainly depending on projecting the brand and taking it to the public where they get to know about the products and tend to buy them. Promotional offers and events are very important to boost the sales. They have businesses running across 140 countries worldwide where they have direct sales and through authorized dealers aswell. Electronic media is more important source for direct marketing along with print media, billboards displayed, featuring in the local festivals and carnivals and sponsoring any sporting events which boots their sales as celebrities use those brands.

Service

Service is very important in all means like customer service, product service and employee service for any organization to run successfully. Training and development programs are very much important for the employees and the customer so that they can get to know in and out of every product and use them efficiently. This was the very first company to introduce the customer service department in the year 1941 delivering quality of service. They every started web surveys so that any customer can give their comments and feedback online.

Support Activities

Global Operations

Global operations department is the one who takes care of the sales and marketing activates in all the countries. It is divided based on the geographical sectors i.e. Europe(West), Latin America, Central and North America , Asia, Europe(East) and Middle East Africa.

Global Business Service

Global business services comprises of data processing, technology, Customer Service and Consumer Service and it provides the data to the global units for the development purposes.

Corporate Functions

HR management ,External affairs, accounts management, Legislative and treasury functions along with administrative affairs.

Conclusion

The brand value and tenure cannot make an organization complete, whereas running the business consistently and sustaining in critical situations is equally important. Their strategy needs to be looked into every time and the strategy needs to be changed alongside the consequences and time in order to continue forward. Innovation is the key to success and also the younger generations who are more interested in latest technology should be focused on and give them better opportunities. Those who perform the proper things at correct situations only lead the markets. P&G contains everything it requires to be in the lead position and due to certain areas still lagging behind they are trying to make their presence felt.