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Transcript of P&G
OVERSIGHT OF THE CASE
EVALUATION OF P&G'S STRATEGY
PESTEL, Porter & SWOT
Problem & Challenge identification
The competitive advantage
McKinsey + 9-cell matrix
List of recommendations
Sell off snack and pet care business segments: they are amongst the least profitable ones
Enter new markets: opportunity to innovate in successful markets
Continue to conquer emerging markets: P&G focuses on 10 emerging markets which include China, South Africa, Mexico, Brazil, Nigeria, and Poland
Costs: 0= high | 5= low
Time: 0= a lot | 5= not much
Feasability: 0= not do-able | 5= good
Best alternative: Conquer emerging markets
Production of the new products
Research tools for the studies
Communication and advertising fees
HR costs: more employees might be needed for this project
Possible changes after the launch, adjustments for the next seasons (risk management)
2nd Best alternative: Overcoming P&G’s main competitors
China soon being the world’s largest purchaser of beauty products
Overrunning them in the long run can also benefit to the brands’ images to the customers
Future obvious increase in sales
Headquartered in Ohio – US.
Founded in 1837, by William Procter and James Gamble.
Health & Baby Care
Upon acquisition, P&G has to successfully integrate the operations of Gillette with its own with minimal unnecessary disruption
Increasing expenses within the R&D sector of the organisation. Increasing debt levels within P&G are also of concern
The threat in the Chinese skincare market, with another company about to overtake as the number one brand
Some markets are undercapitalised and P&G will have to consider operation in those areas e.g. haircare and skincare
As stated earlier on:
P&G’s strategy is to «Be, and be recognized as, the best consumer products and services company in the world».
Gillette’s is «To build a total brand value by innovating to deliver consumer value and customer leadership faster, better and more completely than our competition»
By blending in these two versions, 4 main expectations came out:
To have a stronger business line-up and brand portfolio
To rise significant cost saving opportunities: Cost sharing units + reduction of the workforce
To note faster growing sales
To bring in synergies: operational, financial, and collusive
Oversight of the case
Problem & Challenge identification
Evaluation of the strategy
P&G's competitive advantage
Is it sustainable?
MacKinsey method & 9-cell matrix
Recommendations and their implementation plan
The acquisition owas one of the fifteen largest acquisitions between 2000 and 2010
4 major goals:
Improve its business line-up & brands portfolio
Faster growing sales
Synergies -> 1+1=3
Acquisition cost: over the usual range, but when we consider the market price just before acquisition, the premium of 20.1% is consistent with similar acquisitions
P&G should keep on entering new emerging markets to gain market shares.
160 countries & Gillette is strong in emerging markets like India and Brazil,
High growth market
P&G aced in women segments marketing, while Gillette’s core customer segment was essentially men.
Bargaining power with retail buyers
The acquisition of Gillette strengthened the influence of P&G on retailers, especially Wal-Mart in the US
People will most certainly always come face to face with one of P&G’s brands’ product
Emerging or developed countries
Brands also range from high end to low cost -> High variety + number of customers
Rapidly growing markets.
Salwa Asban - Zineb Mesraf - Antoine Le Guellec - Cyril Remande - Pénélope Bertignon
What is a strategy?
A strategy is a choice of objectives and means in order to achieve them on a long-term basis taking in consideration the vision of the organization.
“Be, and be recognized as, the best consumer products and services company in the world”
One main recommendation stood out:
Continue to conquer emerging markets. Launching new products from existing brands in selected markets may be the answer to overcoming the intense competition.
Focus on overcoming P&G’s main competitors in Household care or Beauty care over the world + in China: Unilever, L’Oréal, and Shiseido
Earnings: 0= low | 5= high
Risk: 0= high | 5= low
Enables innovation and therefore competitivity
Present in almost every place around the world = changes the market segments competition
Improving customer care
Such an important diversification doesn’t let them concentrate on specific products like for instance L’Oréal, who is dedicated to a specific segment.
Headquartered in Boston – US.
Founded in 1901, by King Gillette.
male grooming products
Blades and Razors
Ownership of large leadership brands
Mature market reliance
New emerging markets (India & China)
High-growth markets (Hair & Skin care)
Global and Local competition
Products Brand Wording
Strong staple brand
Declining global economy
Same geo-political landscape
Constant maintenance of products
Wide variety of products
Cheap accessible products
Enormous size of P&G
Over saturated market