Strategic Management Procter & Gamble 2011

8/9/2019 Strategic Management Procter & Gamble 2011

1/10

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The

Union

lnstitute

PG

www.pg.c0m

Plocter

&

Camble

(P&G)

in Aplil.20.l I

solci

its

Plingles line

of

snacks to Diamond

Foocls for

$1.5

billion.

P&G rnanufactures

and markets consumer packaged goocls

in the United States

and abroad, but

the company, with

thrrt

divestiture,

finally

ends being

in

the lood business

in

order

to focus

on beauty

and

personal-care

protiucts.

P&G once

ownecl

Jif

peanut

butter,

Crisco shortening,

Sunny Delight

orange

drink,

and

Folgels

cclffee*btit no longer. A recent

Han'arcl

Bu,siness

Review

article

(April

201 I

)

interviews

lirrmer

P&G

CEO ,4.G. Lafley, rvho

says,

"P&G

learns

muclr

more

from lailed

new

blands

and

products

like Dryel

at-home

clry

cleaning ancl

Fit Fruit & Vqgetable

Wash than

we do from huse

successes like

Febreze

and

Switfer."

ln 11'rrttne's

Most Atlnrired

Cornpany lirrrl


2/10

?tI /\LFN

BADAL

Growth

Strategy

To

grow,

P&G has

historically

acquired many smaller

businesses

such as the

pet-food

company

Natura Pet

Products,

h.rc.

and

Sara Lee Corporation's

Ambi

Pur air refresher. P&G

is

reduc.

ing its

fabric-car:e

bnsiness

to

about

40

proclLrcts,

clown froni

60 lines in 2001 . Also, the corn

pany

desires to

reduce

its

packaging

ink

colors from

4,000

plastic

colors

to

1,500

and

10,000

print-ink

colors to 200, which is plojected

to save

approxirnately

$60

million. P&G desires

to

accelerate its

growth

in

developing markets,

such

as

Brazil

and India, which

analysts

have nick-

named

"walled

cities" because

Unilever ancl Colgate-Palmolive

have

historically

dominatedthe

rnarkets.

Consumers

in

developine markets

are

increasingly

willing

and able to purchase

pncey

items, such

as

P&G's Gillette Fusion ProGlide razor.

P&G invested nearly

$2

billion in research

&

development

in

2010, which

was

nearly50

percent

more than

tl'reir closest competitor.

P&G

strives

to coniinue innovating and

introducing

nerv

prodLrcts

on

an international

basis

snch

as

the new Tide

Stain

Release and

Ariel

Professiona

in laundry additives. P&G

has 50 brands thal account for

90

percent

of

the company's

total

sale

and

profits.

P&G

reports

that 99

percent

of U.S. and

Canadian households

use

at

least

one of

it

products.

North America replesents

about

42

percent

of P&G's revenLtes.

Ftnance

P&G's

financial objectives include:

.

Increasins

sales

I

percent

to 2

percent

faster

tl.ran market

growth

in

all

categolies

and

geo

l laphies.

.

Delivering

earnings

per

share

(EPS)

growth

of high single

digits to

low

double

digits.

.

Generating free

cash

flow

productivity

of

at

least

90

percent.

In

adclition, P&G is focusing

on

improving

in the

following

domains:

.

More

consumers: P&G's aim is to fbcus

on

more

consumers

by

innovating

procluct

lines

an

business portfoiios.

It

is

also

to focus on

and

serve

price-conscious

consumers rvith

lower-

pricecl prodr.rcts,

ofTering superior

pet'lbrmance

compared

to competing

products.

.

In

more

parts

of the

world:

Market

and enter nerv markets,

while

increas

ing

presence

in

developing markets

and

sales in

respective

developing

markets,

with

a

focus on

"afford-

ability,

accessibility, and brand

awareness."

.

More cornpletely: Improve existing

product

lines

by

focusing

on consumer

neecis. Also,

increase consumers

into existing

brand franchises and

broaclen

products.

with

a

lbcus

to

"builcl

scale

and reduce

costs, while increasing profitability

and market

share."

P&G's income

statementb

and balance

sheets

are

provicled

in

Exhibits I and 2. Note

that

th

company's

2010

revenues increased

2.9

percent

to

$78.9

billion, br-rt

profits

declined 5.2

percent

$12.7

billion.

Notice

aiso thar

P&G

had

g95

billion

in

goodwill

ancl

intangibles, which

is nor

goo

L:"11{ifitT

}

P&G's

2010 lncome

Statement

{figures

in

thousands)

Period Ending

Dec.30,

2010

Dec.

30, 2009

Dec.

30,

2008

Total

Revenue

Cost of Revenue

Gross

Profit

Selling,

General, & Admin

Exp

Operating Income

Total Other Inc/Exp.

H

BIT

Interest

Expense

Inconre

Before Tax

Income

Tax Expense

Net Jnc.

lrom

Cont. Ops.

Discontinue

Operations

Net Earnings

78,9-38,000

37,919,000

41,019,000

24,998,000

16,021,000

(28,000)

l

_5,993,000

946,000

15,0,17,000

10,946,000

r,790,000

12,736,000

76,694,000

38,690,000

38,004,000

22,630,000

I5,374,000

397,000

1-5,771

,000

I

r,:ss,ooo

14,41 2,000

4,032,000

10,680,000

2;756,000

13,436,000

8_3,503,000

40,695,000

42,808,000

25,725.000

17,083,000

462,000

17,-545,000

1,467,000

16,078,000

4,003,000

12,075,000

12,075,000

Sorl ce: Company docurnenis.


3/10

CASE

3

.

PROCTER

& GAMBLE

COMPANY

-2011

21

f

:.d

1,r: i:i

j j

Procter

&

Gamble Ealance

Sheet

(000

omitted)

Period

Ending

Jun.30,2010

Jun.30,

2009

Jun.

30, 2008

ASSETS

Current

Assets

Cash

Sholt-Term

Investnrent

Net

Receivables

Inventory

Other

Cunent

Assets

Total

Current

A.ssets

Propelty,/Plant/Eq

u

i

pnrent

Goodwill

Intangible

Asseti

Other Assets

'lbtal

Assets

.

LIABTI-ITIES

Current Liabilities

Accounts Payable

Short/[-ong-term

Debt

Other Current

Liabilities

Total

Current

I-iahilities

Long-telm f)ebt

Other

Liabilities

Del'en'ed

I-ong-term

Liability

Minority

Interest

Total

Liabilities

Stockholclers'

Equity

Pret'errecl

Stock

Common

Stock

Rctained

Earnings

TreasLrly

Stock

Capital

SurplLrs

Other Stockholder's

Equity

Total

Stockholder's

llquity

Total

Liabilities

and

SE

^t.r/rc(.

Curilpatry

Docurnenls.

$2,879,000

6,325,000

6,384,000

3,

194,000

18,782,000

19,244,000

54,012,000

3

r,636,00t)

4,498,000

128.112.000

r5,B

10,000

8,472,000

24,282,A{J$

21,360,000

10,

I 89,000

r0,902,000

324,000

67.,{t57,${tll

1,217,000

4,008,000

'

64,6 r4,000

(61,309,000)

6l

,697,000

(9,1

72,000)

6

r

,439,000

$128,172,00{)

4,7S

1,000

7,04-5,000

6,880,000

3,r 99,000

21.,905,000

19,462,000

'

56,5 I2,000

32,606,000

4,348,000

r34,833,000

14,58

t

,000

r6,320,000

7,768,000

3(),901,000

20,652,000

9, r,16,000

r0,752,000

283,000

71,734,0{t0

r,324,000

4,007,000

-s7,309,000

(55,961

,ooo)

6r;118,000

(4,698,000)

63,382,000

134,833,000

3,313,000

228,000

8,773,000

u,416,000

3,785,000

24,515,000

20,640,000

s9;t67,000

34,233,000

4,837,000

143,992,0tt0

7,91'7,000

13,084,000

9,897,000

30,958,000

23,-581,000

8,1,54,000

r r,805,000

74,498,000

1,365,000

4,002,000

48,986,000

(47,s88,000)

60,307,000

2,421,000

69,494,000

143,99?,000

Global

Business

Units

(GBUs)

Note

in Exhibit

3 that

P&G's

Beauty

and

Grooming

CBU consists

of two divisions,

Beauty

and Grooming.

That

GBU

contributes

34

percent

of tl.re

company's

revenLles and

36

percent

of

profits.

Note

that

P&G's

Health

and

Well-Being

GBu

contributes

18

percent

of

revenues

ancl

l9

percent

of

the

company's profits.

P&G's

Household

Care

GBU

is the largest

among

the

three;

its

Fabric/Home

Care division

contributes

30

percent

of

company

sales, ancl

its Baby/Family

Care

clivision

contributes

18

percent.

Exhibit

4

reveals

sales increases

across

every

single

P&G

busi-

ness

segment

in

2010

as.compared

to 2009.

GBU #1-Beauty

and Grooming

P&G's

beauty

and

grooming

CBU

was overhauled

in 2009

with

each brand

at that

time

being

categorizeei

into

"his"

or

"her"

categories.

Expansion

efforts

in

this GBU

have inchtded

enter-

ing

more department

stores

with

Dolce

&

Gabbana

makeup

counters.,

ancl

expancling

into

new


4/10

a2

ALFN

BADAL

:

,';

r

i,:

i

i

.

P&G's

2O1O

% Sales/Earnings

by

Segment

Within

GBUs

cBU

sesment

%sur*,

t;;;;;;-;;;il;;;*-*

Bear.rty

&

Grooming

Beauty

Cloorning

Total

Health

&

Health

Care

Well-

Being

Snacks/

Pet

Care

Total

Household

Fabric/

Care

Home

Care

30Vr,

Baby/Family

Care

.lg%o

Total

4gTo

23%

Head

& Shoulclers,

Olay,

Pantene

13Va

Braun,

Fusion,

Cillette,

Mach

3

360k

16Vo

Alrvays,

Cr-est,

Oral-B

Iams,

Pringles

Ace,

Darvn,

Downy,

Duracell,

Tide

2B7o

BoLrnfy,

Charntin,

pautpers

17

o/a

45Va

24E

10%

347a

u%,

4%

3%

18Vo

19%

i

Sorrre:

www.pg,com,

Beauty

($

millions)

201

0

2009

Net

Sales

Net

Earnings

Grooming

Net

Sales

Net

Earnings

Health

Care

Net

Sales

Nei

Earnings

Snacks

and

Pet

Care

Net

Sales

Net

Earnings

Fabric

Care/Honre

Care

Net

Sales

Net

Earnings

Baby

Carc/Family

Care

Net

Sales

Net

Earnings

Sorrrce.'

www.pg.com

$

r9,491

(t7t1

$7,63

r

$1,471

$1r,493

$

1,860

$3,

I 35

$326

$23,80-5

$3,339

$14,736

$2,049

$

r

8,924

$2,66.1

7,408

$

1,3-59

$

il,288

$

r

,83-5

$3,

I 1,1

$234

$23,

r

B6

$3,032

$r4,t03

$

1,770

markets

with

olay

skin

crean],

jointly

advertised

with

panfene

hair-care

products.

ultirnatelv.

olay

skin

cream

is

crestineil

to

enrer

r50

countries

where

panren.

ir.;;;;;,;;;;.;;;;,/;

have

improved

in

this

GBU

and

sales

growth

has

outperformed

the

rest

of the

company.

Among

female

cosmetics

piodLrcts

sltch

as

razor

blacles

ancl

skin

care

crames,

Olay

(facial

:k]1t1:)

is

the

str-ongesr

brand

holcling

an

approximate

10 percent

of

the

global

market

share.

P&c

holds

a

20 pe|cent

share

ol

the

retail

hair

care

m.rket

,rnre.

ireaoea

hy

brantls

srch

a\

Pantene

and

Head

& shoulciers

shampoo.

Fragrances

such

as

Dolce

&

Gabbana,

Gucci,

ancl

Hugo

Boss

represent

the

tr-agiance

lines.

Regarding

grooming

products,

Gillette's

Fr-rsion

and

Mach

3

are

top

proclLrcers,

representing

70 percent

of

the

global

nlale

razor

blade

markef

.

Male

deoclorants,

sha;ing

cream,

and

hair/skin

products

are

among

other products

that

P&G

markets.

The

electronic

shaver

Braun

has

been

a

successful

brand,

with

the

company

holding

approximately

30

percent

of

the

nrale

shaver

nrarket

and

-50

percent

of

the

female

epilator

market.


5/10

CASE

3

.

PROCTER

& GAMBLE

COMPANY-2011

68tJ

#2-Health

and Well-Being

In

the

health

care

segment

of this

GBU, P&C

has

about.35

percenr

of the

global

feminine

care prodttcts

business.

Personal

health nonprescription

products,

such

as heartburn

meciica-

tion

Prilosec

(OTC)

ancl

Vicks,

are

successful

P&G

brancls.

In the Snacks/Pet

Care

division.

P&C's Pringles potato

chips lchievetl

a l0

percerrt

share

of

the

glohal

mlrket

shrrre

before

heing

divested.

The pet

care segment's

Iams

and

Eukanuba

brands

have helpecl

capture

an

approximate

10

percent

market

share,

with the rnajority

of

the business being

in North

America.

GBU #3-Household

eare

P&C's

lamily

care flncl home

care

brantls.

including

Ace, Ariel.

bawn. Downy"

Dulacell.

Cain.

and Tide,

achieved net

sales oi Sl-1.8

billion in

2010. The labric

cale product

lines

include

laundry cletergents,

fabric

enhancers,

and home

care

products/batteries.

The division

has

a 30

percent

global

share.

However. the

global

honre

care market

share is about 15

percent

across

the

categories,

and the l)uracell

battery

brancl

yields

about a

25

percent glohal

market

share

for

P&G.

Sorne

of P&G's

household products,

snch as alkaline

batteries,

liquid

detergent/cleaners,

bleach, diapers,

ancl

paper

towels, incurred

cleclining

sales cluring.the 4th qllartel'of

2010,

with

bleach revenues

dropping

1

1.3

percent

and battery revenlles

dropping

7

percent.

P&G has

a Baby

Care and Family

Care division. The

baby

care

business,

which

consists

of

diapers

and

ba6y wipes,

has

about

35

percent

of

the

global

market

share,

making P&G

either

the

number

one or two

manut'acturer

of baby

care

proclucts globally.

Pampers

is the company's

most

sttccessful brand ever and achieved net

sales

of

apploximately

$9

billion

in

2010.

P&G's family

care

br"tsiness

includes

Bounty paper

towels

and

Charmin

toilet

paper,'which

generate

about

45

percent

ancl 25

percent

of the

U.S. market

share

respectively.

Global

Operations

P&G's

does business

in i.lorth

America,

Western Europe,

Central and Eastern Europe/Micldle

East/Africa

(CEEMEA),

Latin

Arnelica,

and

Asia, which

consists

of Japan,

China,

ancl ASEAN/

Austlalia/India/Korea

(A.AIK).

P&G products

are

solcl in

approxintately

lB0

difl'erent countries

around

the globe.

Exhibit

5 lists

the respective

revenues

stemming

from

each

global

region.

l{ote

that North

America

is the

primary

source

of revenues

($33.1

biilion),

followed

by Western

Europe

($

16.6

billion).

The

approximate population

of North

America is

528,720,-588,

rvhereas

Western

Europe's

is about

391

,415,514.In

comparison,

North

America's

revenues

were

approxi-

miltely

25

nercent

greater

than Western

Errrope's

revenues.

OIay

is

a

big

slrccess

in

Mexico

with

an 8

percent

market

share

of

lhe

facial

moisturizing

market.

I-atin

America and

the Middle

East

& Africa

comprise

tl.re

srnallest portion

of P&G's

global

business,

but

Asia

as a

primary

target

for

growth,

with the

continent

being

home to

some

o1'

.the

fastest-growing

economies

in

the

world.

Over three

billion

consumers populate

Asia,

representing

more

than half

of

the

world's population.

During

the last

decade,

P&G

has more

than

doubled

the number

of brands

in

its

Asian

portfolio (from

l0

to

22).

P&G

has

sold products

in

Latin America

for

approxirnately

60

years.

P&G is

one

of

the larg-

est

consumer goods

companies

in

the region,

across

l4

counn'ies

with 19

manufacturing

sites,

l2

distribution

centers, and

one service

site.

The

largest

markets

are Mexibo,

Brazil, Venezuela,

and

Argentina.

Exhibit

6

inclLrdes

P&C's

executives,

and Figure

l

provides

an organizational

chart

fbr

the

company.

Note

that

Werner

Geissler is

the company's

vice chairntan

of

global

operations.

P&G's

2010

Regional

Revenues

Region

Revenues

Nolth

America

Westeln

Europe

Central

& Eastern-

Europe/Middle-

East/&

Africa

Latin

Arnerica

Asia

Totals

42o/a

217o

73Vo

9Vo

15%,

IOAVa

$3-1,I

$16.6

$

10.3

$7.

1

$1r.8

$7&.9

billion


6/10

^ra

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7/10

CASE 3

.

PROCTER

& GAMBLE

COMPANY

-2011

North America

is the largest

clivision

(sales)

of P&G. In Westenr

Europe, P&G

malkets

over

100

brands,

dating

back to

1930

in

the

United

Kingclom. As

of

2011,

P&G

produus

are

nar-

keted

in

every Western

European

country, which

together

account

for

about

25

percent

of total

conpany

sales.

P&G has

about 35 manufacturing plants

in Western Europe.

Competitors

Johnson

&

Johnson

(J&J),

Colgate-Palmolive,

Kimberly-Clark,

Unilever,

ancl Clorox

are major

competitors

to P&G

in

the personal

proclucts

industry.

Exhibit

7 provides

select

competitors'

performance

as

compared

to the industry.

Note J&J's

net

income

was

$

I

3.2 billion compared

to

P&G's

$10.9

billion.

J&.J employs approximately

114,000 associates

worlclwide, operating

in

over

60 countries

with

three business segments: l)

consumer;2) rnedical

devices and diagnos-

tics;

and

3)

pharmaceutical.

J&J

had

$61.5

billion in

revenues

in

fiscal

2010,

birt

its consumer

division is

the one that

primarily

competes with P&G. Particular prciducts

include

J&J

baby

shampoo,

Liquid

Neutrogena,

Band-Aid, and Tylenol

aspirin. J&J utilizes more than

29,000

Internet

domains, such

as KY.com and JJ.com.

J&J

has

an impressive

history

wilh

21

consecu-

tive

yeals'

adjusted earnings

growth

and 48 consecutive years

of dividencl increases.

Similar

to

P&G,

J&J continues

to

introcluce new

products

in

the market, but cluring

fisial

y6ar

2010,

J&J

encountered two

major recalls.

Colgate-Palmolive

Colgate-Palmolive

is

a

global rnanuhcturer nntl

mnrketer

of

oral

care

pelsonal

care, home

care.

and

pet

nr-rtrition products.

The conipany markets

its

prodr-rcts

in over 200

countries under

the

brancls

Colgate, Palmolive,

Mennen,

Softsoap, Irish

Spring, Protex, Sorriso, Kolynns,

Elmex,

Tom's

of Maine, Ajax,

Axion, Soupline,

SLravitel,

ancl Hill's

Science Diet and Hill's Prescription

Diet. Founded

in I

806

and headquarterecl

in New York

City, the company

achievecl

net income

of

$2.2

in fiscal 2010.

The company

operates 280 international

facilities,

of which

76

are

ownecl

in

t

ariotts cottntries,

such

as

Australia,

Brazil,

China, Colombia, France,

Guatemala, Italy,

Mexico,

Polancl,

South

Afi'ica, Thailand,

and Venezuela.

While the

company

has

been

exponentially

phas-

ing out

and closing

selecf

production

facilities

since 2004, it

has

also

built state-of-the-art

plants

that

manufacture

toothpaste in the

United States

and Poland. The company

employs

approxi-

mately

36,000 ernployees

globally.

Kimberly-Clark

'

Kirnberly-Clark

was

fbunded 1n

1812 and operates

four business

segments:

l)

Personal

Care,

2)

Consurier

Tissue,

3) K-C Prof'essional

&

Other, and

4) Health

Care. The Personal

Care clivision

manttfactttres

and markets

products

such

as disposable

diapers,

baby

wipes, ancl fenrinine

antl

incon-

tinence

care

proclucts

under

sLich

braucl names

as Huggies, Pull-Ups,

Little

Swimmers,

GoodNites,

I(otex,

Liglitdays,

Depend,

and Poise.

The

Consumer Tissue

division

manufactures

and

markets

products

such as facial

ancl

bathroom

tisstre,

paper

towels,

and napkins.

Products in

this division

ale

marl


8/10

25

ALEN BADAL

Scott,

Cottonelle,

viva,

Andrex,

scottex,

Hakle,

and

Page.

The

K-c

Professional

&

other

clivi-

sion

markets

such

products

as

tacial

and

bathroom

tissue,

paper towels,

napkins,

and

rvipes

sold

under

the

brands

I(imberly-Clark,

Kleenex,

Scott,

WypAll,

Kimtech,

KleenGuard,

Kimcare'

and

Jackson.

Tl-re

l{ealth

Care

segntent

rnarkets

disposable

health

care

proilucts

such

as

surgical

drapes

ancl

gowns,

infection

coitrol

prodllcts,

face

masks,

exam

gloves,

respiratol'y

prodilcts'

and

pain

manigement

products

uncler

Kimberly-Clark,

Ballard,

ancl

ON-Q

brands'

The

cornpany

has

56,00"0

employees

and

2l

facilities in

the

United

States, one

in

Canada, 20

in

F'urope'

and 64 in

Asia,

Latin

America,

ancl

other

countries,

rvith

many

of the

facilities

producing

multiple

produc-

tion

itel-rs/products

(synergy), The

company

achievecl

$19'7

billion

i1

total

revenues

in

2010'

Unilever

Unilever

is

a

privately-held

British

corporation

heaclquarterecl

in

London

that

n-rarkets

more

than

400

brands,

such

as

Lipton

tea,

Dove,

ancl

Aviance'

However,

the

company's

main

foctts

is

on

what

are

callecl

"billion-.lollo,

branclsi'which

are

12 brands

achieving

annual

sales

in

excess

of

1

billion.

Unilever's

top

25

brancls

accollnt

for

more

than

70

percent

of sales'

They

are

cat-

egorizecl

into

foocl

and

beverage,

home,

and

personal

care

divisions'

The

company

achieved

net

piofits

of 4,591in

2010,

up

flom

3,659

in

2009'

Unilever''s

Asia

Pacific

segment

yielded

double-digit

volttme

g|owth

in

2010'

with

strong

p.rf*t;;;.;

i,.r

u"tnu-,

tne

16itippines,

Pakistan,

and

China.

The

competitive

market

existing

in

India

yiekled

a

clouble-digit

uojl-im.

growth

for

Unilever. The company

experienced

weaker

rnarket

conditions

in

Central

and

Eastern

Europe.

Increases

of

v6luine

growth

wet'e

achieved

as

a

result

of

growth

in

Latin

An.rerica

and

perforrnances

in

North

America'

In

particitlar,

North

America

achieved

a 3

percent

voiume

growth,

while

Latin

America's

grorvth

increased

above

4

percent,

with

the

assistance

of

increased

plicing'

Unilever

directly

competes

with

P&G's

personal

ancl

home

.care

segments'

The

com-

pany witnessed

strong

sales

in deoclorants

clue

in

part to

strong

sales

by

brands

such

as

Dore

Men+Care

anrl

Rexona.

Its

home

care

segment's

laundry

products

have

hacl

strong

volrinle

growth

in

Inciia,

clue

in

part to

the

lelar.rnching

of

Rin

and

Wheel

laundry

detergents'

In

older

to

shrink

the

market

share

gap

in

China,

the

company

launcirecl

Omo

liquids,

which

achieved

double-digir

Srowth.

Clorox

Clorox

manufacturers

ar]d

markets

conslnner

products

uncler

such

brands

as

its

namesake bleach

and

cleaning

products,

Green

Works

nattttal

home

care

proclucts,

Pine-Sol

cleaners'

Poett

home

care

produJts,

Fresh

Step

cat

litter,

Kingsford

charcoal,

Hidden

Valley

and

K C

Mastelpiece

dressings

and

sauces,

Brita

water-filtration

proclLlcts,

Glacl

bags

and

wraps

and

containers'

and

Burt,s

Bees

naturai

per:sonal

care

producrs.

Founded

in

1980

and

employing

approximately

8,300

employees

globally,

Clorox

achieveh

revenues

of

$5.2

billion

in

fiscal

2010'

Clorox

manufactnres

products

in

over

24

countries

and

markets

them

in

100

clifferent

countries

around

;;;;;iJ

**,..

in

lour.

respective

segnrents:

international.

cleaning,

hotrsehold.

ancl

life-

sty1e.

International

sales

constitutecl

21

percent

of

sales.

The household

segment

achieved

32

p"r..n,

of

sales

in 2010,

followed

by

cleaning

\tvith 31

percent,

and

lifestyle

with

17

percent'

A

sample

of

the

compaly's

products

and

brands

sold

under

such

categories

as

lrome

care

products

inclucle

pine-sol,

fifex,

+O+,

and

Liquid

Plumr, whicir

constitr.rted

l7

percent

of

sales'

Charcoal

achievecl

l1

percent

of

sales,

with

such

brands

as

Match

Light

and

Kingsford'

The

Glad

brand

produced

13

percent

of

net

sales,

while

laundry-related

Clorox

produced

1 1

percent,

and

the

.o.pony'u

dressings

and

sauces,

such

as

Hidclen

ValJey

ancl

Masterpiece'

achieved

9

percent

of

net iale.s,

among

other

brands/products

represented

within

the

company's

business

segments'

Exhibit

B

lists

leacling

househoid

prodr.rct

companies

as

cleterminecl

by

sales,

ied

by

P&C

and

followecl

by Unilever

in

fiscal

l0

10.

Retailers,

such

as

giant wal.-Ma{t,

continue

to

place

heavier

emphasis

on

their

own

brands'

High

unemployment

rates

across

the

country

have

catlsed

manufacturers

to

place

greater

em-

phisis on

'value-priced"

products,

sttch

as

P&G's

Tide

Basic,

Channin

Basic,

Bounty

Basic

and

Papers

Basic.

Church

&

Dwight

Company

offer

their

own

"value" products,

such

as

Arm

&

Ilammer

laundry

cletergent

and

Xtra

laundry

detergent'


9/10

hF,t+it,:g' "

; l

Leading

Household

(ranked

by

sales)

CASE

3

.

.PROCTER

&

GAMBLE COMPANY-

2011

I

Products/Personal

Care Companies

Company

Fiscal

Year

End

Sales

(Mil.$/f

Procter

& Garnble

Unilever

L'Oleal

Kimberly-Clark

Colgate-Palmolive

Kao

Reckitt Ilenckiser

Avon

Ilstee

Lauder

Shiseido

Cloror

Chr-rrch &

Drvight

Alberto-Culver

Rcvlon

June

'i0

Dec.

'

10

Dec.

'10

Dec.

'10

Dec.

'10

Mar.

'10

Dec.

'10

Dec.

'10

Jun.

'l

0

Mar.

?

l0

Jun.

'10

Dec.

'

l0

Sept.

'10

Dec.

'10

$78.9

f.44.3

4.9

$

19.8

$15.6

$

I 2,730

f

8.5

$

r0.9

$1,796

$6,9s

1

$).)

$2.6

$

I

,-s97

$1.3

lolicr,.

Stanctard

ancl

Poor's December 30,

20

I

0,

wrvw.finance.yirhoo.cotrr/conrplny reports

P&G

spencls

as mllch on

advertising as

any conrpnny. Exhibit

9

Iists the leading

national

advertisers

during tlie firsl quarter

of

20

10,

led

by

P&G's

$7'72.6

million. IndividLral

item market

share

percentages

remain

tight in the

industry

among

key

products.

P&C

holds

a slight

narket

share

advautage with

Duracell

(40.2

percent)

over Energizer

(38.8

percent).

Sales

cif

bafteries

fell

6.2

percellt

in

2010.

P&G is

the inclusry leader

lvith

the lazor

(65.3

percent)

ancl

blacles

(83.2

percent).

Energizer's

Schick

holcls

a

second

ranking

of market

share

with 28.-5

percent

in

razors

and I

3.8

percent

in

carffidges.

P&G

holds

60.2

percent

of

the laundry

detergent

marl(et

share and 40.4 percent

of the

toothpaste

share,

compared

to

Colgate-Palmolive's

29.7

percent

shale

of

the toothpaste

mar-

ket.

Disposabie

cliapers

market

share

is lecl

by P&C with

48.2

percent

ancl Kimberly-Clark

with

34.2 percent. However,

sales

of

private-label

brancls

rose

13.-5

percent,

while

private,label

mariiet

share

increasecl

to

16.8

percent

in

2010.

In

cleodolants, P&G

holds

a 35,5

percent

share,

Unilever's

share

is

28.7 percent,

and

Colgate-Palnrolive's

share

is 10.-5

percent.

P&G

holcls

a

leading

37.3

percent

of the

shampoo

rnarket

share,

follorvecl

by L'Orealls

13.1

percenr.

Koch

inclustries

leads

in

the

toilet fissue

market

share

wirh

16.7

percenr.

follorvecl

by

Kimberly-

Clark's 25.1 percent

ancl P&G's

24. I

percent.

Industry

analys[s

believe continued

new product

development

will

be

the

key

to

increasing

market

share/sales.

i::l{t{iir;ii

,-r

Top Ten

Advertisers

of

Q1

2010

Company

Jan-March

2010

($

Millions)

$'/72.6

$516.4

$533.7

$5

17.2

$396.4

$366.8

l;304.3

$261.6

$264.6

Procter'&

Camble

Co.

AT&T

Ceneral Motors

Corp.

Verizon

C()mnlunieal

()n\

Pi'izer Inc.

Johnson

& Johnson

Time

Warner Inc.

Walt Disney

Co.

General Electric

Co,

^Solrcz.

www.businesswire.cont.


10/10

28

ALFN

BADAL

The Future

Company reports

have indicated volume

growth

opportunities

exist

across

the

business

land

scape, but

industry reports'suggest consumers are more cash-strapped than before. Given

th

varying

political

and economic

conditions

globally,

as

well

asr'the

August 2011 stock

marke

crash, what strategy should

P&G implement by taking advantage

of

the opportunities that

exi

in the

industry,

while

utilizing

its

strengths?

How

can

the company

optimally

manage

its weak

nesses while

avoiding

potential

threats

imposed by competitors

and/or

the industry? Will

the fu

ture continue to

be

bright

for P&G?

Identify

particular strategies

for

CEO McDonald

to

conside

in order for P&G

to continue surpapsing

its rivals

while

increasing revenues and market

share

across

product

categories

and

regions.

t.

2.

3.

4.

Membare

:

ENSONG,

.JESSE

JEAN

MONI6JO/

WES

l4

a?,S.tO, (l+|y.rJtlAlr

obrqi?Jro,

MarT

pauttna

coftlqd

t

Uqgq-1o2a'73

6%L\7nw

o14z

,6u693

d

@2allo4otr

oAblz

s3

,0u

\

f.

hiltarnau,

prllag

Jen

Strategic Management Procter & Gamble 2011

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Transcript of Strategic Management Procter & Gamble 2011