Procter & Gamble Procter and Case Study
- Length: 7 pages
- Subject: Business
- Type: Case Study
- Paper: #90922939
Excerpt from Case Study :
The company also wishes to expand its business operations to new potential markets in the short run. However, it will first have to analyze its internal strengths and weaknesses in order to evaluate its own capabilities to penetrate in that market in an effective way (Perreault & McCarthy 2002). On the basis of this analysis, it can be recommended that P&G should first focus on improving its existing products and customer services in the already targeted markets before entering into new markets. Reason being, a dual strategy will bring critical challenges for the company which may become unmanageable in the short run and take the company into serious financial problems and competitive challenges (Ferrell & Hartline 2011). Conversely, if it chooses to improve its existing products and services in the near future and target new markets as a second strategy after some passage of time, it can reap benefits from both these strategies in a more effective way.
Q. 3: STRATEGIC DIRECTION
i. Product Development Options:
Keeping in view the internal strengths, core competencies, and resources of the company, the first strategic option in the next 3 to 5 years is to introduce new products that are not yet offered by its major competitors. It can invest in R&D to bring something unique which can not only attract potential customers, but also increase the company's competitiveness in its industry (Yale School of Management 2011).
ii. Market Development Options:
Alternatively, the company can target new markets for its existing products. It can find potential markets in those areas where the intensity of competition is comparatively lower than already developed markets. By entering a new market earlier than its competitors, P&G can establish its strong presence and capture the supply chain and distribution network of that market.
The new product development option may be transformed into a diversification strategy if the new product completely introduces a new product line in the company's existing portfolio. That is, P&G can introduce a product which is not in its main business line -- thus, enabling it to enter and establish its presence in a related or unrelated industry in the next 3 to 5 years period.
iv. Alternative Development Option:
Another alternative strategic direction for the company is to focus on its existing supply chain and distribution network and make it more efficient for its business operations. The suppliers that provide necessary raw material to produce the highest quality of health care and personal care products must be paid an attractive commission in order to keep them tied with the company (Ferrell & Hartline 2011). Similarly, the distributors are responsible to make the company's products available in the potential local and international markets. The company can take their support in promoting and developing its business in the new markets and compete with Unilever, Nestle, and other top industry rivals in a more effective and efficient way.
All these strategic directions will lead the company towards greater competitiveness and improved operational and financial performance. However, the strategic option which can contribute the most in the next 3 to 5 years period is the focus on R&D section to bring innovative products to the market. The company currently manages a wide range of world-class brands like Ariel, Olay, Pantene, Head & Shoulders, Always, Gillette, Tide, Pampers, Downy, Oral-B, etc. (Procter & Gamble 2013). These products are recognized for their performance, quality, and reliability.
The company can do extensive research to develop new products which can, instead of fulfilling the unfulfilled needs, create their own demand among a large number of customers. It can succeed in this new product development option if it introduces a product that has the best quality ingredients and an ability to exceed the consumers' expectations after its first use (Harvard Business 2008). The new product development option will also give the company a first mover advantage in its industry in the short run which will attract the whole target market towards this product due to the absence of similar products.
Ferrell, O.C., & Hartline, M.D. 2011, Marketing Strategy, 5th Edition. Ohio: South-Western Cengage Learning
Frederic, M., Agnes, V., & John, M. 2011, Pest Analysis, 2nd Edition. U.K: Gardners Books
Harvard Business, 2008, Innovation video with a.G.Lafley -- an interview with a.G. Lafley, Chairman and CEO, Procter & Gamble. Available from [Accessed May 7th, 2013]
Hitt, M.A., Ireland, R.D., & Hoskisson, R.E. 2011, Strategic Management: Competitiveness & Globalization - Concepts, 9th Edition. Mason, OH: South-Western Cengage Learning
Perreault, W., & McCarthy, E. 2002, Basic Marketing: A Global-Managerial Approach, 1st Edition. U.S.: McGraw-Hill
Procter & Gamble, 2013, P&G Annual Report 2012. Available from [Accessed May 7th, 2013]
Yale School of Management, 2011, Innovation video with Bob McDonald. Available from [Accessed May 7th, 2013]