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Proctor and Gamble is a global company that produces various products sold around the world. It is a Fortune 500 company and ranks consistently among the top 10 companies in the U.S. in terms of sales. The product chosen for this study is Head and Shoulders, a dandruff shampoo that constitutes 23% of net earnings in the beauty care segment for P&G per annum (P&G Investor, 2015). With sales of more than $80,000,000 for the company, Head and Shoulders is a significant product mover.
MacroEconomic Variables
GDP growth in the U.S. has been stagnant over recent years and therefore P&G has had to look overseas in order to grow its market. However, with global recession likely to occur in the coming months and years, the predicament of P&G does not look positive unless it can penetrate and maintain market share in developing nations.
Unemployment in the U.S. is also higher than reported according to reports from independent sources and suggests that the U.S. economy is not as recovered as pundits might have investors to believe. There is a false sense of security surging among investors but consumer confidence is at an all time low and faith in central banking is crumbling as the price...
Instead, deflation is setting in with the price of oil dropping to decade-lows with no sign of coming back up in the foreseeable future. With oil down the entire economy is dragged back into recession mode and while deflation may put more money in the pockets of the average buyer, it does not help with boosting sales or with profit margins, as the vast majority of consumers are in saving-mode as a result of an awareness of an impending market crisis (Durden, 2016).
The trends for these variables is bad in every way, with each souring the outlook of the U.S. economy. GDP is down, unemployment is up and inflation is low. These trends are likely to continue. They will impact supply and demand negatively because all of them combined contribute to a saving mentality in the consumer and so purchasing is reduced.
Macroeconomic Policies
The current monetary and fiscal policies in the United States have been to perform Quantitative Easing (QE) in which the Federal Reserve injects stimulus money into the…
References
Durden, T. (2016). Markets around the world are crashing; gold soars. ZeroHedge.
Retrieved from http://www.zerohedge.com/news/2016-02-11/markets-around-world-are-crashing-gold-soars
P&G Investor. (2015). Annual Report. Retrieved from http://www.pginvestor.com/interactive/lookandfeel/4004124/PG_Annual_Report_2014.pdf
9% 6.2% 6.3% 6.4% 6.4% 6.4% Source: Kelly, Herring (2012). Fig 3: France Construction Growth Rate (%) Source: Kelly and Herring (2012) Economic theory points out the factors leading to the decline in the construction output in France. Economic theory argues that the changes in demand for construction activities may be due to several economic factors such as changes in Gross National Product, and changes in interest rates. (Finkel, 1997). Akintola and Martin (1994) argue that the level of
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