Success of Proctor and Gamble

Operations Management

Describe the organization (Proctor and Gamble)

What is the product or service?

Proctor and Gamble (P&G) is a U.S. based multinational consumer Products Company. It offers products such as cleaning agents, pet foods, and personal care items. Before selling Pringles to Kellogg Company, P&G offered products in the line of food and beverages.

What is the ownership structure?

The ownership structure of P&G is multi-divisional because simple structures are used in small companies where the owner works as the management and makes all the big decisions for the organization. In such a case, the owner and the manager must be in the workplace every day. P&G is a relative giant company, with businesses spread across the world; therefore, the company uses a multidivisional structure. This structure entails operating divisions, where single divisions represent independent businesses where the top manager assigns responsibilities of daily operations. Every division signifies a different, self-contained business with an independent functional hierarchy (Mitchell & Coles, 2003). Active supervision of performance through this structure increased the chances that managerial decisions in individual units are in the best interest of shareholders. The adoption of this structure was intended to attain three key benefits for the company:

To enable managers to supervise the performance of each division accurately, hence simplify the problem of control

To facilitate comparisons between, thus improve the process of allocating resources

To stimulate managers in poorly performing divisions to look for strategies of improving performance

What are its competitive advantages?

Diversity and inclusion are the core priorities for P&G. Exceeding equality and the idea of doing the right thing is their business imperative and a competitive advantage for the company. Therefore, diversity and inclusion assume the central place at the top of talent management, human resources, and recruitment strategies. Diversity and inclusion are crucial enablers for P&G in becoming an "employer of choice," that recruits, develops, engages, and retains the best talent of all faiths, ethnicities, and backgrounds. The company's global leadership has established a strong vision for diversity and inclusion (Cooper, 2006).

What are its operations competitive advantages?

P&G has invested in market research like no other company in the world. The company interacts with millions of consumers every year in over 100 countries. It conducts thousands of studies every year and invests massively in consumer understanding. Market research is their core competitive advantage in terms of operations because it generates insights that help identify opportunities to serve better, innovate, and communicate with their clients (Mitchell & Coles, 2003).

Describe the industry

Who are its primary competitors?

The markets in which P&G sells its products are highly competitive. P&G's products compete against similar offerings of both small and large companies, notably L'Oreal and Unilever.

How does the competitive environment affect its operations?

The businesses of P&G have been dragging on the top line. After a positive momentum previously, P&G has once more slipped behind competitors L'Oreal and Unilever in terms of sales growth and has even further fallen behind industry player Estee Lauder. This competitive environment has forced P&G to embrace drastic measures to reverse the situation. P&G has adopted digitization of its operations and digital marketing of its brands as part of the remedial measure (Cooper, 2006). The company intends to become the digital savvy by making better use of digital tools to predict demand and enabling innovation.

Discuss the product's location in the product life cycle

P&G's products are in the maturity stage, which is the third stage of the product lifecycle. Their products have been successful in the market and have later attracted rival firms into launching similar offerings. It demonstrates that the products are generating maximum profits used to build the brands. Nevertheless, rival offerings from L'Oreal and Unilever offer the same benefits and this has slowed sales and chipped the market position of P&G. Although the company continues to support the growth of its brands, some of its products continue to struggle in the crowded markets.

Choose a product or service that this organization offers

Proctor and Gamble Company dealing with a wide range of pet food products and cleaning agents that are often released into the market through an intricate chain of supply. Notably, the company is a global dealer in soap and detergents production and the market demand for these products have been overwhelming. The company deals with the extraction of detergents from their crude sources. Ideally, it is engaged in creating value of raw materials into desirable product ready for use by the consumers. The key inputs needed in the production process of the latest brand called Ariel detergent include phosphates compounds, salt, adhesives, solvents, and energy. Through a balanced combination of the above components, the company has established a multi-national detergent that continues to attract huge revenue across its branches (Adams & Rob 49).

According to 2011 Annual Report Ariel is one of the products that were rated t contribute to over $1 billion net income among the diverse products. The company has intelligently navigated through the competitive detergents industry through a number of competitive market strategies. The recent transformational mechanism adopted was sponsorship of the music industry through popular TV shows. In 2008, the company was voted as the most diverse in strategic marketing and transformational role of bringing into light product promotion in a new dimension. Besides, in April 2010, the company together with Unilever formed a cartel that facilitated a rapid flow of goods to the consumers. Price-fixing mechanism in collaboration with other companies such as Unilever has a transformation strategy in business that serves a mutual benefit to both the companies in the long-run (Adams & Rob 43).

Certainly, the company derives pride from an intricate system of processes that aim at delivering safe products to the customers. The process activity chart below helps to demystify the various systems of operations that are interlaced to make up the company lines of activity. Despite the diverse operations, the system has achieved tremendous results to the success of the company

Production Activity

Beauty segment Grooming segment Health Care Segment Snacks & Pets care Fabric Segment

Baby Care Segment

Waiting Line Concept

Understanding queues or waiting lines will influence the performance of the company significantly. According to Anderson (2008), waiting line refers to a queue of people in an organization waiting for a specific product or service provided by the organization. Understanding the effects of the waiting line to the performance of the company in relation to product and services delivery relies on the consideration of a variety of elements that create understanding of its implications. As stated by the queuing theory, elements such as arrivals, waiting line, and servers influence the ability of organizations to provide the required products and services meeting the demands of the consumers. The arrival rate refers to the rate in which the consumers utilizing organizational products and services arrive at the organization at specific time. Determining the arrival rate of the consumers allow the organization to determine the quantity of supply and staff required to provide the required services to them. Similarly, significant evidence has that arrival rate influence the structure adopted by the organization. Among the structures that will be influenced by the arrival rates and waiting line include single-channel, multiple-phase, single-channel-single-phase, multiple-channel, multiple-phase, and single-phase structures (Anderson, 2008).