Proctor and Gamble Strategic Case Study
Company Overview
P&G is an American multinational consumer goods corporation founded in 1837, headquartered in Cincinnati, Ohio. It manufactures and distributes food and beverages, cleaning supplies and personal care products. In 2011, it showed almost $83 billion in sales, making it 5th in the "World's Most Admired Companies." P&G has about 130,000 employees globally (P&G Information, 2012). Bob McDonald is the current CEO, and worked for the company for 29 years prior to his promotion. His view is that P&G should touch and improve "the lives of the world's consumers through branded products of superior quality and value" (Dyer, D., et.al. 2004).
Mission Statement and Values
P&G's values focus on its people and the values with which these people live and work. P&G believes it attracts and recruits the finest people globally, builds its organization from within, and promotes and rewards its employees without regard to any difference…...
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REFERENCES
Basdur, M & Gelade, G 2006, 'The Role of Knowledge Management in the Innovation Process', Creativity and Innovation Management, vol 15, no. 1, pp. 45-62.
Beer, M & Eisenstat, R 1996, 'Developing and Organization Capable of Implementing Strategy and Learning', Human Relations, vol 49, no. 5, pp. 597-618.
Business Wire 2012, Proctor and Gamble Received Golden Halo Award, viewed December 2012, .
Children's Safe Drinking Water 2012, viewed December 2012, .
All other Ultra Gain products are not recommended for High-Efficiency machines
Source: Ultra Gain (2008) at http://www.gainlaundry.com/static/products.asp.
Marketing application and analysis
The "release the hounds" reference used to promote Gain "Outdoor Sunshine" is reflective of the company's past marketing efforts for this product that have equated doing laundry with going to war while remaining "ladylike" in the process. According to Harris (2000), "Throughout the twentieth century, the aesthetic of cleanness has been simultaneously militaristic and ladylike. The rhetoric of germ warfare infuses descriptions of cleaning products, which depict housewives as soldiers on the front lines, 'killing dirt,' 'cutting through stains,' or 'getting brutal with soiled clothing,' as in an advertisement for Gain detergent that shows a laundress in a boxing glove clutching a pair of men's underwear ('Give your boxers some punch')" (p. 250). A common theme that recurs through this marketing copy, with the sole exception of 2X Ultra Gain, is…...
Operations anagement
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…...
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Moreover, the organization will have to consider prioritizing consumers waiting in the line based on various factors. For example, the organization will have to use first-come, first-serve method, considering the age of the consumer, and other factors such as the health status, as in the case of physical disabilities. From the waiting line, managers acquire insights into the level of service and quality of products to provide their consumers. For example, low-service line of service delivery will be inexpensive to the organization, but can cost the organization significant costs due to customer dissatisfaction. Similarly, a high-level line of service delivery will result in low consumer dissatisfaction costs. Therefore, considering the above waiting line factors will influence the performance of the company significantly (Anderson, 2008).
Operations Management
The organization uses total quality management to ensure quality of the products and services it offers to its consumers. Total quality management facilitates the creation of organizational culture that aims at strengthening organizational efforts of improving quality and delivering of high-quality services and products to the consumers. Total quality management ensures the success of organizational activities through the provision of services and products that aims at satisfying consumer needs and participation of organizational stakeholders in activities contributes to its success. The collective efforts of the organizational stakeholders result in the creation of the desired organizational culture focused at success and competitiveness of the company. The company uses various strategies to
At the time of Organization 2005, P&G did not have the ability to report to this specific level, and instead focused purely on geographies first, product area second, and functional areas the last. This clearly made execution of marketing strategies extremely difficult, as in the old organizational structure, country-based marketing managers could decline to sell a specific product or an entire brand.
Jager, who had extensive experience in Asia-pacific prior to taking on the CEO role, had seen through many of his product introductions how having a strong geographical focus was actually a disadvantage for P&G. His work on the SKII market definition and planning in Japan was a case in point (Bartlett 2004).
What is troubling however in the definition of Organization 2005 is the high level of prioritization on process standardization, over and above the finely tuned execution of regional marketing campaigns and the ability to measure results to the…...
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References
AMR Research (2001) - Building a Case for the Private Trading Exchange. AMR Research Report. Boston, MA. Accessed with permission from the publisher.
Asgekar, Fontanella and Swanton (2004). AMR Research (2004, January 22) Demand Driven Supply Network: Striving for Supply Chain Transparency. (Report) Boston, MA
P&G
Proctor & Gamble entered foreign markets early in its existence, and relied on semi-autonomous foreign subsidiaries to manufacture market and distribute products that were developed in the United States. This tactic relied on P&G owning the subsidiary, but giving the subsidiary considerable operational leeway, so that the arrangement almost worked more like a licensing deal. This strategy persisted for P&G through the 1980s.
In the 1990s, this strategy became less viable, at least relative to the alternatives. The strategy had arisen and persisted in an era where barriers to trade between nations were high, and by the 1980s these barriers were beginning to fall -- it was the beginning of the modern era of globalization. National markets were becoming regional markets -- for example with the common market in Europe and the Canada-U.S. Free Trade Agreement. In addition, P&G's retail partners were becoming global in scale, something that demanded P&G adopt…...
Tambrands becoming part of Proctor & Gamble was a wise move, overall, but it was not without its risks. P&G has a huge following, and is a company that virtually everyone in the world has heard of and recognizes. Because P&G is so very popular all over the world, it is very likely that the Tambrands product will be seen as more significant and more respected because it is associated with the P&G name and brand. Of course, it is possible that Tambrands will still fail for other reasons that have more to do with culture and less to do with branding, but that is a risk that has nothing to do with whether Tambrands merged with another company or stayed on its own. What matters most with Tambrands is that it saw the problems it was facing by trying to market to other countries. It was not possible for…...
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References
Bhagwati, J. (2004). In defense of globalization. Oxford, New York: Oxford University Press.
Cateora, P.R., & Graham, J.L., (2002). International marketing, 11th ed. New York: McGraw-Hill
Coughlan, R., & Connolly, T. (2001). Predicting affective responses to unexpected outcomes. Organizational Behavior and Human Decision Processes, 85(2), 211-225
McCarthy, K., Perreault J., & Saphiro, M. (2002). Basic marketing: A global-managerial approach. New York: McGraw-Hill
Buying one brand of shampoo instead of another, for instance, is quite common. ivalry, therefore, is high.
Porter's value chain
Porter shows how firms such as Procter & Gamble can create competitive advantages for themselves. He categorizes a company's activities in the following way:
1. Primary activities: (a) Inbound logistics -- receiving the incoming material, including the handling and inventory of their material; (2) operations -- P&G's suppliers forming this material into their products; (3) Outbound logistics -- getting their products on their shelves and to the shelves of the different private stores and from thence to the customers; (5) marketing and sales -- P&G doing research on customer needs, satisfying their needs, communicating with consumers; (6) service -- fulfilling customers' needs after service has been completed, following up, and occasionally replacing products if need be. esearch too is ongoing in order to discover future trends and ways to best satisfy and…...
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References
Quick MBA. The Value Chain. Strategic management www.quickmba.com/strategy/value-chain
Quick MBA. Porter's Five Forces. Strategic management www.quickmba.com/strategy/porter.shtml
P&G is looking to make the Supplier Environmental Sustainability Scorecard methodology a global standard (P&G, 2010). To support this effort to make the scorecard a global baseline of sustainability measurement, P&G freely distributes Microsoft Excel models of the methodology and baseline analysis tools from their website. The foundations of the methodology can be seen in Figure 2: Procter & Gamble's Supplier Environmental Sustainability Scorecard Methodology. The key metrics measured include energy, emissions, waste, water and an environmental management system performance ranking that can be used for evaluating supplier performance within and across product categories.
P&G has also differentiated this model by rewarding excellent business performance as measured by the key performance indicators (KPIs) first, while also using the methodology to evaluate areas where performance can be improved. The use of incentives and rewards for the top 400 suppliers at P&G have been announced and are actively being applied to supplier…...
Attract Candidates
The fit tool is a neat feature. It is a slightly different way from framing the issue, which is ensuring that the right person applies for the right jobs. You are refining the search, but they frame it in a different way. All the boxes have a Windows 10 sort of look, which I'm not into, but I like the feature overall because they ask basic questions about what sorts of things you are interested in. While people sometimes lack the self-awareness to answer this accurately, it's a good idea that makes the applicant feel as though they are empowered in the situation. But as a tool from a human resources perspective, where effectiveness is important, I am less sold, especially because the version of themselves that people sell is not necessarily the version that is true. Especially with college students, somebody might have a vision of themselves…...
Uniform promotional messages for the products included in the same business unit can be translated by diminished costs. This aspect should not be underestimated, as promotional costs, in the form of TV, radio, paper or Internet advertisements represent an increasing share in the total marketing costs incurred by the company. By using the same promotion method, costs will be most likely cut down. Also, another important effect is the uniqueness character of the company's image throughout the world - consumers at global level could easily point out, indicate or recognize the unique characteristics of the P&G products, the features of the products that differentiate them from competition's items.
5. Innovation is the key to getting ahead of competitors. The development and launch of new products would allow the company to present their customers with higher quality and more innovative products. This way, P&G could obtain better market penetration facilities; improve…...
Production in the corporation is undertaken through guidance on the market need analysis and the research and development aspects of the corporation. The perspective in place of production is to consider market needs and keep innovating products in a way to ensure higher prospect in customer loyalty and lager market share. In this venture the integration of production in product development in accordance to the market needs put the company at the fore front to attract higher level of revenues. Different divisions within the corporation undertake to develop product in line with the corporation core objectives and the market needs.
eferences
Axson, D.A.J. (2010). Best Practices in Planning and Performance Management: adically ethinking Management for a Volatile World. . United States: Wiley.
Hofstede, G., & Hofstede, G.J. (2009). Cultures and Organizations: Software of the Mind. London: McGraw Hill.
loLevin, I., P.,, & Levin, a., M.,. (2007). Modeling the ole of Brand Alliances in the…...
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References
Axson, D.A.J. (2010). Best Practices in Planning and Performance Management: Radically Rethinking Management for a Volatile World. . United States: Wiley.
Hofstede, G., & Hofstede, G.J. (2009). Cultures and Organizations: Software of the Mind. London: McGraw Hill.
loLevin, I., P.,, & Levin, a., M.,. (2007). Modeling the Role of Brand Alliances in the Assimilation of Product Evaluation. Journal of Consumer Psychology, 9(1), 43-52.
Loosemore, M.D., a. & Lingard, H. (2003). Human resource management in construction industry: strategic and operational approaches. New York: Taylor & Francis.
Proctor & Gamble- Milestone
Head & Shoulders remain one of the most celebrated and recognized names in the hair care market for over fifty years. This renowned global brand was launched by Proctor & Gamble (P&G). The company is the leading producer of hair care products across the world, with their Head & Shoulders product securing over 20% market share. ecently, P&G's beauty unit made 30% in net sales and 30% of net earnings. esearch estimates that at least 50% of the world population is suffering from dandruff at least once in their lifetime. This renders it the most common type of scalp issue. Head & Shoulders has become one of the most widely known across the globe; selling a gigantic 150 bottles of the anti-dandruff formula each minute. Head & Shoulders are excelling regarding their marketing strategy. For a new product to penetrate, brand endorsements with powerful and related names…...
A major weakness that can be mitigated for P&G is that of copycat and "me too" products that erode the prestige of the brand. When margins are high competitors tend to enter the market. The industry that P&G operates in is fairly easy to enter. There are many substitutes for Tide as there are many substitutes for Coke. P&G must be very careful to maintain the prestige and quality of the brand so that competitors can not erode its influence on consumers.
Compare the strengths and weaknesses of P&G's resources and capabilities to that of Eastman Kodak (Case 7). These companies are in very different industries. How does this affect strategic analysis of resources and capabilities?
The first major strength of P&G relative to Kodak is its margins and cost structure. P&G has the benefit of increasing earnings without having a corresponding increase in capital expenditures. Eastman Kodak however, as the case…...
Tide
Proctor and Gamble's Distribution System of Tide channel of distributing a product refers to the product's "sequence or marketing intermediaries" that begins after the product has been formulated and created that then pass on the product to the consumer. (Principles of Marketing, 2004, p.5) Proctor and Gamble as a company has recently been commended for using agent-based distribution system modeling. This system is credited with transforming the company. (Anthes, 2003)
According to the HIDC.NewsLetter of 5 May 2004, in an article on distribution systems entitled, "Intelligent Agents "as competition increases and product life cycles shorten" traditional distribution systems "are no longer sufficient for many companies today. Instead, more and more of them are turning to collaboration in supply chains and forming networks of organizations to ensure a competitive advantage. But in such organizational networks, dense and tightly coupled activities increase the difficulty and costs of coordination. Moreover, as the tasks in…...
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Works Cited
Anthes, Gary H. (January 27, 2003) "Agents of Change." Computer World. Retrieved on June 16, 2004 at WWW.COMPUTERWORLD.COM" (COMPUTERWORLD
com. You are aske to briefly aress each of the following issues. Be sure to substantiate your answers with reliable sources. See Moule Six -- " Ethical Business Practices on the Web to assist in you with your answers.
a. Describe any customer concerns that may affect the use of a website to purchase customize cosmetics.
The greatest concern customers have is if they can trust the quality an valiity of the personalize care proucts they buy online. Trust is the overriing an most critical issue there is when purchasing personal care prouct online (Lalisan, Rubio, et.al.). In conjunction with trust, many consumers want expert-level guiance when it comes to efining which ingreients to use on a cosmetic prouct (Groves, et.al.). A customize cosmetics website must also convince customers that the unique prouction processes use to prouce their proucts is safe, secure an reliable. The aspect of prouct personalization an mass customization…...
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d. What are the main lessons entrepreneurs can learn from the Reflect.com Internet venture?
First, it is critically important to design the entire value chain of a business to meet and exceed customer requirements (Porter, et.al.). Second, just concentrating on one aspect of the business that the consumers see, especially on a mass customization-based website, ignores the more important functional areas of managing one-off production and shipping in addition to customer data management (Gaffney, 1). Third, the demographics and psychographics of the customer base need to align with the purchasing process. In the case of Reflect.com, the ideal customer may be too busy with their job and life responsibilities to create designer make-up for himself or herself.
Question 3 in the summer of 2010 a company was formed to sell customized perfume online. The business targets primarily male gift givers and is designed to enable them to create a customized perfume based on the recipient's personality traits. They feel the business will be a huge success. The founder, Wendy Zhang has said, "This a one-of-a-kind gift. It will make the recipient feel special every time she puts it on. Because she will know that, it is perfectly formulated to accent her personality." In the future
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