Parle G Case Study

By upgrading their brand, it will help to identify the qualities of the products that set it apart from the competition. They have to make the

We evaluated our company’s position in the industry, and found ourselves in an excellent starting position to further develop our products and match them to the industry’s needs. Our market share is adequate and we can advance further with our strategy improve and reposition our products in the coming years. We have underutilized capacity, which we intend to improve, while increasing automation to reduce costs. We have plans to improve our promotion to improve product awareness and with the appropriate product lines we will increase price to improve margins and better align our high-end product image. Our current financial position is optimistic, showing our leverage (Assets/Equity) at 2.0, when our goal is to maintain 1.5-2.0 overall. By utilizing the analysis tools we are learning what elements are driving demand, how to effectively tailor our products through R&D, how best to adjust our marketing and pricing, while lowering input costs, in order to improve margins and to ensure our stakeholders are all satisfied.

The company has been functioning well in terms of generating profit and demand so far. However, there will be a 20% increase in demand for the next month of operations as predicted by management, and the production and supply management's problems may come as a problem they can no longer afford.

Although the company did show an increased gross profit of $8,255,000 with $6,358,000 less Net Sales in 2013 versus 2012, that increase is due to the reduction in product Cost of Goods Sold by $14,613,000. Since increases in product price will negatively affect sales, one of management’s primary goals is to keep prices stable. This objective is achieved through implementation of cost cutting programs, investing in more efficient equipment, and automation of more steps in the production process.

the company’s margins have shrunk by 10% in the past year due to rising costs and growing competition.

The company was recently presented an opportunity by its largest retail customer to significantly increase its share in their private label manufacturing. The prospect of growth was risky, since it

Sometimes it is smarter for a company to keep producing when they are not making enough, but they do need to keep a close eye on how much of a loss they are making and if the market is going to turn around.

Lastly, the company suggest to expand their current inventory through increasing production and capacity. With the increase in production rate the company can gain more consumers as a whole through supply and demand. Doing this would give the company an opportunity for more exposure and perhaps better brand recognition.

Although the company made strategy through original cost system, it is still unclear why the profit was declining. Might be some problem when the company was allocating the cost on both lines, and the methods to allocate will route a wrong strategy for the company.

The company may have to pay higher production costs or may not be able to produce and

As seen in exhibit 2 as well, the company’s unit share and dollar share steadily increased minimally from 2005 to 2007. Unit share increased from 21% to 21.3%, while dollar share increased from 15.7% to 16.1%. Similarly, US sales increased in HPL’s Target Markets for skin care, oral hygiene, personal hygiene, and hand and body care from 2003 to 2007, making the package more appealing to the company. With HPL’s sales into its retail channels increasing from 2003 to 2007, in addition to the increase in sales, label shares, and such aspects as revenue, it is evident that the company’s financial performance for the past few years has been favorable.

Another option to consider is to increase the marketing budget beyond 15% as a direct response to Unilever’s marketing expenditure increase in 2006. This increase in marketing expenditure could also lead P&G to reach the recommended 120 GRP’s in television advertising. P&G could also use this extra advertising budget to strongly increase trade sales promotions in an attempt to balance out Unilever’s greatly increased trade sales promotions from the prior year.

Conversely, looking at the income statement for PMWL, operating income shows healthy gains of $45,862, which means the operating expenses are significantly lower in comparison to AWBL’s. However, PMWL’s cost of goods sold appear abnormally high, which makes an investor question whether this company is at it’s maturity phase in the product life cycle, and how much additional capital is necessary to bring this figure down to a number that leverages economies of scale and allows for profit maximization.

P&G need to work hard and do more research and development in order to produce higher quality, more innovative, and more unique in products in order to answer consumer’s need and compete with those major world brand competitors.

As a large global company, P&G has strengths that have helped them to acquire such a vast market share. The company’s culture, strong product quality, the ability to understand customers, brand equity, and centralized management is at the