Procter & Gamble Vs. Gillette Essay

Procter and Gamble Co. also know as P&G, is an American multinational consumer goods company, founded by William Procter and James Gamble. Its products include cleaning agents and personal care products. It has in its kitty global brands such as Ariel and Tide in the Fabric care segments and Head & Shoulder, Pantene and Rejoice is the Hair care segment. For this case study selects P&G Company as it has an important role in the consumer segment products. As P&G was a popular company, the financials statement shows better performance in the previous year.

In 1837, soap manufacturer, James Gamble and candlemaker, William Procter merged their two small Cincinnati businesses.They did this so they could more easily purchase the animal fats necessary to make their products. From there, the company grew to be a $33 billion worldwide leader in consumer products.Both Proctor and Gamble had strong religious, ethical and moral values. The company earned an excellent reputation, and by 1895 was one of the largest companies in Cincinnati. P & G had the reputation of hiring the best and the brightest employees. They treated their employees well. promoting from inside the company. They were one of the first to introduce a profit sharing plan and an employee stock option plan. By 1996, 25% of P & G was owned by employees. In 1890, Proctor and Gamble was incorporated and since that then has more than doubled its sales every 10 years.This growth is attributable to three main factors: the development of new products, global expansion, and acquisitions.Much of the growth is a result of the development of innovative and technologically advanced new products such as Tide in 1946, the first heavy-duty synthetic laundry detergent, Crest in 1955,the first fluoride toothpaste, Pampers in 1961, the first disposable diaper and Bounce in 1972, the first drier-added fabric softener. Other significant innovations were Pert, the shampoo and conditioner in one, and

Procter & Gamble (P&G) is a Fortune 500 American multinational company, and a world 's leading consumer goods company. P&G’s work is driven by a Purpose of providing branded products and services of superior quality and value to improve the lives of the world’s consumers now and for generations to come. P&G now has 50 Leadership Brands, which are among the world 's best known and which account for more than 90% of P&G sales. P&G entered the Chinese market through a joint venture in 1988. Now, P&G is the most successful foreign marketer in China as measured by market share.

Can Proctor and Gamble survive and prosper by reinventing existing products in environment that requires new innovations? And will P&G be able to meet their target of 50% of the market share in each segment?

1. Problems/ Opportunities Executives at Proctor and Gamble are highly ambitious to enter into new and emerging markets, which could act as both an opportunity to increase sales, or a risky problem that could end up causing the company large amounts of money if it were to fail. The strategy Proctor and Gamble used in the 1990s, cutting costs to keep the profits increasing, was a poor strategy that could have caused the company to fail since the retail industry was changing, and rival companies were already causing a slowing of sales to all 18 top brands. The next major problem occurred in the late 1990s when CEO Durk I. Jager introduced expensive new products that never caught on with consumers. During this time, Jager’s decisions also caused share prices to drop 52 percent, which caused tension between the company and its employees as the employees owned around 20 percent

On January 28th 2005 P&G agreed to buy Gillette for $57bn (£30). Gillette was the number 1 in razor accessories and proctor gamble was number 1 in consumer products, a marriage of the best in their respective industries. The merger of the two companies created “the world’s largest consumer products conglomerate.” Gillette was a leader in its category of razors and batteries, merging with P&G provided it access to P&G’s technology and marketing skills. P&G added Gillette razors , Right Guard deodorant and Duracell batteries to its more than 300 consumer brands, including Ivory Soap, Head and Shoulders shampoo, Pringles, Crest toothpaste and Bounty paper towels.

Although few other competitive companies exist, through the years Gillette has become so famous and rigid that it is a household name now. Given this lack of competition, Gillette has the freewill to do almost anything. Their ads now give more attention to the product system rather than focusing on the market. The Gillette Mach3, a modern ad is very simple, and pictures the Gillette blade and mentions its features (Mach 3 Shaving System). Although the ad is very simple in nature, Mach3 is the most sold Gillette product. Thus, owing to low competition and the comfort and uniqueness of the Gillette products, the demand is very high, regardless of the plain features of the ads.

Procter and Gamble is a multinational company that offers a variety of products worldwide. P&G has been in the market for 175 years with numerous and successful strategies that has enabled them to expand internationally over the years. Procter and Gamble has adopted a growth strategy over the years and aimed to improve every consumer’s lives in a small yet meaningful way. Procter and Gamble’s international strategies started with their own values. They based their values on five factors: Integrity, where the emphasized on doing always the right things, being honest and transparent with each other and the consumer, and always uphold P&G’s principles no matter what. Leadership, Have a clear vision and try to eliminate organizational barriers.

For this reason, Gillette has always been trying to innovate in the market with new products. But they did not want their product to be bought just because they are a novelty but because it was perceived by the customer as a good quality product and have a staying power and product loyalty. This can be illustrated by the launch of the “Fusion” product by

product segments – Oral, Personal and Home Care; and Pet Nutrition. The company operates in more than 200 countries and this geographic diversity and balance help to reduce the Company’s exposure to businesses and other risks in any one country or part of the world. The company’s main competitors are Proctor & Gamble (PG), Johnson & Johnson (JNJ), Church Dwight & Company (CHD) and Clorox & Company (CLX).

The industry and the sector can be classified as being in a mature state. Despite this, many companies in the sector are able to achieve higher profit margins due to strong brand name recognition, innovative products and good marketing techniques. A trend observed in this industry was to focus on primary strengths rather than on diversification strategies, which was the case in 1990s. This allowed many companies to sell off their non-profitable businesses and for others acquiring of cash cows. Procter and Gamble followed the suite when it acquired Clairol.

2. Does SK-II have the potential to become a global brand within Proctor & Gamble’s worldwide operations? Why or why not?

Proctor and gamble being a company that is widely spread across many countries such as Asia, Europe, Latin America, India attributes its success to its organizational structure that’s unique and tries to connect with customers at the global as well as tries to address the needs of the local communities. It strives for an organizational structure that has less overlaps and is as efficient as possible. During 1990s after a rapid expansion and growth, the company saw a loss in profitability and growth slowing down. Many research analysts pointed it out to the fact of the company being too conservative and risk averse. It had not launched an important brand since 1984 and the other products that it had launched in the same year such as Dryel (home

In that capacity, this paper plans to investigate Procter & Gamble 's business techniques, including its shortcomings and aspects of the system. The business plans on learning more about the organization by assessment and surveys through the use of it 's new methodology. In such manner, the most recent business procedures for its organization (see above) would be examined and assessed.

In January 2005 P&G announced an acquisition of Gillette, forming the largest consumer goods company and placing Unilever into second place. This added brands such as Gillette razors, Duracell, Braun, and