Procter and Gamble Case Study

Procter and Gamble (P&G) began in 1837 when brother’s in-law William Procter and James Gamble, whose wives were sisters, formed a small candle and soap company. From there P&G launched a variety of revolutionary products of superior quality and value. The products include Ivory soap, Tide laundry detergent, Crest toothpaste and Pampers disposable diapers. They also acquired a number of companies to open the doors to new product categories.

P&G – Procter & Gamble is a consumer product company founded and headquartered at Cincinnati, Ohio in 1837 by Mr. William Procter and Mr. James Gamble. It is now led by Mr. Alan.G.Lafley whom rejoins the company in 2010.

The Procter & Gamble business strategy is to focus on creating new brands and categories so the company can focus on being the best in branding, innovation and scale. This is what sets this company apart from many of its competitors. The Proctor and Gamble are the global leader in all of their core businesses within the company which consists of laundry, baby care, hair care and feminine protection. This report is designed to understand the company’s business model and strategies, and analysis how the P&G has formulated its business-level strategies to pursue its business model.

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.

In P&G, the products are improved with little changes to the original product so they can sustain the market with increased customer base. Disruptive innovation. P&G has started new products Swiffer and Febreze which opened doors to the world class opportunities.

Procter & Gamble’s mission and vision statement is profoundly stated within what the company refers to as their statement of purpose. The statement defines the company’s current and future direction, including their shared image in producing quality products that commit to the well-being of all individuals and communities alike. For nearly the last two decades, P&G has been establishing themselves in various marketplaces around the world, and expanding their product mix in accordance to consumer tastes. However, as the consumer goods industry continues to evolve, so do changes within P&G’s organizational structure, including the need to divest or cease many of the company’s brands to reduce costs and improve operational efficiency.

William Proctor, and James Gamble, started a business in eighteen-thirty-seven, which made soaps, wax candles, and was located in Cincinnati Ohio. About nineteen-thirty the business has offered soap along with establishing their first subsidiary, and was called The International Thomas Dedly, and Sons, the company is located in the United Kingdom.

Thanks to this two factors, P&G find itself with a significant competitive advantage. However, slowdown in global economic condition is making it increasingly difficult for branded product manufacturers like P&G to maintain their sales volume and revenue growth.

Companies like P&G are a force in the world. Their market capitalization is greater than the GDP of many countries, and the market of their products in more than 180 countries. But problem arise when consumer begin too different and more unique. P&G must keep in top survive and hold their consumer with various market strategies. This company must had thought carefully to fulfil consumers ‘needs.

It is true that businesses are competitors. The competition between businesses may be from the acquisition of raw materials, its processing and the sale of the finished product itself. P&G was a company formed out of competition. Established in 1837 in Cincinnati, Ohio William Procter and James Gamble, had the doting father-in-law who convinced both of them to establish a partnership. Alexander Norris noticed that Procter, an established candle maker, and Gamble, a soap-maker’s apprentice, both made a product that consisted of the same raw material, which was wax. Little did they know that this innovative partnership would germinate into one of the most profitable companies in the world, even surpassing GDPs of some countries. Companies like P&G not only survive but thrive on innovation, giving benefits within the business organisation while being customer-centric and expanding their long-standing involvement in developing society with radical business ideas.

Their main strategy stresses on providing branded products and services of premium quality and value that are bound to improve the lives of consumers across the globe, now and for generations to come. In return, they expect a reward from consumers in form of leadership scales, profit and value creation. Innovation has been and continues to be P&G’s lifeblood. To win customers all over the world with price tiers, preferences as also to win against competing brands, P&G undergoes constant game changing innovation. Productivity too works as a core strength for the company and helps lower costs and improve efficiency. The company’s strategy demands a disciplined approach to investing so as to not sacrifice on long-term benefits in a bid at fulfilling short-term goals.

A mission statement specifies the present direction a firm is going, while a vision statement advocates the future course in mind. P&G defines their mission and vision statement with a statement of purpose to reflect upon building products that provide a benefit, and grant prosperity for all. Almost two decades the company has progressively grown; whereas, recently, the company has developed a strategy to alleviate inefficiencies within its organizational structure, which makes them more convoluted compared to its leading competitor. Furthermore, the company is planning to eliminate specific product brands in order to invest more in products that are cost-effective. Diversity is sighted throughout the organization’s operations, and has played a role in creativity. The company’s leadership has also provided the means to propagate diversification through mentorship and proper training programs. Revisiting organizational strategies have effectively shifted the company’s plan of action towards a more meaningful direction.

Procter & Gamble started in a smaller setting in the year 1879. William Procter and James Gamble worked as an inseparable unit to create what started as a brand of body soap; Ivory. In more recent years, Procter & Gamble offers more than three-hundred driving brands (i.e. Duracell, Zest, Tide, Pampers, Downy, Pantene, Secret, Folgers, Pringles, Gilette, Puffs, Cover Girl, Oral-B, Crest, Old Spice, Olay, and Bounty to name a few). In more than one-hundred and sixty nations world-wide, Procter & Gamble advertises its products ' and works roughly one-hundred and fifteen plants in moreover eighty nations everywhere throughout the world. Its central station occupies Cincinnati, Ohio in the United States

P&G’s purpose is to “provide branded products and services of superior quality and value that improve the lives of the world’s consumers” (Procter & Gamble, 2003). P&G values their employees through leadership, ownership, integrity, passion for winning, and trust. P&G entices and recruits best people in the world, builds their organization by promoting and rewarding from within, and believes that their employees will always be the most important asset. P&G has many principles such as (1) showing respect to all individuals, (2) valuing differences, (3) inspiring and enabling employees to achieve high expectations, standards, and challenging goals, (4) valuing personal mastery, (5) believing that all individuals can and want to contribute to their fullest potential, (6) being honest with employees about their performance, (7) having mutual interconnection is the pattern of behavior of P&G,(8) the individual and the interests of the company are interwoven, and (9) the foundation of P&G’s success is innovation.

P&G had a range of about 300 products in the market, spread across different brand categories and product lines. However, lack of improvement and effective innovation had led to the development of only 65 core brands, while the remaining are now out of market circulation. A product portfolio of only 65 branded products provides close to 95% of the organization’s revenue. It was due to the lack of adequate innovation and ineffective marketing planning methods that led to the withdrawal of the products from the market. The company has invested huge capital in developing new products and in streamlining its product distribution process. However, it is now focussed on maintaining its core branded products in the current operation1.