Procter and Gamble Financial Review

12537 Words51 Pages
TABLE OF CONTENTS A. Industry and Sector Overview 2 1. External Analysis 3 a. Technology 3 b. Demographic 3 c. International Exposure 4 2. Economic Indicators 4 a. GDP Growth 4 b. Household Income 4 c. Foreign Exchange Risk 4 3. Competition within Sector 4 B. Procter and Gamble: Company Analysis 6 1. Activities and Products 6 2. Strategic Position and Competition 7 3. Financial Analysis 8 a. Review of Business Segments 8  Health Care 8  Fabric and Home Care 8  Baby, Feminine and Family Care 8  Beauty Care 8  Food and Beverage 9 b. Operating Results of Procter and Gamble 9  Volume and Net Sales 9  Net Earnings 9  Operating Costs 9 c. Financial Performance 10  Profitability Analysis 10  Investment…show more content…
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. 1. External Analysis The primary factors that influence the home product sector are technological change, demographic change and international issues. a. Technology As the industry relies heavily on product development so the participants must keep up to date on technological advancements. If a company within the industry fails to invest heavily in research and development it can easily lose its competitive advantage. Because of the constant information gathering and the continued search for better technology in research and production, the industry in which Procter and Gamble operates would be considered a highly information intensive and information technology intensive industry. This is one of the strong points in case of Procter and Gamble. The

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