Proctor and Gamble Innovations

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GENERAL PROBLEM STATEMENT

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?

ANALYSIS

General Environment

Which of the general environment segments are most relevant to the consumer products industry? What are the main opportunities and threats affecting the company?

Demographics— Proctor and Gamble is one of the largest consumer product companies in the world. They registered in the 2004 fiscal year global sales of $51.4 billion in the segments of fabric and home care, beauty care, baby and family care, healthcare, and snacks and beverages. The products in these
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Because of the industries potential being so lucrative, the array of products that one can specialize in is there to be utilized. The only problem would be that the new entrant into this industry, due to the high demand of better products and the established companies expanding to satisfy this demand, would have to enter on a large scale of one product or many products.

Bargaining Power of Suppliers — Moderate. As the suppliers are the main players in the market, they are able to negotiate favorable terms and conditions for their products. The supplier’s brand loyalty helps with leverage, as these products are one of a kind in this type of market. Bargaining Power of Buyers — Low to Moderate. If the buyer does not want a product, they can easily just change to another product in that segment. And as competitions in these markets begin to rise, many companies may be forced to compete with lower prices in the industry.

Substitutes — Low to Moderate. For some consumers there is no substitute for an electronic toothbrush, but there may be substitutes for certain types of toothpaste. In this industry, a company can have a product where there is no substitute or competition for that product but also have a product where there are so many substitutes that a consumer has the bargaining power.

Rivalry Among Competitors — High. There is a high rivalry between the powerhouses in the consumer product industry. Johnson & Johnson, Kimberley-Clark,

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