Questions On The Procter And Gamble Company

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CHAPTER FOUR 4.0 Problem and Opportunity Quantification This chapter presents an investigation into the problems that the Procter and Gamble Company (P&G) is faced with; this will include an analysis of the company’s bloated cost structure that was followed by the crisis in 2009 that affected their financial performance and productivity in terms of pricing, sales growth, market share and revenue. This analysis will give a clear understanding of the problems that need to be resolved and opportunities that need to be maximised. 4.1 The 2009 crisis The inflated cost structure that was created by P&G, started as an attempt to increase its competitive advantage and win market share but this took a different turn. In 2009 P&G encountered…show more content…
Another contributing factor during the economic recession was this decision to create premium brands that favoured the developed markets instead of investing in developing markets and this has resulted in loss of sales and market share (Byron & Lublin, 2013). 4.2 The company Sales growth, Market share and Revenue The present Chief Executive Officer (CEO), A.G. Lafley is experiencing some level of difficulty in increasing sales since 2013 due to the fact that there is slow growth in the consumer goods industry and also there is a high level of competition (Patton, 2014). In 2013, the company’s sale rose by 2% which did not make much impact on the profit for the year because profit dropped by 48% to 1.9 billion (Coolidge, 2013). Although the company is advancing in their plan for cutting costs in 2014, their sales have fallen by 0.2 percent to $20.6 billion and their net sales dropped in some of their business units such as beauty and grooming, health care and baby care and the feminine and family care units (Patton, 2014). At the third quarter of this year, the company remained flat in their recorded total sales of $20.6 billion while recorded profit of 2.6 billion which was an increase of 2% from the previous year of 2013 (Coolidge, 2014). This shows that the company seems to have made some level of progress in increasing their profit but there is still the need to increase the
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