P&G is an American multinational consumer goods company founded in 1837. It has a revenue of $84.17 billion and operates in 180 countries with 300 brands. P&G focuses on health care, beauty, grooming, fabric and home care, baby and family care, snacks and pet care, and household care. It has strong brands but growth is challenging due to its large size. Opportunities exist in emerging markets but there are also threats from competition, economies, consumers, and raw materials. P&G spends heavily on R&D, innovation, marketing, and acquisitions to drive growth. Its supply chain and distribution strategies aim to be demand-driven.

1. Touching Lives, Improving Life

2. INTRODUCTION
• Founded in 1837 by William Procter
and James Gamble
• Is an American multinational
consumer goods company
• Has a revenue of US$ 84.17 billion and net
income of US$ 11.31 billion
• Total number of brands – 300
• Operating in 180 countries
• Headquartered in Downtown,
Cincinnati, Ohio, United States

3. HISTORY
• Procter’s candle making company merged with
Gamble’s soap making business in 1837
• First company in US to offer a profit sharing
program for its employees
• First to create a Market Research department
• The invention of electric bulbs, ceased the
production of candles
• P&G started supplying soaps to the soldiers in
mass quantities
• Gave an opportunity to return to
the market again

4. VISION & MISSION
“Be, and be recognised as, the best consumer
products and services company in the world.”
“ We will provide branded products and services
of superior quality and value that improve the
lives of the world’s customers, now and
generation to come.”

5. Company Product Portfolio
• Products sold in > 180 Countries
• On the ground operations in 80 countries
• Organized into 2 Global Business Units (GBU’s)
Health Care
Grooming
Beauty
Beauty &
Grooming
Fabric and
Home Care
Baby and
Family Care
Snacks and
Pet Care
Household
Care&

7. SWOT ANALYSIS
Strengths
• Powerful collection of well-known brands
• Massive world-wide distribution network
• Impressive and historically successful R&D efforts
Weaknesses
• Focus on high-end of the market
• Growth hard to achieve for such a large and diversified
portfolio, particularly in mature product categories

8. Opportunities
• Growth of the middle class in developing markets
Threats
• Fierce competitive landscape, with well-heeled participants
like DABUR and HUL
• Often unstable economies and political structures in emerging
markets
• Consumer price sensitivity, particularly in emerging markets.
• Raw material cost increases

10. PORTER’S FIVE
FORCES MODEL

11. Intensity of Rivals
• The intensity of rivalry is very high in this
industry.
• P&G has several strong competitors like
Amway corporation, Colgate-
Palmolive, Unilever, Kimberly-Clark, Johnson &
Johnson

12. Threat of new entrants
• The enormous amount of products that are
distributed under Procter & Gamble’s name creates a
challenge for new entrants.
• Since the P&G possess a significant amount of
market shares around the world, a potential
competitor that lacks large sums of capital for heavy
marketing, R&D, would hardly be able to effectively
compete

13. Bargaining Power of Buyers
• P&G is heavily dependent on Wal-Mart and its
affiliates for generating a major part of its revenue.
• Sales to Wal-Mart and its affiliates have represented
approximately 15% of its total revenue since 2006
thus creating the “ Wal-Mart Effect”.
• High dependence upon Wal-Mart reduces the
bargaining power of P&G. Wal-Mart could use its
bargaining power to impose unfavorable terms of the
company

14. Bargaining Power of Suppliers
• P&G has a codependent relationship with most of its
suppliers. Suppliers of materials also need key
customers like P&G for profitable revenue generation
and will vary likely have little bargaining power
because of its small size
• P&G can use its tremendous size and large amounts
of available cash to its advantage during this current
credit crisis

15. Threat of Substitutes
• This is substantial number of substitutes for all of
P&G’s product offerings, creating an intense
competitive environment
• In order to differentiate itself, the P&G must
continue to provide new, cutting-edge and innovative
products and branding to the customer

16. CORPORATE STRATEGY
• Strengthening Core Business
– Top 20 in Household Care and 20 in beauty &
grooming
• Improving Productivity and Creating cost-Saving
Culture
– Reduction of 5700 non-manufacturing overhead
positions in 2013
• Strengthening Innovation Program
– Dedicating R&D resources and funding to develop new
innovations

17. STRATEGIC FOCUS
• Focus on company’s core markets such as the US, to
strengthen and grow these businesses
• Focus on company’s developing market investments
on the categories and countries with the largest size
of price and highest likelihood of winning
• Focus on portfolio, allocating resources to businesses
where company can create disproportionate value

18. INITIAL STRATEGIES BY P&G
• 1998,P&G faced losses and EPS fell below 14% to 15
%
• Revenue growth rate which varied from 1.4% to 5%
during 1995 to 1999,was also below P&G’s internal
target of 7%.
• To deal with this situation DURK JAGER was
appointed as CEO.

19. Durk Jager introduced the foll. Strategies-
• Corporate restructuring program –
–Global Business Units:-
• Earlier there was 4 business units based on
geographical regions to seven GBUs based on
global product line

20. • Market Development Organisations:-
– P&G established eight MDOs
• Global Business Services:-
– overhead functions such as HR, Operations, etc.
were centralised
• Corporate Functions:-
– most of the corporate function were transferred to
one of the new business units.
• Company culture:-
– P&G redesigned reward systems and training
programs to improve result orientation among
employees.

21. • Secondly, focus was on cost reduction
– P&G reduced the work force approx 10000 by
2004
• Thirdly, for employee retainment
– P&G adopted strategies like pension
policy, career development programs etc.
• Fourthly, P&G focused taking new initiatives in
underdeveloped markets.

22. • In 2000 ,Alan George Lafley became the CEO.
• Under Lafley, strategies were changed according to
upcoming competitive environment.
• During 2000-2005, company strategies changed from
taking initiatives in underdeveloped market to
focusing on big countries and big products.
• Priority was given to best selling brands

23. • More cost reduction was done around 9600
workforce was reduced
• Company focused on acquisitions to have big brands
under P&G umbrella

24. CURRENT STRATEGIES
• Expanding by Acquisition
• Heavy ads- Marketing Strategy
• Supply Chain Strategy
• Heavy R&D and Innovation Strategy

25. SUPPLY CHAIN STRATEGY
• The major supply chain initiatives were:
– Collaborative Planning Forecasting and
Replenishment (CPFR)
– Consumer Driven Supply Network

27. CSDN
• P&G decided to have a connection between actual
sales and supply chain process
• Paradigm shift in viewing supply chain management
from forecast driven to actual demand driven
• Supply Network instead of supply chain because of
information flow in all directions
• This operating strategy is called as Consumer Driven
Supply Network
• P&G used CSDN to create a responsive supply chain
that would produce and supply products as per
demand at the customer level

28. EXPANDING BY ACQUISITION
• Between 1905-2010, P&G invested in 34
acquisitions
• In 2005, P&G acquired Gillette, making it the
biggest acquisition in company history
• This enabled P&G to go from having 16 to 21
“superbrands”
• Acquired Natura and Nioxin, which were leaders
in pet products and hair care
• Some of the biggest acquisitions are
• Charmin, Clorox, Crush, Revlon, and Gillette

29. MARKETING STRATEGY
• P&G spends 15% of their sales on advertising beating
all of their competitors
• P&G was named “2008 Advertiser of the Year” by
Cannes International Advertising Festival
• In 2014, P&G has decided to invest almost one-third of
its media spending in Digital, Social and Mobile
platforms
• Focus is to improve marketing efficiency
through clearer messages and better
targeting

31. Distribution Strategy
• Intensive Distribution
strategy
• Introduced “Project Golden
Eye”
– Reducing the number of
distributors
– Providing better ROI to the
distributors
– Better Infrastructure
– Cost Saving
– Large Investment in
Advertising
Customers
Retailers/Wholesalers/Distributors
Marketing Agents – State wise
Manufacturers (P&G India)

32. Promotion Strategy
• P&G insists on Pull Strategy
• Heavy advertising and media pioneer
• Advertising Creativity
• P&G-A click mortar company
• Coupons

33. Pricing Strategy
• P&G adjusts their pricing according to
different types of customers and situations
• P&G adopted different pricing strategies like:
– Optional Features strategy
– Product-line pricing
– Cost-plus pricing
– Competitive pricing
– Distribution pricing

34. INNOVATION STRATEGY
• P&G spends about US$ 2 billion a year in R&D
with 8000 employees in 26 labs around the
world
• P&G conducts most of its new product
development in R&D labs

35. Connect & Develop
• P&G’s version of Open Innovation
• P&G’s internal global team is dedicated to
empower the concept of C+D
• Connects innovators with the P&G’s
needs, allowing anyone to submit their ideas
to the company

36. Growth Factory
• The problem of Growth-
– Only 15% of innovation projects were meeting the success
targets
• Innovation Assembly Lines-
– Sustaining Innovation
– Disruptive Innovation
– Transformative Innovation
– Commercial Innovation
• Small Bets Labs-
– tapping into university research for potentially transformative
innovation. Eg-Tide Dry Cleaners
• Innovation Transformation
– This resulted in 15% to 50% improvement in its innovation
success rate

37. Presented By:
Arkaprava Sadhu
K Gaurav
Kushagra Shukla
Prateek Bhargava
Prateek Sorte
Sourabh Verdia
Vibhor Shukla