PG 宝洁strategic analysisWord文件下载.docx
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PG 宝洁strategic analysisWord文件下载.docx
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5.SWOTAnalysis6
6.GenericStrategy8
7.Recommendations9
8.Conclusion10
9.Bibliography11
1.Introduction
Forthefiscalyearof2010,Procter&
Gamblewitnessedanincreaseonnetsalesby3%to$78.9billionanda4%increaseinunitvolume(Deloitte,2010).Undertheunfavourableenvironmentofglobalrecession,P&
GhassuccessfullyretainedpositiveincreasessincetheFinancialCrisisandkeptthepositionofworld’slargestconsumerproductsmanufacturer.InFortune’slistofmostadmiredcompaniesfortheyearof2010,P&
Gisrankedas6thamongtheworld’scorporations(Fortune,2010).ProductsofP&
Gserve4.2billionofthe6.5billionpeopleintheworldfromeverydaymorning(P&
G,2010c).Theaimofthisreportistoundertakeadetailedin-depthresearchcentredonthecompanyofProcter&
Gamblewithanumberoftheoreticalframeworks.Inthebeginningofthereport,abriefhistoryofP&
Gwillbepresentedandpointoutsomestrategicchallengesfacingthefirm.Secondly,therewillbeaPESTLEanalysisofthecurrentexternalenvironmentalconditionsforthefirm.Then,thecompany’seffectivenessandsustainabilityofcurrentstrategieswillbeexamined,followedbyrecommendationsforP&
G’sstrategies,accompaniedbyappropriateexplanationandjustification.
TheconcentrationindustryofthisreportwillbetheSICcode2844Perfumes,CosmeticsandOtherToiletPreparations(OSHA,2010).ItwillbedefinedasPersonalProductsIndustrythroughoutthisreport.Theworldpersonalmarketwillberegardedasawholeandthemarketcanbecategorizedintosixsegments,encompassinghaircare,make-up,skincare,personalhygiene,oralhygiene,andfragrances(Grauletal,2006).
2.BriefHistoryandStrategicChallenges
P&
GwasfoundedbyWillianProcter(acandlemaker)andJamesGamble(asoupmaker)in1837inCincinnati,Ohio,theUS.ThecompanywasresponsibleforsupplyingsoapandcandletotheUnionArmyintheAmericanCivilWarandenjoyedthecompany’sgrowthbasedonmilitarycontractsinthatperiod.In1911,thecompanystartedtoopenfactoriesinotherplacesintheUSduetorisingdemandforitsproductsanditsproductsbegantodiversify.In1920sand1930s,thecompanysponsoredmanyradioprogramsthatwerelaterknownas“soapoperas”.P&
Gbeganitsinternationaloperationin1930byacquisitionofaUK’scompanycalledThomasHadleyCo.Thereafter,throughitsownproductsdiversificationandnumerousacquisitions,thecompanygainedcapabilitiestoofferconsumerswithawiderrangeofconsumerproductsanditssizekeptgrowingasitsexpansiontodifferentnations.By1980,thecompanyhadoperatedin27countriesbesidesAmericaandsalesinthesecountriesmadeupaquarterofthecompany’s$11billiontotalsales(Bartlettetal,2008).In2005,P&
GacquiredtheUK’sprestigiousrazorproducer,Gillette,replacingUnileverastheworld’slargestconsumerproductsbrand.Nowadays,P&
GhasbecomeacompanyoperatinginAmerica,EuropeandAsia,with135,000employees,morethan300brandscoveringcosmetic,home,baby,toiletries,andfragranceindustries(Datamonitor,2010).TheannualsaleofthecompanyequalstotheGDPforsomesmallcountriesandhenceitisevencalled“P&
GEmpire”.
Facingenormousbenefitsfromitsextremelylargesizeandprofits,P&
Ghastodealwithstrategicchallengesinevitablyatthesametime.Firstofall,themostoutstandingissueexactlyresultsfromitssize,i.e.issuesof“toobig”.Withitsdominanceinvariousindustriesandhundredsofbrands,issuesonitsindustryandbrandmanagementareprominentforthecompanytodealwith.Forinstance,aparticularstrategydesignedforoneproducttoincreaseitssalesmightsomehowcannibalizethecompany’sanotherproduct’ssalesasaresult.Ontheotherhand,operationsinanumberofcountriesposesignificantchallengestomaintainitsworldwideoperationefficiency.P&
Ghasamatrixorganizationalstructure(Galbraith,2009).Thecompanydeployednumerouscountrysubsidiariesinthoseregionsitoperatedandglobalbusinessunits(GBU)arechargedwithparticularproductsandbrandsoperation.P&
GcategorizeditsglobalbusinessintothreeGBU,consistingofbeauty&
grooming,healthandwell-being,andhouseholdcare.Thematrixstructuredidhelpthecompany’smultinationalmanagementandboostitsworldwideexpansionby1990s.However,sincecompetinginmorethan75countriesbythemid-1990s,theoverseasexpansionopportunitiesleftratherlimitedforthecompany.Thecompanyconsistentlytreatedinnovationasitscorestrengthandpressuresfromdistinctivemarkets’localresponsivenessalsorequiredthecompanytodevelopitsresearchcapability.Nevertheless,incrementalcoordinationwasneededtoinnovativenewproducts,leadingtoreductionsinorganizationalflexibilityandefficiency.Therefore,thematrixstructurerevealeditsshortcomingsforP&
Gwhichthreatthecompany’ssustainabledevelopmentintheglobalmarket.
3.PESTLEAnalysis
ThePESTLEanalysiswillbeconductedtoexaminethecurrentexternalenvironmentforP&
Gintheworldmarket.
PoliticalWithoperationsinmorethanahundredcountriesofdifferentcontinents,P&
Ghastodealwithdistinctivepoliticalpatternsinfluencingitsbusinessoperations.
Ononehand,thecompanyhastodealwithandadapttopoliticalpressuresindifferentnations.Ontheotherhand,withregardtothecorporation’ssize,itplaysintegralrolestocooperatewithandaffectlocalgovernment.
EconomicTheworldeconomyispresentingapatternofrejuvenationfromtherecessionandworlddemandisforecastedtogrowinthenextyears.Hence,thecompanycanhavearelativelypositiveexpectationonitssalesperformance.However,thedevelopmentindifferentmarketmayvarybecauseunbalanceddevelopmentsituationindifferentregions.
SocialThecompanyhastopayattentiondifferentsocialnormsduringoverseasoperationsduetodistinguishedculturalbackgroundindifferentmarkets.Forpersonalproducts,socialneedisevolvingwithtime.Forinstance,thedemandformen’sgroomingisrisingrecentyears.
TechnologicalAsthemarketsizeofpersonalproductsisverylarge,majorplayersinthisindustryinvestsignificantlytogaintechnologicaladvantageinordertomaintainandexpandmarketpositions.Asaresult,technologyappliedinthisindustrydevelopsrelativelyfast.
LegalP&
Ghastocomplywithdifferentnationallegislationsonpersonalproducts,processofproduction,andbusinessoperations.
EthicalBecausepersonalproductsareessentialforpeople’sdailylife,thequalityofproductsareextremelyimportantforbrands.Anyscandalsaboutproductcanleadtosignificantdamageonthebrandimage.
4.FiveForcesAnalysis
PriortoanalyzingP&
G’scurrentstrategies,itwillconductanindustryanalysisforpersonalproductsusingPorter’sfiveforcesframework.ThefiveforcesanalysiswillfocusonpersonalproductsintheUK’smarket.
BuyerPowerBuyerindustryintheUKhasbeengrowingtheseyearsandpresentinganoptimistictrendinthefuture.Asfigure1shows,since2005,thetotalmarketforcosmetics(make-up)andfragranceshaswitnessedincreasedby5.1%(2006),6.5%(2007),7.2%(2008),and6.5%(2009)thantheirpreviousyears(Baxter,2010a).Bytheyearof2009,thetotalvalueofcosmeticsandfragrancesmarkethasreached£
2.18billion(ibid).
Figure1:
TheTotalUKMarketforCosmeticsandFragrancesbySectorbyValue
atCurrentPrices(£
matrsp),2005-2009
Similarly,theUKmarketfortoiletries(includinghaircare,skincare,oralcare,personalwashandbathroomtoiletries,andshavingandrazor)hasmanifestedstablegrowingpattern,withYOYgrowthrateof4.2%(2006),2.3%(2007),2.5%(2008),and2.1%(2009)(Baxter,2010b).
BuyersinpersonalproductsindustrycanbeindividualconsumersaswellaslargeretailersanddistributorssuchasWal-MartandCarrefour.Individualconsumershavelittlebuyingpowerastheyarefragmentedandtheycanaffectpriceandproducttoalimitedextentbuttheynearlyfacenoswitchingcost.However,asfaraslargeretailersareconcerned,theirbargainpoweronpriceisconsiderablebasedupontheirsignificantlylargebuyingquantities.
SupplierPowerEachproductlineofpersonalproductshasitsownuniquerequirementandpreferences.Ontheotherhand,variousingredients,rawmaterial,andcomponentsareneededandtherearesubsequentproceduresthroughouttheproductionprocess.Hence,P&
Giscopingwithsignificantlydifferentiatedsupplierswhilefacerelativelylimitedbargainpowerfromitssuppliers.However,thecompanystillfacesswitchingcostsprimarilyduetoitsqualityneedtobuilditsbrandimage.
ThreatofNewEntrants
Inthepersonalproductsindustry,leadingcompaniesincludingP&
Garealreadyenjoyingeconomiesofscaleandeconomiesofscopeintermsoftheirsize,multiplebrands,anddiversityofproductlines.Furthermore,majorcompaniesinthisindustryhaveaccumulatedconsiderableexperienceintermsofproductdevelopment,distribution,andsupplychain.Forinstance,P&
Ghasestablishedandoperatedformorethan170yearsandpossesses80yearsofinternationalmarketexperience.Therefore,leadingincumbentsinthisindustryhasoccupiedthefavourableplaceonlearningcurve,whichalongwithadvantagesofeconomiesofscaleerectsbarriersforpotentialentrants.Moreover,abigamountofinvestmentisessentialinthisindustrytoimplementproduction,distribution,R&
D,andmarketing.Thus,threatsofnewentrantsarerelativelylimitedforthisindustry.However,itisnotpossibleformajor
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