P&G competes in five major industries: fabric and home care, beauty care, baby and family care, health care, and snacks and beverages.
The five forces are the bargaining power of suppliers, the bargaining power of customers, threat of new entrants, threat of substitute products and competitive rivalry within an industry. The various care products are not made with anything rare so the suppliers do not have significant power in this case. So the threat here is low. However, there are many variations of these products so the threats from substitute products, competitive rivalry and new entrants are high. For the same reason, since the customer has a lot of options with regards to these products, loyalty is not guaranteed. So the threat there is very high. Overall, four of the five forces are serious threats so these industries are not attractive.
Since there are many competitors, P&G must find ways to distinguish themselves from their rivals. The factors that determine these are marketing, technological innovation and accurate consumer feedback. In terms of marketing, the public must be aware of the product, what it is used for and what makes it better than other alternatives. In terms of technological innovation, the product should have some advantage over the competitors’ product such as low cost or high performance. In terms of consumer feedback, data should be gathered on what the customer liked about the product, what they did not. This will allow the product to continue to evolve into what the customer wants.
The tangible resources, in the case of P&G, are a relatively large research department, marketing division and budget. P&G always has enforced research since 1890 and marketing since 1931. Its long history of financial...
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...was too high, thus Jager’s strategy to achieve sales growth and develop new products quickly did the opposite for the company as sales growth continued to decline.
The current competitive situation for P&G is that it is one of the largest and most successful consumer products companies. This is evident in the high volume of sales and profits experienced by the company. Also, the company has updated all of its brands and created new product categories through innovation of the products, thus P&G is considered a leader in the consumer market. On the other hand, the company made cuts in its capital and research and development spending (which was in line with that of its rivals) in order to increase profits, which may serve to hinder the growth of the company. Therefore, competitively P&G may face difficulty in the growth of its earnings as oppose to its competitors.
Porter’s Five Forces is defined as threats of new entrants, bargaining power of suppliers, power of buyers, the threat of substitutes and rivalry among existing competitors. New entrants into the industry aim to gain market share from rivals, so the intensity of competition may require to make changes on current strategy of marketing to maintain existing market share. The bargaining power of suppliers is one of the threats on the industry where price changes or product quality by suppliers can impact the profitability. Therefore, it is important for the companies to keep alternate suppliers or a contract to ensure prices, quality and quantity of the product so to avoid the company's supply from falling behind. The power of buyers can force the companies to lower the prices and offer different type products and service. Buyer can threaten the company with the competitors which may cause a negative impact on the bottom line to the companies. Thus, it is important to create a loyalty market share to avoid this threat. The threat of substitutes increases when another industry offers a similar product or services to customers within the same industry with a lower price. In this case, the industry profitability sinks since the product is available at a better price. This threat forces most competitors to price match or better performance. Rivalry among existing competitors ...
The Procter and Gamble Company. (2013, November 17). Company Strategy. Retrieved March 22, 2014, from http://www.pginvestor.com: http://www.pginvestor.com/GenPage.aspx?IID=4004124&GKP=208821
Although Lafley has had success, the underlying problem remains. How will Lafley return P&G to its rightful place in Corporate America? P&G's solution to its problems is through product line extensions, expansion into non-premium brands, as well as acquisitions, licensing, reinforcing market orientation through consumer focus, and outsourcing. This recommendation was based on following items;
Although the company differentiates itself from its competitors via its own-labelled products, the concept of `Market Street', etc, the core of its competitive advantage lies in its ability to provide c...
Nevertheless, it must “defend” its current market share if not increase it, by maintaining premium quality and develop innovative products. The marketing mix strategies will effectively achieve targeted revenue and profitability in the near future.
Relationships have been in place with two main groups in Singapore long before Proctor and Gamble ever decided to build a plant. The Economic Development Board and A*Star’s Institute for Materials Research and Engineering are the two main groups they have been involved with. Since Proctor and Gamble built these relationships before building a plant in Singapore they have thus established a strategic alliance with Singapore. The Economic Development Board and A*Star’s Institute for Materials Research and Engineering have come together with Proctor and Gamble to share resources and complete a project. Proctor and Gamble benefit from setting up a strategic alliance with A*Star by getting the privilege of looking at IMRE’s innovative research (Moneycontrol.com, 2008). In return for this preferential treatment, P&G shares its new innovations with A*Star’s IMRE (Moneycontrol.com, 2008).
Companies are not able to succeed without having a strong branding and pricing strategy. Colgate-Palmolive has managed to build a strong brand name and offer competitive prices. Innovation is a key factor in the Colgate strategy. This paper will take a look at Colgate-Palmolive’s product positioning and life cycle. This paper will also discuss the branding relationships and pricing methods.
Once America’s most innovative consumer products company, Procter and Gamble (P&G) started by selling soaps and candles in a small Cincinnati storefront in 1837 (Procter and Gamble, 2008). After a hundred and seventy-one years P&G has grown to over one hundred household brands in over eighty countries (Markels 2006). Their products range from air fresheners to prescription drugs. However, as P&G headed into the twenty-first century they announced that they would not be meeting their 1st quarter earnings forecast [Lafley, 2003]. Revenue margins were dropping and P&G was quickly losing market share to Kimberly Clark and Johnson & Johnson. After missed earnings P&G’s stock price fell from $59.18 to $26.50 between January 2000 and March 2000 (PG). Upset, the board of directors pressured then CEO Durk Jager to resign after a lack luster attempt at turning P&G around and replaced him A.G Lafley, an unproven CEO, whom analysts felt lacked the experience to give P&G a much needed clean up (Lafley, 2003).
In this project, I have chosen the Fast Moving Consumer Product industry as the topic of study. First of all we will take a brief look at how the industry started in the late 19th century as soap making companies and slowly evolving into some of the most successful multidomestic company of today. Following we will have insight on the industry’s prominent characteristics and highlight some of the major players. We will also get an idea of the attractiveness of the industry through the use of Porter’s 5 forces industrial analysis.
An industry analysis has shown Procter & Gamble’s top competitors; in the personal product industry are Kimberly Clark, Elizabeth Arden, Colgate Palmolive and Avon. PG is a mature saturated company and finds it difficult to expand market share, for a company of its size. To deal with market share expansion and competition PG focuses on cost reduction through a decrease in promotions, coupons and plans to advertise heavily. PG recently teamed with Coke, Wrigley, and Gillett and has the available cash flow to make several businesses investments such as acquisitions and merger, and is not afraid of this business venture. Procter and Gamble has been around for a long time and their methods appeared to work for the company. The earnings growth in the past year has accelerated moderately, compared to growth in the past three years.
An insignificant point of difference can often go overlooked by consumers for the reason that their current used product has met their needs (Kerin, 2011). Why would they want to change, from one brand to another? Consumers must be informed and given an alternative reasoning for them to switch from one product to another. Manufacturers and their development group must ensure the success of new products that there is a significant difference between their product and their competitor.
P&G is an international and famous consumer goods founded in United States by Williams Procter and James Gamble both from the United Kingdom since 1837 about 177 years ago. P&G manufactures diversified range of product such as personal care, cleaning items, beauty product, pets food, drugs, & other beverages. Their products are sold in more than 180 countries around the world through grocery and departmental stores and retailers. They are also among the world’s most profitable consumer product company, with highest amount of sales. Their products are recognized in most part of the world. Their company have an organizational strategy to touch the live of its employees which is the major strength and competitive advantage of the company.
Competition from industry rivals is the most significant external factor to Pfizer at the present time and will continue to be in the future as well. As developing markets like China continue to grow its citizen’s health will continue to increase as a primary concern. Consequently, this demographic will demand more specialized medicines and treatments to cure what ails them. The pharmaceutical company that can meet these consumer demands will gain market share and outperform its rivals.
Procter & Gamble looks to capitalize on its core competencies to gain a competitive advantage over its rivals. So far, P&G has demonstrated its competencies in: Consumer Understanding, Innovation, Brand-Building, Go-to Market Capabilities and Scale.
These five forces include: bargaining power of suppliers, bargaining power of consumers, competitive rivalry, threat of substitution, threat of new entry. The bargaining power of suppliers, threat of substitutes, and threat of new entries are low for AVON, while the bargaining power of consumers and competitive rivalry is high. The beauty industry is less impacted by a recession; Brazil being a prime example. Competition is competitive in all markets both domestic and foreign. AVON entered the Brazilian market before the competition, but is now battle grounds for entry between L’Oréal and Sephora. AVON is the number one company for direct selling method and marketing (AVON, 2016). Porter’s five forces are similar between domestic and foreign