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Procter & Gamble in the 21st Century (A): Becoming Truly Global

Procter and Gamble also known, as P&G is an American multinational consumer goods company that is headquartered in Cincinnati, it produces pet food, cleaning agents, and personal care products. In 1980, P&G operated its businesses in 23 countries mostly in North America and Europe with a smaller presence in Latin America an Asia, however the “giant” had business almost all over the world in 2005.

Industry Environment Analysis

The consumer products’ is a universal and developed industry; it is considered highly competitive with an astonishing increasing number of competitors providing distinctive kinds of the identical product while contesting for the prices. The most important aspect in this industry is innovation and the quality of the products that play a main role in the success of the product itself. Moreover, the individual consumer does not have the bargaining power to control the prices of the products in the market, however the retail chains and the supermarkets have the power since the switching cost is low in most of the cases.

P&G Position In the Industry

Procter and Gamble is a global leader in the consumer goods industry having in it’s pocket a lot of exceptional eminent products like:

Fabric and Home Care: Tide - Cascade

Baby, Feminine and Family Care: Bounty

Beauty Care: Head & Shoulders

Health Care: Crest

Food and Beverage: Folgers Coffee

Competitive Strategy

P&G targeted the broad market while trying to achieve differentiation. And by differentiation I mean to get low cost differentiation. The products that they produced were very appealing and prevalent that the competitors tried to replicate them. Moreover, they focused on the price, quality and i...

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...uperior supermarkets that can certainly increase the competitiveness among the competitors by putting more pressure on the usage of the front shelves in the market and providing them for other companies to put their superior products. Also there are new players in the market that are offering equal and sometimes better quality at a lower price than what P&G is providing.

Key Issue

In January 2005 Procter and Gamble acquired Gillette, which is considered a huge company with its own reputation in the market. This is a very big step for P&G since its their first time to acquire a big company as big and popular as they are and because of that a key issue comes out, will P&G be able to handle the new company and how will it manage it since the are culture differences and also the decision making process is not the same in Gillette.

Strategic Options