We chose Procter and Gamble because it's a huge company, which is established in different sectors and owns a multitude of products. It acts internationally and has a good place and a good experience in the market.
After a successful start, P&G is now an international company which owns more than 250 different brands and is established in more than 35 countries worldwide. One of its major missions is to respond to consumers' desires in terms of quality and innovation and also to respect the local environment as much as it can. This will not be realized if the company will not do well financially. In fact, P&G has an important free cash flow that helps it to develop and invest in new technologies. Added to sales that are rising up, we obtain a multinational company that has an insurance to be sustained by its shareholders for a long time. The firm has a good predictable future.
To analyze the environmental analysis, we have conducted the PEST analysis of four main factors. We chose an area first: Europe, for the political aspect: environment is stable and governments of different countries don't act alone. They should respect the directives of the European authorities. Relating to economical factors in Europe, each country doesn't have a lot of power; the European organizations take care of the economy notably the laws, directives, etc. For socio-cultural aspects, Europe is an area that blends in the society quite well. Birth rate isn't really high but life expectation keeps growing. Culture doesn't change a lot between countries. Finally, concerning technology, it offers a new way to communicate (internet, customer relationship management) and it improves the supply chain for distribution.
P&G is the market leader in the majority of its segments. To make the difference, it spends $5 million per day for R&D. Product technology and innovation is the task of the company. High barriers to entry are erected because new entrants have to succeed in being a reference in the market. Buyers are the retail establishments such as grocery stores, discount chains, and warehouse stores that purchase P&G products for resale to consumers.
[...] Implementation Plan Procter & Gamble is a company that suffers from a bad image because of its testing products on animals (50,000 animals killed each year for research and development). A lot of consumers and media have a bad opinion of these methods and many of them have even boycotted its multiple and various brands. Since we are aware of this phenomenon, we have decided to try and turn away peoples' interest by launching a humanitarian project, which can improve the brand image. [...]
[...] Swot analysis As we have seen before, Procter and Gamble is a global company offering various products. It operates in five core businesses that we have already mentioned before. Most of its different brands are leaders in their respective segments but P&G must face an important competition from other well-known multinational companies. For this reason, companies are required to analyze themselves by producing documents like Swot analysis. Strengths Weaknesses Realisation of economies of scale Customer repartition Strong brand images Slow down in cash flow High performance in major segments Performance of Clairol business Product innovation Overexposure to mature markets Opportunities Threats Emerging markets Political risks Increase in customers Increase in price of raw materials Health and beauty care categories Intense competition Strengths Realisation of economies of scale In its worldwide expansion, P&G has managed to create few leading brands in different categories. [...]
[...] Procter and Gamble's Matrix O1 - S1: New emerging markets are often confronted to a high increase of demand. For example, in China, P&G is facing a growing demand and to counter it, it will have to augment its production. If its production capacities stay even, and its production increases, the company will be able to realise economies of scale. O1 and O2 - S2: To develop itself in a new emerging market, a company needs to gain/have a strong brand image. [...]
[...] Internal environment The Procter & Gamble Company is a recognized leader in the development, distribution and marketing of superior Fabric & Home Care, Baby Care, Feminine Care, Family Care, Beauty Care, Health Care, and Snacks & Beverages products. P&G owns nearly 300 brands Office technology: Technology on the web P&G operates an interactive technology market, including a detailed catalogue of P&G technologies. Through internet sites, technology buyers and sellers enjoy all the benefits of doing business via the internet; and even marketing and locating complementary technologies are done unencumbered by geographical barriers, time zones, or other limitations. [...]
[...] Procter and Gamble is a company that has multiple activities but only four are core businesses: baby care, fabric care, feminine care and hair care. These four core businesses generate more than half of the total company's profit. But in fact, we know that they are categories in which we can maintain and extend the leadership of P&G. For three years, P&G has had increases in the shares of these core businesses. Now, baby care has 36% of market shares, so there is an increase of approximately 4%. [...]
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