Strategic marketing and planning development Analysis: P&G Manufacturers Analysis
Q?? Write on the strategic planning & management of P&G Manufacturers??
Solution the report writes is:
- Executive Summary
This report takes into consideration the strategic analysis of P&G i.e. one of the leading manufacturers of consumer goods. It has been ranked amongst the 500 fortune American companies. P&G has been ranked 5th out of the list of 500 companies due to the brand image it possesses all over the globe.
The report highlights the two major factors i.e. Internal & External environment to be taken into consideration while performing the strategic analysis. In order to conduct the internal analysis the VRIO framework has been considered whereas in order to conduct the external analysis PEST or ICEDRIP analysis has been used. SWOT analysis has also been conducted which would guide P&G to concentrate upon their strengths, opportunities & take care of the weakness & threats.
P&G has also taken various measures in order to deal with one of the most important aspect i.e. ethics, CSR & sustainability of the environment.
Introduction
Procter & Gamble refers to one of the leading multinational dealing in consumers goods. It has been ranked amongst the 500 fortune American companies. P&G has been ranked 5th out of the list of 500 companies due to the brand image it possesses all over the globe (Parrish, 2006).
The enterprise has made its presence in most of the countries & is known for manufacturing different types of consumable goods. There are various products which have been listed under the name of P&G. some of the products are as under:
Þ Beauty & Grooming products
Þ Household Care products
Þ Baby Care as well as family care products
Þ Heath & Care Segment
Þ Snacks as well as Pet Care segment
P&G has acquired many companies which offer diverse products. This helped P&G to diversify its product line thereby leading to an increase in the overall revenue generated. Some of the acquisitions made by P&G could be listed as under:
Þ Richardson-Vicks
Þ Shulton’s Old Spice
Þ Max Factor
Þ Folgers Coffee
Þ Iams, etc
One of the recent acquisitions done by P&G refers to the merger of Gillette. Soon after the merger, P&G has been ranked first in manufacturing the consumer goods leading Unilever in the second place. After they acquisition, various other products such as Oral-B, Duracell, Razors, etc have been added under the name of P&G (Parrish, 2006).
- Strategic Analysis:
Strategic Analysis refers to a process which would help the organization in order to design & formulate various strategy, plans, policies, etc that might help P&G to succeed in the near future. Different types of techniques would be used in order to perform strategic planning at P&G (Parrish, 2006). some of the tools could be as under:
Þ SWOT Analysis
Þ COPE Analysis
Þ PESTEL Analysis
Þ McKinsey Portfolio Analysis
Þ STEER Analysis
Þ EPISTEL Analysis
The following tools mentioned would help in order to perform the strategic analysis at P&G. The SWOT Analysis at P&G would help the company in order to have an in depth knowledge regarding their Strengths & learn from their weaknesses which might turn out to be their potential threats. With the help of the SWOT analysis, P&G would be able to search their opportunities & take care of the threats which might hamper their scope of growth in this particular industry (Parrish, 2006).
The Strategic Analysis would help P&G in order to conduct an in depth research regarding the internal as well as the external environment where the business operates. While conducting the strategic analysis the following questions should be kept in mind such as:Þ What do we do?
Þ For whom do we do?
Þ How do we excel?
With the help of these three questions the company i.e. P&G would be able to see their current position i.e. where we are & decide as to where they want to go in the years to come. With the help of the strategic analysis, P&G would be able to see whether they would be able to overcome the stiff competition pertaining in the industry (Parrish, 2006).
In order to conduct the strategic analysis of P&G, both the environments i.e. Internal as well as External Environment should be taken into consideration. SWOT Analysis shall be conducted which would help in order to expand its business operations & have a hold of the position amongst the 500 fortune companies (Parrish, 2006).
3.1 Internal Analysis:
Internal analysis refers to the type of analysis where the organization takes into consideration all the internal resources of the enterprise which would help them in order to focus upon the opportunities as well as the potential threats which might come in near future (Gallagher, 2004).
With the help of the internal analysis, P&G would be able to have an in depth knowledge of their strengths i.e. the core competencies which would provide P&G an added advantage as compared to the competitors. Internal analysis would also help the organization i.e. P&G to take care of the weakness as these weaknesses might get converted into the potential threats (Gallagher, 2004).
In order to conduct the internal analysis of P&G the VRIO analysis should be used.
3.1.1 VRIO Analysis for P&G
Valuable: A resource would be termed as valuable if it would help the organization in order to detect the potential threats or opportunities. The resources might not be able to over perform its competitors but would help P&G in order to add a component of strength. The resources would be able to add value if it leads to an increase the (Gallagher, 2004) efficiency, innovation, and high levels of responsiveness from the clients & increased quality. With the help of the first element of VRIO analysis, the firm would be able to recognize the level of effectiveness which would add value & lead to an advantage over its competitors.
Rare: The resource would be termed as rare when it would be recognized by its immediate competitors. For example, P&G is a well known brand name & has been recognized by majority of the big players in the similar industry. Some of the major competitors of P&G would be Unilever, etc. which makes the brand name P&G valuable but less rare (Gallagher, 2004).
Inimitable: This element of the VRIO Analysis states that, the resource would be termed as inimitable if and only if the, the resource or the product provided by P&G would not be able to be substituted by any of the leading competitors. It should be taken into consideration that, there are various products available in the market which resembles to the product being manufactured by P&G. For eg, Tide-Surf, Head & Shoulder-Sunsilk, Whisper-Stayfree, etc (Parrish, 2006)..
Organized: The last element of the VRIO framework states that the resource would be termed as organized if the organization is able to use it in the years to come. The goods manufactured by P&G are highly organized. All the products labeled under the name of P&G are of the highest quality which helps the organization in order to earn high amount of revenues (Gallagher, 2004).
3.2 External Analysis:
External analysis is just the opposite of internal analysis. It refers to the type of analysis which would help P&G in order to have an in depth knowledge regarding the outside or the external environment where the company exists. With the help of the external analysis opportunities & threats of the organization would be highlighted. This would help the organization to take care of the loop holes which might come in near future.
In order to succeed amongst the competitive environment, P&G should perform the external analysis which would help them to sustain in such a business environment. The tool which used be used by P&G to ascertain the external analysis would be PESTEL i.e. Political, Economic, Social, Technological & Legal analysis or the ICEDRIPS i.e. Innovation, Competitors, Economic, Demographics, Regulatory environment, Infrastructure, Partners & Social trends (Boulton, 2011).
3.2.1 ICEDRIP Analysis:
Innovation: Innovation refers to one of the key elements for P&G. This would help P&G to focus more on innovation & hence attract more number of customers towards them. With the help of this factor P&G would be able to have a glimpse of the innovation being done by its major competitors i.e. Unilever, etc.
Competitors: In order to conduct an external analysis, P&G should take into consideration its major competitors. With the help of the SWOT Analysis, P&G should be able to learn from its competitors continuously (Boulton, 2011).
Economic: The economic factors should be taken into consideration while conducting the external analysis. This would help P&G to see which market to target which would help them to increase their revenues.
Partners: P&G should have partnerships with many brands. This would help them to diversify their product line & attract number customers (Boulton, 2011).
Social Trends: The Social trends should be taken into consideration while focusing or targeting any new region, country, economy.
3.3 SWOT Analysis:
SWOT Analysis of P&G
| Strengths | Weakness |
| Þ World class leaders in consumer goods |
Þ Profit earned by P&G is estimated to be approximately 15times more as compared to the entire industry
Þ Strong Brand portfolio
Þ Major focus upon the research & development of the product
Þ High integration amongst the world’s largest retailer in US & UK.
Þ Major focus is upon product innovation
Þ Easy accessibility of the products at all parts of the world
Þ High class quality products
Þ Highly diversified product line consisting of more than 20 brands
Þ Talented mangers
Þ Vast experience in the field of manufacturing oral as well as personal care products
Þ One of the best supply chains as well as logistics
Þ Many of the brands manufactured by P&G have lost their market share.
Þ P&G is lagging behind online marketing
Þ Their main target audience is women
Þ Absence of a private brand. This might act as a future opportunity for P&G
Þ One of the acquisitions at P&G was a great failure. This led to high amount of loss.
Þ P&G sometimes suffer from quality control problems
Þ P&G does not invest their money in weak brands. They lack in Niche marketing
Þ Majority of the customers are located at one place & they concentrate only on them
Þ P&G is majorly dependent upon Wal-Mart or any big retail chains in order to generate high levels of revenue
| Opportunity | Threats |
| Þ Biggest opportunity for P&G would be to market their products through online source of media |
Þ Target the emerging economies & markets. This would help them to diversify their operations.
Þ Sell directly to the customers rather than through any of the mediums such as retail chains, stores, etc.
Þ P&G should try to focus more on the overseas market rather than focusing upon the UK domestic market
Þ P&G should target the Indian market as it is one of the emerging markets in this segment or sector
Þ Try to focus upon the developing markets rather than on the developed market place
Þ More values to be added by P&G in regards to the environment, thereby resolving certain social responsibility issues.Þ Cut throat competition from the similar organizations such as Johnsons & Johnsons, Unilever, Colgate Palmolive, etc.
Þ They competitors are trying to diversify their product line which would lead to a rise in the market share of the company
Þ Rise in the private brand would also lead to major threat for P&G
Þ Prices of the raw materials are at peak which leads to a rise in the prices of the goods so produced
Þ Many substitutes for the goods produced by P&G are available at cheaper rates.
Þ Slowdown or recession in the US market has led to a decrease in the spending of the individual
3.4 Ethics & CSR issues at P&G:
P&G takes into consideration ethics, corporate social responsibility & sustainability issues so as to take care of the environment & its customers at large. P&G has been using renewable resources in order to manufacture the products. The packaging of the product could be done with the help of the renewable materials which would not affect the environment. The vision of P&G is to use the resources in the most optimum manner. This would help them in order to be sustainable & will not affect the entire eco system (Patrick, Burkhart & Reuss, 2005).
P&G takes into consideration that the waste does not flows in to the rivers or the oceans which would adversely affect the natural resources. When P&G manufactures certain products it makes sure that the by products are not left in the open environment or flown in to the dumping ground. P&G has high impact upon the sustainability of the environment as well. It refers to one of the leading organization which significantly uses all the resources which would not impact the environment adversely. The detergents such as Tide, Ariel, etc are manufactured which would reduce the environmental footprint (Parrish, 2006).
P&G focuses upon the conservation of the water resources & maintain the quality of water. P&G ensures management of the water which is being used while manufacturing various products. P&G has a committed team which takes into consideration reduction of water, implementation of the new technologies, innovation of the products, using various watershed approaches, etc (Patrick, Burkhart & Reuss, 2005).P&G has been quite active in participating in the various corporate social issues. P&G has a tie up with the Shiksha group which ensures that, Rupee 1 would be kept aside for the disadvantaged or under privileged children. P&G is quite active & has been able to resolve various such issues for the generations to come.
Majority of the children live in very bad conditions, hence, P&G has adopted various skills, strategies in order to take care of the same. P&G has been focusing upon using world class technologies, skills, etc in order to resolve such type of issues for the under privileged child in the years to come (Stephen & Haines 2004).
P&G has been focusing upon approximately 100 Live, Learn & Thrive programs which take place all over the world. The company assists in providing free vaccinations, clean drinking water, and good conditions to live, etc in places such as North America, Europe, etc. It also helps in imparting education facilities to the unprivileged child in Asia, America, etc. The main aim of P&G is to provide the children as well as the youth better living conditions all across the globe.
P&G has been referred to as one of the 100 Best Companies of the world who have been consistently thinking about the welfare of the society (Stephen & Haines 2004). P&G has been rewarded with many awards in this regards. It has been ranked 43 out of 100 in the Corporate Responsibility Office Magazine. With the various steps under taken by P&G millions of people have been able to an access to education, better living conditions, attain basic skills of life (Patrick, Burkhart & Reuss, 2005).Conclusion
Hence, it could be concluded that in order to conduct the strategic analysis of P&G the two main aspects i.e. Internal & External Environment need to be taken into consideration. The report highlights the various tools to be undertaken by P&G in order to have an in depth knowledge about the same (Patrick, Burkhart & Reuss, 2005).
In order to conduct the internal analysis the VRIO framework has been considered whereas in order to conduct the external analysis PEST or ICEDRIP analysis has been used. SWOT analysis has also been conducted which would guide P&G to concentrate upon their strengths, opportunities & take care of the weakness & threats.
P&G has also taken various measures in order to deal with one of the most important aspect i.e. ethics, CSR & sustainability of the environment (Stephen & Haines 2004).
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