Procter & Gamble 9.30 Section

8/8/2019 Procter & Gamble 9.30 Section

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PROCTER & GAMBLE-GILLETTE

MERGER

By: Christine Cruell

Kamika Hemphill

Antjuan Seawright

Jonathan Toney


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EXECUTIVE SUMMARY


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PRODUCTS

Three main product lines:

y household and personal care

y food consumer

y

heath care products Recent merge with Gillette

y Competitive advantage


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DOMINANT FIRMS

Procter and Gamble, Nestle, Unilever, LOreal,

Colgate-Palmolive, Revlon, Bic, PepsiCo, Sara

Lee, and Kimberly Clark.

Success factors:y positive brand image

y availability of products

y the ease of access


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VISION AND MISSION

Vision

y Be, and be recognized as, the best consumer

products and services in the world

Missiony Procter and Gamble will continue to serve

consumers by continuously innovating products

that will allow us to be leaders in household and

personal care, health care, and food products. Toproduce products with the utmost care to give

nothing but quality to our communities. And to

continue to grow so that we can maximize our

shareholders wealth.


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EXTERNAL ENVIRONMENT


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EXTERNAL ENVIRONMENT

Economic Factors

Social Factors

Technological Factors

Political Factors

Ecological Factors


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ECONOMIC FACTORS SOCIAL FACTORS

Concerned with

nature and direction

of economy in which

the CP industry

Threat/Opportunity

Concerned with

beliefs, values,

opinions, and

lifestyles of people

Threat/Opportunity


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TECHNOLOGICAL FACTORS

Focus on technological changes affecting the

industry: New Products, improvement in existing

products, manufacturing and marketing

techniques

T hreat/Opportunity


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INDUSTRY ANALYSIS


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CONSUMER GOODS INDUSTRY

5 FORCES MODEL

Buyers: large impact on industry

y Large retailers-Wal-Mart, Kmart, Target

Rivalry: keeps industry thriving

y Differentiation, advertising, promotions, price,customer service and quality

Threats to Entry: heavy impact on industry

productivity

y Mergers and acquisitions


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CONSUMER GOODS INDUSTRY

5 FORCES MODEL CONT

Substitutes: no huge impact

y Competitive products replacement

y Private label brands and small label brands-only real

substitutes

Suppliers: no threat to the industry

y Raw materials can be obtained anywhere


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COMPANY PROFILE


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VALUE CHAINANALYSIS

Primary Activity

y Marketing and Sales=Brand Recognition

Support Activities

y Researchy Technology-RFID


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FINANCIALANALYSIS


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FINANCIALANALYSIS

Key Data from Bal. Sheet

Total Assets

138,014.00

135,695.00

61,527.00

57,048.00

43,706.00


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FINANCIALANALYSIS (CONTD)

Key Data from Income Statement

Net Income

10,340.00

8,684.00

6,923.00

6,156.00

5,186.00


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FINANCIALANALYSIS (CONTD)

Key Ratios

Gross Margin

Debt/Equity Ratio

Current Ratio

Quick Ratio

Return On Equity

Return On Assets

Return On Capital


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RATIOANALYSIS

Key Ratios

Gross Margin

Debt/Equity Ratio Current Ratio

Quick Ratio

Return On Equity

Return On Assets Return On Capital

PG Nes Uni Ind

51.8 30.8 14.5 20

.54 .67 .78 .84

.9 .8 .7 .98 .6 .11 .4 .7

16.8 30 32.3 30.9

7.9 8.3 10.9 9.6

10.2 13.4 17.613.4


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SWOT SUMMARY/CORE ISSUE


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SWOT

Strengths

y product variety and

diversification

y Line of shaving

/grooming products

y Supply chain

technology

Weaknesses

y Constant innovation=

higher prices for

consumers


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Opportunities

y Globalization

Threatsy Private labels

Core Issues:

y Overlap in

management

y Overlap in P&G-

Gillette products (I.e.

Old Spice deodorant

and Right Guard

deodorant)

y Expensive products


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LONG TERM OBJECTIVE AND

STRATEGIC SCENARIOS


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LONG TERM OBJECTIVES

Generic Strategy: Differentiation

y Grand Strategies:

Innovation

Conglomerate diversification

Concentric diversification

Strategic alliance


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SCENARIOS

Best

Worst

Likely


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CORPORATE LEVEL STRATEGICALTERNATIVES


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CORPORATE LEVEL STRATEGY

Stay in same SBUS

Get into new SBUS

Keys to success

Proper asset mgmt

Possible change of

mission statement


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CORP LEVEL STRATEGY

Best Case

Expand to new mkts

Grow by 30%

Worst Case

Lose Mkt share

Fail to expand

Most Likely

Grow by 10%

Continue current

corporate strategies


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BUSINESS LEVEL STRATEGIC

ALTERNATIVES


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BUSINESS LEVEL STRATEGY

Generic Options

y Low Cost Leadership

y Differentiation

Pros/Cons of both

Rivals

y Unilever

y Colgate-Palmolive


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GRAND STRATEGIES

Low Cost Leadership

y Concentrated Growth

y Market Development

Differentiationy Product Development

y Innovation


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STRATEGIC CHOICE


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STRATEGIC CHOICE

Corporate level strategy: Get into new SBUs.

Procter & Gamble 9.30 Section

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