Procter and Gamble

What strategy was Procter and Gamble pursuing when it first entered foreign markets
in the period up until the 1980s?
In the beginning the company pursued International strategy. International strategy refers to
activities that happen crosswise over multinational enterprises in the private sector. Although
international strategy refers to doing business across nation-state boundaries, it is based on
home market resources. Similarly Procter and Gamble developed the new products in
Cincinnati and after that depended on semiautonomous foreign subsidiaries to make advertise
and circulate those items in various countries. This strategy started to fail and P&G started to
experience sluggish profits and sales in 1990.
Why do you think this strategy became less viable in 1990s?
The strategy became less viable because P&G's was facing high costs because of of high
duplication of assembling, and marketing in various national subsidiaries. Duplication was
the major cause of high costs. Secondly, the barriers to low cost trade were falling rapidly
around the globe, and fragmented national markets were converging into bigger international
markets. Likewise, the retailers through which the organization disseminated its items were
becoming bigger and more global, and were demanding price discounts from Procter and
Gamble.
What strategy does P&G appear to be moving toward? What are the benefits of this
strategy? What are the potential risks associated with this strategy?
The company appears to be moving toward transnational strategy. As it was an international
business structure where P&Gs business activities were composed by means of collaboration
and relationship between its head office, operational divisions and globally found backups or
retail outlets. The company now comprised of seven business units which were centralized.
Benefits: The major advantage a transnational strategy offers is the centralization advantages
given by global procedure alongside the nearby responsiveness normal for location
methodologies. Another benefits is that the transnational organization is adaptation to all
environmental situations and achieving flexibility by capitalizing on knowledge flows (which
take the form of decisions and value-added information) and two-way communication
throughout the organization. In addition, a transnational strategy is the differentiated
contributions by all its units to integrated worldwide operations

Risks: The major risk involved with this strategy is that attempting to accomplish cost
efficiencies, worldwide learning, and location and consumer responsiveness places
troublesome and conflicting requests on an association. Dealing with these clashing requests
requires the setting of control and motivational arrangements for individuals and associations
that constrain adjusting of these requests at various levels inside firms. The authoritative
difficulties include dealing with these inborn clashes to resolutions that serve the best
advantages of the firm general.