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Table of Contents
1. Introduction...........................................................................................................................................2
2. Profile of the Company..........................................................................................................................2
2.1 Business Objectives of P & G............................................................................................................3
3. Strategic Analysis of Procter & Gamble................................................................................................3
3.1 General or Common Environment.....................................................................................................3
3.1.1 Political Environment..................................................................................................................3
3.1.2 Social Environment.....................................................................................................................3
3.1.3 Technological Factor...................................................................................................................4
3.1.4 Environmental Factor..................................................................................................................4
3.1.5 Legal Factor................................................................................................................................4
3.2 Industry Environment.........................................................................................................................4
3.2.1 Industry Life Cycle......................................................................................................................4
3.3 SWOT Analysis of P&G Company....................................................................................................5
3.4 Porter Five Forces Model...................................................................................................................5
3.5 Porter’s Generic Strategies.................................................................................................................6
3.6 Ansoff Matrix.....................................................................................................................................7
4. Future Strategies for P&G.....................................................................................................................8
4.1 Corporate Strategy.............................................................................................................................8
4.2 Business Strategies.............................................................................................................................8
5. Synthesis of ideas or solutions relating to strategy issues......................................................................9
6. Recommendations.................................................................................................................................9
7. Conclusions.........................................................................................................................................10
References..................................................................................................................................................10
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1. Introduction
Strategic management is the systematic analysis of the company for implementing major goals and
objectives (Haberberg & Rieple, 2008). The main concerning area of the strategic management is to
achieve better success with the help of corporate policies and strategic investigation. On the other
hand, strategic analysis is the business analysis of an organization which is developed by the firm for
developing their strategy by researching the business environment where they operate their business.
Sometimes, it is regarded as SWOT analysis but it is more than that. Strategic analysis is one of the
most useful elements for the strategic business planning by the organization (Goksoy & Ozsoy, 2010).
In this assignment, the strategic analysis of Procter & Gamble (P&G) is going to be discussed.
Procter & Gamble is the America’s largest producer of household goods. They have almost 250
brands only in six categories. Its different products are selling under top ten brands across the globe. P
& G is such a company that always concerned for the improvement of the style and quality of the
people’s day to day life. Their general target is to meet the customer’s demands and wants properly.
For the changing competitive environment they need to adopt different strategy for competing with
the rivals and gain the competitive position in the market place (Dyson, 2010). As a result, to cope
with the change and to get more profitability the company needs to formulate various effective
strategies.
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profile. They focus to produce a product which is environment friendly and emits less carbon
di oxide. In the issue of social responsibility, P & G is working to improve the life of millions
of children. The employees of this company are dedicated to achieve the business goals and
the sustainable development of the company (Dagnino, 2012).
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3.1.3 Technological Factor
The management team of Procter & Gamble is working to assure a healthy and safe environment for
the employee. The technological issues are maintained in a way that helps to increase the market share
of P&G. New and innovative products and services help to gain profitability of this company. By
innovating new products and services and improving the existing products P&G tries to improve the
lives of the consumers. Innovative technologies work better and effectively for the sustained growth
of the company (Dagnino, 2012).
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Figure: Porter’s five forces model
Procter & Gamble has such strategy that creates a challenge for the new comer of the market. They
have a huge market share so the new entrants have to vast capital to compete with the P&G. Their
average annual sales are $84.74 billion. The company is aware about the firms who can enter into the
market and for that they maintain specific policies for the specific market. P&G has a good
relationship with their suppliers (Brown et al., 2013). Without the relationship with the suppliers it
will be impossible for any business organization to run properly in this competitive market. Though
P&G is a large business organization, they have good understanding with their customers. Customers
are the life blood for any business organizations. So, customers get priority in all aspects from them.
There are lots of company are operating their business in the marketplace. Other companies same
category products are becoming threats for P&G’s products. So, they adopt such a policy that helps
control the market share of the business environment. Many business organizations are becoming
competitors of P&G. So, the management of P&G is aware to prevent such type of competitors from
the market place (Mezger & Violani, 2011).
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Cost Leadership Strategy of P&G
By adopting cost leadership strategy P&G has been able to become the market leader in the business
field. P&G offers low price for their products by maintain high quality. For their effective strategy
P&G can get maximum benefit by their minimum resources (Barney & Clark, 2007). The main target
of this company is to gain competitive advantage and for this they introduced a product named “Tide
Natural” by reducing 30% cost than the existing products. Most of the world populations are in the
developing countries and this is the target market of P&G. The introduction of MACH3 razor was for
the middle class people where latest technology was used and the price of the product is obtainable.
Differentiation Strategy of P&G
The main target of the company is to become the market leader. To be market Leader Company has to
follow certain strategies. P&G is able to do this because of their distinctive strategies. They have
almost 300 different brands around the world to keep close with their customer where innovative
products get the most priority (Barney & Hesterly, 2010). P&G is the first company who introduced
baby diapers in the market by using latest technologies.
Focus Strategy of P&G
With the help of this strategy company try to improve their certain sector for the competitive
advantage. Normally, small business enterprises follow this strategy. So, P&G adopts this strategy in
their company for the certain products.
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Violani, 2011). For taking any decision instantly this model is best suitable. P&G used these strategies
for the market development in the existing market as well as for creating new market for their
products.
Market Penetration Strategy
Market penetration strategy is used for selling products into the existing market (Haberberg & Rieple,
2008). Recently, P&G started a product in India named “Tide Natural” by reducing the price of the
product which was before in the market. As 50% people of that particular country earns very low so
P&G adopts this strategy for gaining market share.
Market Development Strategy
Market development strategy is used by the company in the new or potential market. P&G primarily
set up their target market and then they launched a new and innovative product for this market. In this
way they entered into the market and then they captured the market share. P&G developed a product
“Ambit” for their potential market in African region.
Diversification Strategy
Diversification involves the diversification of the existing products. Before adopting this strategy
P&G do the market research and then implement this strategy. With the help of diversification new
and innovative products is introduced for the potential market.
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5. Synthesis of ideas or solutions relating to strategy issues
Different strategy has been used for the different market and different situations (Haberberg & Rieple,
2008). In order to get competitive advantage, manager has to take challenges. To take any decision
instantly, strategic drift has been used. As implementing strategy is a long term process, it is not good
for many organizations. The business environment of the world is changing rapidly, so the business
organization has to cope with the changing need. As a result, business organization has to adopt and
change strategy in any situation to keep them on the competition (Mezger & Violani, 2011).
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6. Recommendations
Retain the competitive advantage and achieve the market growth, business organization have to
achieve the customer loyalty by providing quality products in a low price (Dyson, 2010). The
company should utilize the new market segments for gaining profitability. P&G should utilize their
strengths in the R&D sector for developing the technological resources. The full utilization of
financial sources will help to invest more on for the product innovation and starting venture on the
new market. With the implemented strategy, government regulations and law should be maintained by
the Procter & Gamble. The company should take the environmental sustainability program for the
sustainable development of the company. To implement the strategy effectively, innovation and
knowledge about the current issues is extremely important. The decision making authority should be
decentralized for the easy and fast decision making process (Goksoy & Ozsoy, 2010).
7. Conclusions
Strategic management is very important element for the strategy analysis of the company. For gaining
market share and enhancing profitability, P&G adopts different strategy for their products but the
most widely accepted strategy for the P&G is cost leadership strategy. The strategy should be adopted
for the development of the product with the changing situation and demand (Dagnino, 2012). Present
market is highly competitive for the various business organizations. So the company like Procter &
Gamble should meet the customers need by adopting appropriate strategy for their organizations.
References
Barney, J.B. & Clark, D.N., 2007. Resource-based Theory: Creating and Sustaining Competitive
Advantage. 1st ed. Oxford: Oxford University Press.
Barney, J.B. & Hesterly, W.S., 2010. Strategic Management and Competitive Advantage:
Concepts. 3rd ed. London: Pearson Education Inc.
Brown, S., Bessan, .J.R. & Lamming, R., 2013. Strategic Operations Management. 3rd ed. New
York: Routledge.
Dagnino, G.B., 2012. Handbook of Research on Competitive Strategy. 1st ed. Gheltenham:
Edward Elgar Publishing Ltd.
Dyson, R., 2010. Strategic Planning: Modes and Analytical Techniques. 6th ed. Oxford:
Blackwell Publishing.
Goksoy, A. & Ozsoy, B., 2010. Business Process Reengineering: Strategic Tool for Managing
Organizational Change an Application in a Multinational Company. International Journal of
Business and Management, (22), pp.256-64.
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Haberberg, A. & Rieple, A., 2008. Strategic Management:Theory and Application. 5th ed.
London: Chapman and Hall Plc.
Hussey, D.E., 2012. Strategic Management: From Theory to Implementation. 4th ed. Oxford:
Butterworth-Heinamann.
Kotler, P., 2009. Marketing Management: South Asian Perspective. 13th ed. New Delhi: Dorling
Kindersley (India) Pvt. Ltd.
Mezger, S. & Violani, M., 2011. Seven Basic Strategic Missteps and How to Avoid Them.
Strategy & Leadership, 39(6), pp.19-26.
Miller, F.P., Vandome, A.F. & McBrewstr, J., 2011. Pest Analysis. VDM Publishing.