Procter & Gamble 9.30 Section.ppt

PROCTER & GAMBLE-GILLETTE MERGER

By: Christine Cruell

Kamika Hemphill

Antjuan Seawright

Jonathan Toney

EXECUTIVE SUMMARY

PRODUCTS

Three main product lines: household and personal care food consumer heath care products

Recent merge with Gillette Competitive advantage

DOMINANT FIRMS

Procter and Gamble, Nestle, Unilever, L’Oreal, Colgate-Palmolive, Revlon, Bic, PepsiCo, Sara Lee, and Kimberly Clark.

Success factors: positive brand image availability of products the ease of access

VISION AND MISSION

Vision“Be, and be recognized as, the best consumer

products and services in the world” Mission

“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. To produce products with the utmost care to give nothing but quality to our communities. And to continue to grow so that we can maximize our shareholder’s wealth.”

EXTERNAL ENVIRONMENT

EXTERNAL ENVIRONMENT

Economic Factors Social Factors Technological Factors Political Factors Ecological Factors

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

TECHNOLOGICAL FACTORS

Focus on technological changes affecting the industry: New Products, improvement in existing products, manufacturing and marketing techniques

T hreat/Opportunity

INDUSTRY ANALYSIS

CONSUMER GOODS INDUSTRY5 FORCES MODEL Buyers: large impact on industry

Large retailers-Wal-Mart, Kmart, Target Rivalry: keeps industry thriving

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

Threats to Entry: heavy impact on industry productivity Mergers and acquisitions

CONSUMER GOODS INDUSTRY5 FORCES MODEL CONT… Substitutes: no huge impact

Competitive products replacement Private label brands and small label brands-only

real substitutes Suppliers: no threat to the industry

Raw materials can be obtained anywhere

COMPANY PROFILE

VALUE CHAIN ANALYSIS

Primary Activity Marketing and Sales=Brand Recognition

Support Activities Research Technology-RFID

FINANCIAL ANALYSIS

FINANCIAL ANALYSIS

Key Data from Bal. Sheet Total Assets

138,014.00 135,695.00

61,527.00 57,048.00 43,706.00

FINANCIAL ANALYSIS (CONT’D)

Key Data from Income Statement Net Income

10,340.00 8,684.00 6,923.00 6,156.00 5,186.00

FINANCIAL ANALYSIS (CONT’D)

Key Ratio’s Gross Margin Debt/Equity Ratio Current Ratio Quick Ratio Return On Equity Return On Assets Return On Capital

RATIO ANALYSIS

Key Ratio’s 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 17.6

13.4

SWOT SUMMARY/CORE ISSUE

SWOT

Strengths product variety and

diversification Line of shaving

/grooming products Supply chain

technology

Weaknesses Constant

innovation= higher prices for consumers

Opportunities Globalization

Threats Private labels

Core Issues: Overlap in

management Overlap in P&G-

Gillette products (I.e. Old Spice deodorant and Right Guard deodorant)

Expensive products

LONG TERM OBJECTIVE AND STRATEGIC SCENARIOS

LONG TERM OBJECTIVES

Generic Strategy: Differentiation Grand Strategies:

Innovation Conglomerate diversification Concentric diversification Strategic alliance

SCENARIOS

Best

Worst

Likely

CORPORATE LEVEL STRATEGIC ALTERNATIVES

CORPORATE LEVEL STRATEGY

Stay in same SBU’S Get into new SBU’S

Keys to success Proper asset mgmt Possible change of

mission statement

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

BUSINESS LEVEL STRATEGIC ALTERNATIVES

BUSINESS LEVEL STRATEGY

Generic Options Low Cost Leadership Differentiation

Pros/Cons of both

Rivals Unilever Colgate-Palmolive

GRAND STRATEGIES

Low Cost Leadership Concentrated Growth Market Development

Differentiation Product Development Innovation

STRATEGIC CHOICE

STRATEGIC CHOICE

Corporate level strategy: Get into new SBU’s.