Proctor and Gamble Strategic Evaluation and Analysis - Case Study Example

Proctor and Gamble Name: Lecturer: Course name: Course code: Date: Proctor and Gamble (P&G) Proctor and Gamble is an American multinational company whose headquarters is located in downtown Cincinnati. The company was established more than 170 years ago by William Proctor and James Gamble and incorporated in 5th may 1905. The initial business major on the manufacturing consumer packaged goods over 300 brands including superior fabrics and some home care, snacks and many more brands. In the duration of 20 years after the company inception, it was ranked highly by its sales revenue (P&G annual report, 2013). According to the Proctor and Gamble (2013) Earnings Report, P&G reported sales of $84,167 billion dollars thus describing the company’s high turnover ratio. Currently the Proctor and Gamble leads in the manufacturing and distribution of Fast Moving Consumer Goods (FMCG) in over 180 countries and territories global wide. Alan G Lafley the P&G chief executive officer employs strategic incentives to enhance company’s robust visionary and strategic plans in developing organizational culture, employee management and profitability. Proctor and Gamble is taking the lead in the manufacturing of consumer products such as Fusion, Tide, Pringles, Gahanna Dolce and Gillette, among other P&G brands. Proctor and Gamble has more than 127,000 employee’s workforce with a superior loyal customer base (P&G annual report, 2013). The company’s slogan is “Touching lives and improving life has evenhanded in growth in the company’s revenue from $81,104 in 2011, $83,680 in 2012 and $ 84,167 in 2013 financial year. Proctor and Gamble Strategic Evaluation and Analysis Proctor and Gamble being the worldwide giant manufacturer of packaged consumer goods is facilitated by strategic business incentives and efficiency in its workforces. Its foundation being dated back in more than decade ago as been embraced by a tremendous stages of expansion and technical innovation that facilitate company’s growth , customers satisfaction and gaining competitive forces in the global market. P&G trades over 180 global territories with diversified groups of brands (White Jerry, 1999). The company pride is the capacity to extend its brands performances and meet the competitive nature of the global market forces to increase the organizational revenue and meet shareholders expectations. Proctor and Gamble strategic evaluation and analysis are explicated further through the SWOT analysis strategy where the employed company’s strength is depicted with foreseeable opportunities to being enticed and inducement remedying the company’s negative externalities. P&G SWOT analysis depicts the company’s insight of the future incentives and measures that emphasize on the company’s objectives (Murray B. & Gerhart, 1993). The company’s SWOT is described below. SWOT analysis Strengths Consumer Understanding Proctor and Gamble employs strategies that conceptualize on global market research that has enhance interaction with more than five million customers every year in about 100 territories. In over than 15,000 research studies conducted each year, P&G reveals to have invested more than $350 million per year in consumer understanding strategies (Petromilli, 2002). This strategic insight enhances Proctor and Gamble in identifying innovation opportunities that offers the best service and communication to the customers. Innovation Media report, 2013 recognizes Proctor and Gamble Company has extensively global innovation leader where the growth of the organic sales in the past decade is as a result of innovation of new brands and improved products in the global market. Proctor and Gamble enhance its innovation advancement through collaborative incentives with global network of research partners (Lafley, 2008). Research study emphasizes that in more than half of P&G product innovations at least one major component comes from an external partner. Partnering of P&G has consistently aided the company in earning honors in Symphony IRI New Product. In an average of the past 16 years, P&G Company proofs its competitive for its 132 products on the top 25 Pacesetters list. According to 2011 report, P&G is reported in a 5th place in Fortune’s 2011 list of the World’s Most Admired Companies while P&G consumers from Holland, Spain, US, Italy, UK, France and South Africa countries vote the company 22nd has product of the year. Brand-Building Proctor and Gamble is the industry brand-building leader with the strongest built brands portfolios in the industry. P&G has fifty leadership brands which are amongst the world’s most excellent known household that make up P&G’s 90% sales and over 90% earnings (P&G annual report, 2013). Research concludes that for each twenty five of P&G brands generate more than $1 billion dollars yearly revenues. Go-to-Market Capabilities Proctor and Gamble Company vest in establishing of extremely strong market base both for foreign market and local markets. Surveys among the leading retailers in industry consistently rank P&G as their preferred supplier (Galbraith, 2008). P&G has previously had excellent capabilities and abilities in embracing marketing incentives and it has been in a position to meet market demands speedily more than its competitors in the sector such as Unilever alongside Kimberly Clark and Johnson and Jonson. Scale Proctor and Gamble has vanity of creating efficient and effective scale advantage by integrating across business strategies in global markets. This combination ensures proper organizational controls hence greatly focusing on maximizing its potential (Dodgson, 2006). The resultant advantage from efficient and fairly cheaper production process ensures a fair market price to the company consumers hence competitive in the market. This has guaranteed that P&G consumers position in getting quality product at a relatively cheaper cost as compared to the competitors. Weakness Proctor and Gamble has non-effective distribution system in several number of portions remote locations in foreign territories alongside the expensive capital investments and input factor. P&G also is disadvantage in employment foreign workforce, due to lack of foreign experience among some managers with lack expertise knowledge and experience on international business (Holden, 2009). However, the two vital company challenges have greatly hindered principal operations with the headquarters and major branches of the company. Opportunities The company is sufficiently enriched with advance technology that enhances emphasis on production efficiency, increasing the market share network, and removal of trade barriers or bureaucracies (Porter, 1996). Technological removal of trade barriers in foreign countries conceptualizes the company effectiveness in performing its functions in a more competitive manner without any foreign government’s intrusion. Blockades in business incentives are acknowledged as the most prominent threats to international business because the company’s initiatives are not categorically realized within a span of time. However, the P&G’s technological infrastructure ensures company’s global market accessibility hence higher returns. Threats P&G is intimidated by weighty pressures such as the emergence of product substitute into the market and this has overwhelmingly influenced consumers taste and preferences. Also entrance of several companies in the market has created stiff competition to Proctor and Gamble (Kathie Cooper, 2012). Moreover P&G faces high incidences of product barricades in developing economies with stringent business laws and political instability that creates disparaging environment for P&G business performances hence reducing the company’s profitability. However reduction on the company’s performances will reduce investors confidentially and restrained potential investors due to poor returns from the company’s investment. Proctor and Gamble Organizational design issues Organizational design refers to how the business is aligned organizational elements functions aspects, and, processes and strategies within the business For any organization to succeed it is necessary that they identify ways of addressing coming challenges with a compelling strategic plan without hampering other vital programs in the organization (Petromilli, 2002). Challenges exist both within and outside the organization and how they handle them will greatly influence the realization of the organizational objectives. Proper identification and definition of challenges facing an organization are truly ideal in determining the probability of getting certain goals in the long run. Exact identification can further aid in proper formulation of policies and procedures which are necessary to drive the organization into the future successfully. Proctor and Gambles executives takes the organizational challenges as opportunities to enhance growth in the event of taking corrective measures. According to Kathie Cooper, (2012), if challenges are considers opportunities the organization can be able to move into immense heights. Proctor and Gamble has appropriate measures that emphasize on strategic plans that address the identified organizational challenges (Galbraith, 2008). The organization should therefore be able to address the issues of technological innovation and adoption and be in a position to continuously meet the dynamic market desires. P&G Company has vested providing business effective measures that endows a mechanism for stimulating rigorous growth and be in a position to redress organizational bureaucratic tendencies. This will enable the P&G cop up with product marketing hence addressing customers’ needs and the market demand. Proctor and Gamble having the knowledge of the existing strengths which the company has its level of vulnerability, prevailing opportunities and the possible threats is an ideal mechanism for ease of identification of challenges for any visionary company (Hernandez, 2008). The organization at all level should be able to analysis frequently, and critical evaluate issues in the market place such as company’s competitors, cost of production existing relationships with customers. All these will ensure the P&G is up to date with the necessary information and be able to put up its priorities to meet the market competitiveness. The executive standard monitoring of the P&G external environment is always acutely 0724621402 necessary as concoct technological advancement which is not addressed by other competitive firms in the market structure (Hussey, 2001). This is because technological advancement in information technology has significantly influenced P&G organizational management. Plessis, Jean, p.237(2010) describes the organizational training incentives that ensure that employees are vast on the technological advancement and limit the victim of technological obsoleteness. Proctor and Gamble emphasize training facilities to generate employee familiarity within the organization thus enhances efficiency in addressing upcoming market and individual needs. Proctor and Gamble is faced with organizational confrontations which is interconnected with increasing rate of productivity by investing less and be in a position to earn more from less organizational input. The organization has been able to come up with new officers by employing employees within 145 nationalities with certain expertise fields such as office of productivity and Organizational Transformation executive enabling P&G efficiency, higher profitability and more competitive in the market structure (Mitchell, 2009). Through the organizational training facilities and employment of employees with different nationalities conceptualize on organization striking balance between growth and productivity. Therefore P&G need to embrace a more designed organizational issues that highly nimble objectives in order to continue remaining successful in its global dealings in terms of competition for both short and long term business investments. Proctor and Gamble need embrace the organizational quo in business as a reality which can lend a hand in identifying and addressing upcoming company’s challenges. P&G heavily investment is based on designed managerial incentives that addresses the company’s operations aspects such as efficiency in inventory turn over’s, and profitability, as stimulating feature in identifying the organizational challenges. The company is again further faced by the challenge of phasing out some products since the company having done so in the past; they need to swig down in developing new products (Brooker Katrina, 1999). P&G Company has therefore invested heavily in product mix which will be able to retain its brand characteristics and be in a position to meet the needs of their loyal customers. The company should be able to invest heavily on new innovations which are able to come up with products meeting constant changing customer needs. The success of P&G has been its ability to have pleasing fickle consumers who have been able to consume their products irrespective of the changing and dynamic economic environment (Berry, 2008). This should not be assumed by the organization to mean a constant factor which is not dynamic instead the organization should move ahead and come up with products which are more reflecting of the ever changing consumer preference and taste. Organizational Culture Corporate culture refers to the organizational principles, ways of operating, values, beliefs, internal work environment and traditions. For more than 150 years, Procter & Gamble has delineated its corporate culture through its business tactics, values and way of management traditions and beliefs in working towards attaining and maintaining the company’s standards, Procter & Gamble Corporation was established in the mid 1800's by William Procter and James Gamble where it has shown tremendous success and growth from its first major product, Ivory soap. Procter & Gamble is confident in the brands including hair, skin, beauty, and fabric care (P&G annual report, 2013). According to Proctor and Gamble corporation website; , it defines its Corporate Governance by their principles and values evenhanded to attain and maintain organizational objectives. Procter & Gamble utilize letter P&G as their company’s logo with blue and white colors. The white and blue colors signify the cleanness that the company tries to communicate when marketing its Ivory soap as the first corporate brand. Procter & Gamble corporate slogan: "Touching Lives. Improving Life" is corresponding with the company’s home products they dispense (Tucker, 1999). The image behind the Procter & Gamble slogan conceptualizes on expressing an opinion to their customers that the products they produce and distribute are important to consumer’s everyday lives and meets their requirements. The language they used by Proctor and Gamble in their website is globally friendly and easy for the general public to understand, thus describing its market enhancement. Critical view of the company’s profile in their site, accentuates the apparent measures, principles, values, ideologies and commitments aided towards providing superior quality branded products and services that improve consumers lives thus achieving their objectives. Proctor and Gamble Organizational structure Organizational structure defines how power, roles, and responsibilities are delegated, coordinated and controlled within the company. It also accentuates on the flow of information from the upper level to upper levels of management (Smith, 2008.). Organizational structure depends on the lay down company’s strategies and objectives. Proctor and gamble has a decentralized structure whose power of decision making and intensive control over the firms divisions and departments is distributed to the departmental heads on different degrees of independence (Schuler, 2004). The decentralized structure is facilitated by Proctor & Gamble production of multiple products which can be best organized and controlled differently based on each company product and the geographical location of the department. The growth of Proctor and Gamble has been build traditionally from within the organizational departmental heads that are able to instill company’s structure aiding at the organizational goals and policies (Porter, 1996). Decentralization of P&G Company enhances competition within the company’s departments and division located at different geographical conditions different production inventions. Different locations of company’s department will contribute to smaller number of employee structure that can control efficiently with an aid of organizational objectives. However decentralization of the P&G has tremendously encouraged coordination and control of organizational activities due to inter-departmental competition. Proctor and Gamble has prominent strength in the company’s efficiency ability to produce high quality products which are never achieved in other competitive companies. P&G maintained high standards in meeting consumer’s preferences for producing quality products with a reasonably cheaper price (White Jerry, 1999). The company has been highly innovative and influential managerial influence in producing quality products which meet consumer’s home requirements. The principal acid test of organizational structure is the immediate and long term performance measurement of the company’s achievement of their objectives. According to Lafley (2008), Proctorand Gamble aids in initiating the product differentiation to attain the shareholders interest (Gerhart, 1992). P&G focus on recruiting employees with high trend of positive attitude towards work and a passion of building the company’s future leadership and to maintain the organizational set standards over time. The role of leadership in Proctor and Gamble P&G is ranked first most excellent company for leadership in 2013. According to the survey published report P&G has been ranked in top 5 in the past eight years. P&G’s leadership paradigm is allied to P&G’s organizational culture and strategies. The allied P&G structural and strategic incentives induce the company’s enticement that considers humanizing the employees from their predisposing aspects of life. Most leaders in P&G give room for employee career development hence creating effective organizational working conditions. Hernandez, (2008) criticaly describes the aspect of leadership traits that facilitate establishment of organizations objectives. According to the Proctor and Gamble report, the corporate clear efficient and effective leadership profile except for the company’s subsidiaries installed in developing countries with poor expatriate knowledge and skills. The Company employed passionate executives within its business territories to explicit integrated flexibility in managing the company’s operations. P&G predesigned organizational values principles, and the subsequent expectations that emphasize on managerial and leadership incentives to meet the executive’s objective. Kathie Cooper (2012) describes that, the leadership success in an organization involve spinning challenges into successful ventures which is aided in igniting the organizational success. P&G leadership behaviors employ colossal culture to promoting success of employee’s contribution to the company’s goals. P&G Company senior leadership and managers prioritize on organization development by enhancing maintaining clear lines of communication which emphasize on addressing organizational issues (Mitchell, 2009). P&G is considered compliant to changing consumer demands by evidently and carefully emphasizing on innovative strategies that enhances market dominance to competition. The P&G have hefty number of skilled workforces with over 9000 R&D associates and constitutes 1,100 PhDs experts. This justifies the organizational successfulness since the company’s experienced workforces are in a position to maintain the lead in production innovation. P&G privileged leaders have a responsibility in understanding and the role of organizational culture and employee thoughts to ensure minimum friction that calms the company’s progression. Leaders of the organization indulge their employees as a team working together thus is because as a team, in achieving the best. Proctor and Gamble employment policies are not adequate in regulating the number of productive employees within the company and its branches. The organizational leadership was despaired by hiring too many employees which lessen the company’s profitability (Dodgson, 2006). The crucial leadership requirements and influence in ensuring that the organizational goals are realized within the time threshold is vested on executive initiatives. Proctor and Gamble leadership incentives are prorated with many investments which were unprofitable, however freezing the company’s earning capacity. Woodward, J (1996) emphasize on critical success factors which organizational leadership is expected to comply with in order to embrace quality leadership within the company. These organizational designed factors will not only maintain the company’s production capacity but also enhancing quality products which will strengthen the company’s integrity since the employees are willing cooperate by not compromising on product quality. Diversity of organizational leadership is another crucial incentive which will embrace the company’s predetermined goals with regard to the time factor (Holden, 2009). Diversification enhances the company’s innovative strategy that will embrace company’s innovation of different measures that conceptualize on company’s returns. Proctor and Gamble based on diversification of brand perceived to satisfy the consumer’s requirements. Proctor and Gamble leadership aid on enabling environment where innovation and connection collaborate facilitating the next phase of business progress. P&G emphasize on Platinum Rule which accentuates on prudent concept of organizational leadership which facilitate cooperation between the company’s employees and leader thus enhancing company’s efficiency. Conclusions In conclusion, Proctor and Gamble should augment its organizational management performances by enhancing conceptual frameworks policies that accentuates on the company’s protocol objectives. Through organizational advanced market networking and technological advantage, Proctor and Gamble has restructured its framework to utilize the advantage in gaining consumers satisfactions in the market. Proctor and Gamble Company do not nature on the organizational leadership since most of its departmental heads and executives are old enough for retirement thus creating incidences of leadership vacuum. The organizational leadership have cultured on predetermine revolutionary initiatives that resulted to over employment and reduction on the company’s performances and advancement of its organizational structure Proctor and Gamble remuneration strategies should put into consideration the employee’s efficiency and reward their contribution to enhanced employee satisfaction and competition between themselves in working towards better achievement rewards. According to Gerhart, (1992), the organizational executives should introduce the professional competent employee’s on expertise training to expound on organizational procedures and policies that enhance achievement of organizational objectives. Proctor and Gamble investment strategies is poorly ventured since the company’s project have negative contribution that suppress the company’s earning capacity. The organization managers need to develop customer based relation schemes to be facilitated through the innovative workforce in satisfying their customers’ and meeting organizational competitive measures. It is ideal that the organization should have a based knowledge in terms of improvement and detailing the required steps for its implementations to enable transformation of organization. Proctor and Gamble Strategic Recommendations Proctor and Gamble human resource need to develop the employee supportive schemes and programs that define both managerial system and the employee’s relations. Kathie Cooper Et Al (2012) provide organizational performances measures that promote organization competitiveness. Proctor and Gamble need to capitalize on enticement that enhances efficiency and thus increasing the company’s profitability (Dodgson, 2006). Proctor & Gamble managerial department should endorse fervent strategies that conceptualize on employee’s safety and clear remuneration to promote their effectiveness and increase the company’s earning capacity. Proctor & Gamble Leaders should therefore be trained well on the organization culture and system such that they will be able to deliver the same to their team in a precise effective manner. The company heads needs to evaluate the viability company’s investment reduce the amount company’s projects that have poor returns hence increase the company’s contributions and earnings attributable to shareholders. The company’s managerial sector should effectuate clear line of communication between junior and senior employees to promote satisfactory measures within the company. Proctor and Gamble should establish an all inclusive book management system that facilitates efficient sharing of information between the managerial department and employees to enhance enthusiasm and participative culture within the organization (Brooker Katrina, 1999). This system incept the employee as part of the organizational decision making process since they will feel always considered. Moreover, this system will build the employee trust and infuse motivational aspect in their duties within the organization. Murray, B., & Gerhart, B. (1993) introduces the reward system that recognizes the employee’s individual performances that will enhance motivation and contribute towards realization of organizational objectives. Proctor & Gamble need to design organizational rewards mechanism of rewarding their employee’s based on their credibility and performances. Excellent compensation strategies should be developed to drive the organization efficiency and increase the company’s earning scale. Barry, (2008) stipulates that, organizations faces rising pressures on compensation of employees performances which define effective management remuneration strategies which improves employee better performances. Effective management remuneration and rewarding schemes minimize the organization friction that lowers the employee perfomance and the organizational effecicincy. P&G needs to nature the organizational leadership by steering head future leadership to avoid the organization incidences of creating leadership vacuum. However, P&G organization management should design a formal managerial sector need to ensure clear lines of communication and remuneration schemes that will emphasize on organizational cooperation and realization of its objectives. The managerial system should emphasize on Proctor and Gamble policy framework which enhances achievement of the company’s objectives and gain competitive advantage from the dynamic market conditions. Reference List Berry, M.A..a.D.A.R., 2008. Proactive corporate environmental management: a new industrial revolution. The Academy of Management Executive, pp.38-50. Brooker Katrina, 1999. Can Proctor and Gamble change its culture, Protect its market share and find the next high tide?. Fortune( Europe) , 26 April. Dodgson, M.D.G.a.A.S., 2006. The role of technology in the shift towards open innovation: the case of Procter & Gamble. R&D Management , (36), pp.333-346. Galbraith, J.R., 2008. Designing matrix organizations that actually work: How IBM, Proctor & Gamble and others design for success. John Wiley & Sons. Gerhart, B..&.M.G.T., 1992. Employee compensation: Research and practice.. Hernandez, M., 2008. "Promoting Stewardship Behavior in Organizations: A Leadership Model.". 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