ANALYSIS OF PROCTOR & GAMBLE

Analysis of Proctor & Gamble

Analysis of Proctor & Gamble

Introduction

Proctor & Gamble, a renowned name in the fast moving consumer goods sector (FMCG) faces a very fierce and stiff competition from other names in the industry. The competition is indeed intense and is faced from all sides be it research and development, innovation, market share or product portfolio. One interesting trend noticed by market analysts these days is that the market share for Proctor and Gamble is deteriorating in developed markets, whereas on the contrary it has sustained in developing markets. A brief history of the organisation, together with the discussion of its current activities will help in evaluating Proctor & Gamble strategic management.

Discussion

History of the organisation

The foundation of Proctor and Gamble was laid in 1837 when a soap maker, James Gamble and a candle maker William Proctor joined forces. The firms starting capital was $7192.24, and the profits were distributed among two partners in equal proportion. Proctor was in charge of the office and Gamble used to oversee the factory. The formation of Proctor and Gamble saw economic expansion in the United States. Proctor and Gamble's first base was situated in Cincinnati which was located on the Ohio River. This enabled access to ports of New Orleans. Cincinnati was the largest meat packing centre at that time which placed Proctor and Gamble close to animal by-products. The business was built up by shipping candles and soaps as the raw materials were readily available. By 1850, the provision of the railway was used to market its products in newer markets. Railroads had a clear advantage over rivers which made the distribution process hassle free. By 1870's, the products of this magnificent company were being manufactured and distributed at national level. Ivory soap was introduced by P&G in 1880's which had a huge impact in the soap market. In 1887,, William Proctor's grandson introduced a new scheme in which each and every worker was given a stake in the company. By 1911, the Cincinnati facility had reached its full capacity and therefore P&G started to build locations in other areas of United States. 1920-1930 saw an era where P&G sponsored many radio programs. In 1930, the company became an international operation with the acquisition of Thomas Hedley co. Year after year, P&G launched new products, diversified and penetrated into new markets and consolidated its strategic position. The FMCG giant was growing rapidly inviting competition from other potential market entrants who realized the true potential this sector has (acswebcontent, 2013).

Thus, the journey of well over 175 years made Proctor and Gamble one of the largest name in FMCG industry with sales reaching $180 Billion. It has a global presence in 180+ countries, 98000employees and brands worth of $25 Billion.

Current activities of P&G

Products Offered

The success of the company has by the quality of products it has continued to offer consistently. Surprisingly, the company has the same portfolio of products for all regions, with all regions beingoffered the same product ...