Growth Strategies I would use at Procter & Gamble To do business in various countries

By Joel Jacobson

Kristin Shebasta Adjunct Assistant Professor Milwaukee School of Engineering

17 September 2010

The Procter and Gamble Company is one of the largest consumer products company in the world. The diagram below shows the global business units with P&G. They are Beauty and Grooming, Health and WellBeing, and Household Care. Proctor and Gambles organization structure an important part of their capability to grow. It combines the global scale benefits of a $79 billion global company with a local focus to win with consumers and retail customers in each country where P&G products are sold.1

Figure 1: P&G Organizational Structure SOURCE: Proctor and Gamble Corporation, 20101 Related Business Strategy P&Gs core businesses are its strength. I would use the Related Business Strategy by providing a variety of complimentary goods and services. It states on P&Gs website; We interact with more than five million consumers each year in nearly 60 countries around the world. We conduct over 15,000 research studies every year. We invest more than $350 million a year in consumer understanding. This results in insights that tell us where the innovation opportunities are and how to serve and communicate with consumers.2 Procter and Gamble knows the marketplace, and knows what the consumer wants. That is clearly demonstrated by the numbers shown above. To try and break into an industry outside of the realm of P&Gs expertise would be a great risk with uncertain rewards.

Proctor and Gamble Corporation, 2010, Strength in Structure, [Internet, WWW]; ADDRESS: http://www.pg.com/en_US/company/global_structure_operations/corporate_structure.shtml; [Accessed: September 2010]. A copy of this article is in the students possession and may be consulted by contacting the student at jacobsonje@msoe.edu.
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Proctor and Gamble Corporation, 2010

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Corporate Strategy The next strategy I would employ is the corporate strategy. The corporate strategy addresses these four issues: The type of business the firm wants to be in Ways to acquire or divest businesses Allocation of resources among the businesses Ways to develop learning and synergy among those businesses3

Ive already discussed that I would employ the Related Business Strategy, which falls under diversification. The first point of the corporate strategy is to decide the type of business the firm want to be in. Since we are using the Related Business strategy, then the type of business should fit into one of P&Gs Global Business Units: Beauty and Grooming, Health and Well-Being, and Household Care. One of the ways that a giant company like Procter and Gamble continues growing is through acquisitions. Acquisitions are one of the best ways to grow a company. For example, lets say that P&G wanted to expand its business in the Health and Well-Being GBU. It would need to find a company that had the right product that would fit into P&Gs growth strategy. Eukanuba is a brand of dog food thats very popular in the United States, but maybe there is not much market penetration by P&G for dog food (or pet food) in Europe. If P&G wanted to expand into Europe, it could look for a company to purchase in Europe which would help expand its market share there. This would be significantly easier than trying to start a pet food company from scratch. Integrated Strategy Next I would concentrate on the Integrated Strategy. The Integrated Strategy can be broken down into 4 key areas: Arenas if P&G would decide to acquire an existing company, where would the firm be active? Europe, Asia, Malaysia? The location of the company that is acquired has a lot to do with logistics and target arenas. If the company that P&G purchases is located in France, then obviously Europe would be one of the target arenas due to location. Staging - how fast will P&G make the acquisition? What is the sequence of moves that the company needs to use in order to smoothly integrate this new company into the P&G family? Differentiation what will make this new company better than the others in the market? How will the firm excel? Why will consumers want to buy from this company instead of our competitors?

Butler, Argie, 17 September 2010. Managing: A Competency Based Approach, 11th Edition, Chapter 7 Formulating Plans and Strategies, pp 7.17-7.18. [Internet, WWW, Power Point], Available: Milwaukee School of Engineering, 1025 N. Broadway, Milwaukee, WI 53202; ADDRESS: http://blackboard.msoe.edu; [Accessed 17 September 2010] .A copy of this program is in the students possession and may be consulted by contacting the student at jacobsonje@msoe.edu.
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Vehicles - how will P&G get to the goal of being a leader in this market? Will it be quality driven, cost driven, or a little of both? Building the brand into a product that consumers want to buy is critical for the brands success.4

Outsourcing Strategy Outsourcing would be the last strategy I would employ. Here are the four key points of the outsourcing strategy: Expense reduction fewer employees make for a lower overhead to help keep costs down. Better product quality-if you are getting product from an outside source, product quality is normally better. This is due to the fact they have been producing the product longer and have more control over the quality. Improved reporting uniformity and regulatory compliance-most industries have a regulatory agency that has standards that the company needs to comply to. It is most likely that the company being targeted for acquisition in this scenario would have all the quality and regulatory standards in place. In many cases, companies can be shut down if they are not in compliance with required regulations. More effective use of expensive talent so that they can spend more of their time on innovating, expanding global capabilities, and more effective business process management this is a very valid point. Let the people who have the expertise in management concentrate on the management portion of the business. Let others focus on their tasks at hand, whether its day to day operations, logistics, finance, or whatever the case may be. This will in turn free up resources and time for higher level managers to concentrate on higher level tasks.5 Those are the strategic factors that I would consider when deciding on how to market and operate in various countries for Procter and Gamble.

Butler, Argie, pp. 7.32-7.36 Butler, Argie, p. 7.28

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Bibliography Butler, Argie, 17 September 2010. Managing: A Competency Based Approach, 11th Edition, Chapter 7 Formulating Plans and Strategies, p7.17+. [Internet, WWW, Power Point], Available: Milwaukee School of Engineering, 1025 N. Broadway, Milwaukee, WI 53202; ADDRESS: http://blackboard.msoe.edu; [Accessed 17 September 2010] .A copy of this program is in the students possession and may be consulted by contacting the student at jacobsonje@msoe.edu. _____ 17 September 2010. Managing: A Competency Based Approach, 11th Edition, Chapter 7 Formulating Plans and Strategies, p7.32+. [Internet, WWW, Power Point], Available: Milwaukee School of Engineering, 1025 N. Broadway, Milwaukee, WI 53202; ADDRESS: http://blackboard.msoe.edu; [Accessed 17 September 2010] .A copy of this program is in the students possession and may be consulted by contacting the student at jacobsonje@msoe.edu. _____ 17 September 2010. Managing: A Competency Based Approach, 11th Edition, Chapter 7 Formulating Plans and Strategies, p7.28. [Internet, WWW, Power Point], Available: Milwaukee School of Engineering, 1025 N. Broadway, Milwaukee, WI 53202; ADDRESS: http://blackboard.msoe.edu; [Accessed 17 September 2010] .A copy of this program is in the students possession and may be consulted by contacting the student at jacobsonje@msoe.edu. Proctor and Gamble Corporation, 2010, Strength in Structure, [Internet, WWW]; ADDRESS: http://www.pg.com/en_US/company/global_structure_operations/corporate_structure.shtml; [Accessed: September 2010]. A copy of this article is in the students possession and may be consulted by contacting the student at jacobsonje@msoe.edu.