Environmental Analysis on Procter and Gamble

Solution Preview

This paper deals with the environmental and competitive analysis of P&G. Apart from this, it also provides a brief description of non-economic factors in the remote environment. SWOT analysis forms a critical part in any organization, as it helps in identifying the strength, weakness, opportunity and threat and provides an idea to properly utilizing strength so as to gain competitive advantage. An assessment of Pricing strategy, cost structure and market provides an insight into the microeconomics perspective. This perspective assists in conducting the competitive analysis.

In all, this paper would help the reader in getting the in-depth knowledge of the environmental analysis of P&G.

In the first section of the discussion paper, the current position of the Company is analyzed in detail to make the external and other analysis of the business of the Company much more comprehensible.

Procter & Gamble holds a long duration record of rendering high quality products to accommodate the distinct and ever-changing requirements of customers. It is a multinational consumer product company. At present, the company has developed into a big conglomerate. The company is getting different businesses added to its business portfolio and constituting separate sections of each department. The company mainly concentrates on the employees and assures the employees to keep concentration on the consumers, as consumers are the foundation of the market place (Proctor & Gamble's (PG) Mission Statement, 2005).

Presently, P & G is utilizing 139,600 people world-wide after acquiring different companies. In 2006, its overall income has progressed to $68.2 billion, producing net profits of $8.7 billion from its core businesses. The core competences of the company are development and commercialization. With the assistance of the acquisitions, the company expects to rise and develop quality products for fulfilling the ordinary requirements of the people world wide.

On October 31, 1837, William Procter and James Gamble determined to begin a partnership in cooperation with each other. They started marketing soap and candles with Moon and Stars as their official brand mark. In 1980s, they preferred to convert their brand mark to their company initial letters.

Their sales progressed to $230 million by the 100th anniversary of the company. By this time, they put in various products like Ivory soap, Crisco and simultaneously opened their maiden plant in Canada, that is, outside the USA. P & G added numerous products like Tide, Crest, Downy, Folgers, Bounce, Always, Liquid Tide, and Pampers for the next 50 years. Also, the company achieved $10 billion in sales and was rated as the second company amongst the 50 largest fortune 500 companies. Afterwards, P & G took on companies like Max Factor, Tambrands (Tampex), Clairol. By 2004, the company achieved $16 billion brands, which brought forth $30 billion of the companies overall annual sales, that is, $51.4 billion (Procter & gamble Inc, 2007).

Divisions: Presently, the company possesses a business in around 50 classes accompanying more than 300 brands. The company functions in the five different sections of the business, which can be described as follows:

Personal and beauty care, which comprises of the products that assist in personal care and beauty care. The products are colognes, cosmetics, personal cleansing, skin care, etc.
House and home care, which comprises of the products that assist in house keeping and home care. The products are dish care, laundry products, household cleaners, etc.
Health and wellness, which comprises of the products that assist in health care. The products are health care, different drugs, etc.
Baby and family care, which comprises of the products that assist in baby care and family care. The products are baby care products, snacks, etc.
Pet nutrition and care, which comprises of the products that assist in the care of pets, their health and nutrition.
Along its long time operations of around 169 years, the company has carried further enlargement with the objective to attain economies of scale and to get through customers throughout the world. The company becomes more bureaucratic due to the elaboration of businesses and larger size. In its expansion phase, the company is extremely concentrated and standardized, and is frequently operating in a mechanistic manner. With the assistance of systematically collected and written down policies and processes, and separation of responsibilities, the company is capable of preserving a secure internal control system (Procter & gamble Inc, 2007). The reason behind this is that big organizations require depending on policies, processes, communication procedures for the command of large number of employees and divisions of business.

In 1990s, the company moved into the irregular declination after accomplishing maturity with the assistance of the processes of consolidation and formalization. Therefore, P & G has been attempting to reduce the bureaucratic procedure, and to experience a ...