Exploration and analyzation of Procter & Gamble's markets
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How attractive are the industries that Proctor & Gamble compete in (from the prospective of P&G, investors, and competitors)?
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Solution Summary
In this solution I indentify Procter & Gamble's main business sectors, and discuss the economic and managerial theory derived from each industry's nature, as it related to competition and investment in these sectors. In some instances, empirical observations are cited as supporting evidence for the analysis. This solution is thorough and spans over 1,000 words.
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OK first let's answer the obvious question: "What industries are Procter & Gamble competing in?". As you probably know its hard (or at least very time consuming) to be precise, because Procter & Gamble is one of the largest conglomerates and they have what is called a horizontal strategy. This means that, just like an individual might seek security by diversifying his or her financial portfolio, Procter & Gamble has historically diversified its holdings by buying and (less often) creating a wide range of product lines.
What exactly constitutes an "industry" is somewhat vague (particularly outside of the classroom). There a two "intuitive" ways one can simplify the description of P&G's industry, though. In a macroeconomic sense, it seems clear that that they are in the "consumer goods" industry - however I think this discussion will benefit by being slightly more precise.
The second way to conceptualize it, which I shall use for this discussion, is by the 3 main segments ("industries") which Procter and Gamble specializes in, within the overarching realm of consumable goods. According to the company's Investor Fact Sheet (PG.com, 2006)*, these are:
1. The beauty & health consumer goods industry
2. The household goods industry (everything from coffee to pet toys)
3. The razor and shaving accessories industry (P&G recently bought Gillette)
I know that the divide for the first two seems broad, compared to the third, but this reflects how the company and its investors view its three main industries. I'll discuss the attractiveness primarily for these three markets, but I will also comment on how sub-industries may vary (e.g. within ...
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