Case 8 - Attached© BrainMass Inc. brainmass.com May 21, 2020, 12:14 am ad1c9bdddf
The key strategic issues are that Procter & Gamble has made organizational changes that have enabled it to have global divisions, managers responsible for brand profitability, and encourage global brands. These changes have led the identification and elimination of more than 300 low profit brands. The profit performance of the core brands of Procter & Gamble has not been encouraging. It has been recommended, that even though Procter & Gamble is moving towards globalization of brands it must continue to be responsive to local, regional, and country needs. Further, for sustainable business, it has been recommended that Procter & Gamble should develop a culture of innovation, risk-taking, and responsiveness to market forces. Finally, it has been recommended that the values upheld by Procter & Gamble should support the strategy of differentiation. There is need for using the values for enhancing innovation, creativity, and risk taking at Procter & Gamble.
Strategic issues and Potential Impact on the organization:
The key Procter & Gamble strategy is differentiation. This has been achieved over the years by research and development. The R&D has resulted in new and innovative products that have been introduced at a premium in the market. The company has also spent on advertising to build brand recognition and brand equity. In response to declining sales, Procter & Gamble has decided to streamline its organization through the project Organization 2005. The global business units created are responsible for their products' profits. The result is that Procter & Gamble has been able to identify low profit or unprofitable products. The strategy is to divest these products or to discontinue them. Procter & Gamble has also identified 65 products that are profitable and should be continued. The process of restructuring means discharging staff, creating a horizontal structure, and making every global business unit accountable. Procter & Gamble has now adapted a global strategy. Its products will be similar to countries. Research and development will be conducted for each product group. Moreover, the marketing efforts will also be done across countries. Organization 2005 will lead to lower costs for product and making the products more profitable. Not only is Procter & Gamble competing in a turbulent business environment, it also has formidable ...
This solution explains three types of recommendations for Procter & Gamble. The sources used are also included in the solution.