Strategic Management of Procter & Gamble Toiletries

This report analyzes the strategic management of Procter & Gamble Toiletries, including external and internal governance mechanisms, objectives, ownership structure, sources of cost and differentiation advantage, and major competitors. The report also includes a value chain analysis and VRIO analysis of the company's competitive advantage.

Running head: STRATEGIC MANAGEMENT
Strategic Management
Name of the Student
Name of the University
Author note

1STRATEGIC MANAGEMENT
Executive Summary
The report has helped in analysis of the strategic management of Procter & Gambler
Company wherein the external and internal governance mechanisms has been analyzed in an
effective manner. Furthermore, the different objectives of the company have been described
which has helped the company in understanding the different kinds of value chain analysis of
the company effectively. The VRIO analysis has been conducted which has helped the
company in managing the effectiveness of the company.

2STRATEGIC MANAGEMENT
Table of Contents
Introduction................................................................................................................................2
Overview of Procter and gamble toiletries.............................................................................2
Objectives of Procter and gamble toiletries...........................................................................2
Ownership Structure...............................................................................................................3
External and Internal Governance Mechanisms....................................................................3
Sources of Cost and Differentiation Advantage.........................................................................6
Positioning of P&G and Analysis of Major Competitors..........................................................8
Value Chain Analysis of P&G...................................................................................................9
VRIO analysis of P&G.............................................................................................................11
Recommendations....................................................................................................................12
Conclusion................................................................................................................................13
References................................................................................................................................14

3STRATEGIC MANAGEMENT
Introduction
The report helps in analysis of the Procter and gamble toiletries company wherein the
different strategic issues is required to be identified. Furthermore, the different objectives
along with the ownership structure will be discussed along with analysis of the external and
internal governance of the company in an effective manner. The identification of the sources
of cost and the differentiation advantage in the industry will be explained along with analysis
of the major competitors in the entire competitive market will be discussed. The value chain
and VRIO analysis of the sources of the competitive advantage will be determined as this will
help in analysing the sources of competitive advantage.
Overview of Procter and gamble toiletries
Procter and gamble toiletries are the American multi-national consumer goods
corporation which is headquartered in downtown Cincinnati ("Home", 2018). The company
was founded in the year 1837 which belongs to the consumer goods industry and the founders
of the company are William Procter and James Gamble. The different products which are
sold by the company includes cleaning agents, personal care products along with personal
healthcare products as well. The number of employees who are working in the respective
organization Procter and gamble toiletries are around 96000 till the year 2016 and the
revenue which has been generated by the company in the year 2017 is US$65.06 billion.
Objectives of Procter and gamble toiletries
 To provide branded products to the different customers of superior kind of quality
 To provide and improve the value provided to the customers as this will help the
company in gaining competitive advantage (Wheadon & Duval-Couetil, 2014)
 To promote new products and bring them in the market in a quick manner

4STRATEGIC MANAGEMENT
 To ensure the product safety for the entire environment by staying on top with the
usage of the different leading technologies in an effective manner
Ownership Structure
The ownership structure which is followed by Procter and gamble toiletries is the
Institutional Ownership structure in which it is seen that the entire ownership stake in the
company is held by the different large financial institutions. It is traded as the public
company under the industry of the consumer goods. The areas served by the company is the
entire world except Cuba and North Korea (Di Benedetto & Lindgreen, 2018).
External and Internal Governance Mechanisms
The external analysis of Procter and gamble toiletries are imposed on the organization
by the different external stakeholders in form of the regulatory guidelines. In this scenario, it
has been noticed that the companies report the status of the company in an effective manner
(Foxall, 2014). The external governance mechanism of Procter and gamble toiletries can be
analyzed with the help of Porter’s Five Forces Model Analysis that includes the following:
Intensity of the different competitors is high in Procter and gamble toiletries which is
highly competitive in nature as there are different regional, global and local kind of

5STRATEGIC MANAGEMENT
competitors. Procter and gamble toiletries helps in selling products in many markets and the
different industry segments. Procter and gamble toiletries tries to compete against the other
brands and branded products along with the private label brand of the retailers as well
(Kotler, 2015).
Threats of the new entrants is low and moderate in nature for Procter and gamble
toiletries as there is high range of products and this is hard for the other organization which
will easily come in the line. The huge capital of the Procter and gamble toiletries are
impressive in nature and there is very less kind of probability for the new entrants in the
market to keep a pace with the respective organization in an effective manner (Kotler, 2015).
Threats from the substitutes is low and moderate in nature as most of the products
of Procter and gamble toiletries are being used in the daily life. The strength of the company
is based on offering market all over the world in different P&G products. The respective
organization has tried to adopt different kinds of strategies with the different clients as to
properly develop understanding of the demands of the customers and respond to them
effectively as well (Fulker et al., 2016).
Bargaining Power of the Suppliers is low in nature as the Procter and gamble
toiletries have no such reliance on the different specific suppliers in the entire market. The
entire bargaining power of the different suppliers is being coped with the mutually kind of
dependent relationship of the organization with the different suppliers. The reputation which
is maintained by Procter and gamble toiletries helps in offering advantage to the entire
organization and this helps in improving the relationship between them (Kleinaltenkamp,
Plinke & Geiger, 2016).
Bargaining power of the buyers is moderate in nature as more than 20% of the sales
of Procter and gamble toiletries are provided to the Wal-Mart which is a very demanding

6STRATEGIC MANAGEMENT
kind of buyer. The entire economic kind of downturn will not have any kind of significant
impact on P&G as due to the diversity proof status of the entire organization (Chernev,
2018). The different products which are sold by Procter and gamble toiletries helps in
offering goods and services which has the entire ability to sustain in any kind of economic
downturn.
From the Porter’s Five Forces Model analysis, this can be analysed that there are
different threats from the buyers and other competitors in the entire market. Furthermore, it
has been seen and analysed that there are different kinds of threats which are required to be
analysed and this will help in minimizing the risks in an appropriate manner (Aivazidou et
al., 2017).
On the other hand, there are different internal governance mechanism includes the
board structure variables that includes duality and proportion of non-executive directors and
the different shareholdings. There are different policies relating to the employees and
employer of the organization (Villeneuve & Pasquier, 2017). Furthermore, there are different
CSR policies which are required to be adopted by the organization is analysed in an effective
manner which will help in managing the differences appropriately. There are different kinds
of CSR activities performed by Procter and gamble toiletries wherein the activities are taken
by them with genuine kind of intention and this helps in giving back to the society as well
(Weinstein & Pohlman, 2015).
The different projects which has been undertaken by Procter and gamble toiletries are
as follows:
 Project Shiksha- Secure your child’s future which was undertaken in the year 2003
 Rebuilding the lives in earthquake hit bhuj which was done in the tear 2001 and 2002

7STRATEGIC MANAGEMENT
Furthermore, it has been seen and analyzed that the CSR activities has been taken by
Procter and gamble toiletries is such that they have worked with UNICEF which helped them
in combat micronutrient malnutrition (Armstrong et al., 2015). Procter and gamble toiletries
tried to include the different kinds of sustainability measures which has helped the company
in managing the different issues and addressing them in effective manner. Additionally, it has
been noticed that there are different partnerships made by P&G with different NGOs for
delivering the water purification kind of product. The partnerships made by P&G with the
different non-profit companies is the proof that the local markets can or they will be able to
win over the new products in the entire market effectively (Charter, 2017). Lastly, the
employees’ welfare policies are taken into consideration wherein this has been seen and
analyzed that the respective company is largely contributed towards the entire success by
following the corporate strategies and the management decisions.
Sources of Cost and Differentiation Advantage
P&G uses the generic strategy as to achieve the competitive advantage in the industry
of the consumer goods. The Michael Porter’s Generic Strategies mainly focuses on the
different approaches of the business which will lead to competitiveness of the entire
organization along with resilience amid the competition (Chambers & Humble, 2017). In the
case of P&G, the main focus in on the quality and value of the product. These are the
different factors which are significant in nature as this helps in maintaining a leadership
position in the entire industry of the consumer goods.
Additionally, it has been seen and analyzed that P&G follows the generic strategy
along with intensive growth strategies which is helpful in managing the market performance.
It has been seen and analyzed that due to the tough kind of competition in the competitive
market, this has been seen that the intensive growth strategies are essential and relevant to the
conditions of the current market and this affects the P&G success factor in an inappropriate

8STRATEGIC MANAGEMENT
manner (Berbegal-Mirabent, Gil-Doménech & Alegre, 2016). The intensive growth strategies
of P&G help in depicting the strategic approach which helps in addressing the consumer
goods market. On the other hand, it has been analyzed that the generic strategies help in
achieving the entire competitiveness and this helps in influencing the managerial decisions.
Generic Strategy of P&G
The P&G uses the differentiation strategy for gaining more competitive advantage in
the entire market. Furthermore, differentiation includes the developing of the uniqueness of
business and products which helps in attracting the different customers. P&G tries to
highlight the quality along with value in the consumer goods sold by them. For instance-
P&G tries to highlight that they try to offer high quality cleaning agents at affordable prices
to the different customers in the entire market (Litman, 2018).
The other advantage that is gained from the P&G Company is that the differentiation
will help in maintaining effective marketing strategies which mainly emphasizes on the
uniqueness of the products and services in an effective manner. On the other hand, the cost
leadership generic strategy is applied on P&G which mainly focuses on the cost or the pricing
as to achieve the competitive advantage (Chernev, 2018).
Intensive Strategies of P&G
Market Penetration- It is the primary intensive strategy of P&G which aims in
increasing the market share of the company in an effective manner. P&G tries to conduct
different marketing campaigns as to increase the awareness among the different customers in
the market (Wagner & Eggert, 2016). This strategy is applicable for the different low-
performing products in the market and this will be beneficial through beneficial agreements
with the different retailers. With the help of the aggressive marketing, the market share of
P&G will be increased to a great extent.

9STRATEGIC MANAGEMENT
Product Development- It is the other secondary intensive strategy which is used in
P&G business. This helps in attracting the different customers in the market and this is used
for supporting the continuous growth. P&G tries to develop new products in the company as
this helps in increasing the market share of the company in an effective manner as well
(Bresler & Lubbe, 2014).
Diversification- This is the other strategy adopted by P&G which helps in involving
establishment of the business operations that are new in nature. It has been seen that the
considerable growth in the business of P&G has helped them in becoming successful. The
intensive growth strategy is difficult in nature to implement as the large-scale efforts of P&G
has helped them in building competitive environment. The entire differentiation strategy
adopted by P&G has helped them in using the aggressive approach to acquire the different
firms to grow their business in an appropriate manner (Baker, 2016).
Market Development- This is the last strategy used by P&G which helps in
contributing towards the growth of the company by entering into different segments or new
markets. P&G can expect a new system of revenue and this will help P&G in entering into
different new markets in an effective manner. The main strategic objective of the
differentiation helps in making it easier for P&G to enter the different markets in an
appropriate manner (Huang et al., 2015).
Positioning of P&G and Analysis of Major Competitors
P&G has tried to position themselves with the help of the different radio channels and
television advertisements. There are different products of P&G which has been positioned in
an effective manner which has helped the P&G company in managing their sales along with
the profitability as well (Martín-de Castro, 2015).

10STRATEGIC MANAGEMENT
For instance- Heads & Shoulders has tried to position themselves in an effective
manner which is positioned in the market as anti-dandruff shampoo which will attract the
ones who are suffering from such issues. Gillete has tried to position themselves primarily the
men or the different age group boys from 18 years (Miquel-Romero et al., 2014). P&G
products or the different brands under the P&G has been able to improve their marketing
strategy in an effective manner which has helped them effectively and solved the issues faced
by the different individuals in an appropriate manner (Sheth & Sisodia, 2015).
There are different competitors of P&G brand that includes Avon, Elizabeth Arden
and Unilever as well. The largest international business of Unilever is the one which is the
major competitor of P&G and the brand faces major competition from the different them
which is required to be analyzed by P&G as to adopt different strategies which will help them
in being the top most priority of the different customers in the entire market.
Value Chain Analysis of P&G
The value chain analysis helps in describing the different activities which take place
in the business and this helps them in relating the same in analysing the competitive strength

11STRATEGIC MANAGEMENT
of the business of P&G as well. The primary activities of P&G are the ones which are
directly concerned with creating and delivering the product.
Sourcing and Procurement is the first component in which it has been seen that the
different products of P&G are sourced from the entire world which is cost effective in nature.
Furthermore, there are number of years it has been seen that the company or the brand has
tried to mainly focus on the improvement of the supply chain costs and efficiency. P&G has
powerful network of the industrials which is major for the suppliers and customers in the
market (Sheth & Sisodia, 2015).
Operations and Outbound Logistics is the other component in which P&G has more
than four operations such as health, snacks, beverages and babies. It has more than 300
products inclusive of the major brands such as Tide. The organization uses the MatrixOne
software for automating the knowledge components in an appropriate manner. The operations
of the P&G are helpful in managing the different kinds of issues which will help in managing
their position in the market and this will affect the position in a positive manner with not
much of difficulties faced by the brand in the entire market.
On the other hand, the largest customer of P&G was Wal-Mart which had a reputation
of successful kind of reputation in coordinating with the different suppliers in the market.
Sales and Customer Service is the other component in which it has been seen that more than
20% of the sales of Wal-Mart has helped them in capitalizing their position in the market
(Sheth & Sisodia, 2015).
Support Activities are the ones which are not directly related to the production and
this will increase the overall effectiveness. Financial Management is the first activity in
which transportation costs along with different other costs are included. Research and
Development is the third element in which P&G has been considered to be unimaginative and

12STRATEGIC MANAGEMENT
the brand has started introducing different innovative procedures which has helped them in
managing the activities in an effective manner.
VRIO analysis of P&G
Resources Valuable or
not
Rare Imitate or
Costly
Exploited
by the
organization
Competitive
Implication
Sales of the
company
Yes No Yes Yes Unexploited
kind of
competitive
advantage
Facilities
relating to
credit
Yes Yes Yes Yes Exploited
kind of
competitive
advantage
Innovation
of the
product
Yes Yes Yes Yes Unexploited
kind of
competitive
advantage
R&D Yes No No Yes Exploited
kind of
competitive
advantage
Global Kind
of
Operations
Yes Yes No Yes Unexploited
kind of
competitive

13STRATEGIC MANAGEMENT
advantage
Diversity
among the
different
employees
Yes Yes Yes No Unexploited
kind of
competitive
advantage
The development of the different resources with the corporate governance
mechanisms is such that the CSR activities are being handled and introduced by the P&G
brand is such that this has helped them in innovating the different technologies and this will
improve the entire status of the company effectively as well. P&G tries to maintain different
strategies that has helped in becoming more sustainable in nature and this has helped the
company or the organization in including the diversity problems effectively. The P&G has
been recognized by the Black Enterprise magazine and the diversity issues has been solved
with the implementation of the different strategies that has assisted the brand in becoming
more popular in comparison to the other competitors in the market (Sheth & Sisodia, 2015).
The current sales of the respective brand are 2333.79 crores and they are being ranked in the
sixth position in the market which is helped them in managing their position in the market.
Recommendations
Therefore, it can be recommended that the strategic management of P&G is required
to be analyzed in an effective manner which will help the company in improving the different
strategies effectively. The different recommendations which are required and analyzed by
P&G are as follows:
 In order to maintain their strong reputation in the market, more substitute goods are
required to be included and made available by the company

14STRATEGIC MANAGEMENT
 P&G needs to deliver the quality products to the different customers in the entire
market along with alteration in the process of the innovation
 In order to retain their position in the entire competitive market, this will require P&G
to introduce the feasible and new products in the market
 P&G needs to target the different teenagers through the social media kind of
advertising
 P&G should need to allocate over more than $100 million for the different
advertisements and this will assist the company in promoting the skin care products to
the customers by using the celebrities as their spokesperson.
Conclusion
Therefore, it can be concluded that strategic management is essential in nature which
is required to be adopted by the P&G brand as this will help them in managing their position
and retaining the customers in the entire market. Furthermore, the VRIO and Value Chain
analysis has been performed which has helped the company in managing the different kinds
of issues and this has helped them in retaining their position in an effective manner. Lastly,
the external and internal governance mechanism is required to be adopted in order to
maintain their position in the market in an effective manner.

15STRATEGIC MANAGEMENT
References
Aivazidou, E., Tsolakis, N., Vlachos, D. P., & Iakovou, E. (2017). Water Footprint
Mitigation Strategies for Agrifood Products: The Application of System Dynamics in
Green Marketing. In Strategic Innovative Marketing (pp. 275-281). Springer, Cham.
Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2015). Marketing: an introduction.
Pearson Education.
Baker, M. J. (2016). What is marketing?. In The Marketing Book (pp. 25-42). Routledge.
Berbegal-Mirabent, J., Gil-Doménech, D., & Alegre, I. (2016). IMPROVING BUSINESS
PLAN DEVELOPMENT AND ENTREPRENEURIAL SKILLS THROUGH A
PROJECT-BASED ACTIVITY. Journal of Entrepreneurship Education, 19(2), 89.
Bresler, M., & Lubbe, I. (2014). Marketing management.
Chambers, I., & Humble, J. (2017). Plan for the planet: a business plan for a sustainable
world. Routledge.
Charter, M. (Ed.). (2017). Greener marketing: A responsible approach to business. Routledge.
Chernev, A. (2018). Strategic marketing management. Cerebellum Press.
Di Benedetto, C. A., & Lindgreen, A. (2018). The emergence of Industrial Marketing
Management as the leading academic journal in business-to-business
marketing. Industrial Marketing Management, 69, 5-12.
Foxall, G. (2014). Strategic Marketing Management (RLE Marketing) (Vol. 3). Routledge.
Fulker, D., Timur, A., Dew, K., & Butler, J. (2016). A Case Study of the Grey Oaks
Community and Club: Creation of a High-Performance Culture Through the

16STRATEGIC MANAGEMENT
Innovative Use of a Data-Driven Business Plan. International Journal of Hospitality &
Tourism Administration, 17(1), 72-99.
Home. (2018). Retrieved from https://us.pg.com/
Huang, J., Guo, P., Xie, Q., & Meng, X. (2015). Cloud Services Platform based on Big Data
Analytics and its Application in Livestock Management and Marketing. Proceedings
of science.
Hutchinson, K., Donnell, L. V., Gilmore, A., & Reid, A. (2015). Loyalty card adoption in
SME retailers: the impact upon marketing management. European Journal of
Marketing, 49(3/4), 467-490.
Keller, K. L., & Kotler, P. (2016). Marketing management. Pearson. (Keller & Kotler, 2016)
Kleinaltenkamp, M., Plinke, W., & Geiger, I. (2016). Business Relationship Management and
Marketing. Springer-Verlag Berlin An.
Kotler, P. (2015). Framework for marketing management. Pearson Education India.
Litman, T. (2018). Parking Management Strategies. In Parking Management Best
Practices (pp. 86-225). Routledge.
Martín-de Castro, G. (2015). Knowledge management and innovation in knowledge-based
and high-tech industrial markets: The role of openness and absorptive
capacity. Industrial Marketing Management, 47, 143-146.
Miquel-Romero, M. J., Caplliure-Giner, E. M., & Adame-Sánchez, C. (2014). Relationship
marketing management: Its importance in private label extension. Journal of Business
Research, 67(5), 667-672.

17STRATEGIC MANAGEMENT
Sheth, J. N., & Sisodia, R. S. (2015). Does marketing need reform?: Fresh perspectives on the
future. Routledge.
Villeneuve, J. P., & Pasquier, M. (2017). Marketing management and communications in the
public sector. Routledge.
Wagner, S. M., & Eggert, A. (2016). Co-management of purchasing and marketing: Why,
when and how?. Industrial Marketing Management, 52, 27-36.
Weinstein, A., & Pohlman, R. A. (2015). Customer value: a new paradigm for marketing
management. In Proceedings of the 1997 Academy of Marketing Science (AMS)
Annual Conference (pp. 132-133). Springer, Cham.
Wheadon, J. D., & Duval-Couetil, N. (2014). Business plan development activities as a
pedagogical tool in entrepreneurship education. The Journal of Engineering
Entrepreneurship, 5(1), 31-48.