Strategic Management: P&G Analysis and Recommendations

This report provides a comprehensive analysis of Procter & Gamble's (P&G) strategic management practices. It begins with an executive summary highlighting the use of the Ansoff Matrix and BCG Matrix to understand P&G's strategic direction. The report then delves into a detailed analysis of P&G's strategic direction, utilizing the Ansoff Matrix to understand market penetration, market development, product development, and diversification strategies. The BCG Matrix is used to evaluate P&G's product portfolio, categorizing brands into Stars, Question Marks, Cash Cows, and Dogs. Furthermore, the report critically evaluates P&G's strategy using the SAF Framework, assessing the suitability, acceptability, and feasibility of its strategies. The report concludes with recommendations for P&G to maintain its competitive edge in the consumer goods market, emphasizing the importance of marketing, research, and development.

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

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Executive Summary
The main purpose of the assignment is to discuss about strategic management
practices. In this particular assignment, proper emphasis has been given on
understanding the strategic direction adopted by P & G with the help of two models
such as BCG Matrix and Ansoff Matrix. In the next segment, the organization strategy
had been properly explained with the help of SAF Framework. This framework had been
used to understand the strategies adopted by P & G based on three main criterions
named as suitability, accessibility and feasibility. Therefore, the company has the ability
to sustain in the global marketplace in the near future.

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Table of Contents
Introduction...................................................................................................................... 3
Analysis of the organization’s strategic direction..............................................................3
Ansoff Matrix.................................................................................................................4
BCG Matrix................................................................................................................... 7
Critical evaluation of the organization’s strategy..............................................................9
SAF Framework............................................................................................................9
Organization strategy................................................................................................. 10
Conclusion..................................................................................................................... 11
Recommendations......................................................................................................... 11
Reference List................................................................................................................ 13

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Introduction
This report had been prepared to gather insights of information about a company
that belong to consumer goods sector and the selected company named as Procter &
Gamble (Pg.com, 2018). The current study properly explains the strategic direction
adopted by P & G with the help of using two models such as Ansoff Matrix and BCG
Matrix. By using these models, it will become easy for the reader to understand the
current strategic position of P & G in this competitive marketplace (Morschett,
Schramm-Klein & Zentes, 2015). The next evaluates the organization strategy adopted
by P & G with the help of a famous model known as SAF framework that brings out
criterion such as suitability, acceptability and feasibility. There are various approaches
adopted by P & G where they need to understand customer needs as well as cultural
norms of that specific country. The company need to make strategy where they can
resolve issue based on changing market conditions. In order to undertake relevant
strategic decisions, the managers should be involved in changing the strategic factors
(Wheelen & Hunger, 2017).
Analysis of the organization’s strategic direction
This section of the report will explain about the strategic direction adopted by P &
G and this was explained with the help of two famous models or framework named as
Ansoff Matrix and BCG Matrix (Morschett, Schramm-Klein & Zentes, 2015). With the
help of this model, it was easy to gather insights of information about current strategic

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position of P & G. These models help in understanding the external factors that
influences the profitability position in the current marketplace (Rothaermel, 2015).
Ansoff Matrix
Figure: Ansoff matrix of Procter and Gamble
(Source: Peteraf, Gamble & Thompson, 2014)
Procter and Gamble adopts multi-brand approach where the company has more
than 300 brands in and across the world (Carroll, Primo & Richter, 2016). The company
had claimed market leadership in most of the consumer product category in and across
the world. One of such upward stretching brands that are provided by Procter and
Gamble are Dunhill and Lacostc fragrances. Other such brands such as Pantene target
mass consumers (Peppard & Ward, 2016).

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Procter and Gamble decided to enter in areas that are new to them and engage
in heavy product development as well as innovation when the company attempts to gain
foothold in already existing markets (Carroll, Primo & Richter, 2016). The company
should start planning where they can create innovative products with unique selling
points as it attracts customers to switch from the incumbent brands. By doing this,
Procter and Gamble will gain global presence and they can make use of market
penetration strategy for maintaining or increasing market share of current products
(Pg.com, 2018). In this way, the company can properly secure its dominance in the
market as well as has the ability to face the competitors by making use of combination
of advertising, competitive pricing strategies and sales promotion activities. By doing
this, Procter and Gamble can gain massive success and has the ability to grow in this
global marketplace (Morschett, Schramm-Klein & Zentes, 2015).
By using the Ansoff Matrix Model, it is easy to understand that Procter and
Gamble belong to the matrix market development where they the company engages to
serve new markets with their existing products (Carroll, Primo & Richter, 2016). The
company actually has several successful products that can be noted if it is looked
through new geographical or demographical markets or in case of distribution channels
such as online retail. In this way, Procter and Gamble can engage in diversification into
new markets by using new products. For doing this, the company need to engage in
heavy Research and Development activities for creating new products in new markets.
However, Procter and Gamble is one of the dominant market leaders that aim at
securing their growth outside of the already mature markets (Morden, 2016).

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8
Stars
Gillete, Whisper, Head &
Shoulders, Pantene
Question Mark
Olay
Cash Cows
Ariel, Oral-B, Vicks
and Tide
Dogs
Ambi pur
Relative market share
High market growth
High Low
Low
High
STRATEGIC MANAGEMENT
BCG Matrix
Figure: BCG Matrix of P & G
(Source: Hubbard, Rice & Galvin, 2014)
The above figure explains about BCG Matrix of P& G and treated as one of the
most powerful tool to gather insights of information about whether a particular product is
performing well in the market or not. In this case, the products of P & G are evaluated
and put under several matrixes as shown in the above diagram (Hill, Jones & Schilling,
2014)
The first matrix is Star that comprises of high relative market share and high
relative market growth. In this case, the products belonging to this category are Gillete,

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Whisper, Pantene and Head & Shoulders. This means these products under the parent
name P & G generates large amount of cash for the company as they have relatively
strong market share but even consumer large amount of cash as it has high growth
rate. It is therefore necessary for these products to maintain its market share; otherwise,
they can become a cash cow when the market growth declines (Carroll, Primo &
Richter, 2016).
The second matrix is Question Mark that comprises of low relative market share
and high relative market growth. In this case, the products belonging to this category is
Olay. As these products have low market share, this means they do not generate much
of cash for the company. This category of product has the ability to gain market share
and become a star (Goetsch & Davis, 2014).
The third matrix is Cash cows that comprises of high relative market share and
low relative market growth. In this case, the products belonging to this category are
Ariel, Oral-B, Vicks and Tide. This category of products exhibit a return on assets as it is
greater than the market growth rate. The value for this category of products can be
determined with reasonable accuracy by calculating the present value of its cash stream
as well as discounted cash flow analysis at the same time (Ethiraj, Gambardella &
Helfat, 2016).
The forth matrix is Dogs that comprises of low relative market share and low
relative market growth. In this case, the products belonging to this category is Ambi Pur.
These categories of products have low market share as well as low market growth rate.

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They are cash traps as the money tied in the business has little or no potential left in
reality (Durand, Grant & Madsen, 2017).
Critical evaluation of the organization’s strategy
SAF Framework
Suitability
One of the issue that need to be highlighted is about the products of P & G as
they are primarily suitability goods where consumers require to devote slight exertion for
associating and investigating towards unappealing themes (Hill, Jones & Schilling,
2014). Suitability refers to assessing of attributes where it is noted whether proposed
strategies addresses the key opportunities as well as threat constraints that a particular
business faces. It is all about rationale of a proposed strategy stated in the report about
the company named as P & G. The marketing strategy used by the company is suitable
to large extent but still there are some loopholes present that need to be rectified so that
the company can retain its global position in the near future (Carroll, Primo & Richter,
2016).
Acceptability
Acceptability of a strategy means highlighting three major issues such as level of
risk of a strategy, expected return from a strategy as well as likely reaction of
stakeholders. The marketing strategies used by P & G are widely accepted where
consumers are brand loyal and ready to purchase wide range of products that belong to
the brand name of the company (Bettis et al., 2014).

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Feasibility
Feasibility deals with understanding the fact on whether business has or had
obtained the capabilities for delivering a strategy (Hill, Jones & Schilling, 2014). P & G
enjoys high market share and growth and hence it is equally feasible until date, but still
the company need to improve in some of the areas so that they can retain their present
position in the upcoming financial years.
Organization strategy
In the previous section, there was clear explanation of SAF framework that had
been further classified into three sections such as suitability, acceptability and feasibility
(Carroll, Primo & Richter, 2016). After this framework, it is now important to discuss
about some of the existing organization strategy adopted by P & G and comment on its
advantage and limitations. P & G need to be very careful with its competitor especially
Unilever who have also started to jump on the emerging markets. It is even noted that
the company runs the risk of over centralization in its management that can be
dangerous. In that way, it puts the company at a disadvantage position at the time of
economic weakness and for this, the consumers are forced to select or switch to
purchase from companies who are giving products at cheaper costs (Bettis et al., 2016).
P & G is a market leader in consumer goods but had been inflexible because of
its size of the business organization as well as extensive bureaucracy. It is for this
reason why the company had to reposition their products as well as increase
decentralization of management that ensure that they need marketing intelligence for
better understanding and customizing the local needs and preferences present in the

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emerging market. The company prime focus is to retain their market share and it is
actually difficult to get it back once it is lost. P & G need to spend more on research and
development activities so that they can involve in bringing innovative products in this
competitive marketplace (Barney, 2014).
Conclusion
At the end of the study, it is concluded that P & G still treated as large player in
the consumer goods market but faces stiff competition from rivalry firms. P & G is one of
the multi-billion dollar Multinationals that operate to provide consumer packaged
products. The products offered by P & G ranges from beauty & cosmetics to baby care
products. The above analysis properly discuss about the strategic position of P & G by
explaining it with two models such as Ansoff Matrix and BCG matrix. The above study
even highlights the strategy adopted by P & G and this was explained by illustrating
SAF framework. P & G also have high competitiveness based on global scale of its
operations. In this case, the conditions lead to capabilities that are used for exploiting
the opportunities as available for the company especially in consumer goods market or
industry.
Recommendations
In order to compete in the market, P & G should spent large sums of capital for
heavy marketing as well as research and development activities. The company has
long-standing reputation of having family of product that should be served with excellent
quality. The company have product for both the market segment as well as economic

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and luxury. The company usages the main social broadcasting positions such as
Facebook, YouTube and Twitter. The company had even assembled as association
with an inventive philosophy. Competition was always a major problem faced by P & G
and it is suggested to the company that they involve in innovation and aim at
distinguishing itself if it desire to occupy the topmost position in the consumer goods
market. It is recommended that the company should develop measures for overcoming
its weakness as well as addressing external threats. It is required for the company to
strengthen its competitive advantage as well as business capabilities especially in the
consumer goods market. Several recommendations need to be highlighted in the report
to address such issues that are faced by P & G. It is important to develop competitive
advantage by using innovation as well as technology. The company should expand its
e-commerce operations for exploiting online market growth. Therefore, it is necessary to
diversify by entering new industries for minimizing market-based risk exposure.

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Reference List
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analysis in strategic management. Strategic Management Journal, 35(7), 949-
953.
Carroll, R. J., Primo, D. M., & Richter, B. K. (2016). Using item response theory to
improve measurement in strategic management research: An application to
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Durand, R., Grant, R. M., & Madsen, T. L. (2017). The expanding domain of strategic
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Goetsch, D. L., & Davis, S. B. (2014). Quality management for organizational
excellence. Upper Saddle River, NJ: pearson.

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Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an
integrated approach. Cengage Learning.
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