University Management Capstone Project: Procter & Gamble Analysis

This management capstone project provides an environmental analysis of Procter & Gamble (P&G), a leading multinational consumer goods corporation. The project utilizes strategic management tools such as PESTLE analysis to identify political, economic, social, technological, legal, and environmental factors impacting P&G's operations. Porter's Five Forces are applied to assess the competitive landscape, including competitive rivalry, bargaining power of buyers and suppliers, the threat of substitutes, and the threat of new entrants. A SWOT analysis evaluates P&G's strengths, weaknesses, opportunities, and threats, offering insights into its current market position and strategic recommendations. The project evaluates P&G's current strategies in light of the competitive conditions and identifies areas for improvement, such as addressing threats and leveraging opportunities for innovation and online market expansion. The project aims to provide a comprehensive understanding of P&G's strategic environment and offer practical recommendations for enhancing its competitive advantage in the consumer goods industry.

Running head: MANAGEMENT CAPSTONE
Management Capstone for Procter and Gamble
Name of the Student
Name of the University
Author’s Note:

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Table of Contents
1. Introduction..................................................................................................................................2
2. Discussion....................................................................................................................................2
2.1 Brief Idea of the Industry of Procter and Gamble.................................................................2
2.2 Analysis of the Current Conditions of the Organizational Industry with Suitable Strategic
Management Tools......................................................................................................................3
2.3 Evaluation of the Current Strategy of Procter and Gamble for the Competitive Conditions
or Gaps to be addressed...............................................................................................................8
3. Conclusion...................................................................................................................................9
References......................................................................................................................................10

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1. Introduction
Environmental analysis is a specific strategic tool that is required for identification of all
types of external and internal elements that could impact the organizational overall performances
(Ansoff et al., 2018). Every situational factor helps in determining daily circumstances for
impacting the firms and hence these businesses should continuously analyze the respective
market and trade environment (Rothaermel, 2016). This report will be outlining a brief
description on environmental analysis of the popular and significant organization of Procter and
Gamble with PESTLE analyses, Porter’s five forces analyses and SWOT analyses.
2. Discussion
2.1 Brief Idea of the Industry of Procter and Gamble
The Procter and Gamble Company or P&G is one of the most popular and significant
multinational consumer goods corporation of the USA that has its headquarters in Cincinnati,
Ohio. This particular organization was founded in 1837 by William Procter and James Gamble
(Procter & Gamble Company. 2020). The respective organization has major specialization in a
wider variety of different personal health and consumers’ health products as well as personal
care or hygiene products. Such distinct products are being prepared into different segments like
Health Care, Family and Baby Care, Grooming and many more.
The industry in which they are operating is consumer goods. This particular industry
deals with fast moving consumer goods, which are being sold quickly and at the lower costs. The
most significant and noteworthy examples of several products involve household goods such as
packaged foods, consumables, medicines, beverages and toiletries. The consumer goods sector is
the distinct category of companies and stocks, which relate to the items purchased by the

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households and individuals rather than by different industries and manufacturers (Procter &
Gamble Company. 2020). Such organizations make and sell the products, which are intended for
direct usage by the buyers for their own utilization and enjoyment.
2.2 Analysis of the Current Conditions of the Organizational Industry with Suitable
Strategic Management Tools
The current conditions of the organizational industry of Procter and Gamble is highly
beneficial and is gaining competitive strategies subsequently (David & David, 2016). This
particular organization has become one of the most significant organizations within the
globalized consumers’ goods industry. It is partially an outcome of the organizational efficiency
for addressing different concerns that are identified through environmental analysis. The
strategies of Procter and Gamble are completely on the basis of the understanding of the external
factors within their respective environment.
2.2.1 PESTLE Analysis
This particular analysis is extremely helpful for an organization to identify the external
factors within their macro environment (Ginter, Duncan & Swayne, 2018). A detailed PESTLE
analysis of Procter and Gamble is provided below:
i) Political Factors: The political landscape eventually impacts the process of Procter and
Gamble implementing different strategies for satisfaction of the governmental requirements as
well as policies for better development of business (Lasserre, 2017). Few external political
factors that should be addressed by Procter and Gamble for their effective consumer goods
business performances involve increasing support from government for the electronic commerce
and stabilized overall governmental support for subsequent globalization. The first attribute is

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considered as threat and benefit, while the next factor is considered as only an opportunity for
the business. The other vital and significant political factor is governmental support for the high
energy efficiency. It is also considered as a major opportunity for their business (Moutinho &
Vargas-Sanchez, 2018). The rising support of government for the e-commerce can be referred to
as the major threat for the business as it would increment the competitive rivalry within their
consumer goods industry. More revenues would also be generated for the business through stable
governmental support. Business performances are improvised to a high level for the respective
organization (Hill, 2017).
ii) Economic Factors: The next distinct and vital factor is economic in PESTLE analysis.
The subsequent performances of P&G within their consumers’ goods industry would be directly
on the basis of the economies, where the business is operating in current situation (Hitt & Duane
Ireland, 2017). The adverse impacts of the economic issues and trends for the macro or remote
environment are being determined for the success of the framework. The first significant
economic factor is higher rate of growth of the developing markets, which is a major benefit for
the business. Another economic factor is improvement in the disposable income levels (Morden,
2016). It is also a major opportunity of the organization of Procter and Gamble. Moreover, the
organization is also getting benefit or opportunity is the economic steadiness for maximum of the
developed market. It helps in contributing to the considerable stability for indicating that
different growth opportunities are present to enhance business stability (Meyer, Neck & Meeks,
2017). As a result, high opportunities are being gained with maximum effectiveness.
iii) Social Factors: The third distinct and important factor is social factor in PESTLE
analysis. Social changes and trends eventually affect the organization for understanding the
behaviors of workers and customers (Bryce, 2017). This particular component of the framework

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majorly deals with the overall impact of social circumstances on different business advantages as
well as threats within their macro environment of the businesses. Increasing preferences for the
higher quality consumers’ goods is referred to as a major opportunity in the business. The second
major and significant social factor that influences the business environment of P&G is that it
increases preference for the healthful products and services. It is also referred to as a major
opportunity or benefit for the business (Trigeorgis & Reuer, 2017). Moreover, the declining
population rate of growth in the developed countries like the United States of America is yet
another vital social factor for this particular organization.
iv) Technological Factors: The organization of Procter and Gamble has always
depended on technologies for supporting the consumer goods business. Moreover, distinct
technological advancements impact on the purchase decisions and consumers’ behaviors
(Karadag, 2015). Three major external technological factors for the business include increasing
online market, automation of business and increment in the fuel efficiencies for transportation.
All of these three are opportunities for the business.
v) Legal Factors: They are also following a proper legal approach in their business. The
major legal factors involve incrementing safety rules for product, growth of the environmental
security laws and even incrementing regulations of business sustainability (Engert, Rauter &
Baumgartner, 2016). They are following all types of legal regulations and aspects in their
business.
vi) Environmental Factors: Since the organization is involved into the consumer goods
industry, they have also focused on environmental factors (Hitt, Ireland & Hoskisson, 2016). The
major factors include growing opposition conversion to the oil palm plantation and increasing
availability of the recycled materials.

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2.2.2 Porter’s Five Forces Analyses
Porter’s Five Force analyses would be required for evaluating the external environment
of the organization of Procter and Gamble. It stresses on the intensity significance of their
competitive rivalry in impacting the respective business (Meyer, Neck & Meeks, 2017). Tough
competition is being analyzed with such distinct forces and these forces for analysis of Procter
and Gamble are provided below:
i) Competitive Rivalry: It is referred to as a stronger force for the organization of P&G.
This competitive rivalry helps in determination of the advantages of the business and process of
development of competitiveness within their industry. The influence of the business is based on
low switching costs, high variety of firms and large number of firms.
ii) Bargaining Power of Buyers: The second force of P&G is the bargaining power of
buyers, which is a weak force (Hill, 2017). Three vital aspects help to understand this particular
power of the business, which include low switching costs, lower substitute availability and
higher market demands.
iii) Bargaining Power of Suppliers: It is also a weaker force for P&G, since it focuses on
the moderate degree of forward incorporation, higher overall level of supplies and even higher
population of the suppliers. As a result, it does not affect much to business.
iv) The Threat of Substitutes: Since they are the leading company in the consumers’
goods industry, they do not have any threat from its substitutes (Hitt & Duane Ireland, 2017).
The key external factors in this case involve low switching expenses, low substitute availability
and low substitute variety.

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v) The Threat of New Entrants: The fifth force is the threat of new entrants, which is a
moderate force. The major external forces for this aspect include lower switching costs,
moderate capital expenses and moderate economies of scale.
2.2.3 SWOT Analysis
SWOT analysis is one of the most popular and significant technique to assess four
distinct aspects of any particular business, which include strengths, weaknesses, opportunities
and threats (Ginter, Duncan & Swayne, 2018). As a result, the respective business is able to
identify suitable strategies for their business, so that it becomes quite effective and efficient to
the organizational significance. As a result, business management complexity is reduced to a
higher level and the business would be benefitted with maximum efficiency (Rothaermel, 2016).
A detailed SWOT analysis of P&G Company is provided below:
Strengths Weaknesses
i) Stronger consumer goods brands.
ii) Economies of scale.
iii) Effective network for product distribution.
i) They have imitable products.
ii) Online presence is limited for P&G.
iii) The degree of business diversity is
limited.
Threats Opportunities
i) Local and global competition (Morden,
2016).
ii) Counterfeiting or imitating products.
iii) Trade barriers in few under developed
countries.
i) Business diversification for reduction of the
risks.
ii) Product creativity and innovation.
iii) Development of online presence.
Table 1: SWOT analysis of P&G

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The above mentioned factors of SWOT are being selected as they help to understand the
current market position of the organization (Engert, Rauter & Baumgartner, 2016). It helps to
ensure resilience, despite of the weaknesses and threats within their external environment. Due to
their strengths in economies of scale and product distribution, competition is never an issue for
them. However, they should eradicate their issues successfully, which include competitive
rivalry on top. Moreover, competitive benefits and business capabilities are also incremented to
remove the issues. They also have opportunity to bring out innovation in their products for better
effectiveness (Hitt, Ireland & Hoskisson, 2016). The e-commerce operations are also required to
be expanded for exploiting their online market growth.
2.3 Evaluation of the Current Strategy of Procter and Gamble for the Competitive
Conditions or Gaps to be addressed
Several internal components of this type of analysis for P&G eventually indicate that the
strengths and weaknesses of the respective business and the external components represent the
threats and opportunities that are present outside the company (Karadag, 2015). For the core
purpose of performing this environmental analysis, it is needed to ensure that a constant stream
of adequate and relevant data is being utilized for the best course of action. The strategic
planners utilize the information gathered from their environmental analysis for proper
forecasting of different trends in the future for advance.
This type of analysis also entails the subsequent evaluation of the threat or opportunity
level of that the factors are presenting in the business (Bryce, 2017). Moreover, it is needed to
align the strategies with the organizational environment. Such distinct analysis of environment is
needed for changes in the market, so that several new things are developed and situation is
altered within time. The business of P&G hence is highly influenced by the environment. The

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current strategy is matching with the competitive conditions, according to the SWOT analysis in
this particular business, however they need to remove the issues or threats completely for
enhancing their chance of becoming the leader within the consumer goods industry (Lasserre,
2017). The opportunities highlighted are the main recommendations for them.
3. Conclusion
Hence, a conclusion can be drawn that environmental analysis is required for examining
all types of internal and external elements, which comprise of the influence over the
performances of the business. This information could also be utilized for assessing the operating
environment and then setting up of the organizational objectives. Different steps that are
involved within the environmental analysis include identification, scanning, analyzing and
forecasting. This report has adequately outlined the environmental analysis and strategic
management for Procter and Gamble with relevant details.

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References
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Bryce, H. J. (2017). Financial and strategic management for nonprofit organizations. Walter de
Gruyter GmbH & Co KG.
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concepts and cases. Pearson–Prentice Hall.
Engert, S., Rauter, R., & Baumgartner, R. J. (2016). Exploring the integration of corporate
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Lasserre, P. (2017). Global strategic management. Macmillan International Higher Education.

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Meyer, G. D., Neck, H. M., & Meeks, M. D. (2017). The entrepreneurship‐strategic management
interface. Strategic entrepreneurship: Creating a new mindset, 17-44.
Morden, T. (2016). Principles of strategic management. Routledge.
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Management Journal, 38(1), 42-63.