P&G's Strategic Approach: Addressing Challenges in Today's Market

This report provides a detailed analysis of Procter & Gamble's (P&G) strategic management in today's challenging business environment. It begins with an overview of P&G, including its mission, vision, and strategic development over the past five years, highlighting changes in response to the dynamic business landscape, particularly the impact of the COVID-19 pandemic. The report then employs strategic models such as SWOT, PESTEL, and stakeholder analysis to evaluate P&G's internal strengths and weaknesses, external opportunities and threats, and stakeholder management practices. The analysis covers various factors, including political and economic conditions in the US market, social trends, technological advancements, environmental concerns, and legal regulations. The report concludes by assessing whether P&G's current strategies are appropriate for navigating the identified challenges and achieving its organizational goals, emphasizing the importance of adapting to changing market conditions and stakeholder expectations.

Does the organisation
have the right strategy for
today's challenging
environment

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
TASK 1............................................................................................................................................1
Organisational overview..............................................................................................................1
TASK 2............................................................................................................................................3
Strategic models and theories......................................................................................................3
TASK 3..........................................................................................................................................10
Advantages and dis-advantages to the organisation and its stakeholders..................................10
TASK 4- CONCLUSION..............................................................................................................13
REFERENCES..............................................................................................................................14
Online-...........................................................................................................................................15

INTRODUCTION
Strategic management is the process of managing all strategy of the organisation which
will help them to enhance their productivity and profitability (Abd, Abbas and Khudair, 2019).
It consist of setting goals, scanning current business environment and convert plan into action to
grab all opportunities and defend all threats. A good organisational strategy will help the
organisation to gain competitive advantage. Today, organisations face various issues and
problems in challenging business environment. Hence, the companies are required to make
effective and flexible strategies so that they can mitigate these challenges effectively (Witcher,
2019). The following report covers background of chosen organisation to review its performance
over last 5 years, strategic. The following report also covers critical analysis of strategic theories
with their advantages and disadvantages upon organisation.
MAIN BODY
TASK 1
Organisational overview
Procter and Gamble Company (P&G) is serving in customer goods industry where they send sell
various customer goods like shampoos, soaps, body lotions and many others. This company is
founded in the year 1837 by William Procter and James Gamble. It is headquartered in
Cincinnati, Ohio, United States. Their main product types are skin care, personal care and
cleaning agents.
The last 5 year development of P&G company is mentioned below-
Yea
r
Mission Vision Main
organisational
change
Impact upon
company 's growth
2022 To offer high quality of
products with
reasonable prices so
that their customers will
develop their standard
of living. This will
To be recognized
as the best
customer
products and
services company
in the world
In the year 2022,
the company is
focusing to
enhance their sales
and retain their
employees and
This mission and
vision will help the
company to enhance
their investment
activities. This will
faster the growth of
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further help them to
increase their sales,
become industry leader
and retain their
employees and
stakeholders for longer
period of time.
(Smithson, 2021). stakeholders for
longer period of
time.
company at
worldwide level.
2021 To offer quality
products in lower prices
as compared to
competitors to support
intentional growth of
company.
To gain
competitive
advantage by
offering quality
products within
affordable prices.
Here, company
mainly focus to
maintain their
quality high while
minimizing cost.
This will help the
company to gain
competitive
advantage by
satisfying more
segment of
customers.
2020 To offer high quality of
products to customers
to gain their trust
effectively in COVID
pandemic. Regrowth of
the company after
COVID pandemic is the
main mission of P&G.
To gain the trust
of customers by
offering them
high quality of
products to
maintain their
health even in
COVID
pandemic.
The main change
which is bring by
company in this
year is to test the
quality of products
effectively.
This will help the
company to gain the
trust of their
customers and gain
loyal customers for
longer period of
time.
2019 To enhance the sales of
the company by
offering different kinds
of products.
To offer huge
product portfolio
to customers to
gain their
satisfaction and to
target huge
customer
Here, company
invested more in
Research and
Development
Department and
bring new
portfolio.
The main benefit
gain by the company
is to target new
customers for
organisational
growth.
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segments.
2018 To gain high customer
satisfaction with
effective supply chain
management.
To manage
supply chain with
real -time- point
of sales data
Here, company
mainly focus on
their suppliers and
make sure that
their supply chain
management will
maintain effective.
This will help the
company to offer
their products to
their customers at
any time whenever
they want. This will
help the company to
gain the trust of their
customers
effectively.
From the above table it is analysed that the P&G company modify their mission and
vision on regular basis. The main reason of this continuous change is due to change in business
environment (Aghazade and Abolmolouki, 2018). It is considered that the business environment
is having dynamic nature which means it can change at any time. For example, in the year 2020,
the main mission of the company is to gain the trust of their customers after COVID pandemic
by offering them quality products and ensure them that they are using good quality of products
which will not harm their health. Hence, COVID pandemic is one of the biggest business
environment threat for the companies and the companies are required to change their strategies
and plans as per the affect of this pandemic upon their overall performance. Hence, it is
identified that the mission and vision get impacted by external as well as internal business
environment of a particular industry.
TASK 2
Strategic models and theories
There are various kinds of strategic models and theories which can be used by P&G
company to analyse their internal and external business environment to help them to prepare
specific strategies to achieve their aims, objectives and mission. These tools and theories are
mentioned below-
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SWOT analysis- This tool will help to analyse the strengths and weakness of the
company which further help the company to grab their opportunities and defend their threats.
(Ansoff and et.al, 2018). SWOT analysis of P&G is mentioned below-
Strengths-
Excellent Research and Development-
The good level of R&D of this company
will help the company to introduce their
new products with innovative way to
capture new markets (Bhasin H., 2019).
Fantastic distribution channels- The
distribution channels of P&G company is
good because they offer their products
through various channels like online
mode, rural and urban area and many
others.
Weakness-
Loss due to closure of brands- Few years
back, P&G company closes to deal with few
brands, approx 300 brands are refused by P&G
due to which they have to face loss because
earnings from these 300 brands are of good
amount for the company.
Low organic growth- Today most of the
companies are switching to offer organic
products to meet new customer demand toward
organic product. P&G is lacking behind to
innovate their products in organic segment.
Opportunity-
Increase in organic growth- It is a good
opportunity for P&G company to start
dealing with organic products to capture
larger segment of customers.
Mergers and Acquisitions- It is also
considered as good opportunity to merge
with other big brands to eliminate high
competition from the industry (Steiss,
2019).
Threats-
High competition- P&G is having high
competition within their industry and their
main competitors are Unilever, Church and
Dwight and few others. They are having good
competitive strategy to maintain their high
position in the market. Hence, they can create
a high threat for P&G to expand their business.
COVID Pandemic- Due to the government
restrictions like lock down, curfews and many
others most of the customers are not able to go
out of their home and purchase their needed
products (Avanesova and et.al, 2021). This
pandemic has decline the growth of company.
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PESTEL analysis- It is the framework which helps to identify the external business
environment of a company within a geographical area (Stamevski, Stamevska and Stankovska,
2018). In context of P&G, they are having various opportunity as well as few threats while
operating in US market. The PESTEL analysis will highlight these opportunities and threats and
this framework is mentioned below-
Elements of
PESTEL
Description of PESTEL
factors.
Impact upon company
Political factors In context of US, they are having
political stability and they are
having good relationship with
other nations. They are having
low restrictions on their trading
activities.
The political stability will help the
P&G to sustain their growth for longer
period of time and avoid any political
interference within their operational
activities. On the other hand, due to
less restriction on trading activities,
P&G can export their products easily
from one nation to another. This will
support international growth of the
company.
Economical
factors
In context of US, they are having
58.4% employment rate in the
year 2021 and they are increasing
their employment rate after
COVID pandemic (Employment
rate in the United States from
1990 to 2021, 2022). US is also
having good infrastructure level.
The inflation rate of US is 4.70%
which is considered as high (U.S.
Inflation Rate 1960-2022, 2022).
The moderate level of employment of
US will help P&G to hire highly
skilled and talented employees within
their organisation to achieve their
organisational goal. On the other hand,
high inflation rate will impact customer
purchase habit because high inflation
rate will lower the habit of customers
purchasing activity and they only
spend on essential goods.
Social factors In context of US, their citizens
are mainly concern about their
This will impact upon productivity of
P&G and they are required to sell high
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health and fitness. They always
prefer to look expiry date,
manufacturing date and many
others on the products while
purchasing. They prefer to buy
high quality of products whether
they have to pay little extra.
quality of products with quality check
before selling it to customers. The
quality check will ensure that the
product will not harm any customer
(Ayegba and Lin, 2020).
Technological
factors
US is well known for their
technological factors, their high
quality of tools and machines
will help them to manufacture
high quality of products with
effective packaging activities.
This will impact good and positive
upon organisational growth of P&G
because they can use high quality of
packaging system for maintaining the
quality of their products. They can also
maintain their inventory by digital
tools to satisfy their customers.
Environmental
factors
It is essential for every
organisation to follow some CSR
activities and in context of
customer goods industry, they
can use various sustainable
activities to protect their
environment and planet
(Stamevska, Dimitrieska and
Stankovska, 2019).
In context of P&G, they can use paper
bags for handling the products to their
customers, they can also use high
quality of tools and machines which
will not produce carbon emissions.
They are also planning to use electric
vehicles to deliver their products to the
doorstep of their customers.
Legal factors It is considered as important for
every company to follow all legal
rules and regulations while
operating within any country. In
context of US, they are having
various employment laws like,
Fair Labour Standards Act, it
In context of P&G, their employer and
managers always make sure that they
will follow the legal rules and
regulations of every nation where they
work. For example, their few of the
branches working in UK will follow
UK employment laws and their few of
6

states that the workers who will
work more than 40 hours a week
will definitely get overtime
payment. The employer is not
supposed to refuse for this.
the branches working in Asia will
follow the Asian legal laws. This will
help them to gain the trust of
government of that nation and also
helps to maintain their brand image
high.
Stakeholder's analysis- It is also essential for the companies to manage their
stakeholder's effectively and decide who will have how much power to make effective decisions
for organisational growth (Bindra, Parameswar and Dhir, 2019). The power to make decisions
are mainly given to those stakeholders who are having knowledge and who are well experienced
in decision making process. P&G tries their best to satisfy their stakeholder's so that they will
continue to invest in the company for future. Secondly, providing good benefit to stakeholder's
by giving them good dividend will also help P&G to attract new stakeholders. The main
stakeholder of P&G company are BlackRock Fund Advisors, The Vanguard Group, Inc., Fidelity
500 Index Fund and many others (Procter & Gamble Co (NYSE:PG), 2022). They also allow
their employees and managers to become their stakeholder because the company believe that the
employees who are working for the company will understand the organisational conditions in
better ways. Hence, they can make good decisions for organisational growth.
BCG matrix- This is one of the common framework for strategic management which is
used by managers of the company to analyse the current value of their offered products (Burlov
and et.al, 2018). The BCG matrix of P&G Company is mentioned below-
 Stars- This is the category of products which are having high market share and high
market growth. Here, the products in this category will help the company to gain high
profit because these products are having highest demand then others from the same
company. In context of P&G, they consider their beauty, fabric care, home care and baby
care products in star category. These products are sold majorly and customers of P&G
demands more to purchase these products.
 Cash Cow- These are the products which are having high market share with low market
growth (Chletsos and Saiti, 2019). Here, those products are considered which are gaining
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high investment from the company for their production and promotion but at the end they
are not satisfying their customers and the company is unable to sell these products as
expected. In context of P&G, they put their snacks and grooming products within this
category.
 Question Mark- This is the category where market share is low and growth rate is high
(Slack, and Brandon-Jones, 2018). These are the products which produce less revenue as
compared to investment made for their production and selling activities. Hence, the
company have the question mark that they need to continue invest in such products or
stop their investment. These products can easily become Star in case the company use
any innovation technique to sell these products. In context of P&G, they can put Crest
tooth paste and mouth wash in this category.
 Dogs- These are the products with low market share and low market growth. Such kind
of products will create loss to the company (Ethiraj, Gambardella and Helfat, 2018).
Hence, the company will soon eliminate to produce these products.
Porter five forces analysis- Porter five forces analysis is effective management tool to
evaluate and analyse the industry and understand the opportunities of profitability. Procter and
Gamble (P&G) use five forces of Porter to have lead role in consumer goods industry. They use
Porter's forces to explore different profitable opportunities in consumer service sector.
Porter's five forces in context to Procter and Gamble (P&G) are shown below-
 Threat of new entrants: This factor has high impact on Consumer goods industry as there
are various Well establish businesses which increase competition for new firms (Shatilo,
2019). To achieve success, they need compete against competition. P&G has vast supply
chain, mass-production and worldwide distribution unit. Its products have outstanding
brand equity and developed reputation over the years so it has less impact from the new
entrance.
 Threat of substitutes: In Consumer goods industry, the impact of this factor is Low
because of differ product and services. P&G has less threat from substitute because they
are producing different price ranges products, people can switch according to their
requirements. Sometimes Shelf products are also attracting the customers, so they
products in shelf which can increase their sales.
 Bargaining power of customers: The impact of this factor in Consumer goods industry
8

is high due to low switching cost and various number of firms (Ferlie and Parrado, 2018).
They keep their prices reasonable so this factor has less impact on P&G. They also
provide discounts to attract more customers. It is fast moving consumer goods company
so it has very low switching cost.
 Bargaining power of suppliers: The impact of this factor on Consumer goods industry
is low due to easily availability of raw material from multiple suppliers at low cost. P&G
has large number of suppliers which enable them to buy raw material at any cost or time
so this factor impact is low.
 Competitive rivalry: Consumer goods industry is well established business firm so it
has less impact of competition. They support healthy competition and monopolistic kind
of environment. Their competitors are supportive which allow P&G to conduct their
business operations effectively to increase their brand value.
Porters generic strategies - Porters generic strategies is the most effective business tools
which help the management to understand about various profitable strategies which they can use
in order to enhance productivity and effectiveness of company. It enables them to formulate
effective plan to provide better quality of product and services in order to gain competitive
advantages over competitors. Porters generic strategies in context to P&G are as follows- Cost leadership strategy- It is a strategy in which company can reduce their operations,
production and delivery cost to provide goods and services to customers (G'iyosov,
2019). The management of P&G can use strategy by reducing the distribution cost
through proper utilising the resources which leads to increase in their profit margin and
profitability. Differentiation strategy- In this strategy, entrepreneur can give more focus on making
their product and services unique or different from their competitors in order to increase
their sales and customer base. The professionals of P&G can use this strategy by add
more variety in their customers’ goods as well as introduce new flavours in their existing
products which leads to increase their sales or brand value. Cost focus strategy- In this strategy, the company can give more focus to reduce the
price of product and services to make it more affordable so the customers can take more
benefits in less amount (Phillips and Moutinho, 2018). The management of P&G can use
this strategy by reducing the price of their product and services as they operate their
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