P&G Strategic Management Report: Analysis of Growth and Development

This report provides a strategic analysis of Proctor and Gamble (P&G), a multinational consumer goods corporation, focusing on its financial performance, internal capabilities, and market strategies. It examines P&G's background, including its mission, vision, and values, alongside its growth and changes over the past five years, especially its performance during and after the COVID-19 pandemic. The report uses strategic models such as SWOT and PESTLE to evaluate P&G's internal and external environments, identifying strengths, weaknesses, opportunities, and threats, as well as political, economic, social, and technological factors influencing the company. It also discusses the advantages and disadvantages of P&G's market development strategy and touches on stakeholder analysis, emphasizing the importance of understanding stakeholder interests for organizational success. The analysis aims to provide insights into P&G's strategic approaches and their impact on business performance.

STRATEGIC
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Background information of Proctor and Gamble.........................................................................3
TASK 2............................................................................................................................................6
Using strategic theories and models to analyse the company and discuss the tactic currently in
operation......................................................................................................................................6
Task 3.............................................................................................................................................10
Advantages and Disadvantages of Market development strategy for the organization.............10
TASK 4..........................................................................................................................................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................16

INTRODUCTION
Strategic management is an ongoing process of planning, monitoring and analysis of
necessities that companies require to accomplish goals (Fuertes and et.al., 2020, p.157). This
present study is based on Proctor and Gamble that is an American multinational consumer goods
corporation. It was founded in the year of 1837 by James Gamble and William Procter. It is
specialised in providing qualitative cleaning agents, skin care products as well as personal care
products. This study is going to discuss financial performance of Procter and Gamble as well as
its internal capabilities by which it can take advantages. Further, it will discuss effectiveness of
SWOT and PESTLE analysis model. These models help out companies in identifying internal
and external environmental factors and their impact on business performance. Porter’s five
forced analysis also plays a vital role as it also enables managers and employers in knowing
current competitive situation of market and their position in competitive market.
This study will discuss critical impacts of internal capabilities and strategies that Proctor
and Gamble use. Both advantages and disadvantages can help out companies in knowing
effectiveness of strategies and accordingly, they can make changes in strategies. Stakeholder
analysis also makes companies able in knowing interest level of stakeholders and as per this
analysis, they can make changes in their internal strategies as well as policies. This study will
discuss ways of analysis stakeholders and their impact on organisational performance.
TASK 1
Background information of Proctor and Gamble
Before discussing growth and success history of Proctor and Gamble, it is important to
discuss about its background information. Proctor and Gamble is an American multinational
consumer goods corporation. It is specialised in selling qualitative personal care and hygiene
products. Along with hygiene products, it deals in grooming beauty, home care and baby care
products. Food, beverage and snacks are some other product portfolio of this brand.
Number of employees and stakeholders: Proctor and Gamble employs around 101,000
people. Key stakeholders of this company who help it out in accomplishing goals include:
customers, suppliers, governments of countries and diverse employees who work for them.
David Taylor is the largest shareholder as he holds around 12 million common shares. On
November, 2021, Jon Moeller succeed David and became CEO of Procter and Gamble. On the
basis of this, it can be said that this company is public.

Social responsibility: The main aim of P&G is to improve living standard and lives of
customers by providing them with qualitative hygiene products (Han and et.al., 2019, p.169).
Their main focus is on improving lives of children and people who are living in deprived areas.
Vision: Its vision statement states that it wants to become the market leader and the first
choice for its customers. After covid-19, vision of this company has changed and now it wants to
focus on protecting health and wellbeing of people all over the world and allowing them to
improve a better life (Quezado, Fortes and Cavalcante, 2022, p.2962). It does not focus on
increasing profit margin as it wants to help out people by providing them qualitative products
and services as well.
Mission: Mission of this company is “To provide qualitative as well as branded personal
care products that add value and improve the lives of the world’s consumers”.
Values and integrity: It encourages employees to do the right things.
 It is an honest brand and all employees are straightforward as they provide validate and
reliable information to customers.
 It operates within the letter and spirit of the law.
 It upholds values as well as principles of P&G in every action as well as decision.
 It is honest and data based in advancing proposal (Gopinath, 2021, p.198).
5 years of growth and changes: Within 5 years, Proctor and Gamble has taken growth to the
great extent.

On the basis of above data, it can be said that this brand made growth and success in the
year of 2015. Covid-19 affected companies of different sectors to the great extent. Due to covid-
19, companies became bound to shut down or close their some of physical stores. But Procter
and Gamble was an exception as it was the one who made growth even after Covid-19 because it
deals in personal care and hygiene products. After covid-19 people became health conscious and
they prefer to be safe and secure. They ordered hygiene and personal care products online and
this company delivered products and services at the doors of customers. It increased loyalty and
made customers feel valued.
Figure 1: Financial performnace of Procter and Gamble
Sources: (https://www.macrotrends.net/stocks/charts/PG/procter-gamble/financial-statements)
On the basis of above financial data, it can be said that in the year of 2017, net income of
this company was $15079 and in 2018 it decreased to the great extent and net income for this
year was: $9,485. Again in the year of 2019, it decreased and became $3634. There was great
fall in income of this company. On the basis of this, it can be said that in these 2 years 2018 and
2019, this company suffered loss to the great extent and it needs to focus on improving its
performance. It developed some strategies after facing this loss and its skilled workforce helped

its out in regaining image. In the year of 2020, it made growth and net income of this year was
$12,764 and in 2021 it was: 14,035. So, on the basis of this, it can be said that Covid-19 gave it
opportunity to show its potential and let customers know about effectiveness of its products and
services (Beg, 2018). After covid-19, people became health conscious and they started investing
in personal care and home care products so that they can improve their lives. It was a great
opportunity for this brand to show potential and increase awareness among customers. Now, it
has become one of the best known and well reputed organisation.
Future development: It is found from secondary and published data that Proctor and
Gamble acquired number of other companies that diversified its product line (Winquist and et.al.,
2021, p.1148). This acquisition made it able in increasing profit margin and sales as well. It is
found that this company is going to expand its business in other countries by acquiring Folgers
coffee, Richardson Vicks, Norwich Eaton Pharmaceuticals. Team working and motivation can
also make it able in retaining skilled employees so that they can help out in accomplishing goals.
So, on the basis of this, it can be said that it can take growth in the future and can increase
market share.
TASK 2
Using strategic theories and models to analyse the company and discuss the tactic currently in
operation.
In order to analyse the impact of varied factors or forces on organizational strategy and
practice, there are several models and concepts accessible in the world of business that applied in
the context of varied companies (Akhshik and et.al., 2021, p.110546). In case of TESCO,
SWOT, PESTLE and porter's five forces theories are applied, which enable management to take
pleasure of analysing the impact of each force and the extent to which they may influence.
SWOT analysis-
For purpose of conducting internal business environment analysis, the current model is
applied in regard to Proctor and Gamble, which defines some key information related to the
organization in varied terms and these are;
Strengths-
The biggest strengths of chosen company is its skilled workforce and varied of products
that customers prefer to purchase (Strength, Weakness, Opportunity, and Threat (SWOT)
Analysis, 2021). Each strength may enable firm to take pleasure of making its business more

profitable and SBU strategy successful in the market, which contribute to gain competitive
advantages. With skilled workforce, it may move ahead toward entering into new market, where
growth factors accessible in bulk, among which firm may grab according to need and venture
progress requirement.
Weaknesses-
Lack of digital marketing is the major weakness of company that affect the way it may
take approach to implement the SBU tactic and take essential steps by following the same
(Benzaghta and et.al., 2021, pp.55-73). In the recent time, individual person prefer to use digital
platforms for purpose of collecting information related to a product, service and other things.
When firm may not have any digital or online image in the market, it may lose the chance to grab
the attention of potential target audience (Djellabi and et.al., 202., p.100696). Another
weaknesses that affect Proctor and Gamble, is lack of strategic leadership style utilization that
influence business practice in negative manner.
Opportunities-
Technology advancement, accessible leadership styles and pool of talent, are those
opportunities that organization may plan to grab appropriately. Each opportunity may allow
management to take pleasure of increasing profitability and productivity level, even better than
its rivals that are operating venture within similar industry (JATMIKO and et.al., 2021, pp.505-
515). It is fact that by using advanced technologies, firm may gain benefit of generating more
revenue and making their tactic effective as well as successful, which is not that easy for any
company to do so strategically.
Threats-
Intense competition in the market, pandemic and regulatory changes are the major threats
that affect the way firm take decision and implement the same into practical manner (Olabi and
et.al., 2022, p.123987). Due to each threat, the strategy formulation and implementation process
might be impacted negatively, which drive the attention of management toward taking decisions
to prevent company from failing, that is essential for them to do that, by applying different
techniques and approaches (Rudiawarni and et.al., 2022, pp.39). It is also important for them to
identify the likelihood of each threat that help to mitigate the same.
PESTLE analysis-

In order to identify and analyse the external business environment factors, the current
concept is applied, which may drive the attention of management toward considering factors and
their likelihood that affect organizational success (What is PESTLE Analysis? An Important
Business Analysis Tool, 2022).
Political factor-
In case of Proctor and Gamble, the current category of factor is in favour as the political
stability in the US may affect its performance and strategy positively. It may contribute to drive
the attention of organization toward developing plan to enter into profitable and new market,
where it may grow rapidly and in competitive manner (Wang and et.al., 2021, p.102071.). Due to
this factor, another things in the nation may also stable or progressive like economic growth, etc.
Economic factor-
In the US market economic growth, employment and disposable income are those factors
that affect a company, either in negative or positive manner (Sebayang and Febrina, 2021,
pp.46). In regard to Proctor and Gamble, these forces may affect positively as the increasing
economic growth rate in the United State may enable firm to move ahead toward taking action
develop expansion or growth plan. It may drive the attention of venture toward entering into new
market where the success and growth chances allow company to take pleasure of increasing
more revenue.
Social factor-
Market trends and consumer buying behaviour are those social factors that affect
organizational strategy and practice in positive manner as firm may already consider these two
considerations (Capobianco and et.al., 2021, p.6266). It may drive the attention of management
toward developing new plan to promote venture via using digital marketing channels that he;p to
creative the excellent brand image in the market. It may affect in form of increasing sales,
customer base and productivity as well as profitability.
Technology factor-
Advancement of technology may impact Proctor and Gamble & its SBU tactic positively
in form of driving engagement attention toward adding more value in market growth strategy
(Younus, 2021, pp.59). They may take action to plan and utilize those technologies that have
some smart features, which marketer may use for purpose of promoting excellent brand image in

the market, even better than last few years or months. With the help of great technologies they
may gain the attention of consumers from national to international level.
Legal factor-
Changes related to regulatory frameworks and laws may put adverse impact on
organization in form of increasing work pressure and stress level among employees in the
workplace. It may move the attention of management and other stakeholders to take right
decision in form of making some changes within current employment policies and practices
along with relating to the same, which is quite essential for them to do that strategically, that
might be consumed a lot of time and require unpredictable efforts.
Environmental factor-
In case of Proctor and Gamble, environmental factor affect positively, because firm may
already take initiative to make venture sustainable and conduct practice in the similar manner. It
may take approach to use recyclable materials for purpose of packing products and offering the
same to customers, according to need. It may enable firm to retain potential buyers within
existing and new market where it may plan to enter as according to strategic implementation of
market growth tactic.
Porter's five forces model-
The current model is utilized in the context of Proctor and Gamble, to identify the extent
to which competition or competitiveness in the market accessible that may affect firm and its
tactic such as strategic business units under which firm may plan to conduct practice of market
development (Chik, 2021, pp.10).
Bargaining power of suppliers-
The extent of this force is low, because of number of suppliers available in the world of
business, which may provide organization capability to supply goods and receive quality
material to pack item successfully. It may enable Proctor and Gamble to gain competitive
advantages while running venture into national and international market, which in turn provide
more benefits than now in term of increasing profitability.
Bargaining power of customers-
The degree of this force is high because substitute products and services accessible in the
market, that firm offer to people. It may lead to decrease its productiveness and profitability, and
may create barrier in regard to strategy implementation (Lord and et.al., 2021, pp. E52). It may

enable company to take decision and action to make its goods and services valuable that help to
retain and gain attention of potential target market. It may also aid to gain competitive benefit in
form of giving consumers reason to stay with purchase of brand products.
Threat of new entrance-
The degree of this force is low, because of some necessary requirement that a firm should
consider before entering into industry where, Proctor and Gamble may exist. It may affect
positively upon organization in form of taking less stress to beat new rival, for which new
strategy and plan it might be formulated, which is not suitable in the recent time, especially when
firm may focus on expansion as market growth (Fiorenita and Dwianika, 2021, pp.39).
Threat of substitute products and services-
The likelihood of this force is high, because number of substitute items available in the
market that impact negatively, upon organization plan and strategy. It may lead to decrease the
sale and chance to obtain benefits at initial level, until firm may not assure individual person that
its products are more valuable and beneficial for everyone.
Competition among existing companies-
The extent of this factor is high, because each organization give tough competition to
each other, which lead to increase competitiveness in the market. It may impact negatively upon
Proctor and Gamble and affect its plan, for which management is accountable to work on the
same.
Analysis-
Currently firm may follow simple strategy and that is market growth, which drive its
attention toward considering strategic directions such as own establishment of venture. The
scope of this tactic is vast or wide because customers always tend to retain with those companies
that follow CSR concept and conduct sustainable practice (Appiah and et.al., 2021, pp.48). They
may also seek to purchase those products that are sustainable, valuable, and cost effective. As
chosen company falls under the category of these companies who may have all the features. The
market growth tactic been a long term plan like 5 years and it is also based on market situation.
Task 3
Advantages and Disadvantages of Market development strategy for the organization.
Market development is a growth strategy that involves selling the existing products in the
new market. It requires critical market research and analysis of the new market and the positive

and negative aspects of that market. With regard to Proctor and Gamble, it already has a global
presence and may look to target a new group of customers (Kahn, K.B., 201861(3). pp.453-460).
It may shortlist its existing market strategies that it can carry forward and implement in the new
market. This strategy may bring certain advantages as well as disadvantages that the organization
may experience while implementing the strategy (Thabit and Raewf, 2018, p.4(4)).
Advantages of growth strategy-
Acquire new customers- It is the biggest advantage of the market development strategy as
the new group of customers adds up with the brand. A particular market is limited to a certain
stage and the customers may not increase after a that stage. In that case the organization has to
look for a new market for its products and services in order to grow as a company and generate
more leads and sales. The customer count or buyers of the products increase significantly with
the help of market development strategy and the diversity of the group and type of customers
also become vast. It is very beneficial for the organization to make easy target for wide range of
products and reduce the loss of sales. Proctor and Gamble may acquire new group of customers
based on their research and sell products that had low sales in the previous market (Pienaar, C.,
Van der Lingen, E. and Preis, E., 2019, 30(3). pp.202). Acquiring new customers is beneficial for
the organization in presenting the right products to the right customers. For example, in USA
customers will buy premium products with high price but it may not be able to make adequate
sales of its cheaper product line, and for that it may look for markets like North African nations
where the sales of the cheaper products may be high. Hence, maintaining the balance.
Increase profitability and brand trust- The biggest advantage of product development is
the rapid increase of revenues. Exploring new market brings a lot of opportunities for an
organization. As the new customers adds up with the brand, the sales increase and therefore the
revenue grows along with it (Björkdahl, 2020, 62(4). pp.25). It strengthens the brand value and
recognition and at a certain point where the customer looks for the brand and not the money due
to the reputation and popularity, it psychologically drives the customer to go for a established
name and hence, the profit margins may be increased with time irrespective of its original value.
Proctor and Gamble already has a big name in the market and this global build up of the
organization creates loyal customers and attract them because of the brand reputation.
Support long term company growth- Apart from the opportunities of establishing the
brand in new markets, it is also a long term advantageous step for the company. Diversity in

portfolio is always beneficial and presence in different market helps the company in balancing
the profits and losses (Wu and Wang, 2021, 13(6). p.3046). International market is very volatile
and because the markets are also diverse in all areas including budget, pricing, sales, cost etc. the
organization may adjust with its strategy and product line and can identify appropriate target
audience for its products and services and survive for a long term (Kraujalienė, 2019, 17(1).
pp.79.). Huge customer base lets the company make big profits and store investments for the
future campaigns. It also provides the organization the freedom of introducing new products and
services as the new markets may be an opportunity for taking such chance. On a long term basis,
it may help the organization in achieving new heights in the global business.
Scope- Exploring new market may be full of unexpected benefits. For example, the
organization may find certain location where the cost of production is very low and the
availability of workers is in high numbers. It may produce trained workers and create grounds
opportunities for them which will indirectly benefit them by utilizing their talent for the company
(Lü and et.al., (2018), pp.1280). Markets with high potential buyers may prove to be very
profitable and alliances and relations that are being made in the process can be very beneficial
for future (Cooper, 2019, 76. pp.40). Easy trade laws in many countries allow the industries to
make a frictionless entry and start the business.
Disadvantages of market development strategy-
High Cost- Exploring the new markets may be very exciting but establishing a whole new
system can be very costly. The amount of investment in the new markets may be very high
around the world due to the difference in the import export duties, taxes, employee wage rules
and the local cost of running the company. The cost of establishing the technology and
machinery for production and running the business may prove to be a heavy burden (Veleva and
Tsvetanova, 2020, Vol. 940. No. 1. p. 012065). The organization may face serious consequences
in case of failure in the new markets. In markets where the currency rate is low and the buying
capacity of the consumer is also low, the organization may not be able to cover the cost of
production and sales which may cause a big problem for the organization (Neubert, 2018,
p.8(5)).
Risk of failure- New markets have their own risks such as the risk of failure of the
products and services. Products and services in the new markets may fail unexpectedly even after
deep research and planning. The organization may lose its investments and time and efforts that