PROCTER & GAMBLE DISABILITY BENEFIT PLAN, PLAN #501; Procter & Gamble Long Term Disability Allowance Policy Plan; Procter & Gamble Disability Committee, Defendants-Appellees. 20-4329 FILED September 03, 2021 ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF OHIO Attorneys and Law Firms. P&G facilitates your search via TalentBrew, a job matching tool developed by TMP Worldwide. TalentBrew uses the LinkedIn application to extract job relevant information from a user’s LinkedIn profile (name, email, city, experience, education, skills & endorsements, recommendations, accomplishments and interests). Procter & Gamble's Shares traded at over $86 per share in 2017, and its market capitalization was valued at over US$221.5 billion in October 2018. Procter & Gamble ranked No. 42 on the 2018 Fortune 500 list of the largest United States corporations by total revenue.
The Procter & Gamble Company applies its generic strategy to achieve competitive advantage in the consumer goods industry. Michael Porter’s model for generic competitive strategies focuses on business approaches that lead to competitiveness and resilience amid competition. In the case of Procter & Gamble’s generic strategy, the emphasis is on product quality and value. These factors are significant in supporting P&G’s efforts to achieve and maintain a leadership position in the consumer goods industry. It is worth noting that quality and value are also included as major points in Procter & Gamble’s vision statement and mission statement. Moreover, the company applies intensive growth strategies alongside its generic strategy. These intensive strategies facilitate Procter & Gamble’s growth in terms of market performance. Considering the tough competition in the consumer goods market, it is essential that these intensive growth strategies are effective and relevant to the current market conditions affecting Procter & Gamble.
Procter & Gamble’s generic competitive strategy (Porter’s model) defines the main approach of the business to achieve competitiveness. In this regard, the generic strategy also influences managerial decisions, in terms of marketing, research and development (R&D), and innovation. On the other hand, Procter & Gamble’s intensive growth strategies depict the strategic approach of the business in addressing consumer goods markets. These intensive strategies affect the company’s growth and expansion plans.
Procter & Gamble’s Generic Strategy (Porter’s Model)
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Procter & Gamble uses differentiation as its generic strategy for competitive advantage. Differentiation involves developing the uniqueness of the business and its products to attract target customers. In this case, Procter & Gamble highlights quality and value in its consumer goods. For example, the company offers high quality cleaning agents, like Tide laundry detergent, at affordable prices. Based on this generic competitive strategy, a suitable strategic objective is to maintain P&G’s high investments for R&D to ensure high-quality and valuable products. Another strategic objective based on Procter & Gamble’s generic strategy of differentiation is to maintain effective marketing strategies that emphasize the uniqueness of such products. Such product uniqueness determines pricing and promotional activities. These considerations are included in Procter & Gamble’s marketing mix or 4Ps.
The cost leadership generic strategy (also known as the low cost provider strategy) is partially applied on some of Procter & Gamble’s products, focusing on cost or pricing to achieve competitive advantage. For example, Pantene hair care products are priced relatively lower compared to competitors like Unilever’s Dove hair care products. Procter & Gamble’s marketing mix also considers this generic competitive strategy. A strategic objective based on the cost leadership generic strategy is to develop Procter & Gamble’s competitive advantage based on cost-minimization approaches. For example, automation is increasingly used to minimize cost and maximize efficiency in Procter & Gamble’s production processes.
Procter & Gamble’s Intensive Strategies (Intensive Growth Strategies)
Market Penetration (Primary Intensive Strategy). The Procter & Gamble Company’s primary intensive growth strategy is market penetration. In this intensive strategy, the main aim is to increase the company’s market share. Procter & Gamble does so through marketing campaigns to increase consumer awareness about the company’s consumer goods. This strategy is especially significant for low-performing products in the market. In addition, Procter & Gamble implements this intensive strategy through beneficial agreements with retailers. For example, P&G grows its market share by offering higher retail profit margins for some large retailers. In return such retailers display Procter & Gamble’s products in prominent locations or shelves in their stores. The differentiation generic strategy creates competitive advantage that helps increase success in applying the market penetration intensive strategy. A strategic objective based on this intensive growth strategy is to increase Procter & Gamble’s market share through aggressive marketing.
Product Development (Secondary Intensive Strategy). Product development is used as a secondary intensive growth strategy in Procter & Gamble’s business. This intensive strategy involves design and production processes for products that attract target customers. Procter & Gamble applies product development to support continuous business growth, while addressing competition. For example, P&G develops new products to increase its share of the global consumers goods market. In addition, Procter & Gamble increases its competitiveness by continually enhancing current products. The differentiation generic strategy directly determines the kinds of products that the company develops, especially in terms of competitive advantage based on quality and value. A strategic objective associated with this intensive strategy is to grow Procter & Gamble through continuous innovation.
Market Development. The Procter & Gamble Company uses market development as a supporting intensive growth strategy. Market development contributes to the company’s growth through entry into new markets or market segments. For example, Procter & Gamble could enter new market segments when it creates an entirely new product line or when it changes its market focus. In this way, Procter & Gamble can expect a new revenue stream. The generic strategy of differentiation makes it easier for P&G to enter new markets or market segments when implementing this intensive growth strategy. Also, a strategic objective based on market development is to increase Procter & Gamble’s R&D investment for new product lines, or to reform its marketing strategies to enter new segments in a growing or stable consumer goods market.
Diversification. Diversification is one of Procter & Gamble’s supporting intensive growth strategies. This intensive strategy involves establishing new business operations. For example, every acquisition and corresponding business diversification in Procter & Gamble’s history has led to considerable growth. However, this intensive growth strategy is considerably difficult to implement because of its large-scale effects on P&G’s business organization. For instance, each acquisition leads to adjustments in Procter & Gamble’s organizational structure. The differentiation generic strategy helps build competitive advantage the company needs to succeed in new business operations. Also, this intensive strategy leads to the strategic objective of using an aggressive approach to acquire other firms to grow Procter & Gamble’s business.
References
- Dess, G. G., & Davis, P. S. (1984). Porter’s (1980) generic strategies as determinants of strategic group membership and organizational performance. Academy of Management Journal, 27(3), 467-488.
- Glazer, R. (1999). Competitive Advantage Through Information-Intensive Strategies. Handbook of Services Marketing and Management, 409.
- Merchant, H. (2014). Configurations of governance structure, generic strategy, and firm size. Global Strategy Journal, 4(4), 292-309.
- Parnell, J. A. (1997). New evidence in the generic strategy and business performance debate: A research note. British Journal of Management, 8(2), 175-181.
- Spry, A., & Lukas, B. A. (2016). Brand Portfolio Architecture and Firm Performance: The Moderating Impact of Generic Strategy. In Looking Forward, Looking Back: Drawing on the Past to Shape the Future of Marketing (pp. 866-867). Springer International Publishing.
- The Consumer Goods Industry in the United States – U.S. International Trade Administration.
- The Procter & Gamble Company – Who We Are.
- The Procter & Gamble Company, Form 10-K.
- Varadarajan, P., & Dillon, W. R. (1982). Intensive growth strategies: A closer examination. Journal of Business Research, 10(4), 503-522.
This is a detailed SWOT analysis of Procter and Gamble. It offers insights into the strengths and the weaknesses of Procter and Gamble. It also explores the opportunities and the threats to the company. Procter and Gamble is an American multinational consumer goods company, headquartered in Ohio, the USA.
Strengths of Procter and Gamble
Procter and Gamble was founded more than 180 years ago as a soap and candle company. At present it is one of the largest consumer goods companies in the world and sells many world renown branded products such as Pampers, Gillette, Head and Shoulders, Fairy, and Olay (Procter and Gamble, 2021).
Procter and Gamble sells products that are needed daily. This in turn increases demand and sales. The company sells nearly 300 brands in over 160 countries and has factories around the world. It has become a household name over the years which consumers trust and consider to be reliable.
Procter and Gamble is a diversified company and many different types of products that it sells, have contributed to its financial strength. Its products are widely available and easily accessible in a variety of supermarkets, grocery stores and online.
Another key strength of Procter and Gamble is its research and development. This has enabled the company to develop many different types of new products which have generated large income streams. It does not test its products on animals and have invested millions on developing non-animal testing methods. Half of the non-animal testing alternatives have been invented or co-invented by Procter and Gamble.
Over the years Procter and Gamble has managed to gain a loyal customer base. Sponsorships of events around the world has helped it gain more customers.
Weaknesses of Procter and Gamble
Procter and Gamble has had to recall some of its products which in turn has resulted in it gaining negative publicity and incurring unforeseen costs. The closure of some brands resulted in it having to incur losses too.
Losing loyal customers due to competitors selling quality products at more affordable prices. Its products have high competition from other brands that are recognized globally as well.
In the beauty and personal care industry, new products are regularly introduced by the competitors. Therefore, to keep in line with the competitors Procter and Gamble needs to spend regularly which affects its profits. Vizard and Fleming (2020) report that its marketing spend in categories including beauty, healthcare and baby has increased recently.
Opportunities for Procter and Gamble
Opportunity is the next issue to address in the SWOT analysis of Procter and Gamble. Acquiring small competitors and forming new strategic alliances to compete better and reduce costs is worth exploring. Likewise, Procter and Gamble has an opportunity to use its global brand recognition to diversify into different markets.
An increase in the purchasing power of customers in some countries will increase the demand for products. Procter and Gamble has an opportunity to attract more customers in the rural market. It can also attract niche segments in highly competitive markets globally.
Threats to Procter and Gamble
Product recalls will result in bad publicity and loss of revenue which in turn increases overall costs. Counterfeit products of low quality being sold in the market will result in consumers losing their trust in the brands.
Procter And Gamble Usa Address
When operating in different countries, Procter and Gamble is exposed to fluctuations in foreign currency and changes in government regulations. Since its a global brand, recessions and economic crisis will also affect its business operations.
The present economic lockdowns have resulted in consumers being more careful with their spending. This reduces the demand for non-essential products.
A rise in competition has led Procter and Gamble spend more on research and development and marketing. Some of its major competitors are Colgate-Palmolive, Johnson & Johnson, Church and Dwight, Kimberly-Clark and Unilever.
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Last update: 14 January 2021
Further Reading/References:
Procter and Gamble (2021) Policies and practices, available at: https://www.pg.co.uk/policies-and-practices/animal-welfare-policy/ (accessed on 14 January 2021)
Vizard, S. and Fleming, M. (2020) P&G ‘doubles down’ on marketing as demand soars, available at: https://www.marketingweek.com/procter-gamble-doubles-down-marketing/ (accessed on 14 January 2021)
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Author: Fahim Shah
Procter And Gamble Usa Locations
Fahim Shah has been working in the UK as a visiting lecturer in Business and Tourism for the last 10 years. After completing a Bachelor’s degree in Business and Marketing, he went on to gain an MBA from the University of Bradford, the UK. He is a Fellow of Advance HE (FHEA) and a full member of the Association of Business Executives (ABE).