Procter &gamble

Procter & Gamble-Gillette Merger: 

Procter & Gamble-Gillette Merger By: Christine Cruell Kamika Hemphill Antjuan Seawright Jonathan Toney

Executive Summary: 

Executive Summary

Products: 

Products Three main product lines: household and personal care food consumer heath care products Recent merge with Gillette Competitive advantage

Dominant Firms: 

Dominant Firms Procter and Gamble, Nestle, Unilever, L’Oreal, Colgate-Palmolive, Revlon, Bic, PepsiCo, Sara Lee, and Kimberly Clark. Success factors: positive brand image availability of products the ease of access

Vision and Mission: 

Vision and Mission Vision “Be, and be recognized as, the best consumer products and services in the world” Mission “Procter and Gamble will continue to serve consumers by continuously innovating products that will allow us to be leaders in household and personal care, health care, and food products. To produce products with the utmost care to give nothing but quality to our communities. And to continue to grow so that we can maximize our shareholder’s wealth.”

External Environment: 

External Environment

External Environment: 

External Environment Economic Factors Social Factors Technological Factors Political Factors Ecological Factors

Economic Factors Social Factors: 

Economic Factors Social Factors Concerned with nature and direction of economy in which the CP industry Threat/Opportunity Concerned with beliefs, values, opinions, and lifestyles of people Threat/Opportunity

Technological Factors: 

Technological Factors Focus on technological changes affecting the industry: New Products, improvement in existing products, manufacturing and marketing techniques T hreat/Opportunity

Industry Analysis: 

Industry Analysis

Consumer Goods Industry 5 Forces Model: 

Consumer Goods Industry 5 Forces Model Buyers: large impact on industry Large retailers-Wal-Mart, Kmart, Target Rivalry: keeps industry thriving Differentiation, advertising, promotions, price, customer service and quality Threats to Entry: heavy impact on industry productivity Mergers and acquisitions

Consumer Goods Industry 5 Forces Model Cont…: 

Consumer Goods Industry 5 Forces Model Cont… Substitutes: no huge impact Competitive products replacement Private label brands and small label brands-only real substitutes Suppliers: no threat to the industry Raw materials can be obtained anywhere

Company Profile: 

Company Profile

Value Chain Analysis: 

Value Chain Analysis Primary Activity Marketing and Sales=Brand Recognition Support Activities Research Technology-RFID

Financial Analysis: 

Financial Analysis

Financial Analysis: 

Financial Analysis Key Data from Bal. Sheet Total Assets 138,014.00 135,695.00 61,527.00 57,048.00 43,706.00

Financial Analysis (cont’d): 

Financial Analysis (cont’d) Key Data from Income Statement Net Income 10,340.00 8,684.00 6,923.00 6,156.00 5,186.00

Financial Analysis (cont’d): 

Financial Analysis (cont’d) Key Ratio’s Gross Margin Debt/Equity Ratio Current Ratio Quick Ratio Return On Equity Return On Assets Return On Capital

Ratio Analysis : 

Ratio Analysis Key Ratio’s Gross Margin Debt/Equity Ratio Current Ratio Quick Ratio Return On Equity Return On Assets Return On Capital PG Nes Uni Ind 51.8 30.8 14.5 20 .54 .67 .78 .84 .9 .8 .7 .98 .6 .11 .4 .7 16.8 30 32.3 30.9 7.9 8.3 10.9 9.6 10.2 13.4 17.6 13.4

SWOT Summary/Core Issue: 

SWOT Summary/Core Issue

SWOT: 

SWOT Strengths product variety and diversification Line of shaving /grooming products Supply chain technology Weaknesses Constant innovation= higher prices for consumers

Slide 22: 

Opportunities Globalization Threats Private labels Core Issues: Overlap in management Overlap in P&G-Gillette products (I.e. Old Spice deodorant and Right Guard deodorant) Expensive products

Long Term Objective and Strategic Scenarios: 

Long Term Objective and Strategic Scenarios

Long Term Objectives: 

Long Term Objectives Generic Strategy: Differentiation Grand Strategies: Innovation Conglomerate diversification Concentric diversification Strategic alliance

Scenarios: 

Scenarios Best Worst Likely

Corporate Level Strategic Alternatives: 

Corporate Level Strategic Alternatives

Corporate Level Strategy: 

Corporate Level Strategy Stay in same SBU’S Get into new SBU’S Keys to success Proper asset mgmt Possible change of mission statement

Corp Level Strategy: 

Corp Level Strategy Best Case Expand to new mkts Grow by 30% Worst Case Lose Mkt share Fail to expand Most Likely Grow by 10% Continue current corporate strategies

Business Level Strategic Alternatives: 

Business Level Strategic Alternatives

Business Level Strategy: 

Business Level Strategy Generic Options Low Cost Leadership Differentiation Pros/Cons of both Rivals Unilever Colgate-Palmolive

Grand Strategies: 

Grand Strategies Low Cost Leadership Concentrated Growth Market Development Differentiation Product Development Innovation

Strategic Choice: 

Strategic Choice

Strategic choice: 

Strategic choice Corporate level strategy: Get into new SBU’s.