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TITLE
PREPARE A FULL CASE WRITE-UP ON THE ATTACHED CASE STUDY ON
PROCTOR AND GAMBLE (2011)

COURSE
BACHELOR OF ACCOUNTING WITH HONOURS
NAME
ERVANA BINTI YAHYA
SUBJECT
BBPS 4103 STRATEGIC MANAGEMENT
MATRIC NO
810214035570-001
E-MAIL
vanajk@oum.edu.my
TUTOR
LEARNING CENTRE
TERENGGANU
SEMESTER/YEAR
TEN / SEPT 2013

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1.0

INTRODUCTION COVERING THE CASE ABSTRACT, PROPOSED VISION

AND ACTUAL MISSION STATEMENT

Procter & Gamble Company - 2011

Case Abstract
Procter & Gamble (P&G) is a comprehensive strategic management case that includes
the companys year-end 2010 financial statements, organizational chart, competitor
information, and more. The case time setting is the year 2011. Sufficient internal and
external data are provided to enable students

to evaluate current strategies and

recommend a three-year strategic plan for the company. Headquartered in Cincinnati,

Ohio, P&Gss common stock is publicly traded under the ticker symbol PG.
Headquartered in Cincinnati, Ohio, P&G is the worlds largest household products
company. The firm is divided into two global units: Beauty & Grooming and
Household Care but P&G also makes pet food and water filters and produces a soap
opera. Many P&Gs products are annual billion-dollar sellers, including Fusion,
Always/Whisper, Braun, Bounty, Charmin, Crest, Downy/Lenor, Gillette, Iams, Olay,
Pampers, Pantene, Tide, and Wella, among others. P&Gs fiscal year ends June 30
every year.
Vision Statement (Proposed)
To maintain our status as the number one household nondurables company in the
world.
Mission Statement
We will provide branded products and services of superior quality and value that
improve the lives of the worlds consumers, now and for generation to come. As a
result, consumers will reward us with leadership sales, profit and value creation,

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allowing our people, our shareholders, and the communities in which we live and
work to prosper.
2.0

EXTERNAL ANALYSIS USING THE CPM (Competitive Profile Matrix) AND

EFE (External Factor Evaluation Matrix)
External Audit (Opportunities)
1.

Higher demand for higher-priced products such as prestige cosmetics and

fragrances.

2.

Younger customers are attracted by social media advertising.

3.

Social media advertising is more cost effective than traditional advertising.

4.

The beauty and cosmetics industry is expected to increase globally by 8.5% in

2014 according to recent research from Euro Monitor International.

5.

There is an endless possibility to celebrities endorsing fragrances, these

products are successful because many are persuaded by fame of the celebrity.

6.

Men are increasingly concerned with their appearance, this provides a opening
to grab a new branch of consumers.

7.

Increase in online purchasing, average monthly visits in the U.S. to beautyrelated websites topped 60 million and grew 94% over past three years.

8.

Consumers are interested in products that are made with all natural products.

9.

Research shows that by 2015, global womens purchasing power is expected

to increase by $ 5 trillion and beauty is the category these consumers are most
likely to purchase.

Threats
1.

Volatile foreign exchange rates.

2.

Subject to anti-trust investigation in Europe.

3.

Increase in competitor expansion globally from Johnson & Johnson (J&J),

Colgate-Palmolive, Kimberly-Clark, Unilever, and Clorox.

4.

Regulations are increasing due to the voicing of different groups about

harmful chemical ingredients in cosmetic products.

5.

Diamond foods struggling financially, may not be able to purchase Pringles.

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6.

Premium cosmetics are a prime target for counterfeiters. 9% according to

Global Congress on combating counterfeiting, of all the world trade comprises
counterfeit goods.

7.

Discounting premium cosmetics can damage its prestige image for the
consumers who purchase these products.

8.

The Estee Lauder companies ranks number one in prestige skin care and
number two in makeup in the channel.

9.

Considerable investment is necessary to bring new products to the market and

to maintain their high profile.

CPM Competitive Profile Matrix

EFE Matrix

3.0

INTERNAL ANALYSIS COVERING FINANCIAL RATIO ANALYSIS AND

IFE (Internal Factor Evaluation Matrix)

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Internal Audit
Strengths
1.

Proposed sale of Pringles line of snacks in 2011 for $1.5 billion.

2.

P&G is focused solely on the beauty and personal-care products business.

3.

In 2011, Fortune ranked P&G the number one soap and cosmetic in the
world.

4.

New CEO, Mr. McDonald focuses on lower end products aimed at price
sensitive customers.

5.

P&G operates under a SBU structure.

6.

23 P&G brands routinely earn over $ 1 billion in revenue per year.

7.

Braun, bounty, Charmin, Crest, Downy, Gillette, Pampers are all top brands
owned by P&G.

8.

Invested over $ 2 billion in R&D in 2010.

9.

Market share grew in 14 of top 17 countries in 2010.

10.

EPS is 3.94

Weaknesses
1.

No published vision statement.

2.

$57 billion in goodwill on balance sheet.

3.

Profits declined 5% in 2011 yet revenues increased 2.9%

4.

Weak profitability ratios

5.

Not operating as efficiently as Johnson & Johnson

6.

Spent $772 million in advertising to Johnson & Johnsons $366 million

7.

Consumers may not associate all of our brands with P&G rather view them as
their own distinct companies.

Financial Ratio Analysis

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IFE Matrix

4.0

FORMULATION

OF

STRATEGIES

USING SWOT

WITH

JUSTIFICATIONS
The Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix

PROPER

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The

Strengths-Weaknesses-Opportunities-Threats

(SWOT)

Matrix

is

an

important matching tool that helps managers develop four types of strategies: SO (strengthsopportunities) strategies, WO (weaknesses-opportunities) strategies, ST (strengths-threats)
strategies and WT (weaknesses-threats) strategies. Matching key external and internal factors
is the most difficult part of developing a SWOT Matrix and requires good judgment and there
is no one best set of matches.
SO Strategies use a firms internal strengths to take advantage of external
opportunities. All managers would like their organizations to be in a position in which
internal strengths can be used to take advantage of external trends and events. Organizations
generally will pursue WO, ST, or WT strategies to get into a situation in which they can
apply SO strategies. When a firm has major weaknesses, it will strive to overcome them and
make them strengths. When an organization faces major threats, it will seek to avoid them to
concentrate on opportunities.
WO Strategies aim at improving internal weaknesses by taking advantage of external
opportunities. Sometimes, key external opportunities exist, but a firm has internal weaknesses
that prevent it from exploiting those opportunities. For example, there may be a high demand
for electronic devices to control the amount and timing of fuel injection in automobile
engines (opportunity), but a certain auto parts, manufacturer may lack the technology
required for producing these devices (weakness). One possible WO Strategy would be to
acquire this technology by forming a joint venture with a firm having competency in this
area. An alternative WO Strategy would be to hire and train people with the required
technical capabilities.
ST Strategies

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SWOT

SO Strategies
1.

Spend $4 million in R&D to produce 3 new lines of higher end fragrances (S8,
S9, S10, O1).

2.

Allocate $100 million for advertising and promoting male skin care products
using celebrities as spokesman (S6, O5, O6).

WO Strategies
1.

Increase social media advertising targeting teenagers by $100M (W3, O2).

ST Strategies
1.

Engage in talks with Pepsi to purchase Pringles if the deal with Diamond
Foods is not completed (S2, S3, T5).

2.

Continue to market low end cosmetics and fragrances (S4, T7).

WT Strategies
1.

Reduced advertising by $300M on well established products letting their brand

name sell for itself (W5, W6, T9).

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5.0

Product Development

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6.0

Related Diversification

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7.0

Reference

1)

http://www.wikinvest.com/stock/Procter_%26_Gamble_Company_(PG)

2)

http://www.writemypapers.org/examples-and-samples/corporate-financepaper-procter-gamble.html

3)

http://vivauniversity.files.wordpress.com/2011/09/pg-case-analysis.pdf

4)

http://beta.fool.com/reubengbrewer/2012/11/06/swot-analysis-proctergamble/15838/

5)

http://web.ebscohost.com.newdc.oum.edu.my/bsi/pdfviewer/pdfviewer?

vid=3&sid=f253e8d3-0d2d-423d-b3bd-c67c80f32da0%40sessionmgr11&hid=12
6)

1) http://beta.fool.com/reubengbrewer/2012/11/06/swot-analysis-proctergamble/15838/
2) http://www.slideshare.net/fjpaul1/proctor-and-gamble (penting)
3) http://asmir4u.blogspot.com/2012/03/hierarchical-structure-andswot.html
4) http://www.ukessays.com/essays/business/strategic-analysis-of-procterand-gamble.php
5) http://www.antiessays.com/free-essays/267353.html (CONTOH ABSTRAK)
6) http://newhope360.com/proctor-gamble-company-profile (ABSTRAK)
7) http://www.scribd.com/doc/95688263/Case-Study-Example#download

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