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Plocter & Camble (P&G) in Aplil.20.l I solci its Plingles line of snacks to Diamond Foocls for
$1.5 billion. P&G rnanufactures and markets consumer packaged goocls in the United States
and abroad, but the company, with thrrt divestiture, finally ends being in the lood business
in order to focus on beauty and personal-care protiucts. P&G once ownecl Jif peanut butter,
Crisco shortening, Sunny Delight orange drink, and Folgels cclffee*btit no longer. A recent
Han'arcl Bu,siness Review article (April 201 I ) interviews lirrmer P&G CEO ,4.G. Lafley, rvho
says, "P&G learns muclr more from lailed new blands and products like Dryel at-home clry
cleaning ancl Fit Fruit & Vqgetable Wash than we do from huse successes like Febreze and

Switfer."

ln 11'rrttne's Most Atlnrired Cornpany lirrrl<ingr rclelsed in Febnrary ?0 ll. P&C rarrketl
number one in the Soaps and Cosrretics indr-rstry. P&G changed CEO in Juty 2010, going
tiorlr lv{r. La1ley, rvho focuseci on innovation, to Mr. McDonald, wl.ro focuscs on lower-encl
pl'c)clucts aimed at consumers looking fordiscounts. Founclecl in 1837 in Cincinnati, Ohio, by
\r/illiam Procter and Jarres Carnble. P&G achieved sales ancl eai'nings ol $78.9 billiorr ancl
$12.7 billion respectively in ?010. P&G recently donated $300,000 to the htrFL Play 60 and
YoLrth l-Iealth and Wellness prograrns and pursues LEED certifrcation (gleen buildings) for all
ner',,glohnl siies.
lnternal Factors
P&C opcrltes ilr thlee slrirtegic husiness rrrrits (SBUs). rihich rhey crll glohrrl hrrsines. trnits
(CBUs): l) 13eaLrty ancl Groorning,2) Flealth and Well-Being, ancl 3) Houseliolcl Care. P&G
protlttcts are solcl through thousancls of retail operations, including mass merchanclisers, gro-.
cery stores, membership club stores, clrug stores, clepartment stores, salons, and hrgh-tieqllency
stoles. "lwenty-three P&G products are annual billion-dollar sellers, including Fusion, Always/
Whisper, Brattn, Bour.tty, Charnrin, Crest. Dorvny/Lenor, Gillette, Iams, Olay, Pampers, Pantene,
Tide, ancl Wella. P&C also nrakes pet fbod and water filters anci procluces a soap opera. In March
2011, P&G's air freshener product, Febreze, became the company's 24th procluct to aclrieve $l
billion in revenues. In the Uniiecl States, Febreze cunently l.ras a l7 percent market share in Verstts competing products such as Glacle andAirWick, up fiom 14.t3 percent in 2010. P&G has 2-50
trratrd prodttcts, but the 24 Xlbillion+ proclucts account fbr aboLrt 70 percent of the cornpany's $79
billion+ atrnual revenues. Parrrpers diapers are P&G's best selling plocluct at $9+ billion annually
tbllowed by Tide cletergent"at $5+ billion.

Vision/Mission
As of mid-20 11, P&C does not have a vision statement. The company rnission is:
"We will provide brancled product:i ancl services of superior qLrality ancl value that
improve the tives of tlre wollcl's consumers, now and for generations to come. As
a resttlt, consumers will rer.vard us with lear-lership sales, profit ancl value creation,
allowing our people, our shareholders, and the communities in which r,ve live and
rvorl, to prospel."

?tI

/\LFN BADAL

Growth Strategy
To grow, P&G has historically acquired many smaller businesses such as the pet-food company
Natura Pet Products, h.rc. and Sara Lee Corporation's Ambi Pur air refresher. P&G is reduc.
ing its fabric-car:e bnsiness to about 40 proclLrcts, clown froni 60 lines in 2001 . Also, the cornpany desires to reduce its packaging ink colors from 4,000 plastic colors to 1,500 and 10,000
print-ink colors to 200, which is plojected to save approxirnately $60 million. P&G desires to
accelerate its growth in developing markets, such as Brazil and India, which analysts have nicknamed "walled cities" because Unilever ancl Colgate-Palmolive have historically dominatedthe
rnarkets. Consumers in developine markets are increasingly willing and able to purchase pncey
items, such as P&G's Gillette Fusion ProGlide razor.
P&G invested nearly $2 billion in research & development in 2010, which was nearly50
percent more than tl'reir closest competitor. P&G strives to coniinue innovating and introducing
nerv prodLrcts on an international basis snch as the new Tide Stain Release and Ariel Professional
in laundry additives. P&G has 50 brands thal account for 90 percent of the company's total sales
and profits. P&G reports that 99 percent of U.S. and Canadian households use at least one of its
products. North America replesents about 42 percent of P&G's revenLtes.

Ftnance
P&G's financial objectives include:

.
.
.

Increasins sales I percent to 2 percent faster tl.ran market growth in all categolies and
geo l laphies.
Delivering earnings per share (EPS) growth of high single digits to low double digits.
Generating free cash flow productivity of at least 90 percent.

In adclition, P&G is focusing on improving in the following domains:

. More consumers: P&G's aim is to fbcus on more consumers by innovating procluct lines and
business portfoiios. It is also to focus on and serve price-conscious consumers rvith lower-

.
.

pricecl prodr.rcts, ofTering superior pet'lbrmance compared to competing products.

In more parts of the world: Market and enter nerv markets, while increas ing presence in
developing markets and sales in respective developing markets, with a focus on "affordability, accessibility, and brand awareness."

More cornpletely: Improve existing product lines by focusing on consumer neecis. Also,
increase consumers into existing brand franchises and broaclen products. with a lbcus to
"builcl scale and reduce costs, while increasing profitability and market share."

P&G's income statementb and balance sheets are provicled in Exhibits I and 2. Note that the
company's 2010 revenues increased 2.9 percent to $78.9 billion, br-rt profits declined 5.2 percent to
$12.7 billion. Notice aiso thar P&G had g95 billion in goodwill ancl intangibles, which is nor good.

L:"11{ifitT

P&G's 2010 lncome Statement {figures in thousands)

Period Ending

Dec.30, 2010

Dec. 30, 2009

Dec. 30, 2008

Total Revenue

78,9-38,000

76,694,000

8_3,503,000

Cost of Revenue

37,919,000

38,690,000

40,695,000

Gross Profit

41,019,000

38,004,000

42,808,000

Selling, General, & Admin Exp

24,998,000

22,630,000

25,725.000

Operating Income

16,021,000

I5,374,000

17,083,000

397,000

462,000

Total Other Inc/Exp.

H

BIT

Interest Expense

Inconre Before Tax

(28,000)
l _5,993,000

946,000
15,0,17,000

Income Tax Expense

Net Jnc. lrom Cont. Ops.
Discontinue Operations

Net Earnings
Sorl ce: Company docurnenis.

1-5,771

,000

17,-545,000

r,:ss,ooo

1,467,000

14,41 2,000

16,078,000

4,032,000

4,003,000

10,946,000

10,680,000

12,075,000

r,790,000

2;756,000

12,736,000

13,436,000

12,075,000

CASE

:.d

1,r: i:i

jj

PROCTER & GAMBLE COMPANY

Procter & Gamble Ealance Sheet (000 omitted)

Period Ending

Jun.30,2010

Jun.30,

2009

Jun. 30, 2008

ASSETS
Current Assets
Cash

$2,879,000

4,7S 1,000

Sholt-Term Investnrent

3,313,000
228,000

Net Receivables

6,325,000

7,04-5,000

8,773,000

Inventory

6,384,000

6,880,000

u,416,000

Other Cunent Assets

Total Current A.ssets

Propelty,/Plant/Eq

pnrent

3, 194,000

3,r 99,000

3,785,000

18,782,000

21.,905,000

24,515,000

19,462,000

20,640,000

19,244,000

Goodwill

54,012,000

Intangible Asseti

Other Assets

'lbtal Assets .

' 56,5

I2,000

s9;t67,000

r,636,00t)

32,606,000

34,233,000

4,498,000

4,348,000

4,837,000

128.112.000

r34,833,000

143,992,0tt0

r5,B 10,000

14,58 t ,000

7,91'7,000

8,472,000

r6,320,000

13,084,000

7,768,000

9,897,000

LIABTI-ITIES
Current Liabilities
Accounts Payable
Short/[-ong-term Debt
Other Current Liabilities

Total Current I-iahilities

24,282,A{J$

3(),901,000

30,958,000

Long-telm f)ebt

21,360,000

20,652,000

23,-581,000

Other Liabilities

10, I 89,000

9, r,16,000

8,1,54,000

Del'en'ed I-ong-term Liability

r0,902,000

r0,752,000

r r,805,000

Minority Interest

324,000

283,000

Total Liabilities

67.,{t57,${tll

71,734,0{t0

74,498,000

Stockholclers' Equity
Pret'errecl Stock

1,217,000

r,324,000

1,365,000

Common Stock

4,008,000

4,007,000

4,002,000

Rctained Earnings

'

64,6 r4,000

-s7,309,000

48,986,000

TreasLrly Stock

(61,309,000)

(55,961 ,ooo)

(47,s88,000)

Capital SurplLrs

6l ,697,000

6r;118,000

60,307,000

Other Stockholder's Equity

(9,1 72,000)

(4,698,000)

Total Stockholder's llquity

Total Liabilities and SE

6r

,439,000

$128,172,00{)

63,382,000
134,833,000

2,421,000

69,494,000
143,99?,000

^t.r/rc(. Curilpatry Docurnenls.

Global Business Units (GBUs)

Note in Exhibit 3 that P&G's Beauty and Grooming CBU consists of two divisions, Beauty
and Grooming. That GBU contributes 34 percent of tl.re company's revenLles and 36 percent of
profits. Note that P&G's Health and Well-Being GBu contributes 18 percent of revenues ancl l9
percent of the company's profits. P&G's Household Care GBU is the largest among the three; its
Fabric/Home Care division contributes 30 percent of company sales, ancl its Baby/Family Care
clivision contributes 18 percent. Exhibit 4 reveals sales increases across every single P&G business segment in 2010 as.compared to 2009.
GBU

#1-Beauty and Grooming

P&G's beauty and grooming CBU was overhauled in 2009 with each brand at that time being
categorizeei into "his" or "her" categories. Expansion efforts in this GBU have inchtded entering more department stores with Dolce & Gabbana makeup counters., ancl expancling into new

-2011

21

a_
a2

ALFN BADAL

,';

i,: i i

P&G's 2O1O % Sales/Earnings by Segment Within GBUs

cBU
Bear.rty

sesment %sur*, t;;;;;;-;;;il;;;*-*

&

Beauty Cloorning

23%

24E

Grooming
Total

Health &
Well- Being

Health Care

10%

13Va

347a

360k

u%,

16Vo

Snacks/
Pet Care

Total

Household

Care

Head

&

Shoulclers, Olay,

Pantene

Fabric/
Home

Care
Care

Baby/Family

Total

Braun, Fusion, Cillette, Mach 3

Alrvays, Cr-est, Oral-B
Iams, Pringles

4%
18Vo
i

3%
19%

Ace, Darvn, Downy, Duracell,

Tide

2B7o

30Vr,
.lg%o

17 o/a

4gTo

45Va

BoLrnfy, Charntin, pautpers

Sorrre: www.pg,com,

Beauty ($ millions)
Net Sales
Net Earnings

201 0

2009

r9,491
(t7t1

$ r 8,924

$2,66.1

Grooming
Net Sales

$7,63

7,408

Net Earnings

$1,471

$ 1,3-59

Health Care
Net Sales
Nei Earnings
Snacks and Pet Care
Net Sales
Net Earnings

$1r,493

il,288

$ 1,860

$ r ,83-5

$3, I 35

$3, I

1,1

$326

$234

$23,80-5

$23, r B6

$3,339

$3,032

$14,736

$r4,t03

$2,049

$ 1,770

Fabric Care/Honre Care

Net Sales
Net Earnings

Baby Carc/Family Care

Net Sales
Net Earnings
Sorrrce.' www.pg.com

markets with olay skin crean], jointly advertised with panfene

hair-care products. ultirnatelv.
olay skin cream is crestineil to enrer r50 countries where panren.

ir.;;;;;,;;;;.;;;;,/;

have improved in this GBU and sales growth has outperformed

the rest of the company.
Among female cosmetics piodLrcts sltch as razor blacles
ancl skin care crames, Olay (facial
is the str-ongesr brand holcling an approximate 10 percent
of the global market share.
:k]1t1:)
P&c holds a 20 pe|cent share ol the retail hair care m.rket ,rnre.
ireaoea hy brantls srch a\
Pantene and Head & shoulciers shampoo. Fragrances
such as Dolce & Gabbana, Gucci, ancl
Hugo Boss represent the tr-agiance lines.
Regarding grooming products, Gillette's Fr-rsion and Mach
3 are top proclLrcers, representing
70 percent of the global nlale razor blade markef . Male
deoclorants, sha;ing cream, and hair/skin
products are among other products that P&G markets.
The electronic shaver Braun has been a
successful brand, with the company holding approximately
30 percent of the nrale shaver nrarket
and -50 percent of the female epilator market.

.,t..

CASE

PROCTER & GAMBLE

68tJ #2-Health and Well-Being

In the health care segment of this GBU, P&C has about.35 percenr of the global feminine
care prodttcts business. Personal health nonprescription products, such as heartburn meciication Prilosec (OTC) ancl Vicks, are successful P&G brancls. In the Snacks/Pet Care division.
P&C's Pringles potato chips lchievetl a l0 percerrt share of the glohal mlrket shrrre before heing
divested. The pet care segment's Iams and Eukanuba brands have helpecl capture an approximate
10 percent market share, with the rnajority of the business being in North America.
GBU

#3-Household eare

P&C's lamily care flncl home care brantls. including Ace, Ariel. bawn. Downy" Dulacell. Cain.
and Tide, achieved net sales oi Sl-1.8 billion in 2010. The labric cale product lines include
laundry cletergents, fabric enhancers, and home care products/batteries. The division has a 30
percent global share. However. the global honre care market share is about 15 percent across
the categories, and the l)uracell battery brancl yields about a 25 percent glohal market share for
P&G. Sorne of P&G's household products, snch as alkaline batteries, liquid detergent/cleaners,
bleach, diapers, ancl paper towels, incurred cleclining sales cluring.the 4th qllartel'of 2010, with
bleach revenues dropping 1 1.3 percent and battery revenlles dropping 7 percent.
P&G has a Baby Care and Family Care division. The baby care business, which consists of
diapers and ba6y wipes, has about 35 percent of the global market share, making P&G either the
number one or two manut'acturer of baby care proclucts globally. Pampers is the company's most
sttccessful brand ever and achieved net sales of apploximately $9 billion in 2010. P&G's family
care br"tsiness includes Bounty paper towels and Charmin toilet paper,'which generate about 45
percent ancl 25 percent of the U.S. market share respectively.

Global Operations
P&G's does business in i.lorth America, Western Europe, Central and Eastern Europe/Micldle
East/Africa (CEEMEA), Latin Arnelica, and Asia, which consists of Japan, China, ancl ASEAN/
Austlalia/India/Korea (A.AIK). P&G products are solcl in approxintately lB0 difl'erent countries
around the globe. Exhibit 5 lists the respective revenues stemming from each global region.
l{ote that North America is the primary source of revenues ($33.1 biilion), followed by Western
Europe ($ 16.6 billion). The approximate population of North America is 528,720,-588, rvhereas
Western Europe's is about 391 ,415,514.In comparison, North America's revenues were approximiltely 25 nercent greater than Western Errrope's revenues.

OIay is a big slrccess in Mexico with an 8 percent market share of lhe facial moisturizing
market. I-atin America and the Middle East & Africa comprise tl.re srnallest portion of P&G's
global business, but Asia as a primary target for growth, with the continent being home to some
.the fastest-growing economies in the world. Over three billion consumers populate Asia,
representing more than half of the world's population. During the last decade, P&G has more
than doubled the number of brands in its Asian portfolio (from l0 to 22).
P&G has sold products in Latin America for approxirnately 60 years. P&G is one of the largest consumer goods companies in the region, across l4 counn'ies with 19 manufacturing sites, l2
distribution centers, and one service site. The largest markets are Mexibo, Brazil, Venezuela, and
Argentina. Exhibit 6 inclLrdes P&C's executives, and Figure l provides an organizational chart
fbr the company. Note that Werner Geissler is the company's vice chairntan of global operations.
o1'

P&G's 2010 Regional Revenues

Region

Revenues

Nolth America

42o/a

$3-1,I

Westeln Europe

217o

$16.6

Central & Eastern-

73Vo

$ 10.3

Europe/MiddleEast/& Africa
Latin Arnerica

Asia
Totals

il

,c

9Vo

$7.

15%,

$1r.8

IOAVa

$7&.9 billion

COMPANY-2011

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CASE

PROCTER & GAMBLE COMPANY

North America is the largest clivision (sales) of P&G. In Westenr Europe, P&G malkets over
to 1930 in the United Kingclom. As of 2011, P&G produus are narketed in every Western European country, which together account for about 25 percent of total
conpany sales. P&G has about 35 manufacturing plants in Western Europe.
100 brands, dating back

Competitors

& Johnson (J&J), Colgate-Palmolive, Kimberly-Clark, Unilever, ancl Clorox are major
competitors to P&G in the personal proclucts industry. Exhibit 7 provides select competitors'
performance as compared to the industry. Note J&J's net income was $ I 3.2 billion compared to
P&G's $10.9 billion. J&.J employs approximately 114,000 associates worlclwide, operating in
over 60 countries with three business segments: l) consumer;2) rnedical devices and diagnostics; and 3) pharmaceutical. J&J had $61.5 billion in revenues in fiscal 2010, birt its consumer
division is the one that primarily competes with P&G. Particular prciducts include J&J baby
shampoo, Liquid Neutrogena, Band-Aid, and Tylenol aspirin. J&J utilizes more than 29,000
Johnson

Internet domains, such as KY.com and JJ.com. J&J has an impressive history wilh 21 consecutive yeals' adjusted earnings growth and 48 consecutive years of dividencl increases. Similar to
P&G, J&J continues to introcluce new products in the market, but cluring fisial y6ar 2010, J&J
encountered two major recalls.
Colgate-Palmolive

Colgate-Palmolive is a global rnanuhcturer nntl mnrketer of oral care pelsonal care, home care.
and pet nr-rtrition products. The conipany markets its prodr-rcts in over 200 countries under the
brancls Colgate, Palmolive, Mennen, Softsoap, Irish Spring, Protex, Sorriso, Kolynns, Elmex,
Tom's of Maine, Ajax, Axion, Soupline, SLravitel, ancl Hill's Science Diet and Hill's Prescription
Diet. Founded in I 806 and headquarterecl in New York City, the company achievecl net income of
$2.2 in fiscal 2010. The company operates 280 international facilities, of which 76 are ownecl in
t ariotts cottntries, such as Australia, Brazil, China, Colombia, France, Guatemala, Italy, Mexico,
Polancl, South Afi'ica, Thailand, and Venezuela. While the company has been exponentially phasing out and closing selecf production facilities since 2004, it has also built state-of-the-art plants
that manufacture toothpaste in the United States and Poland. The company employs approximately 36,000 ernployees globally.

Kimberly-Clark

'

Kirnberly-Clark was fbunded 1n 1812 and operates four business segments: l) Personal Care, 2)
Consurier Tissue, 3) K-C Prof'essional & Other, and 4) Health Care. The Personal Care clivision
manttfactttres and markets products such as disposable diapers, baby wipes, ancl fenrinine antl incontinence care proclucts under sLich braucl names as Huggies, Pull-Ups, Little Swimmers, GoodNites,

I(otex, Liglitdays, Depend, and Poise.

The Consumer Tissue division manufactures and markets products such as facial ancl
bathroom tisstre, paper towels, and napkins. Products in this division ale marl<etecl as Kleenex,

l.i.lii

!b

Ii

Direct Competitor Comparison

Market Cap.

# Employees
7o

Qtrly Rev Grorvth

J&J

t'768

658

268

IB

t2'7r<

114K

N/A

2.24K

KC

150

-5 50

r.90

r 1.00

79R

6lB

l98

406M

Margin

5l .29

69.49

33.27

46.91

Oper Margins

t9.'70

26.84

i4.64

r0.40

r3.338

1.848

N/A

4.78

4.45

0"94

ti Revenue
7o Gross
o/o

lndustry

P&G

$ Net Incorne

$ EPS

3.67

KC = Kimberly-Clark
Industry = Personal Products
.lorrrce: Ilased on www.linance.yahoo.com-

0.958

-2011

25

ALEN BADAL

& other cliviScott, Cottonelle, viva, Andrex, scottex, Hakle, and Page. The K-c Professional
rvipes sold
and
napkins,
sion markets such products as tacial and bathroom tissue, paper towels,
and
Kimcare'
under the brands I(imberly-Clark, Kleenex, Scott, WypAll, Kimtech, KleenGuard,
Jackson.

l{ealth Care segntent rnarkets disposable health care proilucts such as surgical
gloves, respiratol'y prodilcts' and pain
ancl gowns, infection coitrol prodllcts, face masks, exam
The cornpany has
manigement products uncler Kimberly-Clark, Ballard, ancl ON-Q brands'
in
F'urope' and 64 in
20
in Canada,
56,00"0 employees and 2l facilities in the United States, one
multiple producproducing
Asia, Latin America, ancl other countries, rvith many of the facilities
in 2010'
revenues
total
tion itel-rs/products (synergy), The company achievecl $19'7 billion i1
drapes

Tl-re

Unilever

London that n-rarkets more than

Unilever is a privately-held British corporation heaclquarterecl in
company's main foctts is on
the
However,
400 brands, such as Lipton tea, Dove, ancl Aviance'
annual sales in excess
achieving
12
brands
are
what are callecl "billion-.lollo, branclsi'which
of sales' They are catpercent
70
than
more
for
of 1 billion. Unilever's top 25 brancls accollnt
company achieved net
The
divisions'
care
egorizecl into foocl and beverage, home, and personal
piofits of 4,591in 2010, up flom 3,659 in 2009'
g|owth in 2010' with strong
Unilever''s Asia Pacific segment yielded double-digit volttme
competitive market existing
The
China.
p.rf*t;;;.; i,.r u"tnu-, tne 16itippines, Pakistan, and
experienced weaker
company
The
in India yiekled a clouble-digit uojl-im. growth for Unilever.
wet'e achieved
growth
v6luine
of
rnarket conditions in Central and Eastern Europe. Increases
North
particitlar,
In
America'
North
in
as a result of growth in Latin An.rerica and perforrnances
4
above
increased
grorvth
America's
America achieved a 3 percent voiume growth, while Latin
percent, with the assistance of increased plicing'
The comUnilever directly competes with P&G's personal ancl home .care segments'
as Dore
such
brands
by
sales
strong
part
to
pany witnessed strong sales in deoclorants clue in
volrinle
strong
hacl
have
products
laundry
Men+Care anrl Rexona. Its home care segment's
older
In
detergents'
laundry
Wheel
and
Rin
growth in Inciia, clue in part to the lelar.rnching of
achieved
which
liquids,
Omo
launcirecl
to shrink the market share gap in China, the company
double-digir Srowth.
Clorox

Clorox manufacturers ar]d markets conslnner products uncler such brands

as

its namesake bleach

cleaners' Poett home

and cleaning products, Green Works nattttal home care proclucts, Pine-Sol
Valley and K C Mastelpiece
care produJts, Fresh Step cat litter, Kingsford charcoal, Hidden
wraps and containers' and
dressings and sauces, Brita water-filtration proclLlcts, Glacl bags and
approximately
Burt,s Bees naturai per:sonal care producrs. Founded in 1980 and employing
globally, Clorox achieveh revenues of $5.2 billion in fiscal 2010' Clorox

8,300 employees
countries around
manufactnres products in over 24 countries and markets them in 100 clifferent

;;;;;iJ

in lour. respective segnrents: international. cleaning, hotrsehold. ancl lifesegment achieved 32

sty1e. International sales constitutecl 21 percent of sales. The household
with 17 percent' A
lifestyle
and
percent,
\tvith
31
cleaning
by
p"r..n, of sales in 2010, followed

**,..

lrome care products

sample of the compaly's products and brands sold under such categories as
percent
of sales' Charcoal
l7
constitr.rted
pine-sol,
whicir
Plumr,
fifex, +O+, and Liquid
inclucle
The Glad brand
Kingsford'
and
Light
Match
as
brands
achievecl l1 percent of sales, with such
and the
percent,
1
1
produced
Clorox
laundry-related
produced 13 percent of net sales, while
of
percent
9
achieved
Masterpiece'
ancl
ValJey
Hidclen
.o.pony'u dressings and sauces, such as
segments'
business
company's
the
within
net iale.s, among other brands/products represented
P&C and
lists leacling househoid prodr.rct companies as cleterminecl by sales, ied by

Exhibit

followecl by Unilever in fiscal l0 10.

their own brands'
Retailers, such as giant wal.-Ma{t, continue to place heavier emphasis on
greater emplace
to
manufacturers
catlsed
have
High unemployment rates across the country
Basic'
Bounty
Basic,
Channin
Basic,
Tide
P&G's
phisis on 'value-priced" products, sttch as
&
Arm
as
such
"value"
products,
own
their
offer
and Papers Basic. Church & Dwight Company
detergent'
Ilammer laundry cletergent and Xtra laundry

CASE

3.

.PROCTER & GAMBLE

hF,t+it,:g'!"

;!l

Leading Household Products/Personal Care Companies

(ranked by sales)
(Mil.$/f

Company

Fiscal Year End

Procter & Garnble

June

'i0

$78.9

Unilever

Dec. ' 10

f.44.3

L'Oleal

4.9

Kimberly-Clark

Dec. '10
Dec. '10

Colgate-Palmolive

Dec. '10

$15.6

Kao

Mar. '10

$I

Reckitt Ilenckiser

Dec. '10

f 8.5

Avon

Dec. '10

$ r0.9

Ilstee Lauder

Jun. 'l 0

$1,796

Shiseido

Mar. ? l0
Jun. '10

$6,9s

Dec. ' l0

$2.6

Cloror
Chr-rrch

& Drvight

Sales

$ 19.8

2,730

$).)

Alberto-Culver

Sept. '10

$ I ,-s97

Rcvlon

Dec. '10

$1.3

lolicr,.

Stanctard ancl Poor's December 30, 20 I 0, wrvw.finance.yirhoo.cotrr/conrplny

reports

P&G spencls as mllch on advertising as any conrpnny. Exhibit 9 Iists the leading national
advertisers during tlie firsl quarter of 20 10, led by P&G's $7'72.6 million. IndividLral item market
share percentages remain tight in the industry among key products. P&C holds a slight narket
share advautage with Duracell (40.2 percent) over Energizer (38.8 percent). Sales cif bafteries
fell 6.2 percellt in 2010. P&G is the inclusry leader lvith the lazor (65.3 percent)

ancl blacles

(83.2 percent). Energizer's Schick holcls a second ranking of market share with 28.-5 percent in
razors and I 3.8 percent in carffidges.

P&G holds 60.2 percent of the laundry detergent marl(et share and 40.4 percent of the
toothpaste share, compared to Colgate-Palmolive's 29.7 percent shale of the toothpaste market. Disposabie cliapers market share is lecl by P&C with 48.2 percent ancl Kimberly-Clark
with 34.2 percent. However, sales of private-label brancls rose 13.-5 percent, while private,label
mariiet share increasecl to 16.8 percent in 2010. In cleodolants, P&G holds a 35,5 percent share,
Unilever's share is 28.7 percent, and Colgate-Palnrolive's share is 10.-5 percent. P&G holcls a
leading 37.3 percent of the shampoo rnarket share, follorvecl by L'Orealls 13.1 percenr. Koch
inclustries leads in the toilet fissue market share wirh 16.7 percenr. follorvecl by KimberlyClark's 25.1 percent ancl P&G's 24. I percent. Industry analys[s believe continued new product
development will be the key to increasing market share/sales.

i::l{t{iir;ii ,-r Top Ten Advertisers of Q1 2010

Company
Procter'& Camble Co.

Jan-March 2010
($ Millions)
$'/72.6

AT&T

$516.4

Ceneral Motors Corp.

$533.7

Verizon C()mnlunieal ()n\

$5 17.2

Pi'izer Inc.

$396.4

Johnson

& Johnson

$366.8

Time Warner Inc.

l;304.3

Walt Disney Co.

$261.6

General Electric Co,

$264.6

^Solrcz. www.businesswire.cont.

COMPANY-

2011

28

ALFN BADAL

The Future
Company reports have indicated volume growth opportunities exist across the business landscape, but industry reports'suggest consumers are more cash-strapped than before. Given the
varying political and economic conditions globally, as well asr'the August 2011 stock market
crash, what strategy should P&G implement by taking advantage of the opportunities that exist
in the industry, while utilizing its strengths? How can the company optimally manage its weaknesses while avoiding potential threats imposed by competitors and/or the industry? Will the future continue to be bright for P&G? Identify particular strategies for CEO McDonald to consider
in order for P&G to continue surpapsing its rivals while increasing revenues and market shares
across product categories and regions.

Membare
t.

2.

ENSONG, .JESSE JEAN

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MONI6JO/ WES

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