Key Internal Strengths:

There are several strengths that allow Procter & Gamble to be the world’s largest
consumer goods product company.

High Brand Recognition

P&G is one of the world’s most successful brand creation and brand building companies.
The company markets more than 40 product categories with 300 brands in over 180
countries. Some of its very well-known brands include Tide, Pampers, Bounty, Charmin,
Cover Girl, Pantene and Clairol. They have 22 brands with sales exceeding one billion
dollars each. P&G’s continuous involvement in consumer research helps it understand,
anticipate and respond to consumer needs and wants and hence create marketing and
advertising innovations more effectively and efficiently than many other companies.
P&G’s brand leadership helps it implement brand building innovations with retail and
media partners in ways that few companies can match.

Diversified and Innovative Product Portfolio

P&G’s leading global brands are platforms for innovation. They can bring new products
to market on brands that already have strong equities and deep consumer trust; this
increases consumer trial and retail customer support. P&G has also been a courageous
leader by creating new categories with new brands such as Febreze, Swiffer, Prilosec
OTC, and ThermaCare. For both new and existing brands, they leverage P&G’s strong
customer partnerships and local market knowledge to maximize consumer trial and the
ultimate commercial success of net initiatives.

P&G generates revenues through seven business divisions; beauty (30% of the total
revenues during 2007), fabric and home care (28%), baby and family care (19%), health
care (12%), pet health, snacks and coffee (6%), blades and razors (5%). The company
markets a range of products across its seven segments.

The company also has a strong focus on innovation. P&G was ranked 7th in Business
Week’s World Most Innovative Companies in 2006. P&G interacts with more than four
million consumers a year in nearly 60 countries and conducts more than 10,000 research
studies each year. The company holds over 25,000 active patents worldwide. Its research
spans more than 25 product categories and 11 core product technologies. Some of its
innovative products include Tide, Crest, Pampers, Dryel, Actonel and Iams.

The diverse product portfolio enables the company to protect itself against demand
fluctuations for certain products, while strong focus on research and development allows
it to renew its product line at regular intervals, which boosts customer loyalty and
revenue growth. These brands have market share in their respective categories, and offer
the company a significant edge over its competitors.
 Leading Market Position

P&G has leading market position across most of its businesses. P&G is the global market
leader in beauty segment with leading market shares of 24% and 36% in the hair care and
feminine care categories respectively, through brands Always, Head & Shoulders, Olay,
Pantene and Wella. Leading market position along with its strong brands provides it with
significant competitive advantage as well as stabilizes the company’s financial growth.

The company holds a leading position in oral care. In pharmaceuticals and personal
health, P&G has approximately 33% of the global bisphosphonates market for the
treatment of osteoporosis under the Actonel brand. The company is also a global leader in
nonprescription heartburn medications and in respiratory treatments. Crest and Oral-B are
well known brands in the health care segment.

The company is also the global market leader in fabric care with global market share of
approximately 33%, with key brands such as Ariel and Tide. P&G also has a global home
care market share of approximately 21%. In baby care, the company has a global market
share of approximately 36% competing through the strong Pampers brand. The
acquisition of Gillette has enabled P&G to hold leading market share in blades and razors
segment with a global market share of approximately 72%. P&G’s coffee business also
holds leadership position with approximately 34% of the US market, through its Folgers
brand.

Organizational Structure

P&G has an organizational structure that is comprised of three Global Business Units
(GBUs) and a Global Operations group. The Global Operations group consists of the
Market Development Organization and Global Business Services. The heads of the three
GBUs and Global Operations each report to the Chief Executive Officer.

Here is the Organizational Chart for Procter and Gamble.

CEO

Vice Chairman VP of the Board Vice Chairman of the Board Vice Chairman
P & G Family Health P & G Household Care Global Operations

Group President President Group President Group President

Global Prestige Care Global Pet Health Global Fabric Care Eastern Europe & Afri

President President President Group President

Global Skin Care Global Pharmaceuticals Global Home Care Western Europe

President President President Group President

Global Hair Care Global Oral Care Global Snacks North America

President President Senior VP HR President

Global Professional Care Global Baby & Adult Global Household Care Northeast Asia

President President President India

Global Feminine Care Global Family Care And Australia

President President
Global Prestige Products Greater China

President President
Global Cosmetics Latin America
The three GBUs are Beauty and Health, Household Care and Gillette. The primary
responsibility of the GBUs is to develop the overall strategy for their brands. They
identify common consumer needs, develop new product innovations and build their
brands through effective commercial innovations, marketing and sales.

This new structure took effect in April 2006 when they announced a number of changes
to certain of their key leadership positions, which resulted in changes to their GBU
structure and their segment reporting. The company believes that they get the full value
of the company’s strengths with a unique organizational structure and supporting work
systems. P&G is the only consumer products company with global business unit profit
centers, a global shared business services, all supported by innovative corporate
functions. They are essentially running a number of highly focused companies that share
common go-to-market operations and business services. They have made it possible for
each business unit to focus on its individual consumers, customers and competitors while
capturing all the capability, knowledge and scale of a $75 billion global company. In
addition, they have created the capability to collaborate, learn quickly from one another,
and reapply successes across P&G businesses. This is a more agile, flexible and
responsive structure, allowing the global business units to focus on necessary growth. It
is also hard for a competitor to duplicate this structure.