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social Sustainability.
Our commitment begins with P&Gs Purpose, Values and Principles, in which Sustainability is embedded, and manifests itself in a systemic and long-term approach. We strive to make our actions matter. In 2007, P&G established five strategies for Sustainability and set goals to be achieved by 2012. In March of 2009, in recognition of the progress weve made so far and to emphasize our commitment to achieving even more significant wins, we increased each of our goals. Its a part of P&Gs culture to continuously raise the bar, and our work in Sustainability is no exception. Our five strategies are as follows:
Delight the consumer with sustainable innovations that improve the environmental profile of our products. GOAL Develop and market at least $50 billion in cumulative sales of sustainable innovation products, which are products that have an improved environmental profile.(1)
PROGRESS (in billions of U.S. dollars) Cumulative sales of sustainable innovation products
Improve the environmental profile of P&Gs own operations. GOAL Deliver an additional 20% reduction (per unit production) in CO2emissions, energy consumption, water consumption and disposed waste from P&G plants, leading to a total reduction over the decade of at least 50%.
PROGRESS (percent reduction per unit production) Energy Usage CO2 Emissions Waste Disposal
Improve childrens lives through P&Gs social responsibility programs. GOAL Enable 300 million children to Live, Learn and Thrive.(2) Prevent 160 million days of disease and save 20,000 lives by delivering 4 billion liters of clean water in our Childrens Safe Drinking Water program.(3)
135 million
CHILDRENS SAFE DRINKING WATER Liters of Clean Water Delivered Days of Disease Prevented Lives Saved 930 million 39 million > 5,200
Engage and equip all P&Gers to build Sustainability thinking and practices into their everyday work.
Shape the future by working transparently with our stakeholders to enable continued freedom to innovate in a responsible way.
(1) Sustainable Innovation Products are included if they have launched in market since July 1, 2007, and have a >10% reduction in one or more of the following indicators without negatively impacting the overall Sustainability profile of the product: A. Energy, B. Water, C. Transportation, D. Amount of material used in packaging or products, E. Substitution of nonrenewable energy or materials with renewable sources.
(2)
(3)
Live, Learn and Thrive (LLT) is P&Gs global cause that focuses our social investments on efforts that improve the lives of children in need ages 0 13. Within Live, Learn and Thrive, our signature program is Childrens Safe Drinking Water. Methodology for calculating diarrheal days and mortality was developed with Population Services International and Aquaya Institute. Details are provided in the 2009 Sustainability Report found at www.pg.com/sustainability.
VALUES
P&G is its people and the values by which we live. We attract and recruit the finest people in the world. We build our organization from within, promoting and rewarding people without regard to any difference unrelated to performance. We act on the conviction that the men and women of Procter & Gamble will always be our most important asset. Leadership We are all leaders in our area of responsibility, with a deep commitment to deliver leadership results.
We develop the capability to deliver our strategies and eliminate organizational barriers.
Ownership We accept personal accountability to meet our business needs, improve our systems, and help others improve their effectiveness.
We all act like owners, treating the Company's assets as our own and behaving with the Company's long-term success in mind.
We uphold the values and principles of P&G in every action and decision.
We are data-based and intellectually honest in advocating proposals, including recognizing risks.
Passion for Winning Trust We respect our P&G colleagues, customers, and consumers, and treat them as we want to be treated. We are determined to be the best at doing what matters most.
OUR PRINCIPLES
We Show Respect for All Individuals We believe that all individuals can and want to contribute to their fullest potential.
We value differences.
We inspire and enable people to achieve high expectations, standards, and challenging goals.
The Interests of the Company and the Individual Are Inseparable We believe that doing what is right for the business with integrity will lead to mutual success for both the Company and the individual. Our quest for mutual success ties us together.
We Are Strategically Focused in Our Work We operate against clearly articulated and aligned objectives and strategies.
We only do work and only ask for work that adds value to the business.
Innovation Is the Cornerstone of Our Success We place great value on big, new consumer innovations.
We challenge convention and reinvent the way we do business to better win in the marketplace.
We Are Externally Focused We develop superior understanding of consumers and their needs.
We create and deliver products, packaging, and concepts that build winning brand equities.
We develop close, mutually productive relationships with our customers and our suppliers.
We Value Personal Mastery We believe it is the responsibility of all individuals to continually develop themselves and others.
We Seek to Be the Best We strive to be the best in all areas of strategic importance to the Company.
We benchmark our performance rigorously versus the very best internally and externally.
We work together with confidence and trust across business units, functions, categories, and geographies.
We build superior relationships with all the parties who contribute to fulfilling our Corporate Purpose, including our customers, suppliers, universities, and governments.
Follow Trefis See all from Trefis More from Trefis: Green Initiatives at Kimberly-Clark Add to Upside Feminine care a battleground for P&G and Kimberly Clark Designer Diapers Boost P&G, Kimberly Clark Article Tools: Buzz Up! Stumble It Tweet It Facebook LinkedIn Share It Referenced Stocks CL75%Rate It KMB0%Rate It PG100%Rate It UL0%Rate It
Posted 1/29/2011 12:30 PM by Trefis Team from Trefis in Investing, Investing Ideas, Stocks, US Markets 0 comments | Like itDon't like it Referenced Stocks: CL, KMB, PG, UL
As the global economy gradually recovers from the recessionary 2008-09, consumer products companies across the globe are implementing measures sustain growth and meet investor expectations. It comes as no surprise that all the big players such as Procter & Gamble ( PG ), Kimberly Clark ( KMB ), Colgate Palmolive ( CL ) and Unilever (UL ), among others, and have resorted to time-tested strategies to maintain the most crucial metric in personal care industry, their market share. But while P&G continues to beat the market expectations, further raising its outlook for sales growth to 7% for the year ahead, Kimberly Clark issues downside guidance for the full year with sales growth expected to be around 2%. This caught our attention and got us thinking what is it that P&G is doing right? Response to economic downturns
While the recent recession was devastating in its scope, economic downturns are no anomalies by themselves. In fact, businesses with sound fundamentals along with good cash and working capital management often stand to gain in the long term from downturns. Here's how the personal care consumer products companies have responded to the adverse macroeconomic environment. 1) All the global players have compensated for low growth in developed markets by focusing on emerging markets in South Asia, Latin America and Eastern Europe, which have been exhibiting double-digit growth rates on account of rising disposable income levels and high population growth rates. While the cash rich players can reasonably target inorganic expansion by acquiring local/regional players amidst lower valuations in general and expensive credit (which restrains the cash starved competitors thereby eliminating competitive bids). 2) The cash starved competitors undertake corporate restructuring and cost-cutting initiatives so as to improve operating margins. This might also involve divestiture of non-strategic and less profitable business units and/or businesses with low growth potential. The industry as a whole focuses on consumer promotions (For instance: Buy Two Get one Free) and retracts from advertising and media spending. Research and development too gets allocated lower budget in general. What Makes P&G Different? P&G has focused on offering value-for-money to the consumers who are strained with cash amid rising unemployment and reduced disposable income levels. Offering branded (quality) products at lower price points has helped P&G maintain and even gain market share. With this result, P&G has been exhibiting robust volume growth in excess of 7%, partially compensated by a negative growth in prices (~1%), still leading to an impressive 5%- 6% value growth. Kimberly Clark on the other hand continues to focus on building the brand. Despite having a portfolio of leading baby care and feminine care products, Kimberly Clark has been losing share to private labels and other competitors, as consumer trade down to other lower priced substitutes. The impact of loss in volumes to private labels lasts much longer than the recession itself since consumers tend to stick to lower-priced products that offer acceptable quality even after the economic conditions improve.
Objective
OUR PURPOSE
We will provide branded products and services of superior quality and value that improve the lives of the world's consumers, now and for generations to come. As a result, consumers will reward us with leadership sales, profit and value creation, allowing our people, our shareholders and the communities in which we live and work to prosper.
History of p& g
Procter & Gamble Co. (P&G, NYSE: PG) is a Fortune 500 American multinational corporation headquartered in Downtown Cincinnati,Ohio[3] that manufactures a wide range of consumer goods. It is 6th in Fortune's Most Admired Companies 2010 list.[4] P&G is credited with many business innovations including brand management and the soap opera. Procter & Gamble is a leading member of the U.S. Global Leadership Coalition, a Washington D.C.-based coalition of over 400 major companies and NGOs that advocates for a larger International Affairs Budget, which funds American diplomatic and development efforts abroad.[5]
Type
Industry
Consumer goods
Founded
1837
Headquarters
Area served
Worldwide
Key people
Bob McDonald
(President) & (CEO)
Products
Revenue
Operating income
Net income
Total assets
Total equity
Employees
127,000 (2010)
Website
pg.com
History William Procter, a candlemaker, and James Gamble, a soapmaker, immigrants from England and Ireland, respectively, who had settled earlier in Cincinnati, who met as they married sisters, Olivia and Elizabeth Norris,[6] formed the company initially. Alexander Norris, their father-in law, called a meeting in which he persuaded his new sons-inlaw to become business partners. On October 31, 1837, as a result of the suggestion, Procter & Gamble was born. In 1858-1859, sales reached $1 million. By this point, approximately 80 employees worked for Procter & Gamble. During the American Civil War, the company won contracts to supply the Union Army with soap and candles. In addition to the increased profits experienced during the war, the military contracts introduced soldiers from all over the country to Procter & Gamble's products. In the 1880s, Procter & Gamble began to market a new product, an inexpensive soap that floats in water. The company called the soap Ivory. William Arnett Procter, William Procter's grandson, began a profit-sharing program for the company's workforce in 1887. By giving
the workers a stake in the company, he correctly assumed that they would be less likely to go on strike. The company began to build factories in other locations in the United States because the demand for products had outgrown the capacity of the Cincinnati facilities. The company's leaders began to diversify its products as well and, in 1911, began producing Crisco, a shortening made of vegetable oils rather than animal fats. As radio became more popular in the 1920s and 1930s, the company sponsored a number of radio programs. As a result, these shows often became commonly known as "soap operas".
The company moved into other countries, both in terms of manufacturing and product sales, becoming an international corporation with its 1930 acquisition of the Thomas Hedley Co., based in Newcastle upon Tyne, England. Procter & Gamble maintained a strong link to the North East of England after this acquisition. Numerous new products and brand names were introduced over time, and Procter & Gamble began branching out into new areas. The company introduced "Tide" laundry detergent in 1946 and "Prell" shampoo in 1947. In 1955, Procter & Gamble began
selling the first toothpaste to contain fluoride, known as "Crest". Branching out once again in 1957, the company purchasedCharmin Paper Mills and began manufacturing toilet paper and other paper products. Once again focusing on laundry, Procter & Gamble began making "Downy" fabric softener in 1960 and "Bounce" fabric softener sheets in 1972. One of the most revolutionary products to come out on the market was the company's "Pampers", first testmarketed in 1961. Prior to this point disposable diapers were not popular, althoughJohnson & Johnson had developed a product called "Chux". Babies always wore cloth diapers, which were leaky and labor intensive to wash. Pampers provided a convenient alternative, albeit at the environmental cost of more waste requiring landfilling. Procter & Gamble acquired a number of other companies that diversified its product line and significantly increased profits. These acquisitions included Folgers Coffee, Norwich Eaton Pharmaceuticals (the makers of Pepto-Bismol), Richardson-Vicks, Noxell (Noxzema), Shulton's Old Spice, Max Factor, and the Iams Company, among others. In 1994, the company made headlines for big losses resulting from leveraged positions in interest rate derivatives, and subsequently sued Bankers Trust for fraud; this placed their management in the unusual position of testifying in court that they had entered into transactions that they were not capable of understanding. In 1996, Procter & Gamble again made headlines when the Food and Drug Administration approved a new product developed by the company, Olestra. Also known by its brand nameOlean, Olestra is a lower-calorie substitute for fat in cooking potato chips and other snacks that during its development stages is known to have caused anal leakage and gastrointestinal difficulties in humans. Procter & Gamble has dramatically expanded throughout its history, but its headquarters still remains in Cincinnati. In January 2005 P&G announced an acquisition of Gillette, forming the largest consumer goods company and placing Unilever into second place. This added brands such as Gillette razors, Duracell, Braun, and Oral-B to their stable. The acquisition was approved by the European Union and the Federal Trade Commission, with conditions to a spinoff of certain overlapping brands. P&G agreed to sell its
SpinBrush battery-operated electric toothbrush business to Church & Dwight. It also divested Gillette's oral-care toothpaste line, Rembrandt. The deodorant brands Right Guard, Soft & Dri, and Dry Idea were sold to Dial Corporation.[7] The companies officially merged on October 1, 2005. Liquid Paper, and Gillette's stationery division, Paper Mate were sold to Newell Rubbermaid. In 2008, P&G branched into the record business with its sponsorship of Tag Records, as an endorsement for TAG Body Spray.[8] P&G's dominance in many categories of consumer products makes its brand management decisions worthy of study.[9] For example, P&G's corporate strategists must account for the likelihood of one of their products cannibalizing the sales of another.[10] On August 24, 2009, the Irish-based pharmaceutical company Warner Chilcott announced they had bought P&G's prescription-drug business for $3.1 billion.[11][12]
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