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[answered] A Progressive Digital Media business COMPANY PROFILE The Pr


I need 3-4 pages summary to the attached file. Please list all the SWOT analysis points and ignore the company overview section.


A Progressive Digital Media business COMPANY PROFILE The Procter & Gamble

 

Company REFERENCE CODE: C895EAE6-25E0-4D36-B30D-69500B939DC1

 

PUBLICATION DATE: 08 Jul 2016

 

www.marketline.com

 

COPYRIGHT MARKETLINE. THIS CONTENT IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED OR DISTRIBUTED The Procter & Gamble Company

 

TABLE OF CONTENTS TABLE OF CONTENTS Company Overview ........................................................................................................3

 

Key Facts ......................................................................................................................... 3

 

SWOT Analysis ...............................................................................................................4 The Procter & Gamble Company

 

? MarketLine Page 2 The Procter & Gamble Company

 

Company Overview Company Overview COMPANY OVERVIEW

 

The Procter & Gamble Company (P&G or 'the company') is one of the world's largest consumer goods

 

companies. It markets branded products in beauty, health care, grooming, fabric care, and home care

 

categories, among others. The company operates in the Americas, Europe, the Middle East and Africa

 

(EMEA) and Asia Pacific. It is headquartered in Cincinnati, Ohio and employed about 110,000 people as

 

of June 30, 2015. The company recorded revenues of $76,279 million in the financial year ended June 2015 (FY2015), a

 

decrease of 5.3% compared to FY2014. The operating profit of the company was $11,790 million in

 

FY2015, a decrease of 20% compared to FY2014. The net profit was $7,036 million in FY2015, a

 

decrease of 39.6% compared to FY2014.

 

Key Facts KEY FACTS

 

Head Office The Procter & Gamble Company

 

One Procter & Gamble Plaza

 

Cincinnati

 

Ohio 45202

 

USA Phone 1 513 983 1100 Fax

 

Web Address http://www.pg.com Revenue / turnover (USD Mn) 76,279.0 Financial Year End June Employees 110,000 New York Stock Exchange Ticker PG The Procter & Gamble Company

 

? MarketLine Page 3 The Procter & Gamble Company

 

SWOT Analysis SWOT Analysis SWOT ANALYSIS

 

P&G is one of the world's largest consumer goods companies. Its products reach nearly 4.4 billion people

 

worldwide. P&G has also built strongest portfolio of brands in the industry with 50 leadership brands

 

together generating nearly 90% of the company's sales and over 90% of profits. Leading market position

 

and strong brand portfolio provide P&G with significant competitive advantage as well as stabilize the

 

company's financial growth. However, increase in counterfeit goods not only deprives revenues for P&G

 

but also dilutes its brand image.

 

Strength Weakness Dominant market position garnered on a strong brand Heavy dependence on few customers

 

portfolio

 

Significant R&D and marketing investments

 

Large scale of operations

 

Opportunity Threat Growing male grooming industry

 

Growing personal care and home care markets

 

Strategic initiatives to drive productivity and reduce

 

costs Counterfeit goods

 

Intense competition

 

Stringent laws and regulations Strength

 

Dominant market position garnered on a strong brand portfolio

 

P&G is the world's largest consumer products manufacturer with revenues of $76,279 million. The

 

company serves nearly 4.4 billion people worldwide. P&G was featured among top 50 of America's

 

largest corporations in terms of total revenues by an industry source in 2015. P&G holds leading global market shares in a variety of product categories. The company holds over 65%

 

of the global market share in the blades and razors category, and has a market share of more than 20%

 

in the male shavers market and nearly 50% in the female epilators market. P&G has a dominant position

 

in the retail hair care and color market with a global market share of more than 20%. The company holds

 

the number two market share position with nearly 20% of the global oral care market. In addition, in the

 

fabric care category, the company holds the number one or number two share positions in the markets in

 

which it competes, with a global market share of about 30%. The company's global home care market

 

share is around 20% across the categories in which it competes. In the baby care category, the company

 

holds a global market share of over 30%. The company holds either number one or number two positions

 

in most of the important baby care markets in which it competes. In the feminine care category, P&G is The Procter & Gamble Company

 

? MarketLine Page 4 The Procter & Gamble Company

 

SWOT Analysis the global market leader with a market share of nearly 30%. P&G's leadership position is built on its strong brand portfolio. The company has 21 billion-dollar brands

 

which generate annual sales of $1 billion to over $10 billion, and 11 brands which generate annual sales

 

of $500 million to $1 billion. The company's brand strength is demonstrated by the fact that its brands are

 

market leaders in most important consumer categories in which it operates globally. For instance, the

 

company's Bounty paper towel and Charmin toilet paper brands have a market share of 45% and 25%,

 

respectively, in the US market. Furthermore, Olay is the top facial skin care brand in the world with more

 

than 8% global market share. Dominant market position based on a strong brand portfolio enables the company to achieve economies

 

of scale in distribution and retain a strong bargaining position with retailers. Furthermore, strong market

 

position provides P&G with significant competitive advantage as well as stabilizes the company's financial

 

growth.

 

Significant R&D and marketing investments

 

Being a consumer products company, P&G relies heavily on innovation and continued marketing

 

investments in order to establish a significant competitive advantage. As a result, the company has made

 

significant investments in R&D and marketing. P&G invests nearly $2 billion a year in R&D. As part of its

 

R&D efforts, P&G interacts with over five million consumers each year in nearly 100 countries around the

 

world. P&G conducts more than 15,000 research studies every year and invests over $350 million

 

annually in studies focused on consumer understanding. Additionally, P&G involves external innovation

 

partners to boost its internal innovative capability, an approach it calls 'Connect and Develop'. Further,

 

more than half of all product innovation coming from P&G includes at least one major component from an

 

external partner. P&G's continued focus on product innovation has enabled the company to further enhance its market

 

position through additional revenue streams. For instance, P&G is recognized as the industry's global

 

innovation leader. Furthermore, a study conducted by an industry source that tracks and ranks the most

 

successful new consumer products introduced in the US revealed that over the past 20 years, P&G has

 

had 161 products on the top 25 New Product Pacesetters list, more than its six largest competitors

 

combined. P&G's strong R&D capabilities and consumer-based innovations are backed by significant marketing

 

investments. In FY2015, the company invested approximately $8.3 billion in advertising. Strong focus on

 

R&D allows P&G to renew its product line at regular intervals, which boosts customer loyalty and revenue

 

growth. Significant marketing investments to support its brands and a broad product portfolio help P&G to The Procter & Gamble Company

 

? MarketLine Page 5 The Procter & Gamble Company

 

SWOT Analysis remain at forefront in a competitive market.

 

Large scale of operations

 

The company has large scale of operations, both in terms of revenues and geographic presence. P&G

 

generated revenues of $76,279 million in FY2015. In comparison, some of the company's competitors

 

have smaller scale of operations, including Avon Products, which generated revenues of only $6,160.5

 

million in the financial year ended December 2015. Furthermore, P&G has a strong geographic presence

 

worldwide. The company operates in about 70 countries worldwide. Its products are sold in more than

 

180 countries and territories around the world spanning the Americas, EMEA and Asian regions. P&G

 

generated 40% of its revenues from North America in FY2015, 26% from Europe, 10% from Latin

 

America, 8% each from Asia Pacific, Greater China and IMEA. In addition, as one of the world's largest

 

consumer packaged goods companies, P&G has scale advantages across its brands, businesses, and

 

operations. This allows the company to optimize its spending and flow resources to better serve

 

consumers and continuously improve its efficiency and productivity. Therefore, large scale of operations

 

expands P&G's customer base and increases revenues by providing a competitive advantage.

 

Additionally, the company's large scale of operations gives it strong bargaining power. Weakness

 

Heavy dependence on few customers

 

P&G is heavily dependent on few customers for its revenue generation. During FY2015, FY2014 and

 

FY2013, sales to Wal-Mart Stores and its affiliates accounted for approximately 14% of the company's

 

total revenues. Furthermore, top 10 customers of the company accounted for approximately 33% of the

 

total sales in FY2015, FY2014 and FY2013. High dependence upon few customers reduces the

 

bargaining power of the company. Also, large customers could use their bargaining power to impose

 

unfavorable terms on P&G. Therefore, any decrease in revenue from these customers could have an

 

adverse effect on the company's revenues and profits. Opportunity

 

Growing male grooming industry

 

In the recent times, the business of beauty has expanded from being women-centric to include grooming

 

products for men as well. According to industry estimates, the global male grooming market is expected

 

to grow at a compound annual growth rate (CAGR) of approximately 8% during 2015?19. A similar trend

 

is noticed in other countries as well. The male grooming market in China is growing at rapid pace. The

 

sales of male grooming products in China are expected to grow at a CAGR of over 4.5% during 2015?20.

 

Additionally, in India, the male grooming market is expected to grow at a CAGR of more than 20% from

 

2015 to 2020. The factors that contribute to this growth in India include rapid urbanization, increasing per

 

capita income and enhanced distribution channels in tier II and tier III cities. The Procter & Gamble Company

 

? MarketLine Page 6 The Procter & Gamble Company

 

SWOT Analysis P&G offers grooming products such as male blades and razors, electronic hair removal devices, and preand post-shave products under the brand names such as Fusion, Gillette, Mach3, and Prestobarba. Most

 

of these products of P&G hold leading positions in the global market. Thus, the company is well

 

positioned to tap the growing male grooming market.

 

Growing personal care and home care markets

 

The company has been focusing on its core attractive businesses such as beauty, health, and household

 

care as these are fast-growing businesses. The personal care products market has been rising rapidly

 

primarily due to the increasing purchasing power and consumers becoming increasingly conscious.

 

According to MarketLine, global personal products market grew by 4.3% in 2014 to reach a value of

 

$502.6 billion. By 2019, this market is expected to reach a value of $625.8 billion, an increase of 24.5%

 

since 2014. The increase in this market is primarily attributable to rising disposable incomes of

 

consumers, and changing lifestyle. Similarly, in 2015, the global home care products market grew by

 

nearly 4.5% to reach a value of $140 billion, according to industry estimates. Focusing on these

 

businesses would provide steady revenues for the company in near term.

 

Strategic initiatives to drive productivity and reduce costs

 

P&G is undertaking strategic initiatives to drive productivity and reduce costs. For instance, in 2012, the

 

company initiated a restructuring program as part of a productivity and cost savings plan to cut costs in

 

the areas of supply chain, R&D, marketing and overheads. As per the plan, the company expects to incur

 

in excess of $5 billion in before tax restructuring costs during 2012 to 2017. The cumulative before-tax

 

savings are estimated at approximately $2.2 to $2.5 billion as of 2015. Further, gross margin increased to

 

50.3% of net sales from the end of FY2015 to December 2015. This was mainly due to manufacturing

 

cost savings. The company is also increasing localization of the supply chain to drive savings in transportation and

 

warehousing costs. In addition, P&G initiated supply chain redesign, starting in North America, in FY2014.

 

As part of this, the company is moving from primarily single-category production sites to fewer multicategory production plants. It is also simplifying, standardizing and upgrading manufacturing platforms for

 

faster innovation, qualification and expansion, and improved product quality. Furthermore, the company is

 

transforming its distribution network, starting with North America. It is moving from shipping products to

 

retail customers from different points to consolidating shipping into fewer distribution centers. These

 

centers are located strategically closer to customers and key population centers in the US, enabling about

 

80% of the business to be within one day or less of the store shelf and the shopper. This will allow both

 

P&G and its customers to optimize inventory levels while improving service and product availability for

 

consumers. As part of this supply chain redesign program, the company announced plans to construct a

 

multi-category manufacturing plant in Berkeley County, West Virginia, which is expected to open by 2017.

 

The plant will be one of the advanced and sustainable plants among P&G?s global manufacturing and

 

supply-chain operations, with over one million square-foot facility and also expected to produce multiple

 

brands. Such strategic initiatives will not only allow the company to reduce costs, but also to deliver

 

bottom-line growth. The Procter & Gamble Company

 

? MarketLine Page 7 The Procter & Gamble Company

 

SWOT Analysis Threat

 

Counterfeit goods

 

Trade of counterfeits and pass-offs products is affecting the growth of FMCG companies like P&G. The

 

spread of counterfeit goods has become global and the range of goods subject to infringement has

 

increased significantly. Some of the major factors that led to an increased trade in counterfeit products

 

include growing internet usage, extension of international supply chains and more recently, the global

 

economic downturn that led customers to look for low cost alternatives. According to the Intellectual

 

Property Rights (IPR) Seizure Statistics by Customs and Border Protection (CBP) Office of International

 

Trade, the number of IPR seizures in the US reached 28,865 in 2015, an increase of nearly 25% over

 

2014. China remained the primary source country for counterfeit goods, accounting for 52% of all IPR

 

seizures by the manufacturer's suggested retail price (MSRP). Similarly, in Europe, the market for

 

counterfeit products is increasing significantly. According to European Commission, the total number of

 

detention cases in 2014 stood at 95,194, an increase of nearly 10% compared to previous year. In other

 

regions such as Asia, counterfeit and pass-offs products are rapidly increasing. Recently, in February

 

2016, P&G filed a High Court action against a discount retailer and two suppliers, as they were selling

 

counterfeit Head & Shoulders shampoo and Ariel laundry powder. Besides revenue losses, counterfeits and pass-offs also affect the company's brand as they are unsafe.

 

Low quality counterfeits reduce consumer confidence in branded products. Counterfeits not only deprive

 

revenues for P&G but also dilute its brand image.

 

Intense competition

 

P&G faces significant competition across all its product categories and geographies. The company's

 

products compete with similar products of various large and small companies, including well-known global

 

competitors. P&G also competes with other branded products and retailers' private label brands. Key

 

factors influencing the company's competitiveness are product quality, performance, value and

 

packaging. The company faces stiff competition from Unilever and Colgate-Palmolive Company. ColgatePalmolive Company and P&G compete in developed and developing markets where they sell products

 

such as deodorants, soaps, dishwashing liquids, and fabric conditioners. In addition, P&G competes with

 

Unilever mainly on the basis of price positioning. This might put pressure on the company's global market

 

share. The company also competes with L'Oreal in the skin and hair care segment. P&G also faces competition

 

from Avon Products and Revlon in personal and other related products. Other competitors of P&G include

 

Kimberly-Clark Corporation, Johnson & Johnson, Energizer Holdings, and Church & Dwight Co. Such a

 

competitive landscape may require the company to increase its spending on advertising and promotions

 

or reduce prices that may lead to reduced profits and thereby affect growth. The reduced profitability and The Procter & Gamble Company

 

? MarketLine Page 8 The Procter & Gamble Company

 

SWOT Analysis revenue growth could then limit the company's growth opportunities.

 

Stringent laws and regulations

 

P&G has a global presence with manufacturing operations in nearly 39 countries. The company

 

generates a significant portion of its revenues from international operations, which are subject to risks of

 

non-compliance with various laws and regulations involving intellectual property, product liability,

 

marketing, antitrust, privacy, environmental, employment, and anti-bribery or anti-corruption (such as the

 

US Foreign Corrupt Practices Act), among others. The company?s sales outside the US also subject to

 

increased tariffs, quotas, trade barriers or similar restrictions. In countries like Argentina, China, Egypt,

 

Greece, India, Nigeria, Ukraine and Venezuela, P&G maintains local currency cash balances with

 

exchange, import authorization or pricing controls. Therefore, non-compliance with any of the above

 

mentioned policies, laws and regulations could significantly increase the cost structure of the company

 

and limit its ability to invest in future growth opportunities. The Procter & Gamble Company

 

? MarketLine Page 9 Copyright of Procter & Gamble SWOT Analysis is the property of MarketLine, a Progressive

 

Digital Media business and its content may not be copied or emailed to multiple sites or

 

posted to a listserv without the copyright holder's express written permission. However, users

 

may print, download, or email articles for individual use.

 


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