Procter

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Procter Gamble-Gillette Merger

• By Christine Cruell
• Kamika Hemphill
• Antjuan Seawright
• Jonathan Toney

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Executive Summary
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Products

• Three main product lines
• household and personal care
• food consumer
• heath care products
• Recent merge with Gillette
• Competitive advantage

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Dominant Firms

• Procter and Gamble, Nestle, Unilever, LOreal,
  Colgate-Palmolive, Revlon, Bic, PepsiCo, Sara
  Lee, and Kimberly Clark.
• Success factors
• positive brand image
• availability of products
• the ease of access

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Vision and Mission

• Vision
• Be, and be recognized as, the best consumer
  products and services in the world
• Mission
• Procter and Gamble will continue to serve
  consumers by continuously innovating products
  that will allow us to be leaders in household and
  personal care, health care, and food products.
  To produce products with the utmost care to give
  nothing but quality to our communities. And to
  continue to grow so that we can maximize our
  shareholders wealth.

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External Environment
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External Environment

• Economic Factors
• Social Factors
• Technological Factors
• Political Factors
• Ecological Factors

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Economic Factors Social Factors

• Concerned with nature and direction of economy in
  which the CP industry
• Threat/Opportunity

• Concerned with beliefs, values, opinions, and
  lifestyles of people
• Threat/Opportunity

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Technological Factors

• Focus on technological changes affecting the
  industry New Products, improvement in existing
  products, manufacturing and marketing techniques
• T hreat/Opportunity

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Industry Analysis
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Consumer Goods Industry5 Forces Model

• Buyers large impact on industry
• Large retailers-Wal-Mart, Kmart, Target
• Rivalry keeps industry thriving
• Differentiation, advertising, promotions, price,
  customer service and quality
• Threats to Entry heavy impact on industry
  productivity
• Mergers and acquisitions

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Consumer Goods Industry5 Forces Model Cont

• Substitutes no huge impact
• Competitive products replacement
• Private label brands and small label brands-only
  real substitutes
• Suppliers no threat to the industry
• Raw materials can be obtained anywhere

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Company Profile
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Value Chain Analysis

• Primary Activity
• Marketing and SalesBrand Recognition
• Support Activities
• Research
• Technology-RFID

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Financial Analysis
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Financial Analysis

• Key Data from Bal. Sheet
• Total Assets
• 138,014.00
• 135,695.00
• 61,527.00
• 57,048.00
• 43,706.00

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Financial Analysis (contd)

• Key Data from Income Statement
• Net Income
• 10,340.00
• 8,684.00
• 6,923.00
• 6,156.00
• 5,186.00

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Financial Analysis (contd)

• Key Ratios
• Gross Margin
• Debt/Equity Ratio
• Current Ratio
• Quick Ratio
• Return On Equity
• Return On Assets
• Return On Capital

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Ratio Analysis

• Key Ratios
• Gross Margin
• Debt/Equity Ratio
• Current Ratio
• Quick Ratio
• Return On Equity
• Return On Assets
• Return On Capital

• PG Nes Uni Ind
• 51.8 30.8 14.5 20
• .54 .67 .78 .84
• .9 .8 .7 .98
• .6 .11 .4 .7
• 16.8 30 32.3 30.9
• 7.9 8.3 10.9 9.6
• 10.2 13.4 17.6 13.4

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SWOT Summary/Core Issue
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SWOT

• Strengths
• product variety and diversification
• Line of shaving /grooming products
• Supply chain technology

• Weaknesses
• Constant innovation higher prices for consumers

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• Opportunities
• Globalization
• Threats
• Private labels

• Core Issues
• Overlap in management
• Overlap in PG-Gillette products (I.e. Old Spice
  deodorant and Right Guard deodorant)
• Expensive products

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Long Term Objective and Strategic Scenarios
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Long Term Objectives

• Generic Strategy Differentiation
• Grand Strategies
• Innovation
• Conglomerate diversification
• Concentric diversification
• Strategic alliance

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Scenarios

• Best
• Worst

• Likely

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Corporate Level Strategic Alternatives
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Corporate Level Strategy

• Stay in same SBUS
• Get into new SBUS

• Keys to success
• Proper asset mgmt
• Possible change of mission statement

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Corp Level Strategy

• Best Case
• Expand to new mkts
• Grow by 30

• Worst Case
• Lose Mkt share
• Fail to expand
• Most Likely
• Grow by 10
• Continue current corporate strategies

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Business Level Strategic Alternatives
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Business Level Strategy

• Generic Options
• Low Cost Leadership
• Differentiation
• Pros/Cons of both
• Rivals
• Unilever
• Colgate-Palmolive

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Grand Strategies

• Low Cost Leadership
• Concentrated Growth
• Market Development
• Differentiation
• Product Development
• Innovation

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Strategic Choice
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Strategic choice

• Corporate level strategy Get into new SBUs.