Merger Strategy Of P&G

PRESENTED BY:DIL BAHADUR YADAVVVISM HYDERABAD

Analyst views"This merger is going to

create the greatest consumer products company in the world," said billionaire investor Warren Buffett, whose Berkshire Hathaway (Research) is Gillette's largest shareholder with 96 million shares, or about 9 percent of the company.

Analyst viewsretail analyst Kurt Barnard said. "They each had a lot of economic power before, but with the marriage they'll have a lot more power, power to get shelf space, preferred positions, all of that."

Analyst viewsRobert specter, a

retail historian based in Seattle said that “ trying to raise prices and improve margins is very, very hard because of the Wall-Mart effect. This deal is about size versus size.”

Analyst viewsSome analysts felt that the P&G-Gillette

merger was a defensive move by P&G to check the growing power of retailers.

Some analyst said that,” it was an aggressive move for achieving growth rather than a balancing act.

P&G’s Strategy behind mergerTo become world’s largest consumer products

company.Benchmarking to HULDesign the worlds best class sales and distribution

model .To enhance P&G’s Strong and diversified brand

portfolio.To cut down the costs to ensure productivity gains.To make faster sales growthTo gather considerable bargaining power.While P&G’s strength lay in women’s personal care

products with brands such as Olay, Always, Tampax and Max Factor,

Gillette’s strength lay in the men’s grooming category.By acquiring Gillette, P&G would be adding the world’s

best shaving products to its portfolio.

P&G’s Strategy behind merger (cont..)The two companies had a global scale

with their products being marketed around the world. Also both had placed high priority on growth in developing markets. Gillette was more established in growing economies like India and Brazil. This would enable P&G to establish itself in these markets.

P&G on its part, would be able to provide wide distribution for Gillette products across the world especially in China and Japan where it had gain a strong foothold.

P&G could use “technology transfer” ability for Gillette products.

Competitors ReactionThe P&G-Gillette deal created merger

pressure for competitors in the industry.Unilever, P&G’s arch rival, had been under fire

from investors for missing earnings targets and had been forced to rethink its 2005-10 strategy in light of low sales and price wars.

The Anglo-Dutch firm was already under pressure to improve its performance. It could have to acquire other firms to keep pace with P&G.

Social Responsibility

Pampers and UNICEF:Working Together for Healthy Babies

Every year, 128,000 people die from maternal and neonatal tetanus —a completely preventable disease. So for the fourth year running, Pampers is teaming up with UNICEF to deliver the vaccines that vulnerable women and their children need.

The effort gets our consumers involved. With the purchase of one pack of Pampers, one dose of the vaccine is donated. campaign has created the highest awareness ever for maternal and neonatal tetanus, helping put the disease back on the agenda of health authorities.

Since the start of the campaign, a total of 45.5 million women and their babies have been protected against maternal and neonatal tetanus — but more work remains to meet our goal of eliminating the disease by 2012.

Pampers has committed to providing the vaccine to target and protect an additional 33 million women and their babies in at least 32 countries around the world.

Since 2006,45.5 millionWOMEN AND THEIR BABIESPROTECTED AGAINST MATERNALAND NEONATAL TETANUS

P&G Beauty’s Aqua Collection:Supporting Children’s Safe Drinking Water

Each day, some 4,000 children die as a result of not having clean drinking water.

For each purchase within “The Aqua Collection,” safe drinking water is donated to children in developing countries through P&G’s Children’s Safe Drinking Water program.

CSDW is a nonprofit program run by P&G which leverages PūR™ water filtration technology to provide clean drinking water in the developing world.

P&G will provide 4 billion liters of clean water between 2007 and 2012 through this program. During “Sustainability Week” events in Geneva, employees were educated about water.

P&G and Shiksha: Increasing Access to Education in India

India has the world’s largest number of uneducated children, with nearly half of all children not attending school. P&G’s Shiksha program is dedicated to fighting that trend, helping create a more educated, progressive nation.

Each time a consumer bought a large pack of any P&G brand in India , part of the proceeds went toward leading children on the path to education.

Since 2006,80,000 GIRLS REACHED IN THE DEVELOPING WORLD100Full enrollment villages87,000 CHILDREN REACHED IN 5 YEARS,TRANSLATING TO:85 Villages free of child labor2,623 Children mainstreamed into formal school4,495 Children immunized

CONCLUSION This merger marks the realization of an

historic next phase of great opportunity for Gillette and also for P&G. it brings together two companies that are complementary in their strengths, cultures, and vision to create the potential for superior sustainable growth.

At last we can describe this merger as a “Perfect Marriage.”

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