Procter & GamblePringles Expansion to
IsraelSonya BarkerRyan Huelsmann
Founded 1837 (173 years in business) Serve 4.2 Billion Customers Worldwide Employ 127,000 People Worldwide NYSE: PG Consumer Goods Industry Revenue $78.9 Billion Net Income $12.74 Billion Total Assets $134.83 Billion
Procter & Gamble:
Product Focus: ◦ Beauty & Grooming◦ Health and Well-Being◦ Household Care
50 Leader Brands Driving Force Billion Dollar Brands:
◦ Bounty, Cover Girl, Crest, Dawn, Downy, Duracell, Gain, Gillette, Head & Shoulders, Olay, Pampers, Pantene, Pringles, Tide, Always, Mister Clean
Procter & Gamble:
Brands Sold in 180 Countries with Operations in 80 Countries
Global Organization with Local Focus Manufacturing Operations Based In:
◦ United States◦ Canada◦ Mexico◦ Latin America◦ Europe◦ China and other parts of Asia (31 wholly-owned factories) ◦ Africa◦ Australia
Procter & Gamble:
Introduced in 1968 Stackable, Fun-Shaped Potato Crisp P&G Health and Well-Being Business Unit,
Snack Food Category Multitude of Flavors to Appeal to Regional
Tastes Pringles Sticks Spin-off
Pringles:
Standard of Living Expansion High Consumer Interest in New Products Potato Chips Led the Savory Snack Market in
Israel, Accounting for a Share of 38.1% Pro-American Business Sentiment Population 7.2 million, Diversity Gaza Strip Embargo Lifted for Certain Products,
Includes Potato Chips Purchasing Power $1 US = 3.67841 Israeli New
Shekel Member World Trade Organization
Opportunities in Israel:
Unrest in Israel Unrest in Middle East Culture Distribution Local Competitors
Barriers to Entry into Israel:
Issue:◦ Political/Religious
Unrest in Israel, partition of Palestine, creation of a Jewish state, an Arab state, and an UN-administered Jerusalem
◦ Ongoing Political/Religious Unrest in the Middle East
Strategy:◦ On-Going Risk
Assessments to Determine if Benefits Outweigh Risk
◦ Constantly Monitor New Developments
◦ Maintain Open Dialog with Government Officials/Agencies
◦ Neutral Status
Overcoming Unrest in Middle East:
Map of Israel
Issue:◦ Cultural Kosher
Preference◦ Language
Strategy:◦ Research and
Development to Focus on Local Preferences
◦ Develop Flavors to Cater to Preferences
◦ Hire Local Talent who have the Expertise and Knowledge to Assist
Overcoming Cultural Barrier:
Issue:◦ Two Primary
Grocery Store Chains in Israel
◦ Few Mom & Pop Small Community Stores
◦ Open Air Markets
Strategy:◦ Focus on Developing Solid
Relationship with two Primary Grocery Store Chains
◦ Hire Local Talent who have the Expertise and Knowledge to Assist
◦ Marketing Blast to Get Customers Excited about Product
◦ Research Vending Machine Sales as an Opportunity for Open Air Markets
Overcoming Distribution Barrier:
Issue:◦ Local Competitors
Utilize Nationalism as a Means to Gain Competitive Advantage
Strategy:◦ Analyze Strengths
and Weaknesses of Competitors and Capitalize on Lessons Learned
◦ Analyze Local Competitor Strategies and Implementation
◦ Create a Tactical Plan to Compete
Overcoming Local Competitors
• Willingness to Expand• Diversified Product• Products Altered to Local
Preferences
• Snack Food Consumption Growing Worldwide
• Environment for Global Growth/Trade Barriers Lifting
• Internet Marketing Sales Trends
• Competition• Substitutes/Cheaper Products
Available• Global Economic Downturn
• Negative Press Related to Snack Foods/Health Concerns
• Workforce Spread Over a Wide Geographic Area
• Spoilage Rate
S W
TO
Macro Snack Food IndustrySWOT ANALYSIS
Opportunities
Strength
Threats
Weaknesses
• Branding• Financial• Global Organizational
Structure• Pringles Flavors Easily Altered
for Local Preferences • Ingredients Available Locally• Israeli/Hebrew Website in
Place
• Environment for Global Growth/Trade Barriers Lifting
• On-Line Social Network & Internet Marketing Techniques
• Environmental Goals Doubled for 2012
• 2010 Unemployment Rate 8.3% in Israel
• Volatility of US Dollar• Middle East/Israel Unrest &
Government Volatility • Competition with Diverse
Product Portfolios• Substitutes Available/Cheaper• Due to Economy, Consumer
Spending Decreases Globally
• Limited Snack Food Industry Presence
• Kosher Food Development • Significant Capital Outlay• Packaging/Labeling
Requirements More Strict
S W
TO
Micro Proctor & Gamble/PringlesSWOT ANALYSIS
Opportunities
Strength
Threats
Weaknesses
• Standard of Living Expanding• Consumer Interest in New
Foods/Products• Snack Growth Rate Increasing• Extensive Transportation
Network/Energy Infrastructure• World Trade Org Member/US
Government Support
• Hi-Tech• Pro-American• Population: 7.2 million • Gaza Strip Embargo Lifted• Purchasing Power $1:3.67841
Shekel• Education Level on the Rise
• Israel Unrest/Government Volatility
• Middle East Unrest Uncertainty• Consumer Spending
Decreases
• Security/Terrorism Remains Precarious
• Kosher Requirements • Import Requirements Strict• Traditional Business Week
Sunday through Thursday• Distribution Barrier• 2010 Unemployment Rate 8.3%
S W
TO
Macro IsraelSWOT ANALYSIS
Opportunities
Strength
Threats
Weaknesses
P&G Strategy Built Around Core Competencies:
Short Term:◦ Brand Building◦ Develop a Winning
Team Utilizing Local and Global Talent
◦ Consumer Understanding-Uncover the Unarticulated Needs of Consumers
◦ Go-to-Market Capability-reach retailers and consumers at the right place and time
Long Term:◦ Brand Building◦ Innovation-Translate
Consumer Desires into New Products
◦ Scale-Drives Efficiency and Consumer Value
International Strategy:
Global Structure:
Operations: Locate in Beersheba Manage Locally Local CEO
◦ Yossi Yitzhak Former Executive at Osem - Nestle Israel Education LLB, MBA
Staff Rabbi for Kosher Expertise P&G Israel Liaison
Map of Israel
Products: Current Products for Israel
◦ Potato Crisps in Snack Packs and Large Containers Original, Sour Cream & Onion, Jalapenos, and
Barbeque ◦ Pringles Snack Stix
Possible New Products◦ Packaged Latkes for Hanukkah
shallow-fried pancakes of grated potato, flour and egg, often flavored with grated onion or garlic and seasoning
Potential Opportunities Outweigh Risks
Proceed with Manufacturing Operation/Sales Expansion into Israel
Recommendations:
THE ENDQUESTIONS ?
Procter & Gamble Corporate Website http://www.pg.com Pringles website http://www.pringles.com Reuters Business & Financial News, by Nidal al-Mughrabi, Israel
Eases Gaza Embargo to Allow Snack Food In 9 June 2010 http://www.reuters.com
Market Report, Savory Snacks in Israel to 2014, http://www.pr-inside.com
Doing Business in Israel—U.S. Commercial Service Israel http://www.buyusa.gov/israel/en/doing_business_in_israel.html
USDA Foreign Agricultural Service GAIN Report, Global Agricultural Information Network, 23 Nov 2009.
Mehadrin Tnuport Export, Israel: Potato and carrot season started. By: Wim Geurts 2 March 2010. http://www.freshplaza.com
Linked In, Yossi Yitzhak personal page Alacra Store, Premium Business Information Source
http://www.alacrastore.com/research/d-and-b/Israel/Snack+Foods_potato+chip
Sources: