PROCTER & GAMBLE-GILLETTE MERGER
By: Christine Cruell
Kamika Hemphill
Antjuan Seawright
Jonathan Toney
EXECUTIVE SUMMARY
PRODUCTS
Three main product lines: household and personal care food consumer heath care products
Recent merge with Gillette Competitive advantage
DOMINANT FIRMS
Procter and Gamble, Nestle, Unilever, L’Oreal, Colgate-Palmolive, Revlon, Bic, PepsiCo, Sara Lee, and Kimberly Clark.
Success factors: positive brand image availability of products the ease of access
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 shareholder’s wealth.”
EXTERNAL ENVIRONMENT
EXTERNAL ENVIRONMENT
Economic Factors Social Factors Technological Factors Political Factors Ecological Factors
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
TECHNOLOGICAL FACTORS
Focus on technological changes affecting the industry: New Products, improvement in existing products, manufacturing and marketing techniques
T hreat/Opportunity
INDUSTRY ANALYSIS
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
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
COMPANY PROFILE
VALUE CHAIN ANALYSIS
Primary Activity Marketing and Sales=Brand Recognition
Support Activities Research Technology-RFID
FINANCIAL ANALYSIS
FINANCIAL ANALYSIS
Key Data from Bal. Sheet Total Assets
138,014.00 135,695.00
61,527.00 57,048.00 43,706.00
FINANCIAL ANALYSIS (CONT’D)
Key Data from Income Statement Net Income
10,340.00 8,684.00 6,923.00 6,156.00 5,186.00
FINANCIAL ANALYSIS (CONT’D)
Key Ratio’s Gross Margin Debt/Equity Ratio Current Ratio Quick Ratio Return On Equity Return On Assets Return On Capital
RATIO ANALYSIS
Key Ratio’s 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
SWOT SUMMARY/CORE ISSUE
SWOT
Strengths product variety and
diversification Line of shaving
/grooming products Supply chain
technology
Weaknesses Constant
innovation= higher prices for consumers
Opportunities Globalization
Threats Private labels
Core Issues: Overlap in
management Overlap in P&G-
Gillette products (I.e. Old Spice deodorant and Right Guard deodorant)
Expensive products
LONG TERM OBJECTIVE AND STRATEGIC SCENARIOS
LONG TERM OBJECTIVES
Generic Strategy: Differentiation Grand Strategies:
Innovation Conglomerate diversification Concentric diversification Strategic alliance
SCENARIOS
Best
Worst
Likely
CORPORATE LEVEL STRATEGIC ALTERNATIVES
CORPORATE LEVEL STRATEGY
Stay in same SBU’S Get into new SBU’S
Keys to success Proper asset mgmt Possible change of
mission statement
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
BUSINESS LEVEL STRATEGIC ALTERNATIVES
BUSINESS LEVEL STRATEGY
Generic Options Low Cost Leadership Differentiation
Pros/Cons of both
Rivals Unilever Colgate-Palmolive
GRAND STRATEGIES
Low Cost Leadership Concentrated Growth Market Development
Differentiation Product Development Innovation
STRATEGIC CHOICE
STRATEGIC CHOICE
Corporate level strategy: Get into new SBU’s.