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5,629,894 likes 407 talking about this. All day, every day, P&G people are #SteppingUp and serving others as a #ForceForGood. Improving everyday life since 1837. #proctergamble #ItsOurHome. Procter & Gamble’s generic competitive strategy (Porter’s model) defines the main approach of the business to achieve competitiveness. In this regard, the generic strategy also influences managerial decisions, in terms of marketing, research and development (R&D), and innovation.
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This is a detailed SWOT analysis of Procter and Gamble. It offers insights into the strengths and the weaknesses of Procter and Gamble. It also explores the opportunities and the threats to the company. Procter and Gamble is an American multinational consumer goods company, headquartered in Ohio, the USA.
Strengths of Procter and Gamble
Procter and Gamble was founded more than 180 years ago as a soap and candle company. At present it is one of the largest consumer goods companies in the world and sells many world renown branded products such as Pampers, Gillette, Head and Shoulders, Fairy, and Olay (Procter and Gamble, 2021).
Procter and Gamble sells products that are needed daily. This in turn increases demand and sales. The company sells nearly 300 brands in over 160 countries and has factories around the world. It has become a household name over the years which consumers trust and consider to be reliable.
Procter and Gamble is a diversified company and many different types of products that it sells, have contributed to its financial strength. Its products are widely available and easily accessible in a variety of supermarkets, grocery stores and online.
Another key strength of Procter and Gamble is its research and development. This has enabled the company to develop many different types of new products which have generated large income streams. It does not test its products on animals and have invested millions on developing non-animal testing methods. Half of the non-animal testing alternatives have been invented or co-invented by Procter and Gamble.
Over the years Procter and Gamble has managed to gain a loyal customer base. Sponsorships of events around the world has helped it gain more customers.
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Weaknesses of Procter and Gamble
Procter and Gamble has had to recall some of its products which in turn has resulted in it gaining negative publicity and incurring unforeseen costs. The closure of some brands resulted in it having to incur losses too.
Losing loyal customers due to competitors selling quality products at more affordable prices. Its products have high competition from other brands that are recognized globally as well.
In the beauty and personal care industry, new products are regularly introduced by the competitors. Therefore, to keep in line with the competitors Procter and Gamble needs to spend regularly which affects its profits. Vizard and Fleming (2020) report that its marketing spend in categories including beauty, healthcare and baby has increased recently.
Opportunities for Procter and Gamble
Opportunity is the next issue to address in the SWOT analysis of Procter and Gamble. Acquiring small competitors and forming new strategic alliances to compete better and reduce costs is worth exploring. Likewise, Procter and Gamble has an opportunity to use its global brand recognition to diversify into different markets.
An increase in the purchasing power of customers in some countries will increase the demand for products. Procter and Gamble has an opportunity to attract more customers in the rural market. It can also attract niche segments in highly competitive markets globally.
Threats to Procter and Gamble
Product recalls will result in bad publicity and loss of revenue which in turn increases overall costs. Counterfeit products of low quality being sold in the market will result in consumers losing their trust in the brands.
When operating in different countries, Procter and Gamble is exposed to fluctuations in foreign currency and changes in government regulations. Since its a global brand, recessions and economic crisis will also affect its business operations.
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The present economic lockdowns have resulted in consumers being more careful with their spending. This reduces the demand for non-essential products.
A rise in competition has led Procter and Gamble spend more on research and development and marketing. Some of its major competitors are Colgate-Palmolive, Johnson & Johnson, Church and Dwight, Kimberly-Clark and Unilever.
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We hope the article ‘SWOT analysis of Procter and Gamble’ has been useful. You may also like reading SWOT analysis of Unilever. Other relevant articles for you in are:
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Last update: 14 January 2021
Further Reading/References:
Procter and Gamble (2021) Policies and practices, available at: https://www.pg.co.uk/policies-and-practices/animal-welfare-policy/ (accessed on 14 January 2021)
Vizard, S. and Fleming, M. (2020) P&G ‘doubles down’ on marketing as demand soars, available at: https://www.marketingweek.com/procter-gamble-doubles-down-marketing/ (accessed on 14 January 2021)
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Author: Fahim Shah
Fahim Shah has been working in the UK as a visiting lecturer in Business and Tourism for the last 10 years. After completing a Bachelor’s degree in Business and Marketing, he went on to gain an MBA from the University of Bradford, the UK. He is a Fellow of Advance HE (FHEA) and a full member of the Association of Business Executives (ABE).
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Procter and Gamble Company (P&G) was founded by William Procter and James Gamble, in 1837. Both men were immigrants to the United States. The company began by selling soap and candles, but after the invention of Edison's electric light bulb in 1850, candle sales were so slow that they stopped production. Things looked up, however, because the U.S. Government began to order loads of soap from Procter and Gamble for Union soldiers during the Civil War. With the increase of production demands, the company began to investigate more productive and less time-consuming ways to make soap. That eventually led the firm to many more innovative ideas and many more lines of soap, for hair, laundry, and eventually dishwashers. Other kinds of products would be born as well. A company is formed The two men might not have met had they not married the sisters Olivia and Elizabeth Norris. Their new father-in-law suggested that they become business partners. In 1837, the Procter and Gamble Company was born. With intentions of heading farther west than they managed, William Procter (emigrating from England), and James Gamble (emigrating from Ireland), settled in Cincinnati, the 'Queen City of the West.' Procter had a sick wife to look after, while Gamble had medical problems of his own to overcome. Those factors compelled the future proprietors to 'stay put,' so that destiny would ensure a great company in Ohio. After Proctor's wife died of a terminal illness, he quickly prospered as a candle maker. Meanwhile, Gamble was making ends meet as an apprentice soapmaker. A few months later, on April 12th, 1837, Procter and Gamble started to make and sell mass quantities of candles and soap. A company built of soap In 1859, 22 years after the partnership was formed, P&G had reached $1 million in total sales, in spite of declining candle sales. Fortunately, three years later during the Civil War, Procter and Gamble was awarded numerous contracts to supply soap and candles to Union armies. Those orders kept the factory of 80 employees busy day and night. The fact that P&G supplied soldiers enhanced the company's reputation for heavy-duty quality. That was reinforced when troops came home from the war carrying P&G's soap among their belongings. By the year 1879, a new generation of the company was emerging — while unveiling improved ideas. Founders' sons Harley Procter and Norris Gamble helped to put a new spark into P&G. Norris Gamble developed an inexpensive white soap equal to the former high-quality, imported castiles. Inspiration for the soap's name — Ivory — came to Harley Procter, where he would place $11,000 towards well-spent advertising. The name became an ideal match for the soap's virtual purity ('99 and 44/100ths percent pure'), mildness, and long-lasting quality. By 1890, P&G was selling more than 30 types of soap, including Ivory. The year 1890 also brought an end to 53 years of the business as a partnership. The partners incorporated, and raised additional capital for expansion. William A. Procter, one of two sons of the founder, was then named the first president. P&G then set up one of the earliest product research labs in America at Ivorydale (a newly constructed plant in Cincinnati) to study and improve the soap-making process. In 1907, following the death of his father, William A. Procter, a new president was named, William C. Procter. Expansion and Crisco The year 1911 saw the introduction of P&G's new Crisco product, and by 1915, the company built its first manufacturing facility outside of the United States, in Canada. The plant employed 75 people. By 1943, following the passing of William C. Procter, new president Richard R. Deupree continued the company's robust progress. The introduction of hair products and household cleaning products gained the growing company even more ground, responding to an increasing demand for daily consumer products. When Deupree took the helm in 1930, he didn't take long to supply the Far East with such products — by means of the Philippine Manufacturing Company. Household products and pharmaceuticals P&G weathered The Great Depression and World War II kept it perking. Most people who grew accustomed to P&G's convenience products couldn't put them down. What that allowed was more research and development of past products as well as newly introduced 'conveniences.' By 1978, Procter and Gamble seemed to have covered all bases in household products. From 'Tide' laundry detergent to feminine products, P&G dominated the industry with company expansions throughout Japan, China, Europe, and other parts of the world. The company's introduction of pharmaceuticals in the form of Didronel (a treatment for Paget's disease), spurred a further upward spiral of corporate profits. Still a diverse company Today, after nearly two centuries of research, development, and expansion, there are more than 300 P&G products available to the general public. If you brush your teeth, wash your hair, or take a prescription drug, chances are good that what you're using originated in a Procter and Gamble plant.