Transcript
Page 1: Procter and Gamble - History, Evolution, Present and the Future
Page 2: Procter and Gamble - History, Evolution, Present and the Future

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History & Origin . . . . . . . . . . . . . . . . . . . 3

Early Evolution . . . . . . . . . . . . . . . . . . . .4

Global Expansion . . . . . . . . . . . . . . . . . 7

Modern Business . . . . . . . . . . . . . . . . . 10

Company Structure . . . . . . . . . . . . . . 11

Recent Efforts . . . . . . . . . . . . . . . . . . . 13

Company DNA . . . . . . . . . . . . . . . . . .17

Summary . . . . . . . . . . . . . . . . . . . . . . . 18

Social Media Accounts . . . . . . . . . . . 19

Page 3: Procter and Gamble - History, Evolution, Present and the Future

Founded in Cincinnati, Ohio, USA in 1837

Alexander Norris, a Cincinnati candle-maker, was concerned for the

financial well-being of his two daughters, Olivia and Elizabeth,

during an economic downturn precipitated by a banking crisis, so

he suggested to their respective husbands that they combine their

struggling businesses to better weather the storm

Irish soap maker, James A. Gamble and English candle-maker,

William Procter dutifully pooled their collective business assets of

$7,192.24 to create the firm of Procter & Gamble (P&G) on 31st

Their surplus fat made a lot of candles and soap

Procter & Gamble given its location backed the winning side and

was soon shipping vast quantities of candles and to a lesser extent

soap to the Union armies

The business founded at a time before modern consumer markets

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Page 4: Procter and Gamble - History, Evolution, Present and the Future

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Procter bought the formula and playing around with it decided to

combine it with another soap feature he had been experimenting

with himself; floatability, which stopped the bar getting lost in

murky bathwater

For the next 30 years, P&G concentrated most of its efforts in

developing an unrivalled competence in soaps and consumer

P&G could have remained as one of America’s hundreds of soap

companies and would almost certainly have been swallowed in the

great series of interwar industry consolidations with the likes of

James S. Kirk & Co

P&G immediately improved their product by adding naphtha

P&G formed the Buckeye Cotton Oil Co. to acquire and build

cottonseed oil mills

Page 5: Procter and Gamble - History, Evolution, Present and the Future

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A scientist E. C. Kayser, literally walked into its office with the

technology for hydrogenation, which enables liquid oils to be

solidified at room temperature. P&G bought it in short order,

patented it four years later and launched Crisco, the world’s first

shortening made entirely from vegetable oil

P&G had been expanding laterally in the soap market

In 1890, P&G had 577 direct soap competitors which kept prices

low and profits elusive

In 1903, P&G entered laundry powder

P&G become second-biggest brand after Ivory had been Lennox

The soap industry began to consolidate and P&G, bolstered by the

success of Crisco, was able to lead the charge swallowing up many

local, regional, and even national players

P&G products sales of $188 million in 1919 fell to $106 million by

1922 and did not reach their original level until 1926

Page 6: Procter and Gamble - History, Evolution, Present and the Future

P&G’s launch of Camay, a perfumed ‘beauty’ soap, developed as a

response to the launch of Palmolive.

P&G’s first operation outside of the United States had been as

early as 1915 in the manufacturing plant in Hamilton, Canada

They set up an International division in 1946

The next baby step came in 1948 with an acquisition in Mexico,

soon to be followed by Venezuela and Cuba

By 1990, there was operations in sixteen product categories

Today it has a share of around 25% in the $4 billion, and rapidly

growing, Mexican household products market among other sectors

Through the 1950s P&G built detergent plants in France, Belgium

and Italy

They led to the initial development of Tide with Henkel, Europe’s

detergents giant

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Page 7: Procter and Gamble - History, Evolution, Present and the Future

Ariel became P&G’s power brand in its overseas markets, and

strong enough to overtake Tide and become the company’s largest

detergent brand

Pampers became a very big brand for P&G across most of its

European markets.

P&G’s next major learning experience in globalism came with its

1970s experience in Japan

P&G had a fairly standard approach to entering markets; research

the consumer and retail trade form an alliance with a local player

as a quick access route and a conduit for P&G technologies and

brands until a critical mass for a P&G local operation was achieved

By 1985, thirteen years after entering the market P&G still hadn’t

turned a profit and pulled together a last-ditch attempt to make a

success of its venture

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Page 8: Procter and Gamble - History, Evolution, Present and the Future

P&G developed a large and profitable business in Japan an

experience that would inform its subsequent forays into Eastern

Europe and the emerging BRIC markets (Brazil, Russia, India,

China)

In the end of the 1970s P&G had finally established itself as a

genuine global company with one-third of its sales coming from

outside the US

P&G was determined to win first place in the race into the

crumbling Communist markets of Eastern Europe

P&G’s Eastern European business had looked very rosy indeed

with annual revenues well over $1 billion in 1997

P&G was also very quick into China opening the biggest consumer

products factory in the country in 1991

In three years it was shipping four million cases of product a year,

making the China one of P&G’s top-ten markets 8

Page 9: Procter and Gamble - History, Evolution, Present and the Future

P&G progressively extended into fabric care, feminine care, oral

care and baby care, eventually building China into its second-

largest market, generating sales of $6 billion in 2012

The rate of growth in China for P&G products was around $200

million

After ten years it was increased to $2.8 billion

P&G’s growth in developing markets has become the growth

engine of the entire company

Their Sales of $8 billion in 2001 had grown to $21 billion by 2007

when they accounted for 29% of total company sales. Two years

later that was up to 32%

P&G’s compound annual growth has been 17% in China, 25% in

Russia and 27% in India

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Page 10: Procter and Gamble - History, Evolution, Present and the Future

Procter & Gamble came into the post-war period better equipped

than any other packaged goods company to benefit from the

twenty-year consumer boom that was about to take place

P&G focused on developing its skills in product enhancements

P&G was now changing rapidly into a maker and seller of brands

rather than having any specific category focus

It was the country’s biggest advertiser at a time when television

dramatically enhanced the ability to reach and influence

consumers

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Page 11: Procter and Gamble - History, Evolution, Present and the Future

P&G had first structured itself into divisions as early as 1955 Tambrands, Clairol, and Wella purchases made the company in a

state of constant realignment, which was not eased by selling

some of is businesses After the Wella acquisition, it was employing nearly 100,000

people in over 80 countries In 1998, P&G launched Organisation 2005 with an aim to cope with

the twin challenges of a truly global company trading in various

market conditions, while operating across a large number of

product segments It resulted to three-pronged matrix with seven Global Business

Units (GBUs) in the first segment: Issue and Towel Fabric and Home Care Feminine Protection Health Care

Food and Beverage Baby Care Beauty

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Page 12: Procter and Gamble - History, Evolution, Present and the Future

The second segment had eight Market Development Organisations

(MDOs), that were responsible for customer development and local

marketing execution

The third segment was a global set of corporate functions

The re-organization didn’t go well, resulting to a 2.6% sales drop

CEO A.G. Lafley, gave matrix structure an external focus by coming

up with the “Two Moments of Truth” idea

Baby Care, Feminine Care, Tissue and Towel, and Health Care

segments were merged into one new Baby Care and Family Care

unit

He also demanded to focus on winning with top brands, customers,

and market

In 2003, P&G’s top ten brands grew by 8%, top ten customers by

13%, and top ten markets by 11%

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Page 13: Procter and Gamble - History, Evolution, Present and the Future

2004

Net sales increased by 17%, breaking the $50 billion barrier

Global market shares core segments increased: 36% in Baby Care,

35% in Feminine Care, and 31% in Fabric Care

Pharmaceuticals Sector launched Actonel, an osteoporosis brand

Prilosec OTC brand achieved market leadership in the heartburn

treatment category

2005

Sales increased by 11% to $57 billion

Tide Coldwater made a successful transition in European and North

American markets

Product innovation like Tide with a Touch of Downy, Febreze air

freshener, Blendax toothpaste, Bounty Basic, and Charmin Basic

Gillette acquisition deal was ratified, increasing the company by

20%

Gillette deal included Duracell, Braun electric shavers, and Oral-B

toothbrush13

Page 14: Procter and Gamble - History, Evolution, Present and the Future

2006 Gillette deal boosted sales by 20% to $68 billion Launched the year’s best selling new product, Gillette Fusion Around 35% of the company’s products included technologies

sourced from outside the company

2007 Product innovations like Tide Simple Pleasures, Febreze

Noticeables, and Crest Pro-Health The company acquired Dolce & Gabbana Sales of blades and razors increased by 8%

2008 The 50% target for new products with an external component was

met Pampers Baby Stages of Development exceeded sales of $8 billion Charmin Ultra-Strong, Bounty Basic and Bounty Extra Soft, under

Family Care segment had a strong growth 14

Page 15: Procter and Gamble - History, Evolution, Present and the Future

In Beauty segment, Olay Regenerist and Dolce & Gabbana were in

the lead

2009

The economic crisis hit the company hard

Net sales declined by 3%

Baby Care and Family Care were the only segments to report

growth

CEO Lafley was replaced by Bob McDonald

2010

The company returned to growth

It claimed to have 4.2 billion customers

Ambi Pur and Sara Lee acquisition

Product innovations like Fusion ProGlide, Pampers with DryMax, and

Crest toothpaste 3D White

Gillette Guard was launched in India, making it the biggest-selling

razor in just three months15

Page 16: Procter and Gamble - History, Evolution, Present and the Future

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2011

P&G won 32 Lion Awards in Cannes Lions International Festival of

Creativity for its advertising

Natura pet business acquisition

Prilosec OTC merged with Teva Pharmaceutical Industries

From seven segments of Organisation 2005, it was down to two

namely Grooming and Beauty, and Household Care

2012

The return of growth in US did not fully help P&G to increase sales

Product innovation such as Tide Pods

Pringles was sold to Kellogg’s

Page 17: Procter and Gamble - History, Evolution, Present and the Future

The company is in the business of building brands and brand value

It was the first company to produce half-hour television series

It was also the first company to align every function in the

business around the sole goal of building brands

P&G mastered the application of science in building brands

Rigour and tenacity were two qualities that made P&G successful

in terms of building brands

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Page 18: Procter and Gamble - History, Evolution, Present and the Future

P&G currently sells 40 billion products a year

It ranked sixth in Fortune’s World’s Most Admired Companies

because of its expertise gained through long years of market

experience

Though considered as one of the best companies, it currently faces

greater challenge of returning into full growth

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