proctorandgamblr

8/7/2019 proctorandgamblr

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Submitt

Submitt

d to: Sir, Ayaz red by:

Sikandar sultanRafia azad

Sadia ahsanAdnan hayatHaider arif

Jihad khalid

hi


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To

Type Publi

Founded 1837

Headquarters Cinci

Key people Bob

Industry Con

Revenue U

Net income U

Employees 138,

Website www

uching Lives, Improving Life .

c (NYSE : PG )

nnati, Ohio , USA; Toronto, Ontario, Canada

McDonald , President, and Chief Executive.

umer goods

$79.0 billion (FY 2009)

$13.4 billion (FY 2009)

00

.pg.com


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INTRODUCTION TO COMPANY

The Procter & Gamble Company (P&G) is a brand behemoth. The world' no.1 maker of household products courts market share and billion-dollar brands. P&G's business is divided intothree global units: beauty, health and well being, and household care. Procter & Gamble Co.(P&G) is an American global corporation based in Cincinnati, Ohio that manufactures a widerange of consumer goods. Three billion times a day, P&G brands touch the lives of people

around the world. This happens because P&G provides branded products of superior quality andvalue to improve the lives of the world's consumers. This results in leadership sales, profits andvalue creation, allowing employees, shareholders and the communities in whichP&G operate to prosper. The Company markets more than 300 branded products. P & G haveon-the ground operations in more than 80 countries and employ nearly 140,000 people. Nearlyfive billion consumers in more than 130 countries. What began as a small, family-operated soapand Candle Company now provides products and services of superior quality and value toconsumers in 140 countries. P&G is a publicly owned company. Its stock is listed and traded onthe New York and Paris exchanges.As of 2008, P&G is the 8th largest corporation in the world by market capitalization and 14thlargest US company by profit. It is 10th in Fortune's Most Admired Companies list (as of 2007).

P&G is credited with many business innovations including brand management and the soapopera .


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HISTORY OF PROCTER AND GAMBLE COMPANY:

William Procter, a candle maker, and James Gamble, a soap maker, immigrants from Englandand Ireland, respectively, who had settled earlier in Cincinnati, formed the company initially,who met as they both married sisters, Olivia and Elizabeth Norris.

As the result of persuation by their father in law, Alexander Norris, Procter & Gamble was bornon October 31,1837, as they became business partners. By1859,when 80 employees worked for P&G, sales reached 1million dollar. The company supplied soaps and candles to the Union Armyduring the American Civil War. the military contracts won introduced soldiers from all over thecountry to P&G

s products, along with increased profits.

1837: William Procter and James Gamble form Procter & Gamble, a partnership in Cincinnati,Ohio, to manufacture and sell candles and soap.

1851: Company's famous moon-and-stars symbol is created.1878: P&G introduces White Soap, soon renamed Ivory.1890: The Procter & Gamble Company is incorporated.

1911: Crisco, the first all-vegetable shortening, debuts.1931: Brand management system is formally introduced.1946: P&G introduces Tide laundry detergent.1955: Crest toothpaste makes its debut.1957: Charmin Paper Company is acquired.1961: Test marketing of Pampers disposable diapers begins.1963: Company acquires the Folgers coffee brand.1980: It began marketing a new product, an inexpensive soap that floats in water. it was named

Ivory

.1982: Norwich-Eaton Pharmaceuticals is acquired.1985: P&G purchases Richardson-Vicks Company, owner of the Vicks, NyQuil, and Oil of

Olay brands.1987: William Procters grandson William Arnett Procter began a profit sharing programme for

its employees,he assumed that by giving the workers stake in the company,they would be lesslikely to go on strike.

1988: Noxell Corporation, maker of Noxema products and Cover Girl cosmetics, is acquired.1991: Max Factor and Betrix cosmetic and fragrance lines are bought from Revlon, Inc.1992: Pantene Pro-V shampoo is introduced.1993: Major restructuring is launched, involving 13,000 job cuts and 30 plant closures.


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1997: Company acquires Tambrands, Inc., maker of the Tampax line of tampons.1998: Organization 2005 restructuring is launched.1999: Premium pet food maker Iams Company is purchased.2001: P&G acquires the Clairol hair-care business from Bristol-Myers Squibb Company.2002: Jif peanut butter and Crisco shortening brands are divested.

2003: Company acquires a controlling interest in German hair-care firm Wella AG.The company started building factories in other site of USA as the demand was Out growing thecapacities of Cincinnati.the products were also being diversified.It also sponsored a number of radio programmes termed as soap operas. With its 1930 acquisitionof Newcastle upon ThomasHedley Co,it became an international corporation. numerous new products were introduced over time, like Tide, Prell, Crest,Bounce, Pampers, Chux. ,.P&G acquired a lot of companiesincluding Folgers coffee,Norwich eaton pharmaceuticals, Richadson-Vicks, Noxell,Max Factor,Iams company. P&G acquired Gillette in January 2005,forming the largest consumer goodscompany and placing Unilever in the 2nd place. P&G has expanded significantly,but its itshesdquaters still remains in Cincinnati.

Logo controversy

The company received unwanted media publicity in the 1980s when rumors were spread thattheir previous corporate logo was a Satanic symbol. The company has sued and attempted to suea number of companies like Amway and individuals who have spread rumors of this type, insome instances because they sell competitive products and have spread such rumors for thepurpose of tarnishing P&G's image to increase sales of their own brands.

However, the continuous media coverage prompted P&G to adopt an entirely new logoconsisting of just the letters P&G. In television commercials in China, the former P&G logo stillappears at the end of each commercial, and up until 2004, it appeared at the end of eachcommercial in Japan


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VISION

What organization want to become in future is known as vision. The vision of Procter andGamble company is

Be, and be recognized as, the best consumer products and services in theworld

MISSION

What is the purpose of the existence of the organization is known as mission. The mission of Procter and Gamble Company is

Procter and Gamble will continue to serve consumers by continuouslyinnovating 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 butquality to our communities and to continue to grow so that we can maximize our

shareholders wealth.

VALUES

P&G is its people & the values by which they live.They recruit the finest people in the world.they build the organization from within,promoting andrewarding people without any difference unrelated to performance.thry work on the convictionthat the people of P&G are the most rewarding asset.

Integrity Being right in deeds, honest and straight to each other operating within the spirit of law,upholding the values and principles in every decision and action, staying data-based andintellectually honest in advocating proposals and recognizing risks.

Leadership: Having clear vision of where they are going, focusssing the resources to achieve leadershipobjectives and strategies, developing the capability to deliver the strategies and eliminateorganizational barriers.


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Ownership Accepting personal accountability to meet the business needs. improve the system and helpingothers improve their effectiveness. everyone acts owner, treating the companys assests as ownand behaving with companys long term success in mind.

Passion for winning Determination to be the best, having healthy dissatisfaction with the status quo, compellingdesire to improve and win in the workplace.

Trust Respecting &treating others as they want to be treated, having confidence in each others

capabilities and intentions. foundation of trust.

PRINCIPLES

~Showing respect for others

~Being strategically focused in the work

~Valuing personal mastery

~Seeking to be the best

~Making the interests of the company nad workers insepsrable

~Innovation is the cornerstone of success

~Making mutual interdependency a way of life

~Staying extremely focused.

OBJECTIVESThe objective of Procter & Gamble is thatThey will provide branded products and services of superior quality and value that improve thelives of the world's consumers, now and for generations to come. As a result, consumers willreward us with leadership sales, profit and value creation, allowing our people, our shareholdersand the communities in which we live and work toprosper.


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ORGANIZATIONAL STRUCTURE P&G has an organizational structure that is comprised of three Global Business Units (GBUs)and a Global Operations group. The Global Operations group consists of the MarketDevelopment Organization and Global Business Services. The heads of the three GBUs andGlobal Operations each report to the Chief Executive Officer. Here is the Organizational Chartfor Procter and Gamble.

The three GBUs are Beauty and Health, Household Care and Gillette. The primary responsibilityof the GBUs is to develop the overall strategy for their brands. They identify common consumer needs, develop new product innovations and build their brands through effective commercialinnovations, marketing and sales. This new structure took effect in April 2006 when theyannounced a number of changes to certain of their key leadership positions, which resulted inchanges to their GBU structure and their segment reporting. The company believes that they getthe full value of the companys strengths with a unique organizational structure and supportingwork systems. P&G is the only consumer products company with global business unit profitcenters, a global shared business services, all supported by innovative corporate functions. Theyare essentially running a number of highly focused companies that share common go-to-market

CEO

VP of the BoardP & G Family

Vice Chairmanof the Board

Vice Chairman Vice ChairmanGlobal

GroupPresidentGlobal Prestige

PresidentGlobal SkinCare

PresidentGlobal PrestigeProducts

PresidentGlobalFeminine Care

PresidentGlobalProfessional

PresidentGlobal HairCare

PresidentGlobal

PresidentGlobal Pet

PresidentGlobalCosmetics

PresidentGlobal Family

PresidentGlobal Baby &

PresidentGlobal Oral

Senior VP HRGlobal

PresidentGlobal Snacks

PresidentGlobal Home

Group PresidentGlobal Fabric

PresidentLatin America

PresidentGreater China

President IndiaAnd Australia

PresidentNortheast Asia

Group PresidentNorth America

Group PresidentWestern Euro e

Group PresidentEastern Europe


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operations and business services. They have made it possible for each business unit to focus onits individual consumers, customers and competitors while capturing all the capability,knowledge and scale of a $75 billion global company. In addition, they have created thecapability to collaborate, learn quickly from one another, and reapply successes across P&Gbusinesses. This is a more agile, flexible and responsive structure, allowing the global business

units to focus on necessary growth. It is also hard for a competitor to duplicate this structure.


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Procter & Gamble brands:

Category Segment BrandPaper Diapers

Baby WipesSanitary Products

PampersLuvsAlwaysAlldays

Laundry & CleaningProducts

DetergentsFabric SoftenersDish Washing LiquidsAir Freshener

TideArielCheerBonuxDownyFairyFebreze

Health & Beauty Care Personal Care & HomeAppliancesGroomingDental CareHair CareSoapsShower GelsShampoosTooth PasteBody Wash GelsCosmeticsMale Toiletries

BraunGilletteOral-BWellaCamayZestOlayCamayHead & ShouldersPert PlusPanteneOlayOil Of OlayOld SpicePringles

Food Potato Chips PringlesBatteries Consumer & Industrial

BatteriesDuracell


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Manufacturing operations are based in the followingregions:Procter & Gamble manufactures its products across the globe. Manufacturing operations are based in the

following regions:

United StatesCanadaMexicoLatin AmericaEuropeChina (31 wholly-owned factories) and other parts of AsiaAfricaAustralia

PRODUCTIONS

Procter & Gamble produced and sponsored the first radio soap operas in the1930s.

Past serials produced by Procter & Gamble include:Another World

Lovers and FriendsThe Brighter DayThe CatliOur Private WorldThe Edge of NightThe First Hundred YearsFor Richer, for Poorer From These Roots


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Search for TomorrowSomersetTexasYoung Doctor Malone

TOP COMPETITORS 1. Johnson & Johnson2. Kimberly Clark3. Unilever

Kimberly-Clark:Kimberly-Clark competes with P&G in the household products market, particularly in tissues,paper towels, diapers, and feminine products. In 2006 K-C reported sales of $16.7 billion, 76%of which came from sales of diapers, wipes, feminine products, tissues, paper towels, toiletpaper, and other related paper tissue products. Major K-C brands include Huggies diapers, Kotexfeminine products, Scott paper towels and Kleenex tissues.

Unilever:

Unilever operates in many countries, including Asia, Africa, North America, the Middle East,Western Europe, and Latin America. The company's products cover two categories -- food andhome and personal care with known brands such as Axe, Dove, sunsilk,Pond's, Suave,Vaseline, Signal, Snuggle, Surf, Slim Fast, Lipton, Ben & Jerrys, Brayers, and CountryCrock .

Johnson & Johnson:

It's nearly impossible to get well without Johnson & Johnson (J&J). The diversified health caregiant operates in three segments through more than 250 operating companies. Itspharmaceuticals unit makes drugs including Best-selling schizophrenia medication Dispersal --for an array of ailments, such as neurological conditions, blood disorders, autoimmune diseases,and Chronic pain. J&J's medical devices and diagnostics division offers surgical equipment,monitoring devices, orthopedic products, and disposable contact lenses, among other things. Itsconsumer products segment makes over-thecounter drugs and products for skin and hair care,baby care, oral care, first aid, and women's health.


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STRATEGIES

A strategy is a long term plan of action designed to achieve a particular goal, most oftenwinning.P&G announced connect & develop strategies P&G has announced a goal of accessing 50% of its new ideas, technologies, and products from external sources. A key element in this openinnovation strategy is the effective utilization of the Internet to match technical needs with theright innovators around the world who have technology solutions and "ready-to-go" products thatP&G can utilize. Nine Sigma is one of the leading companies in the field of innovation sourcing.Through its proprietary Internet-based Managed Exchange process, Nine Sigma deliversconnections to sources all over the world to meet its clients' most challenging needs. In the past18 months, P&G and Nine Sigma have worked together to find solutions and opportunitiesacross P &G's global business units.

Leadership

P&G market shares are growing in more core categories, on more leading brands, at more topcustomers and in more big countries this year than last. P&G has the leading brand in 29 of 47core categories in the U.S. today.

Global Presence

we have on-the-ground operations in 80 countries. Our structure is based on Global BusinessUnits spread across the U.S., Europe, Latin America, and Asia.

Growth

P&Gs business is strong. We are delivering on our goals of:4 percent to 6 percent topline growth, excluding foreign exchange effects.Double-digit core earnings-per-share growth.Total shareholder return in the top third of P&G's peer group .

InnovationWe're innovating in every core P&G category, and creating new categories. For example, in2001, six of the top ten best-selling new non-food products in the U.S. were P&G brands. We'vedeveloped whole new categories like disposable diapers and laundry detergents in the U.S, andmost recently, home dry cleaning (Dryel) and fabric refreshers (Febreze). We consider productresearch and innovation to be the cornerstone of our success. P&G invests more than $1.2 billiona year on research and development, an investment that pays off. We file for nearly 20,000


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patent applications every year, making P&G among the most innovative companies in the world.P&G employs more PhD scientists than MIT, Berkeley, and Harvard combined .

Promotional strategies

Coupons have been a promotional strategy for more than 100 years, it is estimated that 3000manufactures print 310 billion coupons. While coupons are believed to be effective in enticingconsumers to try and to continue to buy a product, less than 2% of distribution coupons areredeemed, leading manufactures and retailers to question how effective couponing really is intodays market-place.

Pricing strategies

Procter & Gamble's new low price strategy on some of its product lines has been getting a lot of

play in the consumer and business press, but the spotlight has fallen almost entirely onsupermarkets. Given the volume that food stores command and the strong symbiosis betweenP&G and the grocery trade, perhaps that's natural.

Connect and Develop strategy

P&G has announced a goal of accessing 50% of its new ideas, technologies, and products fromexternal sources. A key element in this open innovation strategy is the effective utilization of theInternet to match technical needs with the right innovators around the world who havetechnology solutions and "ready-to-go" products that P&G can utilize. NineSigma is one of the

leading companies in the field of innovation sourcing. P&G and NineSigma have workedtogether to find solutions and opportunities across P&G's global business units. By utilizingNineSigma's unique process, P&G can be more proactive in accessing the tremendous innovationassets and ideas that exist outside of Procter & Gamble.

Present and future

With a presence in more than 140 countries, Procter & Gamble serves a potential consumer market of five billion, and employs around 103,000 people. Turnover last year was $3 5 billionand net profit more than $3 billion. On BSE, while P&G is currently valued at Rs 1,988 crore,

Gillette's market cap is Rs 2,199crore Engineering products would soon be sourced from Indiainstead of Japan .


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SWOT ANALYSIS

STRENGTHS

1. Business and community partnerships

Improving lives in all countries and communities has led to a focus on building effectivebusiness and community partnerships in areas where they can make a meaningful difference :

education, economic development,2. Leadership focus and accountability

To assess progress and reinforce leadership accountability for corrective actions, managementshows strong visible leadership, commitment and constant focus.

3. Talent support and development

P&G recruits the best talents ,leverages the full talent of each individual through effectiveassignment and promotion planning processes and executing critical systems that affect andsupport retention of employees .employee support groups and network teams perform effective

recruiting, join-up and development efforts.

4. Organizing facts

For many years, P&G has been recognized across the globe as one of the "best places to work"and for improving lives in the communities where they operate. This recognition is reflected inmany publications, like, Fortune, Working Mother and Latina Style.

5. Employee networks

Employee support groups and network teams operating throughout the organization contributestrongly to effective recruiting and development efforts.

6. Inclusive culture

P&G leaders create an inclusive environment that welcomes and embraces diversity in theemployees, regardless of their individual differences, talents or personal characteristics. This isan environment that provides everyone equal access to information, opportunities and


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involvement, so each person learns, grows, excels and maximizes his or her personalcontribution.

WEAKNESSES:

1.The company introduced toll-free numbers for the costumers but in October 1981,this facilityturned into a backdrop for the company as public used it for enquire about the rumour of theownership of the company by the Church of Satan and the president and chief of P&G JohnSmale being its member. in July 1982,the calls peaked up to 15,000.

2. Although the company changed its logo in 1985,it still appears at the end of certaincommercials in China and Japan, stock certificates and at the entrance of of some P&Gfacilities.

3. P&G is one of the largest corporate producers of air pollution, emitting green house gasesand toxic chemicals.

OPPURTUNITIES:

1.P&G,being a highly diversified organization, can out think, out innovate and out perform anhomogeneous organization.

2.P&G may understand the needs of the diverse consumers and work effectively with customersand suppliers to fulfill its values ,principles and purpose.

3. It can delight the consumer with sustainable innovations that will improve the environmentalprofile of the products, and thereby increasing the sales.

4. Working transparently with the stakeholders can enable freedom to innovate in a responsibleway.

5. P&G can focus on shifting its product portfolio to faster growing high margin businesses.


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6.The company may concentrate on its core business (through innovation), to expandpenetration in the developing countries and restructuring its existing businesses.

THREATS1.The likelihood of one of their products cannibalizing the sales of another. the products maydirectly compete with one another

2.Due to high cultural diversity, problems may arise as a course of miss communication.

3.As a result of language difference, dubbed commercials may be miss interpreted.

4.There is an enormous chance of competion in the market at the higher positions.

5.As the range of its products is very vast,there are even greater number of their substitutes.6.A change in the consumers taste can affect the demand for the products.

P&Gs GROWTH OVER LAST 5 YEARS :

Amounts in millions, except per share amounts 2009 2008 2007 2006 2005

Net Sales $79,029 $81,748 $74,832 $66,724 $55,292

Operating Income 16,123 16,637 15,003 12,916 10,026

Net Earnings 13,436 12,075 10,340 8,684 6,923

Net Earnings Margin from Continuing Operations 14.3% 14.4% 13.4% 12.7% 12.0%

Diluted Net Earnings per Common Share from ContinuingOperations $ 3.58 $ 3.56 $ 2.96 $ 2.58 $ 2.43

Diluted Net Earnings per Common Share 4.26 3.64 3.04 2.64 2.53

Dividends per Common Share 1.64 1.45 1.28 1.15 1.03


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NET SALES

DILUTED NET EARNINGS

Diluted Net Earnings (per commonshare)

05 $2.53

06 $2.64

07 $3.04

08 $3.64

09 $4.26

OPERATING CASH FLOW

Operating Cash Flow (in billions ofdollars)

05 $8.6

06 $66.7

07 $74.8

08 $15.0

09 $14.9

Net Sales (in billions of dollars)

05 $55.3

06 $66.7

07 $74.8

08 $81.7

09 $79


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Summary of 2009 Results

Net sales decreased 3% to $79.0 billion.Net earnings increased 11% to $13.4 billion..Diluted net earnings per share increased 17% to $4.26.Cash flow from operating activities was $14.9 billion.

Financial Condition

Financial condition continued to be of high profile as operations generated substantial cash andaccessing capital markets at competitive rates,.the overall cash status of the company indicatesstrong business results and global cash management strategy.

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