Write a detailed report of your analytical findings and strategic issues from your analysis of the firm to the vice president of strategy. Explain that this analysis focuses on the three strategic elements of the firm and the concerns or opportunities abo

Running head: EXECUTIVE MEMO 1

EXECUTIVE MEMO 5

u01a1: Strategic Frame Assessment

Demetrius Price

MBA6024

Organizational Strategy

9656 Barlow Road

Fort Belvoir, VA 22060

Telephone: 910-987-2621

Email: [email protected]

Instructor: Dr. Vincent DeFazio

Date: 31 August 2015

Date: 31 August, 2015

To: Terri Bell, Vice President of Strategy

From: Demetrius R. Price

CC: Vincent DeFazio, DM

Subject: Procter & Gamble Strategic Frame Assessment

Executive Summary

This is a Strategic Frame of the Procter & Gamble Company (P&G), which is the largest supplier of the personal and household products. P&G is one of the world's largest consumer goods companies. It markets branded products in beauty, health, fabric, home, baby, family, and personal care categories. The company operates in the Americas, Europe, the Middle East and Africa (EMEA) and Asia. The company structure was initially based on the geographical regions, but was changed in 2005 to be based on products. The P&G company structure has been a source of friction for the company since the structure evolved in 1924 into a structure in which all the products had specific production, marketing, and sales departments. The major change of the organization structure was introduced in P&G in 1989 by creating of a global product structure for each of its company structure (Dodgson, Gann & Salter, 2006). The changes in the company structure have been moving towards integration. It is the first of four deliverables that comprise the Comprehensive Organizational Strategic Assessment for P&G.

P&G Business Model

The target market for P&G is the household consumers. P&G’s core products include laundry and personal care products. The strategy used by P&G to make money is selling its products through supermarket chains like Wal-Mart. P&G engages in the provision of branded consumer packaged goods to its consumers around the world. Its products are sold primarily through mass merchandisers, grocery stores, membership club stores, drug stores, high frequency stores, and neighborhood stores which serve many consumers in developing markets. The company revenue comes by selling products to the consumers. When it’s comes to profitability, the company core brands are losing market share and hence the company has experienced a reduction of profitability (Leavy, 2013).

Proctor and Gamble Strategy and Direction

P&G growth and competitive edge in the early years up to 1982 had been achieved through diversification and innovation of its products portfolio. The company introduced products like synthetic detergents, disposable diapers, and fluoride tooth paste that provided a competitive advantage in the market. However, the last groups of new products included the launch of Always. It has been noted that P&G’s diversified corporate strategies resulted in lack of coordination in launching new products (Leavy, 2013). For example, the company launched pampers in Germany in 1973, France in 1978 and United Kingdom in 1981 and hence giving its competitors in the international market to launch imitative products before P&G.

Competitive Advantage (Business Strategy)

P&G employs the strategies of differentiation by operating globally; it encounters wide difference in products across different products markets and regional differences. Consequently, attempts by P&G to take advantage of efficiency and innovation through integration of global border across borders has left substantial differences in its operations. Very few of P&G’s products were globally standardized. The differentiation strategy enabled it to produce skin care products, cosmetics, and foods according to the customer’s preferences in the different geographical regions (Conger & Nadler, 2012).

Procter and Gamble Corporate Strategy

The company corporate strategy changed in 2005, due to the introduction of the seven Global business units that were given worldwide responsibility of product development and marketing. Conger & Nadler, (2012) note that P&G developed a vertical scope through a process of standardization of the manufacturing process, simplifying of brands and developing efficient marketing. More than 300 brands were identified to be closed down. P&G also shifted its primary organization structure from the geographical regions to business division to reduce bureaucracy.

Preliminary Findings and Conclusions

The P&G corporate strategy was initially based on the diversification. The company therefore differentiated its packaging according to product size, marketing, and sales, and employed a variety of distribution channels. Despite the wave of globalization and the standardization of the goods, multinational companies like P&G increasingly developed products and strategies that focus on regionally based products to develop their business in emerging markets like Eastern Europe, South East Asia and Greater China. These findings and conclusions will likely be modified as we develop the assessments between the strategy and the firm, and the strategy and the industry environment.

References

Conger, J. A., & Nadler, D. A., (2012). Strategy and Governance, when CEOs step up to fail. MIT Sloan Management Review, 45(3).

Dodgson, M., Gann, D., & Salter, A. (2006). The role of technology in the shift towards open innovation: the case of Procter & Gamble. R&D Management, 36(3), 333-346.

Leavy, B. (2013). Where to play and how to win–strategy fundamentals the Procter & Gamble way. Strategy & Leadership, 41(5), 7-16.