Proctor and Gamble Strategic Case Study
Company Overview
P&G is an American multinational consumer goods corporation founded in 1837, headquartered in Cincinnati, Ohio. It manufactures and distributes food and beverages, cleaning supplies and personal care products. In 2011, it showed almost $83 billion in sales, making it 5th in the "World's Most Admired Companies." P&G has about 130,000 employees globally (P&G Information, 2012). Bob McDonald is the current CEO, and worked for the company for 29 years prior to his promotion. His view is that P&G should touch and improve "the lives of the world's consumers through branded products of superior quality and value" (Dyer, D., et.al. 2004).
Mission Statement and Values
P&G's values focus on its people and the values with which these people live and work. P&G believes it attracts and recruits the finest people globally, builds its organization from within, and promotes and rewards its employees without regard to any difference unrelated to performance. P&G acts on the conviction that the men and women of the company will always be the foremost asset since each individual is a leader in their own area of responsibility. As leaders, employees should retain a deep commitment to deliver leadership results (Proctor and Gamble 2012).
General Business Strategies
Proctor and Gamble has been a household name in consumer products for multiple generations. Around the globe, Procter & Gamble takes the consumer "from cradle to grave" with its long-time, consistent and quality household and personal care products. For P&G, its 150-year tradition was both a positive for brand awareness and experience and a negative in that it was mired in traditional, and more bureaucratic, management structure. Instituting a boundary less organization changes the paradigm by making all boundaries between layers in an organization, functional units, customers and suppliers, and the outside world, more permeable. It also allows information and ideas to flow from one organization to another; and while an organization cannot be completely without boundaries, it can weaken the layers and open approval levels, innovation discussions, and speed of change. Changing such a large ship was not easy, and called for innovation, patience, and expertise. It was also required and thus merged into a situation in which company-wide collection and usage of data combined with more employee empowerment would energize the organization.
Strategic Directions
Again, due to globalism and increased stakeholder attention, the company as a whole has taken a two pronged approach to moving into the 21st century global marketplace more effectively. First, the company adopted a Knowledge Management Paradigm corporate wide; second, the company has focused both internally and externally on Corporate Social Management (CSR). P&G's hope is that the combination of using the incredible about of data they hold plus their branding philosophies, will use non-traditional marketing tools to retain market share, grow share in new and emerging markets and brand categories, and still satisfy the overall stakeholder need for transparency and active sustainability philosophies. The only way this is happening in the 21st century is new research, new products and new markets -- and the only way to capture those three strategies is to provide continual and accrual knowledge coupled with a softer strategy that gives individuals and governments a belief that P&G is acting morally and for the best interest of its stakeholders and the planet (Procter & Gamble's Innovation Success 2002).
Strategic Methods -- Knowledge Management
Because P&G has so many divisions, each with a specific set of strategic and tactical goals, the company has opted to use an overall paradigm of Knowledge Management (KM). KM provides far more advantages than disadvantages in the modern organization. For years, largely due to size and culture, P&G operated on a traditional structure tended toward a lack of flexibility to changing needs in a rapidly changing world; internal and external communication and sharing of information was limited -- each business unit seemed to act in a proprietary manager; it was slow and ponderous in responding to customer requirements due to internal turf battles; because of its size, it was a lumbering giant, unable to get things done quickly, and finally, difficult to deal with suppliers and vendors because of the specific job responsibilities most managers held and the lack of internal communication (Thieraug & Hoctor 2006).
As an overall strategic direction, the company must continually reinvent its centuries of branding to fit the needs of the modern, global audience. This may require restructuring current brands, ancillary brand development, and certainly new technologies. The only way this can be accomplished on scale suitable for a mega giant like P&G...
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