Procter & Gamble (P&G) is one of the largest consumer goods company in the world. The company was first built in 1837 by William Procter and James Gamble. Later in 1890, P&G decided to stop being a private company and became a public company. Now, P&G is a worldwide company which has 126,000 employees and sub corporations in more than 80 countries. Their total revenue are 84.17billion in 2013. Their products range including Beauty, Grooming, Health Care, Fabric Care and Home Care, and Baby Care and Family Care. P&G sell their products in more than 180 countries. Some of 50 Leadership Brands are the world’s most well-known household names.
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The chart shows that unemployment rate goes down, the GDP growth rate goes up and the inflation rate are maintained between 1 and 3. We can conclude that the economy is slightly expanding. Because of that, People would like to spend more money to buy products and service. In addition, the expanding fiscal policy will cause the Investment-Saving curve shift right which lead to interest rate declines. People would like to invest money instead of saving. P&G’s stock price should go up as it is shown in the chart.
Corporate Philosophy and Organizational Structure
“Be, and be recognized as, the best consumer products and services company in the world.” is the mission P&G want to achieve. How to do that? Almost every senior manager will answer you “To touch and improve the lives of more consumers in more parts of the world more completely.” They believe it and they do their best to make sure it happened. This kind of successful internal marketing result from their culture. People are the company’s most important asset of competitive advantage. For example, P&G identify the best applicants by a proven recruiting process that shows intelligence, leadership and assesses character, and predicts success in company. P&G also likes to recruit fresh graduates for entry level. So they can built culture from the bottom. What’s more, all of their CEO and GM have worked in P&G for a long time since graduation. The company strictly adheres to “promote-from-within” culture to develop future leaders. The recent return of A.G. Lafley shows how much P&G values continuity and company knowledge.
P&G is matrix organization that shared power among executives in charge of functions. The groups served as checks and balances on one another; no individual or group have complete responsibility for any product or area. A.G. Lafley is Chairman of the Board, President and CEO. Dimitri Panayotopoulos is Vice Chairman and Advisor to the Chairman and CEO, Global Business Units. Werner Geissler is Vice CGO.
How does P&G become the leading company from a small soap factory? The answer is in the sentence of Mr. John Pepper, ex-CEO of P&G --” R&D is the lifeblood of our business.” From the soap Ivory, Tide to Pampers, P&G shows the world their innovational power. And what’s more is that not only the R&D department values the innovation, but also every employee believes deep down in their heart. This kind of culture result from P&G’s principles and structure of organization --” We will provide branded products and services of superior quality and value that improve the lives of the world’s consumers.” In order to provide products and services of superior quality, P&G use a systematic approach to innovate. They also have a position called Chief Technology Officer to monitor R&D department.
According to the annual report, they spent more than $2 billion -- 60% more than its closest competitor. They have also won lots...