C2-1 - Production/Operation System Marketing P&G provides...

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Production/Operation System, Marketing: P&G provides branded products and services to consumers in over 180 countries. P&G is organized into 3 Global Business Units: Beauty; Health and Well-Being; and Household Care. Within these GBUs are 5 business segments: Fabric & Home Care, Baby & Family Care, Beauty Care, Health Care, and Snacks & Beverages. Major brands include Tide, Charmin, Crest, Pampers, Bounty, Olay, Pantene, Always, Downy, Dawn, Folgers, and Pringles. In 2005 Proctor & Gamble bought out Gillette for $57 billion, making it the biggest acquisition in company history. This enable P&G to go from having 16 to 21 “super brands” They sold off their Folgers division in November 2008 for more than $3 billion in an effort to stay focused on the markets they are already in History: CEO Durk I. Jager tried to implement too many changes too quickly using the product development strategy. His objective was intended to boost sales and profits by introducing an array of new products, closing some profitable businesses, and eliminating jobs. Because of these decisions in mid year of 2000 the company’s profit margins shrank way below anything expected. Alan George Lafley because the new CEO in June of 2000. He implemented a new strategy – the penetration of old products in existing markets. With this new strategy he was able to turn the company completely around boosted the company’s fortunes Human Resources: One Procter & Gamble Plaza Cincinnati, OH 45202 United States Phone: 513-983-1100 Fax: 513-983-4381 138,000 employees Financial Resources: The customer base of P&G is composed primarily of mass merchandisers, grocery stores, membership club stores, drug stores, and high-frequency stores. In fiscal 2009, Wal-Mart Stores, Inc. and its affiliates accounted for approximately 15% of P&G’s total revenue with no other customer contributing more than 10%. P&Gs Top 10 customers account for 30% of its business. It is estimated that the average U.S. consumer purchases approximately $100 worth of P&G products annually. Problem Statement:
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P&G’s sales decreased within the last year. They are dealing with a market share problem. (market share - the percentage or proportion of the total available market or market segment that is being serviced by a company.)
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R&D: Procter & Gamble has a world class R&D organization with more than 7,500 scientists working in 12 countries around the world. This includes 1,250 Ph.D. scientists. Invest 4% of sales back into research & development which is higher than most of their global competitors P&G is doing extensive research on where their products go after use and what affects they may have on the environment: Looking to see what impact their products have on plants, animals, and bacteria MIS: Interactions with Competitors: Competition: three main competitors Johnson & Johnson Kimberly- Clark Unilever Competition is a medium threat, hard to challenge brand value but relatively easy to enter the market Mission: P&Gs mission is to use the company’s strengths to create a core competence, which will lead to a sustainable competitive advantage.
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