Management Focus On P&G

Trần Thị Ngọc Ánh – 030838220011
a. What strategy was Procter & Gamble pursuing when it first entered foreign
markets? Why do you think this strategy became less viable later on?
In the beginning the company pursued International strategy. International strategy

refers to activities that happen crosswise over multinational enterprises in the private
sector. Although international strategy refers to doing business across nation-state
boundaries, it is based on home market resources. Similarly Procter and Gamble
developed the new products in Cincinnati and after that depended on semiautonomous
foreign subsidiaries to make advertise and circulate those items in various countries.
This strategy started to fail and P&G started to experience sluggish profits and sales in
1990.
The strategy became less viable because P&G's was facing high costs because of
extensive duplication of manufacturing, marketing, and administrative facilities in
different national subsidiaries. Duplication was the major cause of high costs.
Secondly, the barriers to cross-border trade were falling rapidly worldwide, and
fragmented national markets were merging into larger regional or global markets.
Also, the retailers through which P&G distributed its products were growing larger
and more global, such as Walmart, Tesco from the United Kingdom, and Carrefour
from France. These emerging global retailers were demanding price discounts from
P&G.
b. What strategy does P&G appear to be moving toward? What are the benefits
of this strategy? What are the potential risks associated with this strategy?
The company appears to be moving toward transnational strategy. As it was an

international business structure where P&Gs business activities were composed by
means of collaboration and relationship between its head office, operational divisions
and globally found backups or retail outlets. The company now comprised of seven
business units which were centralized.
Benefits:
- Through economic scale Global innovation in manufacturing, R&D, marketing,

streamlining production and distribution across regions helps P&G cut costs.
- Adjusting products, brands and marketing strategies to consumer needs and
preferences provides superior value and quality to customers, helping P&G increase
sales.
- P&G can enhance innovation and learning by tapping into knowledge and
experience from global business units.
- Balancing globalization and local differences thereby creating a flexible organization

that easily adapts to different environments, thereby enhancing P&G's competitive
advantage.
Risks:
- Difficulty in implementing and managing a global strategy, as it requires a high

degree of coordination and integration across multiple dimensions, such as product,
function, region and culture.
- Transnational strategies can create conflicts and tensions within and between global
business units. Because countries may have different goals, motivations, and
performance measures, and may compete for resources and influence.
- May increase complexity and uncertainty about P&G's external environment,

because Transnational strategy presents the company with political, economic, social,
and legal differences that vary across countries and regions.
- P&G's organizational culture and identity can change, because this strategy requires
the company to weigh the need for consistency and standardization against the need
for variety and adaptability.
c. To what do you attribute P&G's recent sales decline?
Procter & Gamble's (P&G) recent sales decline can be attributed to several factors:
- Economic Conditions: Global economic uncertainties, inflation, and fluctuating

exchange rates can impact consumer spending and P&G's profitability, especially in
emerging markets.
- Competition: Increased competition from both established brands and new entrants
in the consumer goods market can erode P&G's market share.
- Changing Consumer Preferences: Shifts in consumer preferences toward more

sustainable, organic, or niche products can affect P&G’s traditional product lines.

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Trần Thị Ngọc Ánh – 030838220011

In the beginning the company pursued International strategy. International strategy

The company appears to be moving toward transnational strategy. As it was an

- Through economic scale Global innovation in manufacturing, R&D, marketing,

- Balancing globalization and local differences thereby creating a flexible organization

- Difficulty in implementing and managing a global strategy, as it requires a high

- May increase complexity and uncertainty about P&G's external environment,

c. To what do you attribute P&G's recent sales decline?

- Economic Conditions: Global economic uncertainties, inflation, and fluctuating

- Changing Consumer Preferences: Shifts in consumer preferences toward more

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