analysis
Success in any company that operates for marketing and profit acquisition
believe. Furthermore, the ability of the company and its management to compete
and maintain a competitive edge among its competitor is another basis to say
line and the growing number of clientele also define the corporate standing of a
company. These are all strategies that Proctor & Gamble are implementing in all
dominance.
for outstanding performance. The Company is prominent for its superb marketing
(2001). It uses the divisional structure by product, that is, when specific products
needed special emphasis. They also use this to implement strategies (2001).
This year, Proctor & Gamble was ranked first in Household and Personal
Products Company and among top 10 in Fortune’s “America’s Most Admired
in all aspect of management and operations as well as the proper handling of this
new strategy, the Company will remain competitive in its defined market position.
innovation ( 2003). The emerging trends in the global marketplace during the
conception of Organization 2005 are among the main mechanisms that prompted
the P&G’s management towards this strategic turn. As early as 1990s, marketing
trends seem to create long terms effects on the future of international business
sector. Competition and its rapid development among various industries is the
most popular if not the primary business concern. (1995) declared that the
condition of the global market is in hyper competition mode and its rate is
growth and expansion, a global enterprise has extensive interests that transcend
national borders and political institutions (2002). Providing a SWOT analysis for
Organizational Strengths
intended to increase sales and profits through the introduction of new brand
corporate ability to create new strategy that is perceived to be inclusive, with top
etc). , P&G’s CEO in 1999 and the precursor of this new program strategy
Organization 2005 will “create an environment that produced bolder goals and
plans, bigger innovations and greater speed” (2003). On specific areas of the
Company for example, the new program will be financially beneficial as one of its
prime objectives is the boosting of sales and profits while in work processes, the
management. The mere fact that Jager came up with such initiatives meant that
there are some areas of management that should be reconsidered. This new
program served the needed purpose by explicating weaker areas that constantly
jobs, departments, and other applications related to the overall operation of P&G,
through more ambitious goals (2003 ), the management functions will be refueled
with further entrepreneurial vigor as there is a requirement to meet set goals and
and do their particular share in the program and its implementation. Innovations
are key factors for development in particular management and production areas.
Through the integration of the deliberate ambitions of Organization 2005, this will
serve as reinforcement to the already effective strategy that the whole Company
Organizational Weaknesses
management sized up and Jager decided to resign from his post. The initial
January 2000 to $90 the next month. The expected good results turned out to be
much pressure that affected certain processes like the delivery of products to
market faster. There are also major moves that are credited to be a part of the
between upper level management and common manpower staff. Lastly, Jager’s
strategy.
Market Opportunities
upon the effectiveness of the Company to implement its policies on the new
program strategy. The new program strategy paves way for a reinforcing effect
Companies like P&G employ detailed business plans and strategies in order to
gain several benefits from its competitors such as increased profits and
within the regional and local research facilities is transferred to specific plant that
organizational structure into business units with five key elements namely global
business services (GBS), corporate functions, and company culture. The said
focused attention from managers and related personnel. The opening of doors
new program strategy, it addresses the opportunity to expand its operations and
the line of industry is also posed through the initiatives of managers and
Market Threats
Company. Amidst the financial capacity of P&G to sustain the needs of the
program, it will not stand credible if and only if the affected stakeholders are not
able to decipher and go along with the changes at hand. On the party of human
resources whom serving the main fuel of production, their inability to deal with
sudden changes is risky. This occurrence will potentially affect the entire
never taken out of the list of most popular threat in any business regardless of
industries is deliberate and seems to be a top priority. For industries like P&G,
and economic factors, changing consumer culture and smart buying behavior
operations even if Organization 2005 looks forward for comprehensive and state-
make new facilities not longer to be obsolete. On the aspect of competition, more
and more companies will try to challenge the market status of P&G. With
EXECUTION
(2000) comprehensively define strategy as “a plan that integrates an
cohesive whole.” The coverage and area of application is related to all levels in
designing the fit between the organization, its resources and objectives and the
the most crucial parts where managerial tasks are needed and to be used in the
admired companies and can also extended globally. Organization 2005 strategy
upon its implementation will further build the competencies, capabilities, and
resource strengths given that strategic options are taken not for granted. The
said strategy will restructure the marketing and management functions of the
Company with ardent hopes of increasing sales and profits. This corporate
appointment of right persons for key job areas, and strengthening weak
2005 strategy program that will create new growth opportunities for the whole
company. As the key person behind it, Jager had an abrupt take-off for the new
program strategy. This action resulted to uncontrolled effects like the decrease in
inability of managers to perform well in their tasks and other human resources
provide what is expected of them. The changes that occurred during the period of
resources policies and programs to help employees make the transition and
upgrade current employee skill sets and/or hire new employees with relevant
related to the changes that occured in the whole period. The Company spent
planning and other marketing functions. Based on the case study, Organization
the Company and the immediate tenure of Alan George Lafley. The new CEO
strategic change will meet its goal. Unlike Jager, Lafley concentrated more on big
his resignation, Lafley, on the other hand, have taken over the position and have
continued what Jager has started but with some organizational-bounded changes
stated above. It could be said that the changes in relation to this first managerial
The Company has allocated $1.9 billion for this six-year corporate
restructuring program. This huge amount of money is not actually an issue for
firms like P&G as they hold a massive supply of economic and financial
these popularly known resources, financial capital counts most and receives the
greatest attention for the sole reason that money keeps the organization
involved large costs where only $400 million is planned to be used in the early
years of implementation (1999) and $1 billion over the next two fiscal years
effective allocation of its manpower, though part of the strategy is to cut cost by
part of the change strategy. The Company in relation to its IT efforts had
2005 new program strategy is consistent and fell on the prescribed and initial
budget for the 5-year duration. There were just small changes yet these are all
negligible. Therefore, all changes met all strategic goals previously imposed.
execution.
Organization 2005 upon its execution includes strategy-supportive
policies that played major controlling role for the initiation of the new strategy. In
Jager’s time, strategy-supportive policies are not case-specific. Among the most
common policies that were not taken into account if not neglected are risk
research and development (R&D). In details, risk management efforts that the
Company can apply include the assurance that all project management
feasible schedule and proper monitoring techniques). These are the essential
elements of ensuring a successful strategy execution. Jager, for instance, did not
use any strategy-supportive policies to address and resolve the problems that
monitoring or evaluation team. If there are such, the flaws of Organization 2005
in its initial take-off are minimized if not eradicated. A monitoring team can also
definite monitoring schedule should then be set and followed. Lastly, the
new program strategy which include various businesses, quality team leaders are
expected to report on the performances per business unit. With the failure to do
so, slight damages are created thus resulting to bad image of the seemingly
necessary in the decision making processes for the development and benefit of
(1982; 1991; 1991). The information collected through marketing research, may it
expectations mean doing more for the customer than is expected under normal
innovation and searching for ways to expand the products or services that can be
provided to enhance the customer’s business but generally also the supplier
solely an altruistic act on the part of the supplier company. P&G feels that when it
pleases customers with product innovation and consistent value, it earns loyalty
practiced by the Company. They found that a focus on quality creates loyal
customers, drives cost out of the system, increases responsiveness to customers
and increases both the individual and collective capability of the organization
(1994). So, the role of marketing research in the decision-making process of the
success and survival of the marketing course of the product in relation to the
business as a whole
their operations and profitability in both short and long term perspectives. These
the execution of Organization 2005. Having these said, the changes that
grow in international market due to the fact that the global market for household
products is not as mature as it is in the Unites States (2003). For instance, using
intensification of existing brand names, P&G must identify its chosen strategic
strategic intent.
P&G has been divesting its non-core brands ( 2003). In the recent years,
resulting from the diversification, such as its Olay line of cosmetics and artificial
cooking fat Olestra, have failed. When the new CEO A. G. Lafley managed the
Company, he decided to sell off the performing poorly brands and refocus on
P&G’s core, higher-profit making businesses by backing the Company out of the
food product business and other failed undertakings. Meanwhile, P&G has
formed over 10 strategic alliances in the recent years (2003). The Company tie-
up with Dana Undies to make Pampers cotton underwear, with Magla to make
Mr. Clean disposable gloves and mops, and with GM to distribute its Tempo car
clean-up towels (2001). Also, it agreed to partner with Whirlpool to develop a new
the diversification. The Company has a strong historical success in its consumer
soaps, including Tide and Ivory, and in Crest toothpaste. However, other
products like its Olay cosmetics and Olestra artificial cooking fat have not been
successful. This results in the firm’s recent decision to refocus on its “core”
brands or the ones that performs very well in the market. P&G’s refocusing may
suggest that its diversification level was producing poor returns. With the aid of
presence by focusing on products and the market and then eventually become
global business product units (i.e. baby, feminine and family care, fabric and
home care, food and beverage, and health and beauty care) and seven market
world such as Northeast Asia. Using the five global product units identified in the
creation of strong brand equities through ongoing innovation is how the Company
marketing plans are fully capitalize on local opportunities is how they acts locally.
The information is shared between areas like the product-oriented and the
presented at hand.
management had installed a support system to initiate the changes, that is, effort
in restructuring of the management team. Herein, the new CEO redistributed the
positions of the company to update and improve operations and meet the
and general business strategy, P&G’s business value could be maximized, and
from the organization’s vision or mission, and could either be short term or long
data, processing of data, storage of data and information from raw input, and the
strategy of providing incentives in exchange to actions that will work on the firm's
employees expect and need to be rewarded according to the work they do, and
will help them to develop their capability, help them to work up to a higher level
their skills and expectations ( 2002). The compensation may, in some cases, act
program strategy. In this case, the goal of the Organization 2005 is to trim down
the units of the business structure by laying-off some of its employees yet
performance of the retained ones. In the execution of this managerial task, Lafley
and effectiveness. The incentives used by P&G are both monetary and non-
Organization 2005.
7. Shaping the work environment and corporate culture to fit the
strategy.
integration that has been considered valid making it possible for others to pass it
down to new members as the appropriate way to think, perceive and feel
restructuring the overall organizational setup, work processes, culture and pay
structures (2003). These corporate shared goals are then achieved through past
practices and strategies that are guaranteed to work and are embodied in
Organization 2005. Upon its initial stages of implementation, Jager had a shared
approval and unified corporate culture to implement the new strategy is present.
cultural change required not only a shift in internal values, but changes in
attitudes about external beliefs as well. She notes that Proctor and Gamble was
sharing information and decision-making techniques with outsiders. That is, the
company must change its relationships with its suppliers and with its customers,
and data. The function of strategic management and planning is also apparent.
Strategic management for (2002) has provided a useful set of tools and
occurrences during the strategy execution imply that the Company supports a
definite level of stability among the upper and lower areas of management.
contrast with Jager. The changes that occurred in this managerial task are
the said program strategy, the corporate culture of the Company is guided with
integrity, respect for the individual and doing what is right long term (2007). Over
the past 165 years, the Company used this culture as seen evidently on the
execution of Organization 2005. There are minimal changes but it could be said
that they are all directed to the achievement of strategic objectives that are
previously identified.
executed.
Leaders primarily work through and with other people. They also help to
are two leaders and two different leadership style used in the strategy execution.
good leader in the first stages of execution. His failure and his team to anticipate
to the whole change process. This made the strategy unsuccessful and
instigated Jager’s resignation from his position. According to (2002), leaders
have the ability to view the future. They are equipped with compelling abilities to
visualize where things will naturally end or lead to. Unlike other people,
individuals with leadership abilities see things that are not noticeable or obvious
to others. In addition, leaders have the ability to build and establish confidence to
problems include autocratic tendency when he tried to put too much pressure on
the P&G managers into bringing their products to market faster and strategic
decision-making and taking. When Jager forced his managers to rapidly deliver
Warner-Lambert and American Home Products, which were futile during those
times.
effective than his predecessor. As Lafley saw the mistakes of the previous P&G
urgent matters at hand when he already had his tenure as CEO. He has his own
set of goals yet they are not far from the original strategic objectives of
Organization 2005. Among his significantly remarkable action are his improved
increased attention on big countries and P&G’s big and core products. This made
a distinct difference. Lafley can also be categorically given credit to effective use
leadership style on the right point in time and circumstance. In relation to the
management team looks forward to the welfare of the whole organization over
employees are more dedicated towards innovations. All in all, the changes that
occurred in this managerial task contributed to the eventual success of the new
program strategy. Indeed, such changes do not only archived but also surpassed
effort to save the latter from further financial handicap (2002). Also, it is
while acquisition means the purchase of one organization from another where
the buyer or acquirer maintains control. It is said that both partners pursue a
organizational strategies setting the stage for potential strategic synergy. More
often than not, merger is closely associated with acquisition. The new wave of
merger and acquisition activity concerns some of the acquiring companies and
merged company. Such could promote cost-efficiencies and even give the newly-
many benefits. In this case, merger and takeover includes several benefits
particularly in addressing common yet challenging issues on the business
operations. Some of these benefits include the importance the said process in
factors. Merger and takeover is an effective solution and way to combat the
The merger boosts any company by providing the needs to attain tremendous
growth and positioned its products and services as dominating forces in the
Strategic alliances like acquisition has helped pressure some firms to link
with others. It has also meant many new players looking for ways to follow their
potentially avert price wars ( 1992). The degree of strategic alliances may range
venture with combined resources, and develop scope economies ( 1998). Merger
and takeover increases the feasibility of innovation and increases the core
consolidation.
Meanwhile, (1991) said that in order to keep up with the rapidly changing
capacity, strategic alliances are being used with increasing frequency. (2000)
said it can be easily said that corporate takeover is a means of survival for
companies. They continued that in this new environment, ownership matters, and
managerial control stems from equity position rather than relational ties. There is
that the deal is beneficial because not only is there a lower cost base, but also
objectives with no conflict of interests from related third parties. Other benefits of
activity since the mid-1970s has been initiated by technological and supply
the financial considerations and the profitability and gains of the company in
mergers have increased by five folds from 1994-1998 and have fully gained their
momentum by 1999. Reports from the (2001) states that mergers and
range of services and talents for the combined firm's clients. Their primary
concerns are legal and financial - how much a company is worth, what terms to
negotiate, how to structure the transaction, and how to get regulators to go along
with it. Balance sheets are scrutinized, projections of demand and capacity are
of the analysis concerns valuation and the financial contours of the deal. Also,
and/ or products”.
and more powerful companies and probably, to dominate the present market.
Though (1999) added that corporate merger has its downside since it creates
monopoly among the consolidating firms. This leads to reduced competitions and
the eventual demise of weaker and smaller corporations. The M&A strategy are
& Gamble (P&G) places even greater emphasis on alliances. The company has
better meet customer demands. Connect and develop (C&D) involves finding
established ideas from around the world and then applying P&G’s own
purchasing in order to improve them further” (). This is particularly evident on the
employment prospects of one or both of the firms such that they cause
and even frightened. For the individuals involved, these feelings can lead to a
Yet, what is often overlooked is that M/A’s not only disrupt the lives of individuals
addition, another disadvantage that merger and acquisition may bring within the
company is the tendency for the company to not give enough focus to its
products because of many products that it offers in the market. In this manner,
the company may not have that assurance of sustaining the competitiveness of
other products.
cultures but also organizational cultures rooted in different national cultures meet
(1996; 1991). When organizational members from diverse cultures interact and,
especially, when one culture is required to adopt the methods and practices of
the other culture, disruptive tensions emerge. These have been described in
conflicts mostly result from the introduction of new management methods that
are incongruent with the values underlying existing practices (1983; 1981). An
within the organization. According to (2000) national differences can magnify the
and make the integration even more difficult. Hence, the risk of failure of a
merger is even greater than with a domestic acquisition. With several factors
different work ethics and priorities in dealing with their jobs will lead to a disaster.
suggested that it does not necessarily follow that when companies merge, the
result shall be lay off of employees. Though, this assumption had been prevalent
among employees. Downsizing arises from the need of the consolidating firms to
or even entire factories. Mass lay off however, had been proven in some of the
world's biggest mergers in history. A paper published by the Center for Research
on Globalization and Labor Markets in the UK claimed that the impact of merger
considered. If the type of merger is a hostile one such as those in the cases of
job loss cited earlier – wherein which the market for corporate control operates
More often than not, the newly merged or acquired business entities don't
really have an easy time adjusting to the changes brought about by the
occurs during mergers involves the difficulty in getting people in the acquired
management aspect. The challenge now for the financial mangers is to explore
the options and take advantage of the opportunities while taking caution in
plans towards the attainment of the company aims and objectives. The
be able to determine first and identify the resources that are available. Studying
and examining the opportunities of the available resources will help in
business should be clearly laid out and the ideas that will be made available
should be thoroughly researched. This will provide relevant information that the
group in the most effective way. All the changes that will be made aim to achieve
the goals and objectives of the business organization or company. That is why it
is highly important that the firm knows the direction it intends to take. Making a
financial decision and taking a stand to support the possibility of exploring the
handy if the financial personnel is decisive and practical enough with a daring
organization.
harmful ways in the previous discussion are said to be evident. However, they
investment that will be made are well examined and researched. This will
prepare the whole business in the problems and issues that the company may
confront during the execution of the project or plan. However, this does not
assure that there will be no problems that will exist and confront the business
venture. The above discussion provides the advantages and disadvantages of
APPENDICES
Appendix 1
Appendix 3
and productivity.
customer service.
to improve performance.
programmes.
(8) Improve timeliness of all operation cycles (minimize all cycle times).