Free Proctor and Gamble Essay Sample
Proctor and Gamble (P&G) is ranked as one of the leading consumer products company in the world. In reference to Hill & Gareth (2008), the company which stands at Cincinnati, was established in 1837 and today it sells more than 300 brands to consumers in 160 countries worldwide (p.149). Initially, the company had a strategy to develop new products in its current location and rely on imported subsidiaries to manufacture, market, and dispense those products to consumers in different countries. Due to high costs of their goods and high import tariffs, the companies profit began to go down.
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Having started from humble grounds as Soap Company, P&G expanded in various directions adding flaked soap and beauty soap then diversified its production into toothpaste, cleaners, shampoos to recent achievement of entering food, paper, beverage and pharmaceutical industry. In order to control its cost of production, P&G has progressively embarked on future approach strategies which have entailed closing down some manufacturing plants hence reducing its employees cost and focusing on production in fewer plants. Still on this point, P&G initiation of second organization in 1999 has seen a bright progress in consumer varieties from introduction of global business units varying from baby care to food production and current the company possesses a huge portfolio of well-known brands. This initiative has given these business units mandate to rationalize production, make universal brands to get rid of market differences in the nations and widen their products.
In its effort to gain market share, the company has used its savings to reduce prices and elevate market expenses; the plan which is working well. According to Harris (2006), P&G has been classified as a downstream company with stages namely; product producer, market distributor, and retailer which have multiple products and multiple markets (p.118). Further more; P&G is anxious to blending its product to capture market interest. For it to be more stretchy and compliant because of its diversity over the other manufacturing companies, it has implemented divisional structure based on vertical integration, geographic site and industry. In addition to this point, the company has divided into individual units based on diverse goods or markets which may contribute to business resources in terms of research and growth amenities.
In the look for structural merit over the rivals in the industry, Procter & Gamble is also practicing matrix structure to bring about the connection of the benefits of divisional and functional structures. In this type of structure, each employee is assigned to one working branch and one project administrator and therefore double chain of authority but within P&G; the matrices are in the second stage of development where there is no dual power and cross-functional duty force is undying. This structure is seen as the competitive merit of Procter & Gamble whereby its brand managers are product specialists, completely familiar and up to date with their products' external and internal environment (Harris, 2006, p.118). P&G success is not only based on products they sell to the other countries but also by the way they market their products with their unique skills. Hill and Gareth (2008) assert that P&G's rapid growth in the international market is because of its skills in mass-marketing which "out market" indigenous competitors in the countries it enters (P.141).
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In conclusion, the unique competences are fundamental for the triumph of a business and P&G should persist in formulating them tirelessly to venturing in today's competitive market. In addition, it should heighten effectiveness through realizing expenditure savings from economics of scale, realizing location economies and even lower the cost of value manufacturing. Lastly, the company should continue with modernization, consumer perceptive and brand building as its core strengths (Procter & Gamble, 2010).