Changing Proctor and Gamble

Changing Proctor and Gamble

Proctor and Gamble Company is a global leader in fast moving consumer goods such as cleaning agents and personal care products. Its co-founders William Procter and James Gamble started the company in 1837 with its headquarters in Cincinnati, the United States (Lafley & Martin, 2013). For a long period, the company had remained successful because of its focus on acquiring and building the products and brands most preferred by the customers. However, starting from the crisis in 2008, the company had been experiencing low earnings and declining market share as well as a great decrease in consumer spending, particularly in the developed countries. This caught the attention of the management and the investors who identified the major weaknesses of the company such as being excessively bureaucratic, insufficient product innovations, and reduced contact with its consumers, hence necessitating various changes in the business strategies. This essay discusses the behavioral, structural and technological change strategies and evaluates the success of the company.

The Proctor and Gamble`s behavioral strategies include taking measures that transform the business into a fast-growing, simpler, and more profitable organization. This is made possible by adding value to the company’s products, the practice that in the end accelerates productivity and savings across all elements of costs, hence leading to improved operating margin (Martel & Klibi, 2016). Further, the company has changed from the product portfolio expansion to a brand consolidation approach whereby the company focuses on around seventy brand categories and divests about one hundred underperforming brands.

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Moreover, the streamlining in the company has worked to the company’s advantage and yielded desirable results with a remarkable increase in the company sales. Further, the management seeks to maintain a simple operation with few brands that are easy to manage and administer.

In addition, the human resource department ensures that the company is staffed with the proper people doing the relevant tasks, the factor that positively works for the organization. Furthermore, the ongoing training equips the staff with the relevant and modern skills that are in line with the organization`s goals and strategies.

Besides, with increased globalization of businesses, the Proctor and Gamble Company adopted the structural change strategies to remain competitive internationally and maximize revenues, profits, and the return on invested capital. Moreover, the company had been previously organized along four geographically based units with more than one hundred profit centers until the year 2005 when the multi-divisional structure was applied (Henry, 2011). The structure consists of operating divisions with each of them representing a separate profit center. In addition, the divisions are headed by a corporate officer who oversees the work of the business managers while comparing the performance of the units, hence facilitating the improved performance of the organization. To be precise, the five product based global business units of the Proctor and Gamble Company are Feminine &Family care, Beauty care, Fabric &Home care, Food &Beverages, and health care all working towards meeting the goals of the company.

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Further, the need to launch creative and innovative products at regular intervals facilitated the adoption by the Proctor and Gamble Company a technological strategy change that would spearhead innovation in the organization. Additionally, the adoption of digital technology is among the main aspirations of the company as this would simplify increased interactions between the corporate officials and the consumers putting into consideration that a large number of the world’s population has become digital via the use of mobile phones (Howard, 2013).

In addition, the company aspires to conduct its advertising by the use of the digital technology that is very cost effective and efficient. Besides, the decision to focus on innovation as the core strength of the Proctor and Gamble Company has had many benefits for the firm. Further, the company has succeeded in satisfying the varying tastes and preferences of its customers, which in turn translates into higher profits (Lafley & Martin, 2013). The management of the company has succeeded in building the culture the organization that perceive the consumer as superior for not only the wealth derived from the customers but also for the valuable information and feedback received from the customers that facilitate the continuous innovation. Moreover, the company has succeeded in its endeavors of maintaining strong teams at the workplace that oversee a new idea from the prototyping to the launching stage, the factor that motivates the employees to take the company to greater heights.

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In conclusion, the Proctor and Gamble Company adopts various strategy changes ranging from behavioral and technological to structural. Besides, concerning the behavioral strategy, the company maintains a less complex operation that is easy to manage and operate by the use of the consolidation approach. The company concentrates on the main global business units that deal with the best performing products. Further, the company changed from the geographically based operations and adopted the matrix-based structure, whereby each business unit is headed by a corporate officer and respective business managers. In addition, the company’s technological change strategies concentrate more on continuous product innovation and intensive digital advertising that result in increased interactions with the customers, in return leading to higher profit margins. Furthermore, the Proctor and Gamble Company has made significant success strides which include the continuous conversion of ideas into new offerings to the market leading to the company’s competitiveness in the global market.

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