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Challenges faced by Colgate-Palmolive Company

Info: 2866 words (11 pages) Essay
Published: 6th Dec 2017 in Business

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Nowadays business is like a war that has every things seem fair, but as a human being we need to kept in mind that all the ethical and moral issues that pertain to all the stake holders. Issues and problems are the ingredient of every business and life, but the only successful business man are the true fighter of all internal and external forces those create obstacle / hindrance in the success ladder.

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This report contain all the aspect of challenges faced by the contemporary business man in running his / her business, and all those issues that he / she has to face in his / her daily routine. This report contain four part in the first part we have discussed the portfolio of the business, secondly PEST analysis, third we discussed the current issues of business and in the last we have conclude all the above stated issue and formerly recommendation.


Colgate-Palmolive Company (NYSE: CL)

This is an American corporation that has the focused on the distribution, production, personal products, provision of household and health care such as detergents, soaps, toothpaste and toothbrushes (oral hygiene products).


William Colgate, a candle and soap maker opened up a starch, soap, and candle factory located on Dutch Street with the name of William Colgate & Company in New York City in 1806. The firm in the initial years began to sell individual bars but later on in 1857, after the death of William the company started reorganized as “Colgate & Company” operated by his son. In the starting of the year 1872, company introduced a perfumed soap with name of Cashmere Bouquet. Colgate sold the first toothpaste in 1896 with the brand name of Colgate Ribbon Dental Cream but after the success of this brand, company started mass selling in 1908 (Wikipedia 2010).

Colgate people have built a reputation as a successful company that has the highest ethical standards. Through living the values of Global Teamwork, Caring, Continuous Improvement, and adhering to the principles of honor, integrity and concern for the environment, as the company seeks to:

  • Provide quality products of value to customers
  • Opportunities for professional growth to all company people
  • Fulfill CSR as a member of the international community
  • Increase shareholder value (Wikipedia 2010)

Factors affecting the Business:

Government Factors:

Government does not have much influence on the FMCG industry in terms of regulations. There are consumer protection laws but they are not implemented as they should be. There are not much regulations involved in this industry (Krutz 2004).

(P)olitical factors:

Political factors are influencing this industry because the recent and order conditions have affected the whole economy which in turn affected the industry. Many of the factories of the big companies were burnt after the assassination of Benazir (Krutz 2004).

(E)conomic factors:

The overall economy of the country is showing a stable growth. Therefore this industry is also showing a growth of 10%. But the inflation is growing rapidly which is not a good sign for the new entrants. Change in the interest rate also affects the industry. Hence the new entrants are also threatened by the increasing interest rates (Wikipedia 2010).

(S)ocial trends:

The social trends are in favor of this industry. Mass awareness is created through media. So people are shifting from their traditional methods of washing clothes, skin care etc to the modern methods. This is a good sign for the new entrants. People have become more educated and health conscious. High population growth is another opportunity for the new entrants (Muravchik 2004).

(T)echnological change:

The technology can support this industry well. If the whole system can be automated from the import of raw material to the finished goods then it would save time and money. This is a good sign for the new entrants. But in this industry technology does not play a major role because the traditional formulae of soap or toothpaste are not that much complicated (Louviere 2001).

Colgate-Palmolive’s Mission Statement

Company mission statement focusing on the following factors

  • Caring

Every Company has claims cares about people but the Colgate Company has original care for its business partners, people, shareholders and customers. Colgate is dedicated to act with empathy, integrity and candor in all circumstances, to pay attention to customer according to the value differences and others. Similarly the Company is committed to defend the universal environment and to augment the communities where Colgate people are alive and work (Wikipedia 2010).

  • Global Teamwork

All Colgate employees are part of a worldwide squad, devoted to working together across countries and all through the world. Only by allocation ideas, technologies and talents can the Company accomplish and maintain profitable growth.

  • Continuous Improvement

Colgate is dedicated to getting improved every day in all it does, as persons and as teams. By better sympathetic consumers’ potential and incessantly working to improve and innovation in services, processes and products Colgate can be the best. (Wikipedia 2010)


Every management has to face difficulties in every step of business development and Effective management is the main ingredients for the establishment / growth and success of the business. The success of the management is to examine the marketplace, background and create employment. In order to make profit opportunities that give the financial viability and potential growth for the business. Beside that the importance of management is usually misunderstood and wrongly interprets because people are giving more focus on the result somewhat than the course of management (Laroche, Michel, Zhou and Kim 1996).

Concurrently with the increase in demand about quality, business man attracted the attention of customers. A sudden wave of successful entrepreneurs looks as if to render earlier management concepts obsolete while ignoring the marketing / organizing talents of the success full business man / entrepreneur (Griffin and Pustay 2009).

Planning is critical for developing a firm’s potential. This view tended to short term enhances profits, however created along term dysfunctional business environment. However, many small businesses do not distinguish the need for long-term plans, for the reason that the miniature no of people concerned in working the business involves equal conscientiousness in the decision making and planning processes (Gauzente and Ranchhod 2002).

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Critical issue/problem for today business:

Every new day bring the challenge for any business person, because to stay alive in the market you need to fight efficiently and smartly, as the world moving; complexity in every aspect of life is increase though technology has improved along but as much we belong to technology we get more depended. Following are the hot buttons for today business, and every business men more or less facing and struggling

Political instability and involvement:

Every government is eager to impose taxes to earn more and more profit, due to recent shock of recession most of the industries are move toward bankruptcy or liquidate just because of high taxes and less benefit given by the government. It is common these day small business or large organization owners to be unaware of current legal issues that can hit them because continuous changes in the business policies and implication by the governments put them in trouble. The problem is that legal trouble can cost them. It can even cost you your business. After 9/11 money laundering and other compliance issues are more dealt in the organization standard operating procedure (Wikipedia 2010)

Poverty and inequality of income:

Due to high inflation and high unemployment rate continuously hitting the poverty level to increase, and that all because of inequality of income, contrary as the inflation increase the cost of business will also increase that thing put the pressure on the business man to reduce the prices because consumer start searching for alternative. In Pakistan micro finance is getting importance as an effective tool for social mobilization & poverty alleviation. Currently in Pakistan, a variety of institution including micro finance banks & Others ranging from NGO’s to private & Government sponsored ruler support programs are delivering services to the poor, who don’t have access to or neglected by the commercial banks. Micro finance aims at empowering individuals to earn a reasonable income through micro credits. Micro finance caters the needs of borrowers and usually focuses on the segment of the population whose economic status falls below poverty level (Krutz 2004)

Ethical issues in business:

Ethics and moral compulsion are something that we all come across at one time or another. All persons have to act in a way that would support the society in a proficient setting. In every business there are own policy of individuals and ethics within the particular business have adhere the compliance of the code conduct most of the organization investing lot of resource in order to maintain the ethic and code of conduct within the organization, even though regulatory bodies also penalized the organization if in case of non – compliance (Krutz 2004)

Constantly Changing Economic Environment:

Dynamic economic environment is a night mare for the Contemporary business, because already exist giant in the market is a serious threat for them, because most of them have made cartel and create obstacle for the new business men to enter in the market or survival.

Economical changes like inflation , Balance of payment, unemployment and poverty is also hindrance for the growth of business, for the fighting against all these indicators, entrepreneur need specific skill and knowledge, because without that he / she cannot be able to run the business smoothly (Griffin and Pustay 2009)

Risk Management:

Every organization is vulnerable of low chances events that could have a potentially appalling effect. Every single step has creating question for the organization success, and organization has to fight not only with external factor but has to manage the internal factor of the organization. All around us we find some people / object / substances that are working against the organization and the entire factor is consist of those indicators that need to be monitored.

  • Theft of property
  • Breach of laws
  • Computer crimes
  • Fraud
  • Weather related damage

In order to determine the variance between the expected and achieving results company has to determine the specific road map and checklist of the indicator which plays are major role in the indicator (Cateora and Graham 2007).

Developing and Mentoring Employees:

Managing the employees / labor is the critical issue for the business men in these days because as the dynamic environment is coming around, for competing with that we need to keep our staff in the phase of learning, and continuous training is required to make them up to date..

The actual problem comes when the employee / labor are unwilling to change and create hindrance in the way, so fighting with this problem is the main issue for the entrepreneurs.

Negotiating and Managing Critical Relationships with stake holders:

Developing / maintaining the relationship with all the stake holders is the important thing for the entrepreneurs because each and every one has its own importance, and without making good relation with them survival is difficult, for all the building relationship entrepreneurs need to have the negotiation and communication skills (Wikipedia 2010).

Every day we have noticed that lots of entrepreneurs were lost their businesses just because they are lack with these skills and for understanding the critical relation with the stakeholders we must need to understand the importance, if we neglect the customers, so we lose business, if we neglect the good supplier so we lose the quality, if we neglect the distributor so we lose the perfection is services, and finally if we neglect the Government so we have to ready for the sanctions and implication / charges / penalties.

Managing global operation:

While organizations turn into global they frequently end up paying a intense price in requisites of managing complex challenges and issues.

  • Host Country Norms and Customs.
  • Workforce management
  • Host country languages
  • Unfamiliar laws and regulations.
  • Unexpected Cost mix.

Globalization has exaggerated most of business tremendously. Multinational Corporations are functioning and operating in almost every part of the world. It is significant to expend time in considerate how globalization formulates it pertinent and necessary for a MNC to scatter and spread its capacity and meaning of Operation. It would be correct if attempt to know the philosophy of Multinational Companies are not operating in any certain regions or countries. Similarly, the western worlds describe these shortcomings of Globalization, if a business decides to close up its business and depart from a host company. The general disadvantages which direct to a Multi National Company forgoing globalization include (Gauzente and Ranchhod 2002).

  • Proprietary Technology to host countries.
  • Poor Employee skills.
  • Political risks.
  • Customer response time is slow.
  • Effective communication

Common reasons why organization Fail:

We can identify certain familiar reasons why Organizations fail to achieve a competitive advantage and end up losing out to their competitors. These reasons are universal in nature and find the same footing in Pakistan as well as any other place in the world. http://smallbiztrends.com/category/current-issues

  1. Too much emphasis on short-term financial performance. Quite often, cost cutting, profit maximizing at the cost of social responsibility or employee motivation is a failed strategy pursued by organizations, which just hastens their status to oblivion.
  2. Failing to take advantage of strengths and opportunities. This is in reality failing to hold on to proven successful strategies or core competencies. Sometimes a change in leadership leads to change in strategy, where just for the sake of glory and high profits, organizations forget their core competence and opt for strategies and tactic which cause their downfall.
  3. Failing to recognize competitive threats. This reason is the exact opposite of failure to make use of the organizations strengths. Quite often organizations decide to pursue status quo and ends up bringing no new product or service or even no innovation in its existing product or service line leading to lack of customer satisfaction, decline in profits and finally being declared a failure.
  4. Neglecting operations strategy. This is definitely the most important reason of failure; organizations often end up employing non productive techniques which lead to inconsistent and failed operations.
  5. Too much emphasis in product and service design and not enough on improvement. Differentiation in terms of service and product, American companies in 1980s did that they never introduced incremental refinements rather went for big changes and thus lost to Japanese competitors.
  6. Neglecting investments in capital and human resources: A total disregard to use the best resource. Capital and human resources in the long run make or break an organization.


Successful management is founded on the mastery of a multitude of details and the success of the business is depended on the efficient management from the available resources and decision making for best purpose. While management teach the significance of focusing attention on main issues affect the business, managers realize the main issues are the variety form the business. The small mistake to the business is unrecoverable bankruptcy, in a progressively more controlled society, inattentiveness to one slight detail cans consequence in considerable commotion of the business. Above mentioned problems is not the only problem faced by the entereprenurers but also every day they faced some sort of problem and hazard in conducting operations and meeting the standards, internal and external players of the market are the main indicator that need to be monitored and effectively organized.


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