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The Procter Gamble Company is a very well-known American public company and based in Cincinnati, Ohio. It is a multinational enterprise which operates at more than 80 countries worldwide which has more than 129,000 employees. They main product are targeted on consumer goods. This company was founded by William Procter and James Gamble on the year of 1837. They started their business with selling soaps and candles but now its brands include beauty & grooming and household care. Its brands are being sold at more than 180 countries nowadays. Basically its products are available at each continent and they are used over 4 billion times a day.
According to Linkedin, Procter & Gamble Company is to be considered the 4th largest company in terms of market capitalization. And, the company is also listed as Fortune’s 6th Most Admired Company. As of the year 2012, the company has systematized into two types of Global Business Units which are Beauty & Grooming and Household Care. And, the Global Business Units is categorized down into five segments. Those segments would be Beauty, Grooming, Health Care, and Fabric Care & Home Care & Baby Care & Family Care (The New York Times). The famous products of this company are but not limited to Pampers, Tide, Ariel, Always, Whisper, Pantene, Folgers, Charmin, Downy, Lenor, Iams, Crest, Oral-B, Actonel, Duracell, Olay, Head & Shoulders, Wella, Gillette, and Braun.
DESCRIBE THE COMPANY INTERNATIONAL BUSINESS STRATEGY
An International Business strategy would either focuses on globalization of market or globalization of production or sometimes both. Procter & Gamble Company follows the both ways by having a globalization of market and globalization of production. Procter & Gamble international business strategy moves from International strategy to Multidomestic strategy and then now staying in Transnational strategy. The company changed itself from a “Global Product Structure” which is commonly related to sameness strategy and moved towards “Transnational” global strategy.
The company exercised a mixed cross organizational method that involves geographical spread of multiple markets, specialization corresponding to certain brands and specializations and economies of scale in the creation of value in particular the roles. It’s called as ‘Front-Back Hybrid Matrix organization’ structure by Ronald Jean Degen. This strategy has enabled the company to cut costs in the firm while still retain good customer responsiveness by complying to local tastes and expectations as they are different in every nation. Basically, this strategy has centralized and also decentralized some functions. To make it simple, Procter & Gamble Company strategy has separated products based into different business groups located in different places. Each group has the responsibility on their products, their research and development, production and marketing. This is the focus of transnational strategy.
EXPLAIN THE COMPANY ENTRY STRATEGY OR STRATEGIC ALLIANCES IN THE GLOBAL MARKET
Basically, Procter & Gamble Company goes global with using International strategy. Then, they changed to Multidomestic strategy and now staying up with Transnational strategy. And, the company entered into global market in many ways according to the regions. At first it was through exports but then their main entry strategy into global market was via acquisitions. At first, the first established subsidiary overbroad was with the acquisition of Thomas Hedley & Co. Ltd. Then, it expanded its operations far east with the acquisition of Philippine Manufacturing Company. From the year 1931 till now, the company has acquired and established a joint venture with other many companies which serve all the product brands it has right now. In most cases, it begins manufacturing and selling its product in a foreign country by acquiring first a local small enterprise in the host country. For an example, was like the acquisition of The Nippon Sunhome Company which later was called Procter & Gamble Sunhome Company Ltd.
Procter & Gamble first major joint venture was in the year 1988 to manufacture products in China, entry into the biggest consumer market in the world.
Therefore, Procter & Gamble Company entry strategy into the global market was mainly through acquisitions of other established local enterprise in the host country. It was exporting its product before all the acquisitions but wasn’t in a larger scale. And, there was other entry strategy like some joint ventures with local companies such as in China on the year 1988.
EXPLAIN THE COMPANY’S GLOBAL MARKETING STRATEGY
Basically, Procter & Gamble global marketing strategy is divided into five different areas. They are Consumer Understanding, Innovation, Brand Building, Go-To-Market Capabilities and Scale. Furthermore, the company was first to perform data-based market research with consumers on the year 1924 itself. This shows that they are concerned on delivering the best value to their end consumers. Well, this company has a very high consumer understanding as they’ve invested a lot in market research compared to other companies. They invest in about 350 million dollars and conduct about 15,000 research studies annually to gain insights to better serve their customers. Under innovation, they’ve worked with on worldwide scale research partners. The reason for this is to create new product lines in satisfying the new desires of consumers.
On brand building, the Procter & Gamble Company has created and still creating brands based on purpose-driven. Their brands are innovative and purpose-driven as to give the greatest value towards the consumers. It is so delivering the consumers with the best products. Fourthly, the company another global marketing strategy would be the “Go-To-Market.” They basically reach the retailers and consumers at the right place and time. And, they’ve achieved it as famous retailers ranked them as the most preferable supplier. Lastly, the company is creating scale advantage by amalgamating across their enterprise, consistently being as one company. It will encourage efficiency and creating customer value. By being one Company. Procter & Gamble can systematically allocate resources and use efficiently than a single small enterprise. Thus, the combination of many is great and maximizes the potential.
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