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Presentation On P&G
Presented By:
Usman Rehmani
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Usman Rehmani
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VISION
STATEMENT
Be, and berecognized
as, the bestconsumerproducts and
services
company inthe world.
Usman Rehmani
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MISSION
STATEMENTWe will provide products andservices of superior quality andvalue that improve the lives of theworld's consumers. As a result,
consumers will reward us withleadership sales, profit and valuecreation, allowing our people, ourshareholders, and the communitiesin which we live and work to
prosper. We will provide brandedproducts and services of superiorquality and value that improve thelives of the world's consumers, nowand for generations to come.
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RECOMMENDED
VISION & MISSIONVISION
P&Gs intent is to offer the highest quality consumerproduct goods at the least expensive price for thewidest spectrum of customers in a convenient format.
MISSIONcoca-cola will work with its suppliers and distributorsto ensure that its products are recognized both in themarket and on the supply side as contributory to aretail distributors bottom line.
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VALUES Integrity
Passion for Winning
Leadership
Trust
Ownership
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PRINCIPLES We Are Strategically Focused in Our
Work.
We Value Personal Mastery. We Seek to Be the Best.
The Interests of the Company and theIndividual Are Inseparable.
We Are Externally Focused. Mutual Interdependency is a Way of
Life
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OBJECTIVES To build existing core businesses into stronger
global leaders.
To grow leading brands in big countries, winningcustomers.
To develop fast-growing, higher-margin withglobal leadership potential.
To regain growth momentum rate and leadershipin Western Europe.
To drive growth in key developing markets.
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COMPANY OVERVIEW & HISTORYProcter and Gamble is actually thename of two persons William
Procter and James Gambleimmigrants from England & Irelandrespectively.
Procters business was candle
making and Gambles business wassoap making.
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The partnership year 1837 was adifficult time to start the business
although Cincinnati was a bustlingmarket place; the nation was
gripped by financial panic.
Hundreds of banks were closing
around the country.
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In the 1850s despite rumors of an
impending civil war in the US, theybuilt a new plant to sustain their
growing business.
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In 1859 sales reached one milliondollars. By this point only eight
employees were working with
Procter and Gamble, the company
won contracts to supply the Union
Army with soaps and candles.
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In 1880s coca-colabegan to marketa new product, an inexpensive
soap that floats in water, thecompany called the soap Ivory.
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By 1890, the fledgling partnership
between the Procter and Gamble
had grown into multimillion dollar
corporation. In 1939, Television was
introduced in USA and coca-cola was
the only company thatcommercialized its product just after
five months.
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In 1980, as it approached its 150th
anniversary, coca-cola was poised
for a most dramatic period of
growth in its history.In 1915 coca-cola started business
outside USA in Canada.
Company serves 106000
employees all over the world.
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History Of coca-cola In Pakistan
coca-cola Pakistan, headquartered in Karachi,commenced operations in Pakistan in 1991.
In 1994 coca-cola acquired a soap-manufacturing
facility Hub, Baluchistan. In 2004, a PUR facility was set up to produce P&Gs
water purifying technology.
Today, the Hub plant is equipped with state-of-the-artmanufacturing technologies and quality assuranceprocesses and systems, reflecting the company's valuesof safe, hygienic and ethical manufacturing practices.
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DISTRIBUTION CHANNEL coca-cola itself has no distribution channel rather they
were initially distributing its products through
International Brands Limited (IBL). In the 1940s, Abudawood became the exclusive
distributor of coca-cola(coca-cola) brands throughoutSaudi Arabia.
In 1956, Abudawood and coca-cola established a joint-venture factory in Saudi Arabia (called ModernIndustries Inc.). In the same year Abudawood starteddistribution of coca-cola products in Pakistan.
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SOCIAL RESPONSIBILITY
Pampers Hospital Education Program
Safeguard School Education Program
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SUSTAINABILITY AT coca-cola
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FINANCIAL ANALYSIS
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Balance Sheet 2010
During the previous 3 years P&Gs assets have
diminished by 10%.
While long term debt has been constant short term
debt has decreased by 48%.
coca-cola has an extremely low ratio of tangible assets
to intangible assets.
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June 2008 June 2009 June 2010
Total Assets 143992.00 134833.00 128172.00
Total Liabilities 74498.00 71734.00 67057.00
Total Equity 69494.00 63099.00 61115.00
Short Term Debt 13084.00 16320.00 8472.00
Long Term Debt 23581.00 20652.00 21360.00
Current Assets 24515.00 21905.00 18782.00
Intangible Assets 98837.00 93466.00 90146.00
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ANALYSIS OF THE
EXTERNAL
ENVIRONMENT
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Porters Five Forces
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Continued.. faces very strong buyers power because retailers like
Wal-Mart are able to negotiate for pricing with
companies. limited supplier power because of the costs they incur
when switching suppliers.
low threat of new entrants because a huge capital
amount is required. high threat of substitutes.
high level of rivalry exists among existing firms.
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PEST ANALYSIS
Usman Rehmani
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SWOT ANALYSIS (Opportunities
and Threats)
Usman Rehmani
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Opportunities
Developing markets. Niche markets.
New products.
To invest in the segment forchildren.
To introduce food and beveragesfor Pakistani market.
Emerging consumer market(China& India).
Manufacturing facilities inChina.
Selling through internet.
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Threats
Uncertainty inpharmaceuticals business.
Increase in prices of raw
materials. Unilever is the biggestthreat.
Price competition aroundthe world.
Political disruption.
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COMPETITORS
Usman Rehmani
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coca-cola Kimberly-
Clark
Johnson &
Johnson
Critical Success
Factors
Weight Rating Score Rating Score Rating Score
Advertising 0.20 4 0.80 1 0.20 3 0.60
Product Quality 0.10 4 0.40 4 0.40 3 0.30
Price Competitiveness 0.10 3 0.30 3 0.30 4 0.40
Management 0.10 3 0.30 4 0.40 3 0.30
Financial Position 0.15 3 0.45 4 0.60 3 0.45
Customer Loyalty 0.10 4 0.40 4 0.40 2 0.20
Global Expansion 0.20 2 0.40 4 0.80 2 0.40
Market Share 0.05 4 0.20 1 0.05 3 0.15
Total 1.00 3.25 3.15 2.80
CPM
EFE M t i
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Key External Factors Weight Rating Weighted
Score
Opportunities
1. Global markets are a significant growth
market
0.15 1 0.15
1. Increased demand due to new health and
beauty needs.
0.05 4 0.20
1. Internet advertising growth. 0.05 1 0.051. coca-cola is a category killer. 0.14 4 0.60
1. Increasingly health conscious public. 0.10 3 0.30
Threats
1. Economic downturn. 0.10 3 0.30
1. Increased competition from rivals. 0.05 3 0.15
1. Lack of product acceptance. 0.05 2 0.10
1. Poor media exposure for new products. 0.10 4 0.40
1. High core commodity prices affecting
product cost.
0.20 1 0.20
Total 1.00 2.45
EFE Matrix
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ANALYSIS OF THE
INTERNALENVIRONMENT
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SWOT ANALYSIS (Strengths and Weaknesses)
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Strengths
large scale operations.
very strong brand name and leading market position.
coca-cola has a huge customer base.
innovations to sustain its customer base.
Diversified product portfolio.
Strong focus on research & development.
Strong global presence (160countries).
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Core StrengthsCoca-cola focuses on five core strengths required to
win
in the consumer products industry.
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Weaknesses
less innovative than its major competitor Unilever. products have failed in certain geographic areas. Forexample, Oil of Olay failed in Pakistan, Camay failedhere as well.
Dependent on Wal-Mart stores for majority of itsrevenue.
Production facilities in 43 countries while operationsin more than 160 countries.
IFE M t i
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Key Internal Factors Weight Rating Weighted
Score
Internal Strengths1. Largest home consumer product goods manufacturer. 0.05 4 0.20
1. Innovative products format. 0.10 4 0.40
1. Increasing free cash flows. 0.05 3 0.15
1. Career development program. 0.15 4 0.60
1. Strong management team. 0.05 3 0.151. Strong logistics supply chains. 0.05 3 0.15
1. Discount pricing structures. 0.05 3 0.15
1. Long-range planning. 0.05 4 0.20
1. Reputation for quality. 0.05 3 0.15
1. Outperforming financial ratios 0.05 3 0.15Internal Weaknesses
1. Many products are not personal care necessity. 0.04 2 0.08
1. Little unified brand focus. 0.05 2 0.10
1. Narrow margins. 0.05 2 0.10
1. High operating costs. 0.11 1 0.111. Uncertain oint marketin ventures. 0.10 1 0.10
IFE Matrix
TOWS MATRIX
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TOWS MATRIXS- Strengths Innovative products.
Professional management.
Diverse product lineup.
Plans for acquisitions.
W- Weaknesses Lack of direct marketing.
Lack of new media
marketing channels.
Dependence on few major
product categories.
O- Opportunities Expanding marketing
strategies.
Undifferentiated rival products.
Consumer demand.
Niche markets.
S-O Strategies
Develop new products to target niche
markets.
Utilize managerial competencies for
aggressive marketing strategy to
attain competitive advantage.
Continue diversification to fulfill
consumers demand.
W-O Strategies
More focused marketing
strategy.
Liaison with good
distributors to increase
online sales.
Utilize niche markets rather
to depend upon few product
categories.
T- Threats Price competition.
Regulations.
Rival competitors.
S-T Strategies
Utilize buying volume to put pressure
on competitors.
Continue product diversification to
offset increased chances of
competitor entry.
W-T Strategies
Develop good partnership
with internet consumer
product goods distributors
to increase sales.
SPACE Matri
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Financial Strength Ratings
The companys original capital ratio is 7.23 percent which is 1.23 percentage points
over the generally required ratio of 6.
P&Gs return on assets is negative 8.7 compared to industry average of positive 8.0.
The companys net income is continually expanding.
The companys revenue increased 14 percent.
1.0
1.0
3.04.0
9.0
Industry Strength Ratings
Increasing market share provides geographic and product freedom.
More competition in global markets.
Kimberly-Clark provides a strong industry benchmark.
4.0
2.04.0
10.0
Environmental Stability Ratings
High inflation rate in developing countries and political instability are big
hurdles for international business growth.
Merger and acquisitions are also difficult due to credit markets. coca-cola get more of its revenue fr0m US market.
-4.0
-4.0
-5.0-13.0
Competitive Advantage Ratings
coca-cola focused on home consumer product goods for health and beauty.
coca-cola is a recognized category killer.
In addition of Kimberly-Clark, Johnson & Johnson is a trouble creating
competitor.
-2.0
-5.0
-2.0
-9.0
SPACE Matrix
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Conclusion: ES average is -13.0 3= -4.33
IS average is +10.0 3= +3.33
CA average is -9.0 3= -3.00
FS average is +9.0 4= +2.25
Directional vector coordinates:
x-axis: -3.00 + (13.33) = 0.33
y-axis: -4.33 + (12.25) = -2.08
Outcome:
coca-colashould pursue Competitive Strategies.
QSPM Chart
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QUANTITATIVE STRATEGIC PLANNING MATRIXStrategic Alternatives
Key Factors Weight Joint Ventures in
Europe
Joint Ventures in
Asia
Opportunities AS TAS AS TAS
1. Europe is a potential growth market. 0.10 4 0.40 2 0.20
1. The US market continues to develop
new product categories.
0.15 4 0.60 3 0.45
1. Free market economies increasing in
Asia.
0.10 2 0.20 4 0.40
1. Demand for health & beauty products
is increasing.
0.05 - - - -
Q
Threats
1. Competitor threats such as Kimberly-Clark. 0.10 3 0.30 4 0.40
1. Economic contraction in its main US market. 0.05 - - - -
1. Lack of defining product to attract continued
foot-traffic in the companys retail
distributors.
0.10 4 0.40 1 0.10
1. Environmental issues with some home
consumer product goods products.
0.05 - - - -
1. Low value of US dollar abroad. 0.15 4 0.60 2 0.30
St th
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Strengths1. Profits rose 0.10 4 0.40 2 0.20
1. Strong management team 0.10 - - - -
1. New employee development programs. 0.10 4 0.40 2 0.20
1. Diversified product portfolio. 0.05 4 0.20 3 0.15
1. Performance driven management. 0.05 - - - -
1. Capacity utilization increased from 60%
to 80% for all manufacturing facilities.
0.15 3 0.45 4 0.60
Weaknesses1. Johnson & Johnsons troubles could be
contagious.
0.05 - - - -
1. Restructuring costs could be significant if
the market requires.
0.05 - - - -
1. International expansion suffers. 0.15 2 0.30 4 0.60
1. The company is slow in leveraging its
global operations due to current economic
conditions.
0.15 4 0.60 3 0.45
1. Pre-tax profit margins are narrow.
0.05
-
-
-
-
Sum of Total Attractiveness Score 1.0 5.30 4.65
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INTERNAL-EXTERNAL (IE) MATRIX
BOSTON CONSULTANT GROUP MATRIX
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BOSTON CONSULTANT GROUP MATRIX
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CONCLUSION
coca-colais the worlds largest producer of householdand personal products by revenue with net sales of$83503 million with its products reaching 4 billionpeople worldwide.
Being in more competitive position coca-cola mustcontinue to scan the environment for possible threats,whether through acquisition or Greenfieldinvestments.
coca-cola must continue to innovate becauseeconomies of scales allow coca-cola to spend muchmore than rivals on research and development.
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coca-cola will also have to control its pricing and
reduce outside vendors.
coca-cola will want to continue its strong support and
funding of its world class research and development
in order to continue to provide innovative products to
touch the lives of customers worldwide.
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RECOMMENDATIONS coca-cola may have a series of strategies which can be
more attractive to the company. Such series of
alternatives may not result in an alternative internal
rate of return (IRR) relative to the cost of the
strategies. Hence, in such time of economic pressure
it is recommended to do nothing and continuebusiness as usual and even avoid organic expansion
also.
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Another recommendation is to expand organically.
coca-cola has access to a greater number of developedand developing markets.
The company has also product co-branding
opportunities because of its size and volume of sales.
Thus, coca-cola can opt to expand through organic
growth by establishing another brand category that
will target specifically the UK and European markets
to increase companys continued growth.
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Third suggestion is about acquisition that the company can
acquire its primary competitor. Through such acquisition the
established company can gain immediate sales capacity and
market position without investing in substantial marketing
effort.
New products must be introduced which must be appropriately
positioned relative to its competitors but this would involve
thousands of dollars in terms of marketing.
Usman Rehmani