Question

Procter & Gamble Embraces Continuous Planning and Execution

The Procter & Gamble Company (P&G) is an American multinational consumer goods corporation headquartered in Cincinnati, Ohio, founded in 1837 by William Procter and James Gamble. It specializes in a wide range of personal health/consumer health, and personal care and hygiene products; these products are organized into several segments including Beauty; Grooming; Health Care; Fabric & Home Care; and Baby, Feminine, & Family Care. Before the sale of Pringles to Kellogg's, its product portfolio also included foods, snacks, and beverages.

Procter & Gamble's mission statement is “We will provide branded products and services of superior quality and value that improve the lives of the world's consumers, now and for generations to come.”

The Procter & Gamble Company today expanded its sustainability goals to continue creating value with consumer-preferred brands and products while conserving resources, protecting the environment, and improving social conditions for those who need it most.
P&G is guided by 12 established Environmental Sustainability Goals toward its vision of 100% renewable energy use, 100% renewable or recycled materials for all products and packaging, and zero consumer and manufacturing waste going to landfills. Since establishing its goals in 2010, P&G has made considerable progress. There now are 70 zero-waste manufacturing sites; energy consumption, water use, C02 emissions, and truck transportation are all down significantly; use of renewable energy and the number of virgin-materials certifications are up substantially. P&G also has expanded its social sustainability work, touching and improving the lives of more than 50 million people each year through disaster relief and programs such as Children’s Safe Drinking Water and the Pampers UNICEF partnership.



Nowadays, P&G has operated on the global stage for decades and has seen its share of challenges, failures and successes along the way. The company successfully operates in over 180 countries. Also, P&G has created a groundbreaking business intelligent system called Business Sphere which allows it to respond rapidly to changes in the marketplace and uncover new opportunities. It is a visually immersive data environment that transforms decision-making at P&G by harnessing real-time business information from around the globe.

Moreover, comparing the results to its competitors, P&G reported Total Revenue decrease in the fourth quarter of 2015 by -16.1%, despite revenue increase by most of its competitors of 0.17 %, recorded in the same quarter. With net margin of 19.08% P&G achieved higher profitability than its competitors.

The Procter & Gamble Company’s management strategy follows goals for optimization in efficiency and effectiveness in satisfying various needs of the business in consumer goods markets worldwide. For example, based on higher productivity, Procter & Gamble’s managers can implement higher production capacity directives. These conditions contribute to the company’s ability to stabilize its global business.

Procter & Gamble’s managers are concerned about product specifications and development within organizational capabilities, while supporting goals for innovation. In applying this approach, the company’s managers focus on cost minimization without sacrificing product quality. In addition, quality management’s objective at P&G is to implement quality standards based on the expectations of target customers or consumers.

Also, Procter & Gamble’s objective is to develop and implement short-term and intermediate operational schedules for optimum utilization of resources to support business needs. For example, Procter & Gamble’s corporate office employees adhere to their fixed schedules for data processing and analysis. On the other hand, operations managers apply rotating schedules for manufacturing processes. Some of these rotating schedules are variable to enable Procter & Gamble to correspondingly vary its productivity as a way of addressing changes in market demand for consumer goods.

1. The external environment is continually changing and dynamic environments are more the norm than the exception. Managers should effectively plan in such environment.
a. Do you believe in that? How can managers plan effectively in such environment? ?
b. How turbulent is Proctor & Gamble’s environment and how well do you believe that they adapt to it? Support your answer by example from the case .

Answer 1

a)

Yes, I do believe that the external environment is continually changing and dynamic environments are more the norm than the exception. Managers can plan effectively in such environment by keeping the real time track of the market situation and being always attentive and ready to find innovative ways dealing with any market situation and provide for business solution and strategy making that guides the organization for taking effective actions and business decisions.

b)

Procter and Gamble’s environment is competitive and that it has to continuously be innovative in its business decision and flexible and adaptive to market situations. The competitor of the company would take away its profit so it has to make strategy for the same as well. However, the company can still capitalize on its brand and its internal process and promise to never compromise with sustainability and product quality which at the end creates trust and in long term consumers remain loyal and willing to buy the product even at higher cost than the competitor.