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In the modern era, the competition among business in almost every industry has become so intense that it is no longer easy for firms to gain advantage over other market players. Furthermore businesses such as Procter and Gamble need to focus on their overall operations in order to attract desired number of customers. It can be stated that Procter and Gamble was founded in the year 1837 and the firm is carrying out its operations from more than 179 years (Achrol and Gundlach, 2014). It has headquartered in Ohio, United States and its founders are from United Kingdom.
During initial stages, Procter and Gamble carried out its operations in United States only and it was in the year 193 when the company expanded its business practises in international market. Today the selected business enterprise is considered as one of the most renowned brand in the world which carries out operations worldwide. The product range of Procter and Gamble includes products such as baby care, family care, grooming, health care, home care, skin care etc.
The key target markets of Procter and Gamble includes Europe, Asia pacific, South America, North America, and Greater China, Africa, Middle East and India. Furthermore, the selected business enterprise has targeted the people which usually fall in middle income group of the society.
The main reason behind selecting Procter and Gamble as an organization can be termed as its strategies with regards to carrying out international operations. One of the most interesting things about Procter and Gamble is that instead of operating with standards products in different international market, the brand has implemented strategy of differentiation (Buxel, H., Esenduran and Griffin, 2015). For example the product offered by Procter and Gamble in India are completely different from what is offering in counties such as North America and South America. This has resulted in developing sense of satisfaction among customers in international market and supported Procter and Gamble in emerging as a strong brand in market. The organization is worth studying because its study will reveal the fact that how Procter and Gamble has positioned itself in many competitive markets of the world.
Procter and Gamble also carry out various activities in order to accomplish its corporate social responsibilities. For example in a country like India, the selected company is offering education program for children in order to carry out their growth and development. In the present research report different types of models such as Porter five force and Porter Generic Strategy has been used in order to identify the competitive positioning of Procter and Gamble (Dinnie, 2015).
Comparative analysis of Procter and Gamble
Procter and Gamble being a public sector organisation is an illustrious American international consumer goods venture that is operating since 179 years with its headquarter in Ohio, US. It is referred to serve at a global level with some leading products like cleaning agents and personal care commodities. It is currently working with around 125, 000 number of employees to handle its worldwide operations.
It is also evident to sell the product of Pringles that belongs to Kellogg company involved in the food product line of Procter and Gamble (Grant, 2016). It is however evident to possess some leading competitors who are operating in a similar set of market as that of Procter and Gamble. These are Revlon, L'Oreal, Unilever, Colgate Palmolive and Johnson and Johnson, etc. It is therefore important for the quoted entity to operate with a strategic context of merchandising their goods and services in the market that will in turn assist them in combating the ferocious state of rivalry in the market.
It is however with a prime responsibility of their sales and marketing personnel's to carry out a principle investigation of their existent positioning in the market.
This will in turn support them to frame some succeeding schemes to attain a prosperous future of their business. It is therefore on referring to the unique selling point (USP) of Procter and Gamble where they are referred to be one of the oldest consumer products organisations that possess the most stable nature and is widespread in above 180 different nations. It carries the most vibrant outlook towards serving their clients and users in the sector of FMCG that can also be depicted from its tag line that specifies that “touching lives for improving life” (Hoffman, Corbett, Joglekar and Wells, 2014).
There together exists yet another strategic outlook of work adopted by Procter and gamble with reference to their applied tact of segmentation, targeting and positioning (STP). Wherein, their segmentation criteria has determined products and services that fulfil the daily needs of consumers. Additionally, their targeted group has recognised a major intervention of middle class families where they serve all sort of household needs of individuals. Lastly, the positioning action plan of Procter and Gamble is evident to improve the living standards of customers where they believes in serving superior quality goods to them.
On together referring to the product portfolio of Procter and Gamble, it is also evident to deal with more than 300 different brands who are directly associated with it. Procter and Gamble with its multi divisional structure of the organisation was designated at 6th largest position as per its acquired market capital and 14th largest as per its enumerated profit in the year 2008. Where, as per the latest market statistics, it has hereby obtained a net margin of 46.84% that is referred to be a high range of profits in comparison to its contenders (West, Ford and Ibrahim, 2015).
This ratio has thereby depicted some leading strengths of the cited firm where from the total number of 300 brands, its 24 affiliated brands are evident to make an annual sale of more than 1 billion dollars. With respect to which, Procter and Gamble is dealing with highly recalling brands that has a high perceptibility of serving quality goods and services to the consumers. It is also due to its superior marketing and advertising strategies where the brand of Procter and Gamble has also served as sponsors in some leading entertainment and sports events.
However, there together exists certain deficit dimensions of Procter and Gamble where they are often required to deal with some fraudulent measures where varied counterfeit products are being sold in the name of their brand. Wherein, their products are together dealing with an intense state of competition in comparison to those who are playing in the biggest set of markets with an international recognition of their brand. assignment writing help
Whereas, there together exists some vital opportunities for the establishment where they can duly refer to enter into the rural set of markets in order to rise the penetration in urbanised areas (Ashenfelter, Hosken and Weinberg, 2014). Another vital alternative of mergers and acquisition is also supportive to address the increasing buying power of the customers to satisfy their augmenting demands. It is with a relative outlook of considering the prevalent occurrence of threats where an increasing level of competition in the FMCG sector is necessitating FDI to allow more international brands in the retail sector. Wherein, Procter and Gamble is together evident to face an aggravated state of competition even from the non branded and local commodities where the people are more likely to purchase low priced goods and services.
An abstractive model is more likely to support in making a comparative analysis of Procter and Gamble with its existing number of contenders in the market. It is with a fundamental concern of exploring the prevalent condition of Procter and Gamble in terms of competition. Porter's five force analysis with its five leading constituents is evident to assist in this analysis as mentioned below-
- Threat of new entrants- It is the foremost determinant of an organisation while referring to frame an apt strategy of marketing in accordance to either expand into any other set of market or diversify any existent product line (Pelaez, 2016). The threat of new entrant is moderate for the cited entity where they are already dealing with a broad range of goods and services that is evident to prevent any new venture to take part in its convergent marketplace.
- Bargaining power of buyers- It is mainly in order to scrutinize the purchasing power of the buyers associated with Procter and Gamble (Davenport, 2014). It is with a special context of lower families who are more concerned about the pricing of goods and often refers to buy unbranded goods that costs comparatively lower than Procter and Gamble.
- Bargaining power of suppliers- The bargaining power of suppliers in Procter and Gamble is relatively lower where they tends to maintain an effective and a reciprocally mutualist relationship with their delegated number of suppliers (Ezrachi and Ioannidou, 2014). It is where Procter and Gamble together demands for high quality materials to further commence their production function. This in turn helps them to create a reliable set of relationship with their clients and users that is a foremost consideration of the suppliers. As a result to which, this low bargaining power of suppliers is evident to maintain a harmonious relationship with the venture.
- Threat of substitute products- The threat of substitute product is moderately high for Procter and Gamble where their exists a variety of similar range products in the market (Hanssens and Pauwels, 2016). However, the offered quality of their proposed goods and services do not corresponds with the substitute commodities in the market where they together refers to provide value for money by creating a trustworthy affinity with their consumers.
- Competitive rivalry- It is mainly in accordance to the prevalent context of competition in the market where it is moderately low for Procter and Gamble where they are already serving high quality products to their customers (Moore, 2015). Along with which, they are together evident to carry a flexible attitude of merchandising their goods and services with a practical sense of identifying the pertinent requisition of their clients and users. This in turn aid them to fulfil their factual needs and demands where they frequently modify their policies as per the driving forces in their convergent set of market.
It is therefore on referring to the above five force model, there together exists yet another conceptual theory to further depict some vibrant strategies for Procter and Gamble. This is in context to recommend some applicable work strategies that can be adopted by Procter and Gamble via the below stated components of Porter's generic strategy model-
- Differentiation- The strategy of differentiation is basically to refer the diversified range of products in the market where it is referred to be one of the most contending strategy undertaken by the enterprises. It is however in association to a prospective procedure of innovation (Wolter, 2014). It is where Procter and Gamble is evident to have a systematic research and development (R&D) segment that can largely assist them in adoption of this particular strategy. It is also in accordance to serve a qualitative product to the users with impelling strategies of sales and marketing that is already possessed by the marketeers of Procter and Gamble.
- Cost leadership- It is yet another contending tool that can be undertaken by Procter and Gamble in association to their discovered operational tact (Hoffman, Corbett, Joglekar and Wells, 2014). By which, they can together refer to commence their expansion program in the rural locations with low cost products with a greater sense of dealing in cost-effective logistics.
- Focus- It is yet another pertinent strategy that is being adopted by the companies to aim at the smaller segments of market in order to achieve a contending benefit in the market (Thompson and et. al., 2013). It is however a very common strategy that is usually adopted by the small scale industries who cannot survive into the long run endurance. It is also recognised as niche strategy where the establishments are either required to be convergent on either the tact of differentiation or cost leadership.
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