CASE 26

PROCTER &
GAMBLE
Group 3: BSMA-4A
Jenny Alute
Allen Angeles
Mariel Barrot
Cresalyn Dellezo
Roda Sajut
Kate Tenaja
 I. Situational Analysis (SWOT)
Procter & Gamble, an American multinational consumer goods corporation, has faced
significant challenges over the years. Despite its long history and iconic brands, it has
struggled with declining growth, competitive pressures, and internal inefficiencies. Efforts to
streamline its operations and focus on core brands show some progress, but challenges
persist, particularly in innovation and market adaptation.
Strengths:
 Strong legacy and well-established brands (e.g., Tide, Pampers, Crest).
 Extensive R&D capabilities and innovative product lines.
 Global presence and distribution network.
 Focus on talent development and internal promotion systems.
Weaknesses:
 Over-reliance on legacy brands and limited new product innovations.
 High operating costs and bureaucratic structure.
 Difficulty adapting to dynamic consumer trends and markets.
 Declining morale and employee retention challenges.
Opportunities:
 Expanding presence in emerging markets.
 Leveraging digital marketing and e-commerce platforms.
 Innovating high-margin products tailored to changing consumer preferences.
 Strengthening partnerships and acquisitions for external innovation.
Threats:
 Intense competition from established players like Unilever and Colgate-Palmolive.
 Growing market share of private-label and cheaper alternatives.
 Economic uncertainties impacting consumer spending.
 Challenges in integrating new brands or ventures like services (car washes, dry
cleaning).
 II. Identification of the Problem
The primary problem in the case of Procter & Gamble (P&G) is stagnant growth and
declining competitiveness, stemming from several interconnected issues:
1. Lack of Innovation: P&G’s innovation engine has faltered, with few groundbreaking
products emerging and an over-reliance on line extensions or costly acquisitions
rather than transformative innovations.
2. Bloated Brand Portfolio: P&G’s extensive brand portfolio became unwieldy,
diluting focus and resources, leading to a strategy of shedding underperforming
brands.
3. Centralized Bureaucracy: The company’s centralized and bureaucratic structure
stifled agility and creativity, making it less competitive against nimble and focused
rivals.
4. High Costs and Premium Pricing: Many of P&G’s premium-priced products failed
to resonate with price-sensitive consumers, especially during economic downturns.
5. Competitive Pressure: Intense competition from global players like Unilever and
smaller, internet-based disruptors eroded P&G’s market share.
6. Leadership Instability: Frequent leadership changes and inconsistent strategies (e.g.,
McDonald’s “purpose-inspired growth” vs. Lafley’s consumer-focused approach)
caused confusion and disrupted momentum.
These issues collectively undermined P&G’s growth, innovation, and market leadership,
necessitating urgent restructuring and strategic shifts.

III. Development of Strategic Alternatives

1. Streamline the Brand Portfolio Further
o Focus only on the top 50 brands with the highest profitability and growth
potential.
o Sell or discontinue underperforming brands.
o Strengthen R&D for flagship brands to drive product differentiation.
2. Digital Transformation and Market Expansion
o Accelerate investments in digital marketing, e-commerce, and data analytics.
o Strengthen brand positioning in emerging markets with tailored products.
o Collaborate with online retail giants for better consumer outreach.
3. Innovate and Partner for New Product Growth
o Increase focus on external collaborations through the "Connect and Develop"
model.
 o Invest in high-growth categories like sustainable products and health care.
o Push for premiumization strategies with higher-margin products.
4. Decentralize Operations
o Simplify decision-making processes by empowering regional teams.
o Increase agility to respond to local consumer demands effectively.

IV. Evaluation of Strategic Alternatives

Criteria Alternative 1 Alternative 2 Alternative 3 Alternative 4
(Streamline (Digital (Innovation) (Decentralize)
Brands) Expansion)
Revenue Growth Medium High High Medium
Potential
Cost- High Medium Medium Medium
Effectiveness
Implementation High Medium Medium Medium
Feasibility
Risk Level Low Medium High Medium
Adaptability to Medium High High High
Trends
Overall Rating 4.5/5 4/5 3.5/5 3.5/5

V. Recommendation
Procter & Gamble should adopt Alternative 1 (Streamline Brand Portfolio) as its primary
strategy to ensure a sharper focus on its high-performing and most profitable brands while
eliminating underperforming and non-core products. This approach will allow P&G to reduce
operational complexity, lower costs, and concentrate its resources on brands that have the
greatest potential for market growth and consumer loyalty. By narrowing the focus to its core
portfolio, the company can redirect investments toward enhancing product quality, improving
marketing strategies, and driving innovation in these flagship brands. This streamlining will
also help P&G simplify its organizational structure, making it more agile and responsive to
changing consumer needs.
To maximize the benefits of this strategy, P&G should complement it with aspects of
Alternative 2 (Digital Transformation and Market Expansion). This involves investing
heavily in digital marketing and e-commerce platforms to improve brand engagement,
especially as consumer shopping habits increasingly shift online. By leveraging data analytics
and personalized marketing, P&G can better understand consumer behavior and preferences,
enabling it to create targeted campaigns that resonate with modern audiences. Additionally,
digital transformation will allow the company to reduce its reliance on traditional retail
channels and expand its reach to younger, tech-savvy consumers.
In emerging markets, P&G should develop region-specific strategies by tailoring its high-
performing brands to meet the unique preferences and needs of local consumers.
Collaborations with online retail giants, such as Amazon, Shopee, or Flipkart, can enhance
P&G’s visibility and accessibility in these regions. By combining a leaner brand portfolio
with an aggressive push into digital platforms and emerging markets, P&G can position itself
to regain market share, drive sustainable growth, and strengthen its long-term
competitiveness.
This dual approach balances operational efficiency with a modernized, consumer-centric
growth strategy, ensuring that P&G can maintain its iconic status while adapting to the
challenges of a rapidly changing global marketplace.