Procter & Gamble Case Analysis

Procter & Gamble started as a small soap and candle company in 1937. Since that time, Procter & Gamble (P&G) has grown to be a global leader in the manufacturing and selling of household products. Over the years, P&G has been instrumental in the innovation of common corporate practices, such as employee profit-sharing programs, market research, and brand-management systems. The multinational corporation sells its products (at least 250 household products) through a well-structured system of mass merchandisers, grocery stores, department e-commerce, and other specialty stores, like beauty or baby stores, in more than 170 nations across the globe (Frank, 2017). Procter & Gamble business segments include the following categories; laundry (fabric)

The company has undergone significant strategic transformations in the last 20 years. Among the most notable is the acquisition strategy, which led to the 57 billion dollar acquisition of the wet shaving industry giant, Gillette. The company’s control has been referred to its competitive advantage that is drawn from its premium-based differentiation strategy of creating high-value products (Kalogeropoulos, 2017). As such, a review of the stock prices for Procter & Gamble indicates that in start the company have been demonstrating an upward trend. For instance, stock prices for P&G were at an approximated average of $82 in 2014, and $75 in 2015 and $85 in 2016. The current stock price is at $94.17 and the market capitalization is $240.72

Among all these, P&G investors are losing patience and calling for a strategic restructuring to stimulate sales growth.

The five forces analysis by Michael Porter

Porter’s is a tool for evaluating, and estimating the competitive advantage and business situation of a corporate entity. Mainly, five forces analysis identifies the business strengths of an organization, pointing weaknesses and avoiding mistakes. Components of the five forces analysis include the supplier power, buyer power, competitive rivalry, threat of substitution, and the threat of new entry. In this case, the most important forces that can potentially impact P&G’s profitability growth is competitive rivalry and the threat of new entrants in the market. The force with the strongest intensity is a competitive rivalry, due to the massive number of companies operating in the industry. The low cost of switching from one brand to another increases the force of competition. For instance, consumers can move from using P&G’s Crest toothpaste to CL’s Colgate with minimal