PROCTER & GAMBLEGILLETTE MERGER

By: Christine Cruell Kamika Hemphill Antjuan Seawright Jonathan Toney

EXECUTIVE SUMMARY

PRODUCTS

Three main product lines:

household

and personal care food consumer heath care products

Recent merge with Gillette

Competitive

advantage

DOMINANT FIRMS
Procter and Gamble, Nestle, Unilever, LOreal, Colgate-Palmolive, Revlon, Bic, PepsiCo, Sara Lee, and Kimberly Clark. Success factors:
positive

brand image availability of products the ease of access

VISION AND MISSION

Vision
Be,

and be recognized as, the best consumer products and services in the world and Gamble will continue to serve consumers by continuously innovating products that will allow us to be leaders in household and personal care, health care, and food products. To produce products with the utmost care to give nothing but quality to our communities. And to continue to grow so that we can maximize our shareholders wealth.

Mission
Procter

EXTERNAL ENVIRONMENT

EXTERNAL ENVIRONMENT
Economic Factors Social Factors Technological Factors Political Factors Ecological Factors

ECONOMIC FACTORS FACTORS

Concerned with nature and direction of economy in which the CP industry Threat/Opportunity

SOCIAL

Concerned with beliefs, values, opinions, and lifestyles of people Threat/Opportunity

TECHNOLOGICAL FACTORS
Focus on technological changes affecting the industry: New Products, improvement in existing products, manufacturing and marketing techniques T hreat/Opportunity

INDUSTRY ANALYSIS

CONSUMER GOODS INDUSTRY 5 FORCES MODEL

Buyers: large impact on industry

Large

retailers-Wal-Mart, Kmart, Target

Rivalry: keeps industry thriving

Differentiation,

advertising, promotions, price, customer service and quality

Threats to Entry: heavy impact on industry productivity

Mergers

and acquisitions

CONSUMER GOODS INDUSTRY 5 FORCES MODEL CONT

Substitutes: no huge impact

Competitive

products replacement Private label brands and small label brands-only real substitutes

Suppliers: no threat to the industry

Raw

materials can be obtained anywhere

COMPANY PROFILE

VALUE CHAIN ANALYSIS

Primary Activity
Marketing

and Sales=Brand Recognition

Support Activities
Research Technology-RFID

FINANCIAL ANALYSIS

FINANCIAL ANALYSIS
Key Data from Bal. Sheet Total Assets

138,014.00 135,695.00 61,527.00 57,048.00 43,706.00

FINANCIAL ANALYSIS (CONTD)

Key Data from Income Statement Net Income

10,340.00 8,684.00 6,923.00 6,156.00 5,186.00

FINANCIAL ANALYSIS (CONTD)

Key

Ratios Gross Margin Debt/Equity Ratio Current Ratio Quick Ratio Return On Equity Return On Assets Return On Capital

RATIO ANALYSIS

Key Ratios Gross Margin Debt/Equity Ratio Current Ratio Quick Ratio Return On Equity Return On Assets Return On Capital

PG 51.8 20 .54 84 .9 98 .6 16.8 30.9 7.9 9.6 10.2 13.4

Nes 30.8 .67 .8 .11 30 8.3 13.4

Uni Ind 14.5 .78 .7 . .

.4 .7 32.3 10.9 17.6

SWOT SUMMARY/CORE ISSUE

SWOT

Strengths
product variety and diversification Line of shaving /grooming products Supply chain technology

Weaknesses
Constant

innovation= higher prices for consumers

Opportunities
Globalization

Core Issues:
Overlap

Threats
Private

labels

in management Overlap in P&GGillette products (I.e. Old Spice deodorant and Right Guard deodorant) Expensive products

LONG TERM OBJECTIVE AND STRATEGIC SCENARIOS

LONG TERM OBJECTIVES

Generic Strategy: Differentiation

Grand

Strategies:

Innovation Conglomerate diversification Concentric diversification Strategic alliance

SCENARIOS

Best

Likely

Worst

CORPORATE LEVEL STRATEGIC ALTERNATIVES

CORPORATE LEVEL STRATEGY

Stay in same SBUS Get into new SBUS

Keys to success Proper asset mgmt Possible change of mission statement

CORP LEVEL STRATEGY

Best Case Expand to new mkts Grow by 30%

Worst Case Lose Mkt share Fail to expand

Most Likely Grow by 10% Continue current corporate strategies

BUSINESS LEVEL STRATEGIC ALTERNATIVES

BUSINESS LEVEL STRATEGY

Generic Options
Low

Cost Leadership Differentiation

Pros/Cons of both

Rivals
Unilever Colgate-Palmolive

GRAND STRATEGIES

Low Cost Leadership

Concentrated

Growth Market Development

Differentiation
Product

Development Innovation

STRATEGIC CHOICE

STRATEGIC CHOICE

Corporate level strategy: Get into new SBUs.