Global Strategy Advisors. . .

Challenging boundaries and beyond

February 19, 2006

Unilever
Unilever House, Blackfriars
London EC4P 4BQ, United Kingdom

Sent Via Electronic Mail

RE: Strategy Analysis

Ladies and Gentlemen:

At the request of the Board of Directors of Unilever, we provide herein our analysis of the
Personal Products Industry and a strategy analysis of both Unilever and its biggest competitor,
Procter & Gamble. The enclosed analysis also provides recommendations for Unilever to
improve its competitive advantage.

Respectfully submitted,

GSA
 Procter & Gamble, Unilever
and the
Personal Products Industry

Global Strategy Advisors

Lee Ann Graul, Sherry Henricks, Steve Olp and Charlene Strohecker

University of Maryland, University College

AMBA 607
February 19, 2006
 Table of Contents
1. Executive Summary i
2. Industry Analysis-Personal Products Industry 1
a. Introduction 1
b. Industry Defined 1
c. Historical Data Analysis 2
d. Major Competitors 3
e. Trends and Industry Outlook 3
f. Strategic Challenges and Opportunities 5
g. Industry Conclusions 5
3. Procter & Gamble and Unilever 6
a. Competitor Analysis: P&G 6
b. Competitor Analysis: Unilever 8
c. Strategy P&G 10
i. Business Level 10
ii. Global 11
iii. E-Business 13
iv. Corporate 14
d. Strategy: Unilever 15
i. Business Level 15
ii. Global 16
iii. E-business 17
iv. Corporate 19
e. Conclusions and Recommendations 20
4. Appendices 22
A. SIC Code 2844 and Industry Description 22
B. Global Personal Products Industry, Market Segmentation 24
C. Personal Products Industry, Five Force Analysis 25
D. Global Personal Products Industry, Market Share 30
E. Market Growth 31
F. Producer Price Index (PPI) for SIC 2844 32
G. Industry Growth Rate-Sales 33
H. Average Revenue Growth: Industry 34
 I. Historical Data-Personal and Household Products 36
J. Household and Personal Prod. Industry, Ranking by Revenues, Profits 38
K. Company Ranking by Personal Care Revenues 39
L. Trend Line, Exports, SIC 2844 40
M. Trend Line, Imports, SIC 2844 41
N. Fastest Growing Markets 42
O. Value Chain Analysis, P&G and Unilever 43
P. P&G, RBV Analysis 51
Q. Unilever, RBV Analysis 53
R. P&G Financial Analysis 55
S. Unilever Financial Analysis 61
T. P&G SWOT Summary 66
U. Unilever SWOT Summary 67
V. History of P&G Global Expansion 68
W. History of Unilever’s Global Expansion 69
X. Dynamic Resource-Based Model of Competitive Advantage 71
Y. Unilever’s Early Use of the Internet, 2000 72
Z. Global Data Synchronization Network 73
AA. Safeway, Unilever Complete Global Data Synchronization Project 74
BB. Unilever Initiatives in Information Technology 75
CC. P&G Portfolio: Product Groups & Businesses 76
DD. Unilever Portfolio: Product Groups & Businesses 79
EE. P&G e-Business Network 84

5. Endnotes 85
 P&G and Unilever i

Executive Summary

This paper provides an examination of the personal products industry as a whole, including a review of
the historical market share, financial performance, competition, and industry trends. Additionally, a
discussion of industry opportunities and challenges is conducted, presenting issues such as increases in
the cost of raw materials and operations, a slow recovery of growth due to the economy, changes in
government regulations, and the ever changing wants and needs of the consumer. These conditions create
the need for companies to respond quickly, develop innovative new products, and find ways to become
more efficient while reducing costs. The industry itself is an attractive one, having steady growth,
emerging global markets, and repeat purchases (consumables products), but also requires achieving
economies of scale, significant investing in R&D, and developing brand loyalty.

An examination of two major competitors in this industry, Procter & Gamble (P&G) and Unilever
reveals a very competitive industry that is not yet highly consolidated. P&G is an industry leader focused
on innovation, knowledge sharing, improved efficiencies, cost reduction, and first mover advantage – i.e.
quickly getting new ideas from conception to the shelf. Unilever is primarily focused on strong brand
recognition, expansion of its product lines through R&D, and development of alliances. Both P&G and
Unilever take advantage of economies of scale and global expansion into emerging markets.

P&G’s strategy is flexibility for quick response to market demands and opportunities, development of
strong product branding, and new product innovation. To achieve speed and flexibility, P&G has been a
leader in e-business implementation, obtaining real-time information and utilizing global knowledge
sharing externally from its users, suppliers and buyers, and internally for management and product
development. P&G also maximizes its value by investing in global markets through acquisition, joint
ventures, alliances, direct investment and direct marketing. P&G understands the importance of local
market insights and successful management of people in foreign markets and subsidiaries and has
achieved competence in these key aspects of globalization. From a portfolio perspective, P&G’s
investments and business developments have remained in or related to the consumer products industry,
maintaining its focus. P&G Chemicals and Health Sciences lab reflect the vertical integration of its
current product line.

While Unilever trails slightly behind P&G in most product segments, its similar focus on branding,
product development and quality advertising has helped it hold its position. Unilever’s biggest challenges
are in improving efficiencies to reduce costs, especially in its use of people and its time to market.
Unilever’s costs and number of employees is much higher than P&G’s. As P&G takes a proactive roll in
e-business and innovation, Unilever’s stance is a reactive one. Although Unilever seems to have
expanded globally with some success, it seems to be lacking an overall global strategy. Learning and
sharing information on a global scale is one of P&G’s strengths, but a weakness for Unilever.

Unilever has improved its focus and resource allocations, as it divested itself of non-performers,
allowing it to concentrate on performing products. Unilever needs to establish a focused strategy, and
ensure activities drive toward strategy achievement. The recent corporate restructuring should continue,
with ongoing efforts to achieve a corporate structure, which will maximize strategy achievement. The
improvements in overall communications, processes, and market introductions and management will
enable Unilever to remain competitive and grow as an industry leader. Additionally, recommendations
provided herein include an alignment of strategies, a strengthening of brand differentiation, and continued
investments in R&D, global expansion, advertising, and strategic alliances.
 P&G and Unilever 1

INDUSTRY ANALYSIS – PERSONAL PRODUCTS INDUSTRY

Introduction

The objective of this report is to provide an overview and examination of the Personal Products

Industry – covering industry structure, competitors, past and future performance trends, and conclusions

about attractiveness for incumbents. Additional objectives include a competitor analysis, comparing

Procter & Gamble and Unilever, an examination of their strategies, and recommendations for future

growth and sustainability. Our analysis includes global operations, financial results, market share and

current initiatives. Information for these analyses was derived from library databases, internet searches

and company websites.

Industry Defined

The industry segment chosen for this analysis has been assigned the SIC code 2844 entitled Perfumes,

Cosmetics and other Toilet Preparations. Companies within this industry have referred to this market

segment as the Personal Products Industry. A complete list of the products included in this industry has

been provided in Appendix A. The SIC 2844 category, when converted to the new North American

Industry Classification System (NAICS) was further divided into 2 categories, 325620 (Toilet Preparation

Manufacturing) and 325611 (Soap and Other Detergent Manufacturing).

The global personal products market encompasses fragrances, hair care, make-up, oral hygiene,

personal hygiene, and skincare products. This highly competitive industry will “derive its future

performance relative to global consumer spending patterns and raw material prices.”1 In 2005, the

leading revenue source in this market was hair care, accounting for 25.5 percent of the global value (See

Appendix B).2 This industry has recently been affected by rising commodity costs which, coupled with

increased marketing spending, put significant pressure on operating margins and earnings in 2005.

Earnings per share (EPS) were expected to improve by 2006, as commodity costs began to stabilize.3

For an analysis of the Industry Structure, Porter's 5 Forces Model4 has been used and provided in

Appendix C. The result of this analysis reveals strong barriers to entry, moderate bargaining power of
 P&G and Unilever 2

buyers and suppliers, considerable threat of substitutes, and substantial rivalry among existing companies.

This industry favors incumbents.

Historical Data Analysis

The CR4 analysis provided in Appendix D shows a total of only 28.7 percent of the market being

satisfied by the top four producers in the industry. Therefore this industry as a whole is not considered

highly consolidated. The market volume has shown an average growth of 2.2 percent for the four year

period, 2000 – 2004. (Actual rates are provided in Appendix E.) This reflects a slow recovery from the

downturn in the economy in the early 2000s, which followed an average 5 percent per year growth

between 1996 and 2000.5 Market growth is expected to continue to grow steadily over the next five

years, with a projected average of 2.7% between 2006 and 2009.6 The Producer Price Index also shows a

slow but steady growth over the past ten years (see Appendix F).

The total value of industry shipments has steadily increased from $19.7 billion in 1994, $22.8 billion

in 1997 to $28.8 billion in 2001.7 The market’s weighted average growth in sales for the past 5 years was

9.95% and for the past three years increased to 11.29%8 (See Appendix G for details). Over the past 3

years, the industry average EPS grew by 19.1% 9 (See Appendix H).

The industry has seen slight increases in gross margin, operating margin, and sales when comparing

the five-year industry average to the most recent one-year average. In most cases, these figures have

exceeded the S&P 500’s averages (See Appendix I). The industry average Return on Assets (ROA),

Return on Equity (ROE) and Return on Investment (ROI) have decreased when comparing the same time

periods, however they still exceeded the S&P 500 Average. The Global Strategy Advisors believe these

decreases were caused by higher operating costs (raw materials and fuel) in the past year and/or required

larger investment in assets or R&D since the Liquidity and Solvency Ratios were below average for the

same time periods. Such factors, however, will vary by company and a more in depth analysis of the

industry leaders would need to be made.

 P&G and Unilever 3

Major Competitors

Fortune Magazine and Reuters group “personal products” together with “household products” when

analyzing industries. As of April 2005, Procter & Gamble (P&G) was the leading company in terms of

revenues and profits in the Household and Personal Products Industry, followed by Kimberly-Clark,

Colgate-Palmolive, Gillette and Avon Products (See Appendix J). The October 2005 acquisition of

Gillette by P&G10 solidifies P&G’s number one position on this list. Competitor ranking of the personal

products industry (not combined with household products) as measured by market share is led by L’Oreal

(8.8%), followed by Procter & Gamble (8.5%)11 (See Appendix D for an industry market share overview).

When competitors in the Personal Care Industry are ranked by revenues however, the top three were (1)

P&G, (2) L’Oreal and (3) Unilever (See Appendix K for rankings by revenue).

Competitive advantage in mature industries often manifests itself in cost advantage from economies of

scale or experience and differentiation advantage through brand loyalty12 – all of which are characteristic

of the personal products industry. Companies have instituted cost reduction programs (including the

creation of manufacturing efficiencies, renegotiated supply contracts, and employee and plant layoffs) to

improve margins during the last few years. Facing stiff competition from private labels, personal

products companies rely on a high turnover of products in order to improve performance, thus requiring

the investment of significant resources into R&D. Additionally, many firms view emerging markets

(such as China and India, where consumption of household products is low) as an opportunity to expand

revenues13 (For fastest growing markets in cosmetics and toiletries, see Appendix L).

Trends and Industry Outlook

The household products and personal care segments are expected to be the stronger within the US

consumer products industry – entering 2006 with a strong financial profile. These segments are

characterized as having well-supported, strong brands and superior product development, commanding

premium pricing in sectors that are less cyclical.14

Two events that dominated the landscape in 2005 for consumer product companies will also have an

impact on future performance – the continuation of raw material cost escalations, which in turn prompted
 P&G and Unilever 4

price increase announcements, and significant mergers or pending mergers - among them, P&G’s

acquisition of Gillette. Many companies instituted cost reduction programs, but in the end, few

companies were able to fully offset raw materials cost escalation. In addition, industry competition in the

form of advertising has ratcheted upward, largely due to the strong influence of P&G in 2005.15

Changes affecting the demographics and demands of the consumer, such as the aging baby boomers

causing an increase in the demand for age-defying skin care and hair color, or animal rights activists

protesting animal testing, directly affect the industry. The growing need for compliance with more

stringent environmental regulations, and the consumer demand for natural and organic products, have also

changed how products are produced, requiring additional investment and expanded product lines.

Keeping up with changing wants and needs of the consumer in order to remain competitive in this

industry increases the need for investment in research and development. Globalization and the growing

ethnic population in the US will also continue to broaden the industry and create new market segments.

Not only the US economy, but also the global economy, will affect sales for items not considered a

necessity, such as some cosmetics, perfumes, and household items. The consumer will continue to be

influenced by price and convenience for most products. “There is a close correlation between a country’s

consumption of soaps and detergents and its standard of living.”16

Trends in how consumers shop also affect the industry. Beginning in the 1990s into the 2000s,

consumers began purchasing these types of products at mass discount centers, such as Costco and Sam’s

Club, rather than at upscale department stores.17 These macro-level factors – environmental regulations

(government), the global economy, the cost of raw materials, global competition, innovations in research,

consumer demographics, and the ever changing wants and needs of the consumer – will continue to

impact the performance of companies in this industry. Companies expected to fare well in the future are

those with strong momentum from earlier and successful restructuring actions whose cost savings are

ramping up quickly, with less exposure to specific raw materials, and with balance sheet flexibility.18
 P&G and Unilever 5

Strategic Challenges and Opportunities

As mergers and acquisitions continue, this industry will likely become more consolidated, which,

along with strong entry barriers and substantial rivalry among existing members, will favor sustainability

for incumbents. Cost and availability of raw materials may continue to pose a threat to smaller firms

lacking adequate capital reserves to compensate for additional costs. Future performance in this industry

will be tied to global consumer spending patterns and raw material prices. Expansion into global markets

will be important for future growth. As is seen by the trends in imports and exports provided in

Appendices L and M, expansion into the global market is not new to this industry. “Low consumption of

household products in emerging markets – such as China and India – represents an opportunity for

companies to expand their revenues and escape from the stale performance of their home markets.”19

The fastest growing and emerging markets include the Pacific Rim20, Latin America, and Eastern

Europe21 (see Appendix N).

While the Asia-Pacific area is noted to be a key emerging market for this industry, one of the main

hindrances in this area has been low income.22 Products designed for areas with higher incomes may not

be suitable for emerging markets; thus companies desiring to expand into this region will need to invest in

development of products that can be priced more affordably. A global expansion study would be

recommended to determine which countries would provide the best opportunity.

The expanding US Market for natural and organic personal care products is an opportunity for

industry to provide products for a growing consumer want and need. Most US Consumers are willing to

pay, and are used to paying, a higher price for natural and organic products. If the personal products

industry can find ways to produce natural and organic products at reasonable costs, the profit margins on

such products are expected to be greater than their non-organic counterparts.

Industry Conclusions

The attractiveness of the Personal Products industry includes such elements as steady growth in

consumer demand and repeat purchase of the products, since most are consumables. Some larger current

producers are achieving economies of scale, brand loyalty, and first mover advantage. Other smaller
 P&G and Unilever 6

producers have developed a market niche for a specific consumer need and have been successful. The

challenges in this industry include taking advantage of economies of scale in order to compete on price

with current companies, keeping up with changes in customer preferences and government regulations

(e.g., labeling, chemical handling, and environmental impact), and the investment in R&D required to

stay ahead of the competition with new product innovation.

PROCTER & GAMBLE AND UNILEVER

Competitor Analysis: P&G

William Procter (a candle maker from England) and James Gamble (a soap maker from Ireland)

founded Procter & Gamble Company when, through a series of events, the two strangers traveled to the

United States, met and married sisters. At their father-in-law’s urging, Procter and Gamble pledged

$3,596.47 each, and formed the Procter and Gamble Company in 1837.23 The Company, headquartered in

Cincinnati, Ohio, has reported revenues of $56.8 billion for the fiscal year ended June 2005.24 This

revenue comes from sales in over 160 countries, balanced worldwide with one half from the domestic

market and one half from the international market.25

Today, P&G markets more than 300 brands, of which 22 are $1B sales producers, 26 and has Market

Development Organizations in 80 countries, leading teams to build brands organized in seven

geographies: "North America, Western Europe, Northeast Asia, Latin America, Central and Eastern

Europe/Middle East/Africa, Greater China and ASEAN/Australasia/India".27 Their products are sold

primarily in grocery stores, discount stores, through mass merchandisers, membership club stores, and

high frequency stores (neighborhood stores in developing countries).28 The Company and its 110,000

employees are organized into three global business units, P&G Household Care (33% net earnings), P&G

Family Health (30% net earnings), and P&G Beauty (37% net earnings).29 These global business units are

distributed into five segments, Health Care, Baby and Family Care, Snacks and Coffee, Fabric Care,

Home Care, and P&G Beauty30 (See Appendix O, Value Chain Analysis, for an overview of P&G

structure and primary activities). The business segment being examined in this report, P&G Beauty;

encompasses personal cleansing, antiperspirants or deodorants, cosmetics, colognes, hair care, feminine
 P&G and Unilever 7

protection, hair color, and skin care, includes five $1Billion brands, and achieved double digit growth for

2005, with a net profit margin of 13%, ROI of 12%, and ROE of 42% on 7.257M Sales31,32 (See

Appendix Q, Financial Analysis, for a P&G company overview).

P&G’s competitive advantages arise from several key factors, one of which is innovation. Spending

$2B annually on R&D and deploying approximately 7,500 researchers in technical centers around the

world, P&G is a leader in innovation.33 They have 29,000 patents, and over the past eight years, have

introduced the #1 or #2 new non-food products in the US.34 Key to their success is knowledge sharing

and cross-borders replication of innovations, reducing costs and quickly expanding the company

knowledge and line offerings.35 Another factor contributing to their competitive advantage is their large-

scale operations and go-to-market capabilities that provide first mover advantage and limit the ability of

competitor’s to copy ideas and replicate them.36 Additionally, economies of scale and scope in

purchasing, distribution, business services and merchandising provide financial and trade advantages.

Lastly, P&G is well known for its brand management and brand leadership capabilities, which are

significant advantages for customer loyalty and market penetration (See Appendix O for P&G's RBV

Analysis). Supplementing their innovations, facilitating their rapid go-to-market capabilities, as well as

their customer and partner management is P&G's significant use of IT and tracking systems, including

CRM, EDI, and RFID, that improve R&D speed and capabilities, communications, information tracking

and sharing, and inventory management37 (See Appendix O, Value Chain Analysis, for an overview of

P&G supporting technologies and awards for excellence).

In order to sustain their competitive advantage, P&G must continue to utilize their acknowledged

strengths, as well as continue to exploit international growth, especially in emerging markets, as P&G is

currently overexposed in the US and Western Europe.38 Additionally, the company is moving away from

the commoditized household products and food businesses and should continue its focus on personal care

health and strong household businesses that provide for more profitable growth.39 P&G has also been

successful with its mergers and acquisitions strategy, such as the recent acquisitions of Clairol in 2001,

Wella in 2003, and Gillette in 2005, and should continue this strategy.40 Active portfolio management,
 P&G and Unilever 8

using divestiture and acquisition strategies, has been shown to increase stakeholder value;41 P&G needs to

review longer held businesses and lower earners for their continued value to the organization, divesting if

needed.

P&G has been diligently participating in activities that should ensure a good future of sustainability.

Their R&D has enabled ongoing introduction of new lines, as well as expansions and adaptations of

current lines to meet local needs. Their Corporate Standards System application provides for innovative

R&D methods to reduce costs while increasing quality and enhancing go-to-market capabilities.42 They

need to successfully fold in Gillette, and have recognized $1B in cost synergies as this integration

occurs.43 Additionally, a strong focus on expansion in developing countries is being undertaken and

should provide significant growth opportunities, in conjunction with their maintenance of market share

and line extensions in developed countries. P&G needs to look at their businesses, however, and ensure

good fit and value-added, and continue activities that have been driving organic growth and increasing

EPS (2.831 basic normalized EPS; 2.662 diluted normalized EPS 2005), as well as increase free cash

flow, ROI, and profits, which their activities are focused on to accomplish (See Appendix R for financials

on P&G and Appendix T: P&G SWOT Analysis).

Competitor Analysis: Unilever

Unilever was officially formed in 1930, through the merger of Lever Brothers, a British soap

manufacturer and Margarine Unie, a Dutch margarine manufacturer.44 It has since become one of the

largest direct investors in the United States.45 Unilever is unique in that it has maintained a dual

ownership structure since its inception, governed by an equalization agreement.46 Although the company

has two legal entities as its parents, one Dutch (Unilever NV), and one British (Unilever plc), it has only

one board of directors47 and reports one set of financial statements.48

Today Unilever is present in 150 countries, employs over 223,000 people, and has numerous well-

known brands, 12 of which each have worldwide sales exceeding €1 billion.49 Unilever has products for

three markets, home, food, and personal care,50 which fall into 6 primary categories: home care (17%),
 P&G and Unilever 9

spreads (12%), savory & dressings (21%), beverages (8%), ice cream & frozen foods (16%), and personal

care (26%)51 (See Appendix Q for Unilever's structure and primary activities).

In the area of personal care, one of the segments where Unilever competes directly with P&G,

Women's Wear Daily ranked Unilever ($9.3 billion) the third largest cosmetics company behind L'Oreal

($17.7 billion) and P&G ($16.5 billion).52 Company-wide, P&G's sales are around $70 billion and

Unilever's are around $50 billion.53 P&G's sales are nearly 40% greater than Unilever's, with

approximately 40% of Unilever's employee headcount.54 Clearly there are fundamental operational

differences between Unilever and P&G.

Unilever's competitive advantages arise from strong brand recognition, such as Dove and Bird's Eye,

strong R&D initiatives for line expansion, and leading brands in personal care, deodorant and personal

wash.55 Their renewed focus on strong line expansion (especially after reducing their number of brands

from 1600 products to approximately 400 in 2003),56 and alliances with strong corporate partners such as

Pepsi are also advantages. In order to sustain their competitive advantage, Unilever has several issues to

resolve (See Appendix Q for RBV Analysis). First, it has been a complex company, with two CEO's,

separate organizational structures (PLC and NV), and earnings reported in two venues, Euro and

Dollars.57 This complexity increased costs, and impacted opportunities for efficiency economies of scale

and scope, not to mention the potential concern in transparency in reporting.58 The 2004 figures reflected

a net profit of 5%, ROI of 6%, ROE of 37%, sales of 48,204M and net income of 2468.5M (See

Appendix S, Unilever Financial Analysis). Sales were flat in 2004, and Unilever began a major push for

elimination of non-productive lines, cost elimination, share buybacks, focus on core products and regional

activities with increased spending on R&D, marketing, and advertising, resulting in increased sales

growth in many regions.59

In 2005, Unilever initiated consolidation efforts (One Unilever) including development of one

executive group (from three), a decrease in the number of executive managers by one-third, a flattening of

the organization, and a restructuring that created global groups, such as a global brand strategy group.60

One such effort at consolidation is the 2005 sale of Unilever Cosmetics International unit to Coty for
 P&G and Unilever 10

approximately $800 million.61 For future sustainability, Unilever needs to continue their operational

enhancements, including additional outsourcing when needed (as was done in business support services),

add line extensions with core brands while guarding against negative impacts should an extension fail,

look to mergers and acquisitions to support their growth and development, protect against exchange rate

fluctuations, and continue to expand globally, especially in India and China, the identified locations for

substantial growth.

Strategy: P&G

Business-level Strategy

P&G, with the largest product portfolio in the consumer products industry, faces significant

challenges maintaining cost efficiency and scale economies while creating innovation and

differentiation.62,63 With their recent acquisition of Gillette, P&G now has 22 brands that each exceed $1B

in annual sales, with a balance of ten- $1B brands in Beauty and Health, and twelve-$1B brands in Baby,

Family and Household lines.64 The company is divided into four pillars: Global Business Units, Market

Development Organizations, Global Business Services and Corporate Functions, each working separately

and together to bring competitive advantage to P&G.65 As competition from other major global and small

local companies are vying for market share, a sound business strategy, with a focus on flexibility and

responsiveness, is required to maintain and grow their leadership position.66

P&G's business strategy focuses on large-scale operations, strong product branding, and product

innovation to develop competitive advantage.67 P&G is the global leader in its four core categories, Baby

Care, Feminine Care (35%), Fabric Care (approximately 30%), and Hair Care (greater than 20%).68 To

achieve sustainability and continued growth, P&G's strategy is to continue to innovate and sell products

that appeal to retail trade customers and consumers, providing pricing and product that adds value for the

customer, while improving efficiencies in sales and operations with their ongoing restructuring and

technology enhancements, and quickly responding to competitive advancements.69 Their comprehensive

research network and $2B of research spending annually support their innovative focus, and they have

received awards for supply chain management (#1 in 2004), are leaders in inbound logistics, and are
 P&G and Unilever 11

technology innovators for improving efficiencies and reducing costs, such as with bar coding and wireless

technologies.70 With their market knowledge and focus on efficiencies, they excel at "demand chain

planning," identifying their "target market's requirements and designing the supply chaining backward

from that point. 71 Additionally, P&G uses business development structures combining sales, logistics,

finance, marketing, and IT to work with trade customers for ways to add value to the consumer, including

Market Development Organizations in 80 countries, to provide focus and management for increasing

customer concentration at the retailer and country levels, growing volume in developed and developing

markets, and focusing on higher profitability lines for growth; Beauty and Health Care.72

P&G has been awarded #1 best category management and consumer marketing, another competitive

advantage, and continues to concentrate on relationship management with customers and suppliers.73 Use

of the Siebel CRM solutions has improved efficiencies and reduced costs, and needs to be further

implemented beyond the US and Western Europe.74 With ongoing improvements in resource

management, planned divesture and ongoing acquisition strategies, and continued maximization of their

product innovations, marketing, and rapid go-to-market strategies, P&G should continue to meet (and

exceed) its business goals.75

Global Strategy

P&G has made substantial investments globally, and used acquisitions, joint ventures, and alliances to

expand their market understanding and reach. Key to expansion are three competencies P&G has

developed: 1) understanding of the foreign marketplace, 2) ability to manage people in foreign markets,

and 3) skills at managing foreign subsidiaries.76 Their global strategy includes innovation, increasing

market share on base business while focusing on each business as well as on each industry, and investing

in the developing marketplace.77

P&G has gained substantial market knowledge, has innovative databases including over 100 million

consumers across 30 countries, utilizes a blend of local and expatriate managers, and provides training,

global resource centers, and partnerships and alliances for managing foreign subsidiaries, all successful

activities that promote local acceptance and a climate enabling knowledge transfer.78 Their flattened
 P&G and Unilever 12

structure and focus on relationship management with stakeholders provides for efficient and rapid

communications throughout the value chain.79 These capabilities have afforded P&G the opportunity to

leverage insights from the local shopper, consumer, and retailer to generate cross-business unit plans and

create efficiencies across the breadth of P&G lines. 80 With their marketplace knowledge and research

centers strategically located throughout nine countries, P&G focuses on 360-degree innovation,

identifying significant opportunities and acting on them quickly.81 For example, P&G modified products

in their upper tier and launched middle tier level products in Russia, driven by their identification of the

beauty-conscious orientation of women in that marketplace.82 Other examples of their approach to

learning, knowledge transfer, and rollout based on market understanding is the learning from SK-11 store

counters in Asia. Knowledge from that rollout was then integrated into the Olay launch in Spain,83

demonstrating a reduced risk method of global expansion, where launches are first piloted on a limited

basis, then expanded upon.84

Overall, P&G has a well-developed knowledge base and global mindset, and with innovation a key

component of their global strategy, they have created the ability to implement distribution systems that

can move innovations across borders.85 P&G has been an early adopter and substantial user of

information technologies, and has been recognized by CIO Magazine for its “Corporate Standards System

application” that revolutionizes the way their employees and partners collaborate, reducing costs,

improving product quality, and getting products quickly to the marketplace.86

P&G has had success expanding globally with its strategies of acquisition, strategic partnering,

innovation, and rapid go-to-market strategy (See Appendix V for the History of Global Expansion

P&G).87 P&G has coordinated activities to provide a global network with all activities, structure and

coordination driving for a global competitive advantage. However, P&G is at risk due to overexposure in

the US and Western Europe, and needs to continue growing globally.88 It is estimated that 90% of the

world's population will be in developing countries by 2010.89 P&G has been working to expand rapidly

in these markets, and in fact, their presence in high frequency stores has grown 50% in 4 years, and in

China alone, P&G serves 2000 cities and 11,000 towns.90

 P&G and Unilever 13

E-Business Strategy

P&G’s CEO wants P&G “to be known as the company that collaborates – inside and out – better than

any other company in the world”91 P&G’s strategy and e-business focus is three-fold: “one-to-one

communications, real-time and predictive business intelligence, and ‘virtualization’ of business

processes.”92 Sales and distribution is through retail partners – drug stores, grocery stores, and wholesale

clubs (such as Costco). P&G does not have direct selling of its products through the internet, however,

P&G does utilize the internet as a valuable resource tool for its domestic and global operations to improve

the efficiency and effectiveness of managing its supply chain, internally share R&D information, logistics

for retail partners, transportation, billing and payment, and for video conferencing and customer

information and feedback. These resources all interact electronically to provide real-time access to

information to those who need it, creating a competitive advantage. Such a system can provide real-time

information regarding costs and other metrics in order to more quickly identify problems or issues and

implement a resolution (See Appendix X For network details).

P&G has also created such centralized e-business sites for the business-to-business (B2B) side.

P&G’s website PGEDI.com provides an electronic exchange of information between P&G and its trading

partners, suppliers, current and prospective retail partners, financial institutions, and transportation

carriers. P&G fully utilized its Electronic Data Interchange (EDI) as a hub of doing business. The Web

Order Management System and Customer Portal assist partners in purchasing, managing and promoting

products by providing critical data, product information, order status and invoices 24 hours a day, every

day. There are also links to track shipments, make payments, receive invoices, and share data.

P&G has invested in Yet2.com Inc., an Internet company that has launched a web site that allows

companies to post their technologies for license or sale.93 P&G has taken a “use it or lose it” approach

since many of its patents are not being used. P&G has also invested in a marketing collaborative software

development company called Emmperative, formed in February 2001, which provides a way of sharing

significant information share data; working simultaneously on the same files; even pulling up research

collected by colleagues in other countries for various brands and re-applying it to other product
 P&G and Unilever 14

developments.”94 Creating this central library for accessing information allows for faster turnover and

more efficient use of time and information. P&G also sells basic marketing and management techniques

on the web site. Initiatives and investments such as these, in accordance with the Dynamic Resource-

based Model of Competitive Advantage,95 are valuable resources that enable P&G to increase its

efficiency and effectiveness, and if complex enough, are difficult for the competition to easily imitate.

Such early involvement and sizable investment in e-business as a tool reinforces P&G's position as a

leader in the industry.

From an end-user standpoint, customers can visit PG.com and sign up for P&G’s monthly emailed

publication, Everyday Solutions, which offers tips, promotions, and free samples, or seek expert advice

about personal care, household, health & wellness, baby & family, or pet care. P&G also has numerous

internet sites for specific brands and products where customers can obtain information, coupons, and

samples, as well as provide feedback, such as pampers.com, charmin.com, iams.com, tide.com and many

others.96

Corporate Strategy

P&G markets over 300 products in 160 different countries. P&G groups its business into two

categories, foundation business and higher growth business. Foundation Business includes Fabric, Home,

Baby, Family care, and snacks and coffee. P&G also has a Market Development Organization organized

in seven97 geographical areas, and among others, a commercial product segment, P&G Chemicals, Health

Sciences, and P&G Europe98 (See Appendix CC for list of businesses and product group descriptions).

P&G’s portfolio includes other ventures related to its core products, i.e., P&G Chemicals, Inc. which

vertically integrates ingredients for some of its products and P&G Health Science which is a research lab

for product development.

P&G divested its juice business in August 2004, acquired Wella in 2003, and most recently, acquired

Gillette.99 Internationally, in 2005 P&G acquired a Pharmaceuticals business in Spain, a Fabric care

business in Europe and Latin America, and increased ownership in its Glad venture with the Clorox

Company. P&G continues to both look for acquisition opportunities that are related to its core business
 P&G and Unilever 15

and develop new products, and they do it well. “In a rapidly globalizing world, focusing on core expertise

and collaborating with partners in innovative ways are the keys to growth”100 which is exactly what P&G

is doing. P&G is aware of their core products and business foundation, but also understands that the

development of new products through innovation, research and development is the key to maintaining its

competitive advantage. P&G should continue its current successful strategy.

Strategy: Unilever

Business-level Strategy

Most companies that hold a market leadership position do so by achieving the right balance between

differentiation and low cost.101 In the consumer products industry, consumers have many choices

regarding which brand they select. With twelve brands that each exceeds €1 billion in annual sales,102

Unilever's market leadership cannot be sustained if costs are significantly higher than a competitor's

products. Similarly, without adequate differentiation, brand loyalty could be difficult to maintain.

For Unilever, the current business-level strategy would be characterized as a differentiation strategy,

where the emphasis is on branding, advertising quality and new product development. Unilever holds the

world number one position in five of six food segments, and two of six segments in Home & Personal

Care (skin and deodorants).103 Unilever holds the (world) number two position in two of the six Home

and Personal Care segments (Laundry and Daily Hair Care) and is number three or less in Household

Care and Oral Care.104 Company resources have been divided into two primary functions, one

responsible for brand development, innovation, and brand strategy ("Categories"), and the other for

managing the business, effective deployment of brands and innovations, and winning with customers

("Regions").105 Their commitment to R&D and innovation is clearly stated through their mission

statement ("Add vitality to life") and their corporate purpose ("Vitality Innovation").106 The alignment of

company resources with its strategy is an important component for sustaining a competitive advantage.107

With its resources aligned and a commitment to funding its significant R&D spending, Unilever should

be well positioned to sustain and improve their current standings. Perhaps the greatest risk to sustaining

their competitive advantage is the high SG&A costs of Unilever's current organizational structure.
 P&G and Unilever 16

Global Strategy

Unilever’s global presence has deep roots, beginning with the founding companies (See Appendix W

for a history of Unilever’s global expansion). At various stages throughout the course of Unilever’s

history, there is evidence that the firm was driven by nearly all five global expansion imperatives -- the

growth imperative, the efficiency imperative, the knowledge imperative, the globalization of customers,

and the globalization of competitors108 -- in its efforts to globalize. However, Unilever’s progress in

exploiting global presence may in fact be hampered by the lack of an overarching global strategy.

With 223,000 employees in over 150 countries,109 Unilever is proud of its deep roots in local cultures

and markets worldwide, which enables it to bring its wealth of knowledge and international expertise to

local consumers. In doing so, Unilever labels itself as a “multi-local multinational”110 and truly believes

that it is creating value through global expansion by adapting to local market differences and tapping the

most optimal locations for activities, resources and product launches.

In an effort to “win Latin America,” Unilever embarked on a number of transformational initiatives,

with the goal of “One ULA” (Unilever Latin America) and a regional approach based on four

cornerstones -- strategic leadership; innovation, market share and brand health; excellence in reaching

consumers and customers; and implementing common processes, systems and shared services. In three

countries in this region, Unilever is the market leader for four out of six primary HPC categories.111

With 44 operating companies in the Asia/Africa region, and brands sold in 98 countries, Unilever is

the market leader in most priority categories in countries where it has a presence (key markets include

India, South Africa, Indonesia, Thailand, Vietnam and the Philippines). In this region, Unilever places

emphasis on: serving and delighting consumers; deepening partnership with customers; and building

relationships with local communities.112

Unilever’s current expansion plans call for a focus on the developing and emerging markets, where the

company enjoys a long-established presence, has established consumer intimacy, and prides itself on

affordability. Thirty-five percent of Unilever’s turnover is in developing and emerging markets, products

are tailored to different income levels, and Unilever’s distributions systems reach deep into these areas.113
 P&G and Unilever 17

Unilever is aiming for “seamless global development,”114 with system-wide automation and data

synchronization, among other things, to make this possible. Further, in at least one of its brands, it has

opted to consolidate its advertising accounts into one global agency network -- an example of centralizing

key business functions -- which, though cost effective, runs counter to being sensitive to local markets,

and “global box-ticking can’t match intuitive knowledge of local markets.”115 However, despite all the

references that Unilever has made to global strategy and its acknowledged global presence, the company

has not articulated an overarching global strategy that clearly outlines the alignment of all functions in the

value chain to that strategy. While it has taken steps to adapt to local markets, and capture economies of

global scale and global scope, as Trevor Gorin, press officer for Unilever has stated, Unilever needs to

“counter threats in specific markets” and transplant learning's from one place to another.116 Unilever

needs to take the next steps in ensuring global competitive advantage, by evaluating the “optimality of its

global network for each activity in its value chain,”117 along each of three dimensions: activity

architecture, locational competencies and global coordination. 118

E-Business Strategy

Unilever’s e-business strategy continues to evolve, from its early membership in a B2B marketplace,

to participation in the GDSN, the implementation of RFID technologies,119 and the creation of an online

buying system for making certain types of purchases from suppliers.120 The firm’s e-business strategy

focuses primarily on the use of the internet and information technologies (IT) to achieve operational

efficiencies in dealing with suppliers and in utilizing its distribution network. The firm’s e-business

strategy is progressing, but its IT initiatives are not unique or rare within this industry, nor are they

inimitable. Unilever has made significant advances – most notably its alliance with Safeway, however,

according to the Dynamic Resource-based Model of Competitive Advantage (DRMCA) (See Appendix

X), Unilever will need to continue to add new and industry-leading IT resources to build and sustain a

resource-based advantage. 121

Many of the products in the personal products industry fall under the category of “experience goods”

– that is, the qualities and characteristics of those products are only recognized after consumption.122 As
 P&G and Unilever 18

such, those products by and large do not lend themselves well to e-commerce – purchases by consumers

via the internet. However, as early as February 2000, Unilever was making plans to invest heavily in

electronic commerce, in an effort to slash costs, radically change its supply chain, and reach out to

consumers. The company recognized that it could achieve significant savings by using the internet to

“buy everything from raw materials to cardboard.”123 Unilever also began using the internet to target

consumers of its products by advertising selected products on websites catering to specific consumer

markets (See Appendix Y for Unilever's early use of the Internet).124

Unilever and P&G are members of Transora,125 a B2B marketplace consisting of 49 companies.126

Transora merged with UCCnet to form 1SYNC, which offers a cost-effective data pool with solutions and

services that support user needs, and helps the industry maximize the value of data synchronization.127

Unilever, as a member of Transora, was part of an enterprise-wide effort in 2004 to test the GDSN – an

internet-based supply chain initiative launched to streamline communication of product information128

(See Appendix Z). Furthermore, in June 2004, Safeway and Unilever heralded the success of their joint

Global Data Synchronization initiative; the first time that product information had been “synchronized

between the leading supply side and demand side data pools” (See Appendix AA). 129 Other examples of

Unilever’s forays into e-commerce and information technologies include: the implementation of radio

frequency identification (RFID) tags,130 the Unilever Private Exchange (which provides secure links

between operating companies and suppliers’ and customers’ systems and to external electronic

marketplaces),131 Ariba, Unilever’s online buying system (which “enables purchases of non-production

items to be made at volume-negotiated prices from selected suppliers”)132 and ISIS, Unilever’s supply

management information system (which helps local, regional and global supply managers to gather and

analyze information quickly, and make appropriate sourcing decisions)133 (For additional information

about Unilever’s utilization of information technology, see Appendix BB).

 P&G and Unilever 19

Corporate Strategy

Corporate strategy addresses the scope of the firm's activities, including the portfolio of businesses that

a firm chooses to engage in, the locations or geography it will cover, and the amount of vertical

integration it employs.134 Unilever's strategy is to have strong customer relationships at the local level,

everywhere they do business, and to be seen as "a truly multi-local multinational".135 Unilever's activities

are spread across six primary business categories, including home care, spreads, savory & dressings,

beverages, ice cream & frozen foods, and personal care,136 and are sold in 150 different countries.137 As

previously mentioned, Unilever is number one or two in all but three segments in which they compete. In

the segments where they are not number one or two, they face intense competition and weak consumer

spending, particularly in Europe.138 Further, the business is in an area that is relatively mature and

segmented.139 It is in cases like this where companies might benefit from a divestiture of low-growth,

under-performing business units in order to free up resources to focus on higher growth, higher profit

opportunities.140 (For additional details see Appendix U: Unilever SWOT Summary).

A decision to divest the brands that are under-performing would not be foreign to Unilever; over the

last several years the brand count has been reduced from over 1,200 to around 400 as part of an overall

restructuring campaign.141 With a stated focus on developing and emerging markets, particularly in the

area of personal care,142 divesting the European frozen foods units would free up resources, provide cash

for additional debt reduction, and help reduce their high SG&A costs. Such a move would better position

Unilever for sustained profitability, however, should Unilever wait too long before executing this

divestiture, they risk a reduction in the value of the business due to further brand depreciation.143

Another option for the cash that would be generated through the divestiture of low-growth businesses

would be to seek out potential acquisitions that offer growth or complimentary products, and would help

consolidate a market. Consolidating markets can help provide sustained competitive advantage by

reducing the overall level of competition.144

 P&G and Unilever 20

Conclusions and Recommendations

This comparison clearly shows why P&G is a leader in the industry. Unilever can learn from P&G

and further develop itself as a leader. Taking into consideration the analysis provided, Global Strategy

Advisors believe that there is considerable opportunity for Unilever to strengthen its profitability and

sustainability; however it will require strong discipline and careful analysis in terms of pursing

appropriate acquisitions and divestitures, cost reduction programs, product and brand differentiation

initiatives, and alignment of strategies. Unilever must remember to base its strategies and activities on

three fundamental questions: Who are our target customers? What value do we want to deliver to these

customers? How will we create this value? Based on the results of our analysis presented in this report,

we recommend the following plan of action for the next 5 years (with annual reviews of progress to date):

• Align Unilever resources to strategies; align strategies to optimize all value chain components.

Regional Unilever strategies are individually strong; develop an overarching global strategy that

provides consistent direction and ensures global synchronization and pooling of knowledge and

best practices. E-Business strategy progressing; continue to invest in IT and internet solutions to

achieve global efficiencies in negotiations, electronic transactions, and communications related to

suppliers, distribution networks, and retailers/customers. Look for opportunities for vertical

integration: cost savings and increased efficiencies can be created with this modification in the

Unilever portfolio.

• Strengthen consumer research and brand differentiation. Continue consumer research efforts to

ensure an understanding of the global marketplace. Continue consumer research to ensure that

products and brands are meeting target customer needs, while identifying new opportunities.

Utilize partnerships and alliances for market understanding and product development.

• Continue investments in R&D initiatives for increasing line extensions and new products;

develop fallback plans should line extension efforts fail, and pursue increased efficiencies and

cost reduction strategies.

 P&G and Unilever 21

• Balance differentiation with low costs and continue reducing SG&A costs. Market leadership

cannot be sustained if your costs continue to exceed that of your competitors’ products. Seek

opportunities to out-source, where economically feasible and ROI is highly probable.

• Aggressively pursue acquisitions and divestitures. Sell off under performing businesses or slower

performing brands (European frozen foods businesses, for example). Identify potential

acquisitions that would help consolidate markets and thereby enhance Unilever’s market

leadership. Use proceeds from divestitures to acquire businesses. Identification of optimal

acquisitions is beyond the scope of this paper; a market analysis is required to identify best

acquisition options that would complement existing brands and product lines, and promote market

consolidation.

• Exploit and expand global presence. Conduct (or contract for the development of) in-depth global

expansion study to identify risks/benefits of potential regions and focus on markets with growth

opportunities. Exploit markets where consumption of household products is low; identify

locations where first mover advantage is possible, and where that competitive advantage can be

sustained. Explore increasing global research centers, but only when alliances/investments are

aligned with Unilever strategies and where projected ROI will enhance pursuit of goals of

profitability and sustainability. Seek alliances that may produce ways to increase speed-to-market

and leverage global opportunities while increasing protection against exchange rate fluctuations.

• Continue to pursue strategic corporate alliances for R&D, when such alliances fit with and add

value to Unilever’s strategies and where ROI justifies cost.

• Increase focused advertising, especially for higher profit line and expansion in emerging

countries.
 P&G and Unilever 22

APPENDIX A: SIC CODE 2844 AND INDUSTRY DESCRIPTION

2844 Perfumes, Cosmetics, and Other Toilet Preparations

Establishments primarily engaged in manufacturing perfumes (natural and synthetic), cosmetics, and
other toilet preparations. This industry also includes establishments primarily engaged in blending
and compounding perfume bases; and those manufacturing shampoos and shaving products, whether
from soap or synthetic detergents. Establishments primarily engaged in manufacturing synthetic
perfume and flavoring materials are classified in Industry 2869, and those manufacturing essential
oils are classified in Industry 2899.
• Bath salts
• Bay rum
• Body powder
• Colognes
• Concentrates, perfume
• Cosmetic creams
• Cosmetic lotions and oils
• Cosmetics
• Dentifrices
• Denture cleaners
• Deodorants, personal
• Depilatories, cosmetic
• Dressings, cosmetic
• Face creams and lotions
• Face powders
• Hair coloring preparations
• Hair preparations: dressings, rinses, tonics, and scalp conditioners
• Home permanent kits
• Lipsticks
• Manicure preparations
• Mouthwashes
• Perfume bases, blending and compounding
• Perfumes, natural and synthetic
• Sachet
• Shampoos, hair
• Shaving preparations: e.g., cakes, creams, lotions, powders, tablets
• Soap impregnated papers and paper washcloths
• Suntan lotions and oils
• Talcum powders
• Toilet creams, powders, and waters
• Toilet preparations
• Toothpastes and powders
• Towelettes, premoistened
• Washes, cosmetic

Retrieved February 7, 2006, from

http://www.osha.gov/pls/imis/sic_manual.display?id=614&tab=description
 P&G and Unilever 23

APPENDIX A, pg 2: GLOBAL INDUSTRY RANKING BY SIC

Current Industry: 2844 - Perfumes, Cosmetics and Other Toilet Preparations
Source: Business & CO Resource Center, Toiletries and Cosmetics." Encyclopedia of Global Industries. Online Edition.
Thomson Gale, 2006.

Elf Aquitaine Paris La Defense $124,532.10 M Sales

Nestle S.A. (NSRGY) Vevey $63,563.20 M Sales

Sunstar Inc. (4913) Osaka $59,038.00 M Sales

Procter and Gamble Co. (PG) Cincinnati, Ohio $56,741.00 M Sales

Unilever London $53,674.00 M Sales

E. Merck Darmstadt $49,882.00 M Sales

Johnson and Johnson (JNJ) New Brunswick, New Jersey $47,348.00 M Sales

Abbott Laboratories (ABT) Abbott Park, Illinois $19,680.00 M Sales

Pharmachim Holding Sofia $19,563.40 M Sales

Sanofi-Aventis (SNY) Paris $19,024.70 M Sales

L'Oreal SA (LORLY) Clichy $18,317.00 M Sales

Wyeth (WYE) Madison, New Jersey $17,358.00 M Sales

Christian Dior S.A. Paris $17,219.90 M Sales

LVMH Moet Hennessy Louis Vuitton S.A. (LVMHF) Paris $17,108.00 M Sales

CP and P Inc. Atlanta, Georgia $16,083.00 M Sales

Hayel Saeed Anam Group of Cos. Taiz $12,157.90 M Sales

IPP Ltd. Dar es Salaam $11,549.50 M Sales

Colgate-Palmolive Co. (CL) New York, New York $10,584.20 M Sales

Gillette Co. Boston, Massachusetts $10,477.00 M Sales

Kao Corp. (KCRPY) Tokyo $8,723.80 M Sales

Unilever United States Inc. New York, New York $8,000.00 M Sales
 P&G and Unilever 24

Appendix B: Global Personal Products Industry, Market Segmentation145

Global Personal Products Market

Segmentation: % Share, by Value, 2004

Oral hygiene
Haircare
12.30%
Make-up 25.50%
13.30%
Fragrances
Skincare
13.70%
18.70%

16.50%
Personal Hygiene

The leading revenue source in the personal products market is hair care, which accounts for
25.5% of the global value.

Appendix C: Personal Products Industry, Five Forces Analysis
PERSONAL PRODUCTS INDUSTRY FIVE FORCES ANALYSIS
(Industry Attractiveness Analysis from the Perspective of Major Incumbents )
I. Barriers to Entry and/or Mobility
Factor
Large firms do not have a cost or performance
advantage in your segment of the industry. For
example, costs do not decline significantly with
volume. (No economies of scale)
There are no “experience curve” economies in this
industry. (This is different from economies of scale.
The existence of experience effects in an industry
means that incumbents are able to have lower costs due
to past learning and experience, and that it would be
difficult for less experienced firms to gain the same
level of performance without going through the same
learning process.)
There are no proprietary product differences in the
industry. (For example, existing companies’ products
are not protected by patents)
There are no established brand identities in the
industry. (Lack of brand equity for incumbents)
Not much capital is needed to enter the industry. (For
instance, used equipment might be available, as in the
airline industry, to start operations)
Newcomers to the industry will be able to access
existing distribution channels.
Newcomers to the industry will have little difficulty in
obtaining the necessary inputs and resources (e.g.,
skilled people, materials, or suppliers) to start business
operations.
The industry rate of growth is high.
P&G and Unilever 25
Yes Comment/Support No
(9) (9)
Large firms do indeed enjoy economies 9
of scale in this industry – and
advantages of size, scale and diversity
of products.146
This industry encompasses a wide 9
variety of products and brands; industry
leaders have been masterminds in
developing innovative products147 –
which suggests that they benefit from
experience curve economies – in many
aspects of their businesses, to include
product development, distribution
networks and supply chain.
Patents abound in this industry. 148 9
These segments are characterized as 9
having well-supported, strong brands,
and superior product development,
commanding premium pricing in
sectors that are less cyclical. 149
Industry entry requires capital to either 9
acquire an existing company or to
construct facilities and purchase all
manufacturing (and R&D) equipment.
Incumbent companies establish 9
contracts with firms in their distribution
channels, and enjoy an advantage
(particularly the industry leaders) due
to size.
While human resources may be 9
available, establishing partnerships
with suppliers and distributors will take
time. Incumbent firms have the
advantage.
9 “Global personal products market grew
by 3.4% in 2004 to reach a value of

The industry has well-defined product standards or
specifications, which newcomers can implement.
Newcomers to the industry will be able to obtain the
necessary licenses and permissions to start operations.
The industry offers newcomers one or more potential
point of entry. (Incumbents haven’t attempted all
possible viable strategies in the industry)
The industry has no history of retaliation by
incumbents against new entrants. Industry economics
(e.g., low fixed, high variable cost, low level of
consolidation) is such that incumbents don’t typically
react to new entries.
Note: The greater the number of NO checks, the more attractive the industry to incumbents.
P&G and Unilever 26
$152.4 billion.” 150 Market is forecasted
to have a value of $182.9 billion in
2009 – an increase of 20.1% since
2004.151 Highest growth area expected
in the Asia-Pacific region, due to
current low penetration of personal
products in large markets (China,
India).152
9 Product standards are fairly well-
defined; many FDA regulations govern
this industry, to include prohibiting
manufacturers from making therapeutic
claims based on the vitamin content of
skin care products. Some U.S. states
have instituted regulations limiting the
use of volatile organic chemicals
(VOCs) as a result of pressure to reduce
the use of VOCs for environmental
reasons. 153 Government regulation,
intervention, consumer concern over
animal rights and environmental
concerns have affected the industry for
more than 100 years.154
Planning and establishing personal 9
products manufacturing facilities
involves permits and adhering to
environmental and government
regulations.
9 There are many different market
segments and niches where a new
entrant might specialize, however
competition is fierce, with leaders
regularly introducing new products.
9 No evidence of retaliation by
incumbents against new entrants,
however industry leaders are goliaths!

II. Bargaining Power of Buyers
Factor
The buyer industry is more consolidated than my
industry.
Buyers buy in large quantities.
My product is a small part of the buyer's cost of inputs.
The buyer does not face any significant costs in
switching suppliers. (That is, my buyers can easily
purchase from my competitors.)
Does the buyer need a lot of important (technical)
information to inform its purchasing decision? (In such
situations, buyers tend to be more knowledgeable about
what they are buying.)
The buyers can vertically integrate backwards into your
business.
III. Bargaining Power of Suppliers
Factor
The supplier industry is more consolidated than my
industry.
My business is not important to the suppliers.
The quality of inputs is critical to my finished
product.
P&G and Unilever 27
Yes Comment/Support No
(9) (9)
Buyer industry will continue to grow, 9
as companies continue to expand
globally. Many products in this
industry are fundamental to health and
cleanliness, and of use to people of all
ages. Product lines target males and
females.
9 A draw here – consumers buy in small 9
quantities; distributors (Wal-Mart, etc.)
purchase in large quantities.
9 Yes, for consumers as well as
distributors.
9 No significant costs associated with
switching suppliers.
While some products are becoming 9
more sophisticated (anti-aging
products; products with vitamins;
natural products), technical information
is not required in making purchasing
decisions.
Many firms are vertically integrated in 9
this industry – large multinational firms
are engaged in every aspect of the
production process.155 It is difficult for
buyers to vertically integrate backwards
into these businesses.
Yes Comment/Support No
(9) (9)
Supplier industry is not any more 9
consolidated than personal care
industry.
Business is important to suppliers. 9
9 Many firms in industry are vertically
integrated156; quality is of prime
concern in each step of production
chain.

My inputs (materials, labor, supplies, services, etc)
are unique or differentiated. That is, I cannot switch
suppliers quickly and cheaply.
I don't have many supplier alternatives.
My suppliers can vertically integrate forward into my
business.
IV. Threat of Substitutes
Factor
My customers have one or more substitutes available
to them.(For example, high fructose corn syrup is a
substitute for sugar in many industrial applications.)
At least one of the substitutes performs well and
could pose a threat to my business.
My customers will not incur much costs or critical
uncertainties in switching to a substitute.
V. Rivalry Among Existing Competitors
Factor
My industry is not growing rapidly or the industry is
in the decline stage of its life cycle.
P&G and Unilever 28
Each market has its own unique 9
preferences and needs; one-size-fits-all
approach will not work when supplying
global markets. Therefore, supplies,
services must be differentiated.157
There are many, many personal care 9
contract manufacturing suppliers for
this industry.158
There are many different components 9
and ingredients, from raw materials
(cultivation of plants and flora used in
fragrances), through the final
production stages159 and packaging and
distribution. It would not be easy for
suppliers to vertically integrate
forward.
Yes Comment/Support No
(9) (9)
9 See appendix D – top four firms make up
only 28% of market share; substitutes are
readily available.
9 While brand loyalty exists for some
firms, substitute products perform well
and can pose a threat.
9 Little costs incurred in switching for
consumers; distributors/retail giants will
need to renegotiate contracts (to possibly
include transportation). Proximity of
manufacturing plants to distributors/retail
stores is an advantage (lower
transportation costs).
Yes Comment/Support No
(9) (9)
“Global personal products market grew 9
by 3.4% in 2004 to reach a value of
$152.4 billion.” 160 Market is forecasted
to have a value of $182.9 billion in
2009 – an increase of 20.1% since
2004.161 Highest growth area expected
in the Asia-Pacific region, due to
 P&G and Unilever 29

current low penetration of personal

The industry is fragmented and exhibits boom-and-
bust cycles.
The industry has excess capacity, or the industry is
cyclical with intermittent excess capacity.
The industry suffers competition from companies
based in low-cost locations.
There are high exit barriers.
Major competitors in my industry are of comparable
size.
There are no significant product differences and brand
identities among the major competitors.
My competitors are mostly specialized in my line of
business and are not diversified.
products in large markets (China,
India).162
This industry is not fragmented; leading 9
firms in this industry are not small,
relative to the size of the industry.163
Excess capacity not evident; industry is 9
not markedly cyclical.
Not the case. 9
9 Investment in facilities, R&D,
distribution networks is substantial,
making exit pricey.
9 Leading firms (those with comparable
levels of differentiation) are similar in
size.
Industry is characterized as having 9
well-supported, strong brands, and
superior product development,
commanding premium pricing in
sectors that are less cyclical. 164
Some industry leaders specialize in 9
limited segments, however most
provide a variety of brands and
products, some of which span multiple
industries.

Overall Ratings of the Five Forces

Yes Comment/Support No
Force
(# (#
(Relative to the Power of Checks) Checks)
Incumbents)

Barriers to entry/mobility 4 8

Bargaining power of buyers 3 4

Bargaining power of suppliers 1 5

Threat of substitutes 3 0

Rivalry among incumbents 2 6

Total No. of Checks 13 23

Note: The greater the number of NO checks, the more attractive the industry is to incumbents.
 P&G and Unilever 30

Appendix D: Global Personal Products Industry, Market Share - % Share by Value,

2004165

Global Personal Products Market Share: % Share, by

Value, 2004

L'Oreal, 8.80%
Procter &
Gamble, 8.50%
Unilever, 7.80%
Colgate-
Palmolive,
Other, 71.20% 3.60%

The leading player in the personal products market is L’Oreal, which accounts for 8.8% of the global
value.

The four-firm concentration ratio (CR4) is calculated by adding the market share of the four largest firms
in the industry. The top four companies in the Global Personal Products industry represent 28.8% of the
market share. A CR4 of 40% or higher represents a consolidated industry; industries that reach that ratio
begin to exhibit oligopolistic behavior.166 While this industry is becoming more consolidated, particularly
as industry leaders merge with or acquire other firms, it would not be characterized as an oligopoly.
P&G’s acquisition of Gillette in 2005 will very likely change this picture in Datamonitor’s 2006 reports.

The following CR4 table shows the total of less than 80% and is therefore not considered highly
consolidated.

Company %share
L'Oreal 8.8
P&G 8.5
Unilever 7.8
Colgate-Palmolive 3.6
TOTAL 28.7

Source: Datamonitor, 2005, May.

 P&G and Unilever 31

Appendix E: Market Growth

Market Volume Growth 2000 – 2004

Year Billion Units % Growth

2000 45.5
2001 46.5 2.2
2002 47.7 2.5
2003 48.5 1.9
2004 49.6 2.2
2.2

Market Value Growth

$ Billion
Year Market Value % Growth

2000 133.6
2001 138.3 3.5
2002 142.9 3.3
2003 147.3 3.1
2004 152.4 3.4
3.3

Source: Datamonitor, (2005, May).

 P&G and Unilever 32

APPENDIX F: Producer Price Index (PPI) For SIC 2844

The following was obtained from the US Bureau of Labor website.

A family of indexes that measure the average change over time in selling prices received by domestic
producers of goods and services. PPIs measure price change from the perspective of the seller. This
contrasts with other measures that measure price change from the purchaser's perspective, such as the
Consumer Price Index (CPI). Sellers' and purchasers' prices may differ due to government subsidies, sales
and excise taxes, and distribution costs.

Series Id: PDU2844#

Industry: Perfumes, cosmetics, and other toilet preparations
Product: Perfumes, cosmetics, and other toilet preparations
Base Date: 8003

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual
1993 165.3 165.9 166.7 167.2 167.2 166.9 166.7 166.7 167.0 166.9 166.9 166.8 166.7
1994 167.2 167.0 166.1 165.9 167.7 166.0 164.6 168.4 166.2 167.4 165.1 166.8 166.5
1995 168.5 165.2 167.9 167.2 168.2 167.3 167.4 165.1 166.6 166.1 167.4 168.0 167.1
1996 169.2 170.0 167.6 167.8 168.6 168.4 168.7 168.2 167.9 168.3 168.4 168.5 168.5
1997 168.9 169.1 168.8 168.8 169.1 169.1 168.8 168.5 168.7 168.8 168.9 169.1 168.9
1998 169.4 170.0 170.6 170.9 172.3 172.4 172.4 172.1 171.8 172.1 172.4 172.5 171.6
1999 172.5 172.6 173.8 172.9 172.8 176.0 176.0 175.4 175.6 176.2 176.7 176.6 174.8
2000 176.5 176.5 176.4 176.7 177.6 177.5 177.3 178.2 178.9 179.1 179.1 179.0 177.7
2001 179.6 179.4 179.2 179.4 179.4 179.4 179.1 179.0 178.9 179.3 179.0 178.8 179.2
2002 179.3 180.3 180.2 180.4 180.1 180.8 180.8 180.7 180.7 180.7 180.6 180.7 180.4
2003 181.0 181.0 181.9 181.9 181.9 181.8 181.7 181.7 181.8 181.9 181.9 181.9 181.7
 P&G and Unilever 33

Appendix G: Industry Growth Rate - Sales

Note: this source did not include Unilever in its categorization of Personal & Household Prods. Industry.

source: http://www.investor.reuters.com/
Data as of 2/9/2006
72 companies

3 Yr. Sales
Growth 5 Yr. Sales
Name TTM Sales $ Rate% Growth Rate%
MktCap Weighted Average 44,319.94 11.29 9.95

McKesson Corporation 85,876.80 17.22 17.01

The Procter & Gamble Company 61,675.00 12.14 7.27
Mitsui & Co., Ltd. (ADR) 32,205.62 12.27 45.65
Colgate-Palmolive Company 11,396.90 7.03 4.83
 P&G and Unilever 34

Appendix H: Average Revenue Growth: INDUSTRY

Name Revenue M Revenue Growth Rev Growth, 3 yrs

Industry Average $44,319.9 11.0% 11.3%

1. McKesson Corporation $85,876.8 15.8% 17.2%

2. The Procter & Gamble Company $61,675.0 10.4% 12.1%

3. Mitsui & Co., Ltd. (ADR) $32,205.6 18.2% 12.3%

4. Colgate-Palmolive Company $11,396.9 7.7% 7.0%

5. Avon Products, Inc. $8,149.6 5.2% 9.5%

6. Newell Rubbermaid Inc. $6,479.8 -2.1% -0.5%

7. The Estee Lauder Co. $6,362.9 9.4% 10.4%

8. Shiseido Co. LTD. (ADR) $5,396.2 2.5% 2.7%

9. The Clorox Company $4,508.0 5.4% 2.9%

10. Ecolab Inc. $4,465.9 11.2% 21.7%

EPS
Name EPS EPS Change (1yr) EPS Growth (3yr)

Industry Average 3.5 14.0% 19.1%

1. Mitsui & Co., Ltd. (ADR) 19.6 61.3% 26.4%

2. Pillowtex Corporation 15.6 203.9% NA

3. The Clorox Company 3.0 26.2% 23.8%

4. The Procter & Gamble Company 2.6 14.7% 19.9%

5. McKesson Corporation 2.5 -124.4% NA

6. Grupo Casa Saba, S.A. (ADR) 2.5 6.8% 12.5%

7. Colgate-Palmolive Company 2.4 4.2% 3.6%

8. Alberto-Culver Company 2.3 47.2% 13.6%

9. USANA Health Sciences, Inc. 1.9 54.4% 137.2%

10. Blyth, Inc. 1.8 18.1% 15.4

Name Gross Margin Operating Margin Net Profit Margin

Industry Average 47.8% 15.4% 9.7%

1. China Techfaith Wireless Comm. Tech. Ltd 61.8% 47.6% 48.5%

2. Pillowtex Corporation 4.6% 35.3% 33.0%

3. The Yankee Candle Company, Inc. 57.8% 24.1% 14.2%

 P&G and Unilever 35

4. Playtex Products, Inc. 52.2% 19.7% 9.5%

5. The Procter & Gamble Company 51.0% 19.4% 12.6%

6. WD-40 Company 48.6% 18.6% 11.0%

7. Parlux Fragrances, Inc. 57.9% 18.4% 11.4%

8. Colgate-Palmolive Company 54.4% 18.2% 11.9%

9. USANA Health Sciences, Inc. 37.0% 17.5% 11.9%

10. DAC Technologies Group 35.7% 16.9% 9.5%

 P&G and Unilever 36

Appendix I: Historical Data – Personal and Household Products

Source: http://www.investor.reuters.com
Note: The industry being studied in this report does not include household products. However, Financial
information on the Personal Products industry as a whole is difficult to obtain without subscribing to a
service such as Hoovers or Datamonitor.

Profitability
Industry Industry Sector S&P 500
Exceeds S&P

Gross Margin – 1yr 47.90% 44.80% 44.60%

Gross Margin – 5yr 47.10% 45.00% 45.30%
EBITD Margin - 1yr 18.90% 17.40% 23.50%
EBITD Margin - 5yr 18.00% 18.90% 20.90%
Op Margin - 1yr 15.60% 13.80% 23.10%
Op Margin - 5yr 14.20% 14.90% 20.30%
Pre-Tax Margin - 1yr 14.80% 10.10% 18.20%
Pre-Tax Margin - 5yr 13.60% 14.00% 14.50%
Net Margin - 1yr 10.10% 5.60% 12.60%
Net Margin - 5yr 9.10% 9.50% 9.60%

Growth
Industry Industry Sector S&P 500
Exceeds S&P

Sales - 1yr 11.00% 5.80% 16.20%

Sales - 5yr 10.00% 7.10% 9.60%
Op Margin - 1yr 15.40% 10.80% 23.30%
Op Margin - 5yr 14.20% 14.90% 20.30%
Net Margin - 1yr 9.70% 4.40% 12.70%
Net Margin - 5yr 9.10% 9.50% 9.60%
Capital Spending - 5yr -3.30% 1.80% 4.20%

Operational Efficiency
Industry Industry Sector S&P 500
Exceeds S&P

Revenue/Employee $709,062.90 $525,871.90 $690,072.30

Net Income/Employee $59,030.90 $45,140.90 $94,007.40
SGA/Sales 33.2 28.5 19.5
Receivable Turnover 12.1 12 27.5
Inventory Turnover 5.9 6.6 13.6
Asset Turnover 1.2 1 0.9
 P&G and Unilever 37

Financial
Industry Industry Sector S&P 500
Exceeds S&P

Returns
ROA - 1yr 8.10% 8.50% 7.50%
ROA - 5yr 10.40% 9.30% 5.50%
ROE - 1yr 29.30% 41.60% 26.80%
ROE - 5yr 52.40% 36.40% 17.50%
ROI - 1yr 11.60% 12.60% 12.30%
ROI - 5yr 15.90% 13.70% 9.20%
Liquidity
Quick Ratio - qtr 1 0.9 1.4
Current Ratio - qtr 1.3 1.2 1.7
Solvency
LT Debt/Equity - qtr 80.4 115.5 90.9
Total Debt/Equity - qtr 105.2 139.9 138.6
Interest coverage - 1yr 16 12.7 38.04
Debt/Equity - 1yr 156 163.4 180.9
Tax
Effective Tax Rate - 1yr 32.70% 30.40% 30.20%
Effective Tax Rate - 5yr 33.60% 32.40% 30.70%
 P&G and Unilever 38

Appendix J: Household and Personal Products Industry

Industry Ranking by Revenues, Profits (US) 167

Revenues, EPS, Total return,

Profit as % of...
Profits Employees

REVENUES PROFITS
1,000
% change $ % change
Rank Company revenues $ millions
from 2003 millions from 2003
rank
Procter &
1 26 51,407 19 6,481 25
Gamble
Kimberly-
2 135 15,401 7 1,800 6
Clark
Colgate-
3 210 10,584 7 1,327 -7
Palmolive
4 Gillette 215 10,477 13 1,691 22
Avon
5 278 7,748 13 846 27
Products
6 Estée Lauder 346 5,790 13 342 7
7 Clorox 445 4,324 4 549 11
Alberto-
8 530 3,258 13 142 -13
Culver
Stanley
9 533 3,224 13 367 240
Works
Energizer
10 593 2,813 26 267 57
Holdings
11 Solo Cup 729 2,116 N/A -50 N/A
12 Blyth 893 1,586 5 97 12
Church &
13 929 1,462 38 89 10
Dwight
14 Rayovac 941 1,439 56 56 260

From the April 15, 2005 issue of Fortune magazine.

 P&G and Unilever 39

APPENDIX K: Company Ranking By Personal Care Revenues Only (Financial Yr 2005).

Source: www.datamonitor.com

http://www.datamonitor.com/~927b43b1a6624e8dbcd8e03d52c57dde~/companies/lists/list/?listID=5876A758-E821-4B88-9979-
0DEA4C54EA5C
List last updated:
5 April 2005
1 The Procter & Gamble Company

2 L'Oreal S.A.

3 Unilever

4 Global Gillette

5 Kao Corporation

6 Avon Products, Inc.

7 The Estée Lauder Companies Inc.

8 Shiseido Company, Limited

9 Colgate-Palmolive Company

10 Kimberly-Clark Corporation
 P&G and Unilever 40

Appendix L: Trend Line, Exports (SIC 2844)

(In millions of dollars)

Value of exports

Million US $

2500

2000
Million US $
1500

1000

500
89

90

91

92

93

94

95

96

97

98
19

19

19

19

19

19

19

19

19

19

2844 Toilet preparations

Year Million US $
1989 694
1990 886
1991 1118
1992 1254
1993 1437
1994 1733
1995 1887
1996 2195
1997 2628
1998 2586

Source: US Dept of Commerce: Bur of the Census; Int’l Trade Administration.

 P&G and Unilever 41

Appendix M: Trend Line, Imports, SIC 2844

(In millions of dollars)

Imports
YR M$
1989 594
1990 634
1991 712
1992 892
1993 956
1994 1035
1995 1156
1996 1257
1997 1410
1998 1618

Source: US Dept of Commerce: Bur of the Census; Int’l Trade Administration.

 P&G and Unilever 42

Appendix N: Fastest Growing Markets, 2004

“Heading into the mid-2000s, the cosmetics and toiletries industry was becoming more global
than ever before, as industry leaders continued to capitalize on developing international markets.
Indeed, in 2004, Argentina, Brazil, Russia and China were the fastest growing markets for
cosmetics, with sales in Argentina alone growing by 17% compared to 2003. China’s cosmetics
market grew by 12.5% in 2004, while India’s increased by 7.7%. Together, China and India
accounted for US$10 billion in sales in 2004. The leading category in terms of growth was skin
care, followed by hair care. Sales of skin care products in Asia reached about US$17.5 billion in
2004, led by Japan.”168
 P&G and Unilever 43

Appendix O: Value Chain Analysis, P&G and Unilever

Value Chain Analysis: Worksheet

Key Differences between Major Competitors
Industry: Personal Products Industry Date: Feb. 10, 2006
P&G Unilever Additional Info
Activity Dimension
Market Product(s) P & G Beauty (34% of Personal care (26% of Industry includes
Positioning portfolio) includes portfolio) includes skin, fragrances, hair
personal cleansing, hair, deodorant, care, make-up,
For each
antiperspirants or perfume, and oral care: oral hygiene
company,
deodorants, cosmetics, Axe, Rexona, Dove, products, personal
explain the
colognes, hair care, Lux, Ponds, Sunsilk, hygiene products
dimension.
feminine protection hair Suave, Vaseline, clear, and skincare
Use the findings color, and skin care Signal, Close Up, products.
to write an products: Sure, Secret, Old Calvin Klein & other
explanation Spice, Max Factor, designer fragrances
within the body Covergirl, Tampax,
of your analysis Always, Herbal Essence,
comparing the Clairol, Infusium,
companies. PhysQue, Pert, Pantene,
Aussie, Head &
Shoulders, Zest, Olay,
Camay, Ivory, Noxzema,
Safeguard, Hugo Boss, &
Giorgio Colognes
Target Customer Lower- income strategy Differentiated for
Segments (product lines) for different income levels
developing markets i.e. affordability-
(affordability). Balanced Lifebuoy, as well as
approach w/ ½ sales from regional
N. America, ½ differentiations, i.e.
International. Sunsilk -Europe, Dove-
N America
Balance between retail
customers (top 5 sell $ 1B
annually, and high
frequency stores
(developing countries). No
dependence on single
channel or customer.
Targeting of Gillette
products into China major
initiative. Beauty focuses
on providing the customer
a “beauty experience”.
 P&G and Unilever 44

Summary of Strategy to achieve Products are tailored

Product-Market balancing of products, regionally for customer
Positioning customers, markets, and differences, i.e. ponds
brands, facilitated by Malaysia, Rexona
Gillette acquisition. ebony- brazil; Sunsilk
for Asia, Indonesia,
Products positioned
turkey, and Latin
through Market
America; and further
Development
expanded across
Organizations in 80
product lines i.e. Lux is
countries, leading brands
body wash in Europe,
organized in seven
hair care in Japan, and
geographies: "North
massage bar in Brazil
America, Western Europe,
Northeast Asia, Latin
America, Central and
Eastern Europe/Middle
East/Africa, Greater China
and
ASEAN/Australasia/India
". Products sold primarily
in grocery stores, discount
stores, through mass
merchandisers,
membership club stores,
and high frequency stores
(neighborhood stores in
developing countries).169
 P&G and Unilever 45

Primary Inbound Awarded # 1 in supply Unilever logistics

Activities Logistics chain management 2004, organization has been
by survey of US retailers. restructuring and
Leaders in inbound consolidating to create
logistics. Early in 2000, uniform regional
began compliance labeling distribution centers
mandates for its suppliers geographically located
to improve efficiencies nearer the customers
and reduce costs, with bar (within 24 hrs
coding and wireless delivery). Also,
technologies. Localized implemented web-
inbound raw materials based solutions
supply to decrease costs & provider (Transplace) to
increase efficiencies. manage inbound
transportation. Have
developed
transportation
leadership team to
analyze and improve
processes from
acquiring raw material
through output to
customers. Also, with
LeanLogistic's Web-
native On-Demand
TMS implemented
value chain solutions
flexible warehousing in
NA to reduce inventory
and Costs, while
delivering on-time.
 P&G and Unilever 46

Operations Since 1999, have ongoing "Trade links" with large

restructuring programs to retailers such as Wal-
minimize costs in Mart and Carrefour;
production and sales. SAP & customer
Decreased global business management software,
services costs over 5 years regional financial
15%, increased sales per shared services. In
employee 40%, and 2005, hired IBM
increased product supply Business Consulting
services. Have strong Services, operating in
partnerships with large India, Poland and
retailers. Large scale Portugal, to provide
distribution operations in purchase-to-pay,
over 160 countries. Large general accounting and
scale manufacturing bill-to-cash functions.
operations located in 42
countries; deploy latest
technologies incl. RFID
for supporting operations.
Use Value Added
Networks for B2B
Customers: linking
financial institutions,
retailers, and
transportation carriers.
Additionally P & G
developed their customer
business development
structure, which teams
sales, logistics, finance,
marketing, and IT to work
with trade customers for
ways to add value to the
consumer. Standardized
manufacturing platforms,
contract manufacturing
when available.

Outbound P & G uses logistics
Logistics specialists to support its
transportation,
warehousing, and picking
solutions such as it's
expanded contract with
Exel to service distribution
centers in France.
Morocco, United States,
Argentina, Canada, China
and Mexico. Interestingly,
P & G also co-developed
software for case picking
and truck-loading for P &
G, and now sells that
software through a joint
venture with Moore and
Associates.
Marketing and Superior sales and
Sales marketing machine.
Awarded # 1 best category
management and
consumer marketing in
survey of US retailers.
Currently have 22 brands
each produce $1B sales
annually (10 $1B brands
in Beauty & Health).
Have focus on word of
mouth programs to impact
influential teens (Tremor).
Customer Enterprise IT Strategy for
Service positive customer impact
and social impact.
Awarded # 1 in 2004 for
most helpful consumer
and shopper information.
Global business service
organizations l in low cost,
high quality locations
Costa Rica, Philippines,
and UK
P&G and Unilever 47
Consolidated transport
business, incl. Ocean
going internationally,
improving efficiencies
and decreasing carrier
bases 70%. Also
implementing web-
based B2B solutions for
managing
transportation
information, including
carrier contracts,
sourcing strategies
spend history.
Strong international Unilever and P &
growth from mega G have strong
brands that are programs for
marketed globally, as corporate social
well as regional responsibility
marketing campaigns,
including partnering for
Dove's American Girl
with Bath & Body and
Mattel Co.'s. and Lynx
deodorant, advertised
on fantasy airline
airplanes. New
branding initiatives for
all products
implemented.
Additionally, Unilever
provides wireless
applications in the field
to gather customer
information from sales
back to the company.
Use IT software for
order management, and
customer relationship
management.

Support Firm 4 Pillars of the firm:
Activities Infrastructure Global Business Units,
Market Development
Organizations, Global
Business Services and
Corporate Functions
working separately and
together. Additionally, 4
Global divisions: P&G
Beauty, P&G Family
Health, P&G Household
Care, and Gillette; in 7
segments: Beauty, Health
Care, Baby Care & Family
Care, Fabric Care & Home
Care, Snacks & Coffee,
Blades & Razors, and
Duracell & Braun.
Human Diverse leadership team-
Resources half of the presidents are
Management from outside the US. The
number of U.S. minorities
and women at the VP and
GM level over the last five
years has doubled. PG has
strong recruiting and
"employee for life" history
(golden handcuffs) from
strong stock purchase
plan, profit-sharing plan,
comprehensive training at
"P&G College", tuition
reimbursement program,
relocation assistance
program and other
benefits.
Heavy recruiting at
business schools and top
universities.
P&G and Unilever 48
2 Global divisions:
foods & home and
personal care; further
organized into mostly
regional business
groups w/brand,
innovation, and
technical centers-heavy
resources deployed,
incl. # of plants,
managers, and support
staff (i.e. Brazil has
approx. 13,000
workers, 754 managers,
and 13 plants)
One Campaign
providing Regional HR
activities, i.e. Latin
America. Strong
recruiting and training
program, global
employment with blend
of local and expatriates
in management roles.
Managers get global
toolkit for diversity
training. Developed
"Community of
Learning Academies"
for ongoing learning
and knowledge sharing
throughout key
functions, such as
finance, HR, IT,
customer development.
Unilever has won
awards on cultural
diversity and leading
company to work for.
Provide flexible work
hours, internal clubs,
tuition reimbursement,
stock options, and other
benefits.
 P&G and Unilever 49

Technology/R&D In 2005, spend approx
$2B on continuing R & D,
and use large network of
partners to support R & D
efforts. To date PG has
29,000-patented
technologies. Have 20
technical centers in 4
continents. Have won the
National Medal of
Technology for innovative
achievement in technology
in the US. Have strong B-
to-B programs such as
"Connect & Develop"
program to find innovation
partners-strong effort now
for packaging initiatives.
Created new product
categories w/in last 4 years
generating $5B retail
sales,
Procurement Leverage Buying Power
w/global procurement and
services (high economies
of scale) and software
based supply chain
management
In 2004, spent E1040, P & G has more
on select, focused Ph.D.'s working in
global projects, their labs world
producing innovations wide than a
and line extensions of combination of
core products. Have faculty from
network of "global Harvard,
research centers" and Berkeley, and
are beginning to work MIT in science
with external and engineering
innovation partners to
expand R & D
capabilities, and speed
to market.
15 Global Supply
Management teams of
approx. 120 people
from 20 nations-Global
purchasing yielded
approximately E700M
in savings in 2004.

Balance and leadership. 2005 Annual Report. (2005). Retrieved from P & g Website February 1,
2006 at: http://ccbn.mobular.net/ccbn/7/1142/1201/
Case study. Unilver foods.solution for Unilever salesforce. (n.d.). Retrieved February 11, 2006 from
http://web.o2.ie/pdf/CR1515_Unilever.pdf
Company Spotlight: Unilver. (2005, August). Retrieved February 2, 2006 from
www.datamonitor.com
Drake, C. (2000, May). Press Release. Retrieved February 11, 2006 from:
http://www.lowrycomputer.com/news/press/pg_Release.doc
Editorial Staff. (2004, October 7). Unilever Aims to Improve Customer Service with On-demand
TMS. Supply & Demand Chain Executive. Retrieved February 11, 2006 from:
http://www.sdcexec.com/article_arch.asp?article_id=6181
Editorial Staff. (2006, February 11). Procter & Gamble Taps Exel for Logistics Services Supply &
Demand Chain Executive. Retrieved February 11, 2006 from:
http://www.sdcexec.com/article_arch.asp?article_id=6153
Fantasy airline gives Unilever dream run. (2006, February 9). Syndey Morning Herald. Retrieved
February 11, 2006 from: http://www.smh.com.au/news/business/fantasy-airline-gives-unilever-
dream-run/2006/02/08/1139379573717.html
Hallet, T. (2005, December, 24). IBM wins 7-year Unilever outsourcing deal. Retrieved February
11, 2006 from: http://news.zdnet.com/2100-9589_22-6007859.html
Harps, L. (2002, March). Making Dollars & Sense Out of Logistics. Retrieved February 11, 2006
from http://www.inboundlogistics.com/articles/features/0302_feature02.shtml
Harps, L. (2002, July). Transformers. Retrieved February 11, 2006 from
http://www.inboundlogistics.com/articles/features/0702_feature05.shtml .
Minow, N. (2004, September). Procter & Gamble's Tremor Targets Young Girls and Minors for Viral Marketing.
Retrieved February 11, 2006 from: http://newmediasphere.blogs.com/nms/2004/10/procter_gambles.html
 P&G and Unilever 50

Prianti, V. Unilever Brazil: A truly local global company. (site retrieved?)

Sobredo, A. Organizing to win in Latin America. (site retrieved?)
2004 Unilever annual review and summary financial statement (citation)
Unilever. (2004). Retrieved February 11, 2006 from:
http://www.legendarylogistics.com/UniLever.htm
Unilever and eSpace: a potentially growing relationship. (2002) Retrieved February 11, 2006 at:
http://www.espace.com.eg/unilever.html
Unilever jobs, careers and hiring information. (n.d.) Retrieved February 11, 2006 from:
http://www.vault.com/jobs-company/Unilever_.html
Welcome to P & G Solutions. (2006). Company Homepage. Retrieved February 1, 2006 at:
http://www.pg.com/en_US/index.jhtml
 P&G and Unilever 51

Appendix P: Procter & Gamble, RBV Analysis

Resources & Sources of Rare Valuable Inimitable Non-

Competitive Advantage substitutable
Core Competencies
Innovation: brands & categories; Yes Yes Possible, but Possible with
300 consumer products in 4 areas volume of heavy R & D
P&G Beauty, P&G Family innovation very
Health, P&G Household Care, hard to imitate
and Gillette ; in 7 segments:
Beauty, Health Care, Baby Care
& Family Care, Fabric Care &
Home Care, Snacks & Coffee,
Blades & Razors, and Duracell &
Braun.
Patents: 29,000 patented Yes Yes Possible, not Possible, not
technologies probable probable.
Requires with
heavy
investment, IP,
and focus
Go to Market Expertise Yes Yes Difficult to Difficult to
Capabilities Achieve Achieve-
Unilever
working on
this now.
Brand Management: Yes Yes Possible, but Difficult in
Development of Name market market leading,
Recognition and Trust leadership esp. non-
difficult to commoditized
overtake brands
Brand Leadership (i.e. Tide, Yes Yes Possible, but Possible but
Downy, Crest, Pampers): 22 difficult in non- difficult esp. in
brands each produce $1B sales commoditized non-
annually (10 $1B brands in Beauty
markets commoditized
& Health)
markets
Resources & Capabilities
Ongoing R & D: 20 technical Yes Yes Yes, but high Difficult to
centers in 4 continents entry costs replace or
compete with
IP
Global Scope Advantage: Large Yes Yes Yes, but high Possible, not
scale sales and distribution replication probable. high
operations in over 160 countries costs replication
costs
Large scale manufacturing Yes Yes Yes, but high Possible not
operations; locations in 42 replication probable. high
countries costs replication
costs
 P&G and Unilever 52

Economies of Scale with Yes Yes Yes Possible, Possible, not

leveraged Buying Power not probable. probable. high
w/global procurement and high replication replication
services, supply chain costs costs
management w/RFID
Economies of Scale with Global Yes Yes Possible, not Possible, not
operations in finance, marketing, probable. high probable. high
logistics, r & d, technology replication replication
costs costs
Growth in Emerging Markets Yes Yes Yes Yes
(but weakness in overexposure
in US & Western Europe)

Value Added Networks for Yes Yes Yes-requires Yes-requires

B2B Customers: linking willing partners willing
financial institutions, retailers, & partner partners &
transportation carriers management partner
management
EDI (Electronic Data Yes Yes Yes Yes
Interchange (only in N.
America-need to extend
reach
Enterprise IT Strategy for cost Yes Yes Yes but Yes but
reductions, positive customer difficult to difficult to
impact, social impact, ROI, implement and implement and
operational efficiency afford afford
enterprise-wide enterprise-wide

Adapted from Lucas (2002)

Colbert, C. (n.d.) Fact Sheet. The Procter & Gamble Company. Retrieved February 5, 2006 from:
http://www.hoovers.com/procter-&-gamble/--ID__11211--/free-co-factsheet.xhtml
Company Profile: Procter and Gamble. (2004, May). Retrieved February 1, 2006 from
www.datamonitor.com
Form 10-Q for PROCTER & GAMBLE CO. (2006, January). Retrieved February 1, 2006 from:
http://biz.yahoo.com/e/060130/pg10-q.html
P & G North America electronics data interchange. (2006, February). Retrieved February 7, 2006
from: http://www.pgedi.com/.
Procter & Gamble awarded enterprise value award by CIO Magazine for work with MatrixOne
on innovative product lifecycle management application. (2004, February). Retrieved
February 10, 2006 from: http://www.matrixone.com/matrixone/press_releases_20040223_p
g.html
 P&G and Unilever 53

Appendix Q: Unilever, RBV Analysis

Resources & Sources of Rare Valuable Inimitable Non-

Competitive Advantage substitutable
Core Competencies
Innovation: NO Yes No No
Strong Brand Recognition and Yes Yes Yes , but Yes, but strong
Trust: 12 Brands with difficult brand
E1Billion; Dove, Magnum acceptance
Hellman's, Knorr, Bird's Eye
Yes Yes Yes , but Yes, but strong
Brand Leadership, i.e. (Dove) difficult brand
acceptance
Strong relationship with Yes Yes Yes , but Yes, but
Retailers, incl. Wal-Mart, difficult requires
Carrefour resources,
relationship
management
Resources & Capabilities
Yes Yes Yes , but Yes, but
Ongoing R & D: high difficult requires strong
spending and ongoing brand IP, and high
extensions spending
Yes Yes Yes , but Yes, Difficult
Global Scope Advantage: difficult to to reproduce
Large scale sales and imitate
distribution operations.
Large scale manufacturing
operations;
JV's for strong positioning-ie Yes Yes Limited Limited
Pepsi, offering additional
supply chain management,
complementary distribution
network
"Path to Growth" Strategy to Yes Yes Opportunity Yes, but with
focus on core products and R to build in continued
& D for development of them lock outs development
further
differentiate
and strengthen
core products
Wide product reach across Yes Yes Limited Limited
stores (present in many
locations)
Growth in Emerging Markets, Yes Yes Yes but Yes but
esp. Peru, Chile, Mexico. 35% difficult to difficult,
of sales in developing & imitate requires heavy
emerging countries. (Need to resources
expand into India and China)
 P&G and Unilever 54

Economies of Scale- Vast Yes/emerging Yes/emerging Yes but Yes, Difficult

resources with leveraged difficult to to reproduce
Buying Power and supply imitate
chain management for reduces
costs However, organizational
structure & differentiated
product lines had been
weakness, but brand sell offs
& corporate reorganizing
improving this.
RFID technologies-weakess, Emerging Emerging Limited Yes but costly
just developing and difficult to
implement
Growth through Acquisition No No Limited Limited
weakness-need to look to this
avenue ongoing
Go to Market Expertise No No Difficult Difficult
Capabilities- current weakness
& focus for improvement

Adapted from Lucas (2002)

Introduction to Unilever. (2005, June). Retrieved February 2, 2006 from:

http://www.unilever.com/Images/Introduction%20to%20Unilever_tcm13-15184.pdf
Unilever Company Profile. (2004, May). Retrieved February 2, 2006 from: ww.datamonitor.com
 P&G and Unilever 55

Appendix R: P&G Financial Analysis

P&G Financial Statements

ANNUAL BALANCE SHEET

In Millions of U.S. Dollars As of As of As of As of As of
(except for per share items) 6/30/2005 6/30/2004 6/30/2003 6/30/2002 6/30/2001
Reclass. Reclass.
6/30/2005 6/30/2004

Cash & Equivalents 6,389.0 4,232.0 5,912.0 3,427.0 2,306.0

Short Term Investments 1,744.0 1,660.0 300.0 196.0 212.0

Cash and Short Term Investments 8,133.0 5,892.0 6,212.0 3,623.0 2,518.0

Accounts Receivable -
Trade, Net 4,185.0 4,062.0 3,038.0 3,090.0 2,931.0
Total Receivables, Net 4,185.0 4,062.0 3,038.0 3,090.0 2,931.0
Total Inventory 5,006.0 4,400.0 3,640.0 3,456.0 3,384.0
Prepaid Expenses 1,924.0 1,803.0 1,487.0 1,476.0 1,659.0
Other Current Assets, Total 1,081.0 958.0 843.0 521.0 397.0
Total Current Assets 20,329.0 17,115.0 15,220.0 12,166.0 10,889.0

Property/Plant/Equipment,
Total - Gross 26,325.0 25,304.0 23,542.0 23,070.0 22,821.0

Accumulated
Depreciation, Total (11,993.0) (11,196.0) (10,438.0) (9,721.0) (9,726.0)
Property/Plant/Equipment, Total - Net 14,332.0 14,108.0 13,104.0 13,349.0 13,095.0
Goodwill, Net 19,816.0 19,610.0 11,132.0 10,966.0 6,969.0
Intangibles, Net 4,347.0 4,290.0 2,375.0 2,464.0 1,331.0
Long Term Investments – – – – –
Other Long Term Assets, Total 2,703.0 1,925.0 1,875.0 1,831.0 2,103.0
Total Assets 61,527.0 57,048.0 43,706.0 40,776.0 34,387.0

Accounts Payable 3,802.0 3,617.0 2,795.0 2,205.0 2,075.0

Accrued Expenses 7,531.0 7,689.0 5,512.0 5,330.0 4,631.0
Notes Payable/Short Term Debt 11,441.0 8,287.0 2,172.0 3,731.0 2,233.0
Current Port. of LT Debt/Capital Leases – – – – –
Other Current liabilities, Total 2,265.0 2,554.0 1,879.0 1,438.0 907.0
Total Current Liabilities 25,039.0 22,147.0 12,358.0 12,704.0 9,846.0

Long Term Debt 12,887.0 12,554.0 11,475.0 11,201.0 9,792.0

Capital Lease Obligations – – – – –

Total Long Term Debt 12,887.0 12,554.0 11,475.0 11,201.0 9,792.0

Total Debt 24,328.0 20,841.0 13,647.0 14,932.0 12,025.0

Deferred Income Tax 2,894.0 2,261.0 1,396.0 1,077.0 894.0

Minority Interest – – – – –
 P&G and Unilever 56

Other Liabilities, Total 3,230.0 2,808.0 2,291.0 2,088.0 1,845.0

Total Liabilities 44,050.0 39,770.0 27,520.0 27,070.0 22,377.0

Redeemable Preferred Stock, Total 1,483.0 1,526.0 1,580.0 1,634.0 1,701.0

Preferred Stock - Non Redeemable, Net – – – – –
Common Stock, Total 2,473.0 2,544.0 2,594.0 1,301.0 1,296.0
Additional Paid-In Capital 3,142.0 2,425.0 1,634.0 2,490.0 2,057.0
Retained Earnings (Accumulated Deficit) 13,204.0 13,611.0 13,692.0 11,980.0 10,451.0
Treasury Stock - Common – – – – –
ESOP Debt Guarantee (1,259.0) (1,283.0) (1,308.0) (1,339.0) (1,375.0)
Other Equity, Total (1,566.0) (1,545.0) (2,006.0) (2,360.0) (2,120.0)
Total Equity 17,477.0 17,278.0 16,186.0 13,706.0 12,010.0

Total Liabilities & Shareholders' Equity 61,527.0 57,048.0 43,706.0 40,776.0 34,387.0

Shares Outs - Common

Stock Primary Issue 2,472.90 2,543.80 2,594.40 2,601.54 2,591.48
Total Common Shares Outstanding 2,472.90 2,543.80 2,594.40 2,601.54 2,591.48

Employees 110,000 110,000 98,000 106,000 106,000

Number of Common Shareholders 1,608,000 1,426,000 1,234,000 1,004,000 1,090,000

ANNUAL INCOME STATEMENT

In Millions of U.S. Dollars 12 Months 12 Months 12 Months 12 Months 12 Months
Ending Ending Ending Ending Ending
(except for per share items) 6/30/2005 6/30/2004 6/30/2003 6/30/2002 6/30/2001
Revenue 56,741.0 51,407.0 43,373.0 40,169.0 39,244.0
Other Revenue, Total – – 4.0 69.0 –
Total Revenue 56,741.0 51,407.0 43,377.0 40,238.0 39,244.0

Cost of Revenue, Total 27,804.0 25,076.0 21,760.0 20,481.0 20,962.0

Gross Profit 28,937.0 26,331.0 21,613.0 19,688.0 18,282.0

Selling/General/Admin. Expenses, Total 18,010.0 16,504.0 11,344.0 10,451.0 10,054.0

Research & Development – – 1,665.0 1,601.0 1,769.0
Depreciation/Amortization – – – – –
Interest Expense(Income) - Net Operating – – – – –
Unusual Expense (Income) – – 755.0 1,027.0 1,723.0
Total Operating Expense 45,814.0 41,580.0 35,524.0 33,560.0 34,508.0

Operating Income 10,927.0 9,827.0 7,853.0 6,678.0 4,736.0

Interest
Expense, Net
Non-Operating (834.0) (629.0) (561.0) (603.0) (794.0)
Interest Income(Exp), Net Non-Operating (834.0) (629.0) (561.0) (603.0) (794.0)
Gain (Loss) on Sale of Assets – – – – –
 P&G and Unilever 57

Other, Net 346.0 152.0 238.0 308.0 674.0

Net Income Before Taxes 10,439.0 9,350.0 7,530.0 6,383.0 4,616.0

Provision for Income Taxes 3,182.0 2,869.0 2,344.0 2,031.0 1,694.0

Net Income After Taxes 7,257.0 6,481.0 5,186.0 4,352.0 2,922.0

Minority Interest – – – – –
Equity In Affiliates – – – – –
Net Income Before Extra. Items 7,257.0 6,481.0 5,186.0 4,352.0 2,922.0

Accounting Change – – – – –
Discontinued Operations – – – – –
Extraordinary Item – – – – –
Net Income 7,257.0 6,481.0 5,186.0 4,352.0 2,922.0

Preferred Dividends (136.0) (131.0) (125.0) (124.0) (121.0)

Income Available to Com Excl ExtraOrd 7,121.0 6,350.0 5,061.0 4,228.0 2,801.0

Income Available to Com Incl ExtraOrd 7,121.0 6,350.0 5,061.0 4,228.0 2,801.0

Basic Weighted Average Shares 2,515.60 2,580.10 2,593.20 2,594.80 2,600.60

Basic EPS Excluding Extraordinary Items 2.831 2.461 1.952 1.629 1.077
Basic EPS Including Extraordinary Items 2.831 2.461 1.952 1.629 1.077

Dilution Adjustment 135.0 127.0 116.0 112.0 106.0

Diluted Weighted Average Shares 2,726.20 2,790.10 2,802.60 2,809.80 2,811.20
Diluted EPS Excluding ExtraOrd Items 2.662 2.321 1.847 1.545 1.034
Diluted EPS Including ExtraOrd Items 2.662 2.321 1.847 1.545 1.034

DPS - Common Stock Primary Issue 1.030 0.930 0.820 0.760 0.700
Gross Dividends - Common Stock 2,595.0 2,408.0 2,121.0 1,971.0 1,822.0

Pro Forma Stock Compensation Expense 334.0 325.0 398.0 442.0 310.0
Net Income after Stock Based Comp. Exp. 6,923.0 6,156.0 4,788.0 3,910.0 2,612.0
Basic EPS after Stock Based Comp. Exp. 2.700 2.340 1.800 1.460 0.960
Diluted EPS after Stock Based Comp. Exp. 2.530 2.200 1.705 1.385 0.925

Interest Expense, Supplemental 834.0 629.0 561.0 603.0 794.0

Depreciation, Supplemental 1,884.0 1,733.0 1,703.0 1,693.0 2,271.0

Total Special Items – – 755.0 1,027.0 1,723.0

Normalized Income Before Taxes 10,439.0 9,350.0 8,285.0 7,410.0 6,339.0
Effect of Special Items on Income Taxes – – 213.0 252.0 632.3
Inc Tax Ex Impact of Sp Items 3,182.0 2,869.0 2,557.0 2,283.0 2,326.3
Normalized Income After Taxes 7,257.0 6,481.0 5,728.0 5,127.0 4,012.7
Normalized Inc. Avail to Com. 7,121.0 6,350.0 5,603.0 5,003.0 3,891.7
Basic Normalized EPS 2.831 2.461 2.161 1.928 1.496
Diluted Normalized EPS 2.662 2.321 2.041 1.820 1.422
P&G and Unilever 58
 P&G and Unilever 59

ANNUAL CASH FLOW STATEMENT (Indirect Method)

In Millions of U.S. Dollars 12 Months 12 Months 12 Months 12 Months 12 Months
Ending Ending Ending Ending Ending
(except for per share items) 6/30/2005 6/30/2004 6/30/2003 6/30/2002 6/30/2001
Restated Restated
6/30/2005 6/30/2005

Net Income/Starting Line 7,257.0 6,481.0 5,186.0 4,352.0 2,922.0

Depreciation/Depletion 1,884.0 1,733.0 1,703.0 1,693.0 2,271.0
Deferred Taxes 650.0 415.0 63.0 389.0 (102.0)
Non-Cash Items – – – – –
Changes in Working Capital (1,069.0) 733.0 1,748.0 1,308.0 713.0
Cash from Operating Activities 8,722.0 9,362.0 8,700.0 7,742.0 5,804.0

Capital Expenditures (2,181.0) (2,024.0) (1,482.0) (1,679.0) (2,486.0)

Other Investing Cash Flow Items, Total (155.0) (8,120.0) 119.0 (5,156.0) 643.0
Cash from Investing Activities (2,336.0) (10,144.0) (1,363.0) (6,835.0) (1,843.0)

Financing Cash Flow Items – – – – –

Total Cash Dividends Paid (2,731.0) (2,539.0) (2,246.0) (2,095.0) (1,943.0)
Issuance (Retirement) of Stock, Net (4,548.0) (3,515.0) (967.0) (331.0) (1,109.0)
Issuance (Retirement) of Debt, Net 3,111.0 5,686.0 (1,882.0) 2,623.0 38.0
Cash from Financing Activities (4,168.0) (368.0) (5,095.0) 197.0 (3,014.0)

Foreign Exchange Effects (61.0) (46.0) 387.0 17.0 (56.0)

Net Change in Cash 2,157.0 (1,196.0) 2,629.0 1,121.0 891.0

Cash Interest Paid 783.0 630.0 538.0 629.0 735.0

Cash Taxes Paid 2,644.0 1,634.0 1,703.0 941.0 1,701.0

P&G Financial Data

2005 2004 2003 2002 2001
Net Income 7,257.0 6,481.0 5,186.0 4,352.0 2,922.0
Sales 56,741.0 51,407.0 43,377.0 40,238.0 39,244.0
Assets 61,527.0 57,048.0 43,706.0 40,776.0 34,387.0
Equity 17,477.0 17,278.0 18,186.0 13,706.0 12,010.0

P&G Dupont Analysis

Net Profit Asset Rtn. On Financial Rtn. On
Margin Turnover Invest. Leverage Equity
2001 0.07 1.14 0.08 2.86 0.24
2002 0.11 0.99 0.11 2.98 0.32
2003 0.12 0.99 0.12 2.40 0.29
2004 0.13 0.90 0.11 3.30 0.38
2005 0.13 0.92 0.12 3.52 0.42
 P&G and Unilever 60

P&G Dupont Analysis

1.20
1.00
0.80 Net Profit Margin
Asset Turnover
0.60
Rtn. On Invest.
0.40 Rtn. On Equity
0.20
0.00
2001 2002 2003 2004 2005

Financial data obtained from Reuters on February 4, 2006 from

http://www.investor.reuters.com/IS/aspx.

P&G's overall financial performance is good, but not stellar. Return on equity has generally risen slightly
over the last several years, although profit margin and return on investment have both leveled off in
the 12%-13% range. Asset turnover efficiency is declining, which is due to increases in inventory,
accounts receivable, cash and goodwill. The firm's financial leverage increased, which is due to
increasing levels of debt that is being carried on the balance sheet, most of which is short-term debt.
Carrying a high short-term debt load may be considered problematic, and is reflected in P&G's
liquidity as measured by the current ratio and quick ratio at .81 and .61 respectively, somewhat below
the sector (non-cyclical consumer goods) averages. In terms of the long-term debt load, it is currently
equal to about 42% of the stockholder's equity, which is also considered a little on the high side,
compared to a more optimal level of 25%-35%. P&G's SG&A costs are in the 25%-30% range,
which is somewhat high, compared to a more optimal level of 12%-15%. Cash flow from operating
activities has also slowed, and in the most recent year was reduced to a level comparable to two years
prior.
 P&G and Unilever 61

Appendix S: Unilever Financial Analysis

Unilever Financial Statements

ANNUAL BALANCE SHEET
In Millions of U.S. Dollars As of As of As of As of As of
(except for per share items) 12/31/2004 12/31/2003 12/31/2002 12/31/2001 12/31/2000
Restated Restated
12/31/2003 12/31/2002

Cash & Equivalents 1,904.5 2,224.9 2,013.7 2,234.5 3,135.7

Short Term Investments 1,219.2 1,789.3 1,471.3 526.8 792.0

Cash and Short Term Investments 3,123.7 4,014.2 3,484.9 2,761.3 3,927.8

Accounts Receivable -
Trade, Net 3,791.0 4,212.2 4,934.6 6,413.1 6,553.5

Receivables - Other 1,491.7 1,419.7 1,696.9 1,938.1 1,779.7

Total Receivables, Net 5,282.6 5,631.8 6,631.5 8,351.1 8,333.1
Total Inventory 4,509.8 5,010.2 5,400.2 6,411.9 6,505.5
Prepaid Expenses 393.6 661.2 687.6 657.6 597.6
Other Current Assets, Total 1,167.6 764.4 566.4 3,032.5 4,849.4
Total Current Assets 14,477.4 16,081.8 16,770.7 21,214.4 24,213.4

Property/Plant/Equipment,
Total - Gross 16,063.8 16,565.5 18,358.3 21,801.3 23,003.7

Accumulated
Depreciation, Total (8,538.3) (8,579.1) (9,434.8) (10,712.8) (11,196.4)
Property/Plant/Equipment, Total - Net 7,525.5 7,986.3 8,923.6 11,088.4 11,807.3
Goodwill, Net 13,810.2 16,149.0 18,394.3 22,458.9 30,308.4
Intangibles, Net 4,596.2 5,107.4 5,935.4 7,499.1 1,453.3
Long Term Investments 242.4 238.8 814.8 1,060.8 1,388.5
Other Long Term Assets, Total – – – – –
Total Assets 40,651.6 45,563.4 50,838.8 63,321.7 69,170.8

Accounts Payable 4,475.0 4,448.6 5,209.4 5,858.6 6,463.5

Accrued Expenses 3,046.9 3,057.7 3,466.9 3,835.4 3,250.9
Notes Payable/Short Term Debt – – – – –
Current Port. of LT Debt/Capital Leases 6,236.6 8,921.2 10,724.8 13,535.3 20,010.8
Other Current liabilities, Total 3,726.1 4,062.2 4,545.8 4,626.2 4,313.0
Total Current Liabilities 17,484.7 20,489.6 23,947.0 27,855.5 34,038.2

Long Term Debt 8,271.9 10,159.6 13,120.1 17,065.9 15,679.8

Capital Lease Obligations – – – – –

Total Long Term Debt 8,271.9 10,159.6 13,120.1 17,065.9 15,679.8

Total Debt 14,508.6 19,080.8 23,845.0 30,601.2 35,690.6

Deferred Income Tax 613.2 896.4 450.0 1,092.0 2,382.1

Minority Interest 434.4 528.0 742.8 796.8 741.6
 P&G and Unilever 62

Other Liabilities, Total 7,206.3 6,385.5 6,936.3 8,119.5 6,525.9

Total Liabilities 34,010.6 38,459.1 45,196.2 54,929.8 59,367.6

Redeemable Preferred Stock, Total – – – – –

Preferred Stock - Non Redeemable, Net – – – – –
Common Stock, Total 504.0 504.0 504.0 504.0 504.0
Additional Paid-In Capital 1,676.5 1,676.5 1,676.5 1,676.5 1,676.5
Retained Earnings (Accumulated Deficit) 6,291.9 6,062.6 4,945.4 3,686.5 5,379.8
Treasury Stock - Common – – – – –
Other Equity, Total (1,831.3) (1,138.8) (1,483.3) 2,524.9 2,242.9
Total Equity 6,641.1 7,104.3 5,642.6 8,391.9 9,803.2

Total Liabilities & Shareholders' Equity 40,651.6 45,563.4 50,838.8 63,321.7 69,170.8

Shares Outs - Common

Stock Primary Issue 571.58 571.58 571.58 571.58 1,122.00
Total Common Shares Outstanding 571.58 571.58 571.58 571.58 1,122.00

Employees 227,000 240,000 258,000 265,000 295,000

Currency Exchange Rate

(most recent) 0.833 Euro / U.S. Dollar

ADR Information 1 Share(s) Per ADR

ANNUAL INCOME STATEMENT

In Millions of U.S. Dollars 12 Months 12 Months 12 Months 12 Months 12 Months
Ending Ending Ending Ending Ending
(except for per share items) 12/31/2004 12/31/2003 12/31/2002 12/31/2001 12/31/2000
Restated Restated
12/31/2003 12/31/2003

Revenue 48,204.7 51,233.6 57,926.3 61,819.3 57,100.7

Other Revenue, Total – – – – –
Total Revenue 48,204.7 51,233.6 57,926.3 61,819.3 57,100.7

Cost of Revenue, Total 24,014.2 25,431.4 28,860.0 32,515.3 30,266.4

Gross Profit 24,190.6 25,802.2 29,066.4 29,304.0 26,834.3

Selling/General/Admin. Expenses, Total 20,097.2 19,222.4 23,057.7 23,368.5 22,871.7

Research & Development – – – – –
Depreciation/Amortization – – – – –
Interest Expense(Income) - Net Operating – – – – –
Unusual Expense (Income) – – – – –
Total Operating Expense 44,111.4 44,653.8 51,917.7 55,883.8 53,138.1

Operating Income 4,093.4 6,579.9 6,008.6 5,935.4 3,962.6

 P&G and Unilever 63

Interest
Expense, Net
Non-Operating (921.6) (1,407.7) (1,735.3) (2,223.7) (1,177.2)
Interest/Invest
Income - Non-
Operating 308.4 472.8 460.8 363.6 526.8
Interest Income(Exp), Net Non-Operating (613.2) (934.8) (1,274.5) (1,860.1) (650.4)
Gain (Loss) on Sale of Assets – – – – –
Other, Net (73.2) (199.2) 129.6 50.4 (44.4)
Net Income Before Taxes 3,406.9 5,445.8 4,863.8 4,125.8 3,267.7

Provision for Income Taxes 938.4 1,832.5 1,926.1 1,822.9 1,683.7

Net Income After Taxes 2,468.5 3,613.3 2,937.7 2,302.9 1,584.1

Minority Interest (928.8) (1,242.0) (922.8) (1,386.1) (774.0)

Equity In Affiliates – – – – –
U.S. GAAP Adjustment 972.0 1,254.1 1,862.5 (273.6) 188.4
Net Income Before Extra. Items 2,511.7 3,625.3 3,877.4 643.2 998.4

Accounting Change 0.0 0.0 626.4 (7.2) –

Discontinued Operations – – – – –
Extraordinary Item – – – – –
Net Income 2,511.7 3,625.3 4,503.8 636.0 998.4

Preferred Dividends (33.6) (32.4) (50.4) (61.2) (52.8)

Income Available to Com Excl ExtraOrd 2,478.1 3,592.9 3,827.0 582.0 945.6

Income Available to Com Incl ExtraOrd 2,478.1 3,592.9 4,453.4 574.8 945.6

Basic Weighted Average Shares 963.41 968.91 976.70 982.80 989.22

Basic EPS Excluding Extraordinary Items 2.572 3.708 3.918 0.592 0.956
Basic EPS Including Extraordinary Items 2.572 3.708 4.560 0.585 0.956

Dilution Adjustment 0.0 0.0 0.0 0.0 –

Diluted Weighted Average Shares 1,012.55 998.14 1,006.60 1,010.00 1,014.28
Diluted EPS Excluding ExtraOrd Items 2.447 3.600 3.802 0.576 0.932
Diluted EPS Including ExtraOrd Items 2.447 3.600 4.424 0.569 0.932

DPS - Common Stock Primary Issue 2.268 2.088 2.040 1.872 1.716
Gross Dividends - Common Stock 2,178.1 2,018.5 1,990.9 1,836.1 1,749.7

Interest Expense, Supplemental 921.6 1,407.7 1,735.3 2,296.9 1,209.6

Interest Capitalized, Supplemental – 0.0 0.0 (73.2) (32.4)
Depreciation, Supplemental 1,195.2 1,078.8 1,604.5 1,749.7 1,822.9

Total Special Items – – – – –

Normalized Income Before Taxes 3,406.9 5,445.8 4,863.8 4,125.8 3,267.7
Effect of Special Items on Income Taxes – – – – –
 P&G and Unilever 64

Inc Tax Ex Impact of Sp Items 938.4 1,832.5 1,926.1 1,822.9 1,683.7

Normalized Income After Taxes 2,468.5 3,613.3 2,937.7 2,302.9 1,584.1
Normalized Inc. Avail to Com. 2,478.1 3,592.9 3,827.0 582.0 945.6
Basic Normalized EPS 2.572 3.708 3.918 0.592 0.956
Diluted Normalized EPS 2.447 3.600 3.802 0.576 0.932

Currency Exchange Rate

(most recent) 0.833 Euro / U.S. Dollar

ADR Information 1 Share(s) Per ADR

ANNUAL CASH FLOW STATEMENT (Indirect Method)

In Millions of U.S. Dollars 12 Months 12 Months 12 Months 12 Months 12 Months
Ending Ending Ending Ending Ending
(except for per share items) 12/31/2004 12/31/2003 12/31/2002 12/31/2001 12/31/2000
Restated Restated
12/31/2003 12/31/2003

Net Income/Starting Line 4,093.4 6,579.9 6,008.6 5,935.4 3,962.6

Depreciation/Depletion 3,430.9 2,445.7 3,098.5 3,414.1 2,344.9
Deferred Taxes – – – – –
Non-Cash Items 667.2 (410.4) 136.8 (860.4) 427.2
Changes in Working Capital (1,549.3) (2,124.1) (1,864.9) (2,040.1) (684.0)
Cash from Operating Activities 6,642.3 6,491.1 7,379.1 6,449.1 6,050.6

Capital Expenditures (1,176.0) (1,249.2) (1,575.7) (1,843.3) (1,633.3)

Other Investing Cash Flow Items, Total 302.4 766.8 1,634.5 4,386.2 (32,488.9)
Cash from Investing Activities (873.6) (482.4) 58.8 2,542.9 (34,122.2)

Financing Cash Flow Items (972.0) (1,432.9) (2,336.5) (879.6) 2,048.5

Total Cash Dividends Paid (2,097.7) (2,090.5) (1,933.3) (1,761.7) (1,687.3)
Issuance (Retirement) of Stock, Net (8.4) (9.6) 10.8 (3.6) (21.6)
Issuance (Retirement) of Debt, Net (3,496.9) (3,490.9) (3,704.5) (6,203.0) 27,505.1
Cash from Financing Activities (6,575.1) (7,023.9) (7,963.5) (8,848.0) 27,844.7

Foreign Exchange Effects – – – – –

Net Change in Cash (806.4) (1,015.2) (525.6) 144.0 (226.8)

Cash Interest Paid – 1,336.9 1,760.5 2,210.5 1,159.2

Cash Taxes Paid 1,653.7 1,707.7 2,180.5 2,646.1 2,080.9

Currency Exchange Rate

(most recent) 0.833 Euro / U.S. Dollar

ADR Information 1 Share(s) Per ADR

 P&G and Unilever 65

Unilever Financial Data

2004 2003 2002 2001 2000
Net Income 2,468.5 3,616.3 2,937.7 2,302.9 1,584.1
Sales 48,204.7 51,233.6 57,926.3 61,819.3 57,100.7
Assets 40,651.6 45,563.4 50,838.8 63,321.7 69,170.1
Equity 6,641.1 7,104.3 5,642.6 8,391.9 9,803.2

Unilever Dupont Analysis

Net Profit Asset Rtn. On Financial Rtn. On
Margin Turnover Invest. Leverage Equity
2000 0.03 0.83 0.02 7.06 0.16
2001 0.04 0.98 0.04 7.55 0.27
2002 0.05 1.14 0.06 9.01 0.52
2003 0.07 1.12 0.08 6.41 0.51
2004 0.05 1.19 0.06 6.12 0.37

Unilever Dupont Analysis

1.40
1.20
1.00 Net Profit Margin
0.80 Asset Turnover
0.60 Rtn. On Invest.
0.40 Rtn. On Equity

0.20
0.00
2000 2001 2002 2003 2004

Financial data obtained from Reuters on February 4, 2006 from

http://www.investor.reuters.com/IS/aspx.

Unilever's financial performance leaves much room for improvement. Net profit and return on investment
margins have remained in the single digits for the last several years. Over the last three years, return on equity has
also dropped off. To Unilever's credit, debt loads have been significantly reduced along with inventories and
accounts receivable, which has improved the company's financial leverage and improved asset turnover. For the
most recent year, their current ratio is .82, and their quick ratio is .57. Although their debt loads have been
significantly reduced, their liquidity is still below industry averages. Unilever's SG&A expenses have run unusually
high at around 37%, and in the most recent year, swelled to more than 40%. Perhaps most significant is the fact that
Unilever's sales have been on a decreasing trend for the last five years. Because Unilever has its ownership spread
across several different countries, its financial results can be greatly impacted by fluctuations in foreign exchange
rates.
 P&G and Unilever 66

Appendix T: P&G SWOT Summary*

Strengths Weaknesses

• Significant scales of scope and economies • Reductions in cash flow levels

in their operations • Mature Markets
• Excellent brand recognition and brand • High customer concentrations
management • High SG&A costs
• Good product innovations • Low R&D expenditures
• Good overall performance
• Supply Chain excellence

Opportunities Threats

• Good growth potential in the Health and • High levels of competition

Beauty segment • Raw material and energy price increases
• Growth opportunities in developing • Potential Gillette integration issues
countries and markets
• Growth potential of domestic retailers

*Information derived from financial statements, company reports, industry news and periodicals and competitor websites. This summary
represents the key issues that Global Strategy Advisors have identified for each category.
 P&G and Unilever 67

Appendix U: Unilever SWOT Summary*

Strengths Weaknesses

• Strong brands and brand management • Very high SG&A costs

• Significant economies of scope and scale • Complex organizational structure
• Abundant resources • Decreasing sales/revenues

Opportunities Threats

• Product portfolio simplification • Foreign currency exchange fluctuations

• Developing markets in developing • Competitors growing through acquisition
countries • Potential failure of internal growth
• Significant debt reduction initiative
• internal growth initiative

*Information derived from financial statements, company reports, industry news and periodicals and competitor websites. This summary
represents the key issues that Global Strategy Advisors have identified for each category.
 P&G and Unilever 68

APPENDIX V: History of Global Expansion P & G

As early as 1915, P & G began movement outside the United States, developing a manufacturing facility for soap
and Crisco, in Canada, and by 1930, P & G created its first subsidiary overseas, purchasing Thomas Hedley & Sons
Co., Ltd., in England.170 In 1935, P & G acquired their first Far East operations, in 1948, moved into Mexico with a
subsidiary in Latin America, and in 1954, moved into continental Europe leasing of a plant in France.171
Understanding the importance of foreign marketplace knowledge, people management, and subsidiary management,
P & G created an Overseas Division to manage the Company's growing international business.172,173

Continuing to identify key markets, in the 1960's, P&G GmbH moved into Germany and established a
manufacturing facility, began Middle East business in Saudi Arabia, and opened their European Technical Center in
Brussels, serving Common Market subsidiaries.174 In the 1970's, P & G acquired a company for manufacturing and
selling P&G products in Japan, and by 1984, highlighting their global development capabilities, P & G introduced
Liquid Tide, with components developed in Japan and Europe, and packaging in the United States. This
accomplishment is an example of their true Global Mindset and orientation to maximizing global strengths. To
further propel their global expansion for increased opportunity, P & G made several more acquisitions in the 1980's,
and reorganized to category management while integrating, purchasing, engineering, manufacturing, and
distribution, to create an effective, well coordinated product supply system.175
From the late 1980's until currently, P&G has formed a manufacturing JV in China and Viet Nam, moved into
Eastern Europe through acquisitions and new business development,176 and secured additional acquisitions such as
Max Factor, Betrix,177 Clairol, and Gillette.178 To better serve the global marketplace, P & G modified their
geographic structure for better strategic integration and coordination globally, creating four regions, North America,
Asia, Latin America, and Europe/ Middle East/Africa,179 created alliances for co-marketing, especially their
pharmaceutical line, and developed the Market Development Organization, which leads country business teams in
building brands in local markets.180 They continue to benefit from ongoing learning, such as their launch of Olay in
Spain, following a roll out in store counters in Asia with lessons shared, and their completed acquisition of the
remaining 20% of its China venture from its partner, giving P & G full ownership.181

* This history is in an expanded presentation format to provide an insightful overview of their growth. The Unilever
history is presented in a table, as the Board of Directors knows this information.
 P&G and Unilever 69

APPENDIX W: A History of Unilever’s Global Expansion182

YEAR GLOBAL EXPANSION

By 1906 Lever Brothers had established factories in three European countries, plus
Canada, Australia and the U.S. and enterprises in the Pacific.
Both Lever Brothers and Jurgens and Van den Bergh had established palm
planting operations – Lever Brothers in the Solomon Islands; Jurgens and
Van den Bergh in German Africa.
1910 Lever Brothers buys first company in West Africa.
1914 Jurgens and Van den Bergh acquire additional small businesses in the
Netherlands; they operate seven margarine factories in Germany.
1920s Jurgens and Van den Bergh own margarine factories in Scotland, Ireland
and England.
1926 New mass market for consumer goods in Argentina
1927 Jurgens and Van den Bergh team up with two European businesses, Centra
and Schicht. Jurgens and Van den Bergh merge to create Margarine Unie
- the Margarine Union. The union gains new members, creating a large
group of European businesses involved in the production of almost all
goods created from oils and fats.
1928 Margarine Unie acquires the French-Dutch Calvé-Delft group with
factories in the Netherlands, France, Belgium and Czechoslovakia.
1929 New mass market for consumer goods in Brazil
1930 Unilever is officially established
1940s During war years, Unilever is broken up, with businesses in German and
Japanese-occupied territory cut off from London and Rotterdam.
Unilever continues to expand in the food market, increasing shareholder
interest in UK businesses and gaining UK rights to deep-freezing methods
(through acquisition of Birds Eye and other companies).
1945 Unilever regains control of its international network, post-war
1948 New mass market for consumer goods in Caribbean
1950s
1954 Sunsilk shampoo available in 18 countries worldwide
1955 Dove soap launched in the U.S.
1960s Manufacturing and packaging initiatives launched in Europe
1961 Good Humor ice cream acquired in U.S.
1962 New mass market for consumer goods in Chile
1963 New mass market for consumer goods in Central America.
Cornetto, the first packaged and branded ice cream cone, begins its launch
in Europe.
1965 New mass market for consumer goods in Mexico.
Cif (everyday cleaner) launched in France.
1970s United Africa Company yields large profits in Nigeria
1971 Unilever acquires Lipton Teas; Unilever’s tea business becomes one of the
largest in the world.
1973 Unilever acquires Frigo ice cream in Spain.
United Africa Company (Unilever subsidiary) becomes UAC International
- having expanded since its inception in the 1920s to trade in 43 countries.
1977 By now, across the nine members of the EEC, Unilever employs nearly
177,000 people in 200 offices and factories.
1978 Unilever acquires National Starch in the U.S.
1980s
1987 Dove soap relaunched in Europe, starting in Italy.
 P&G and Unilever 70

1989 Magnum ice cream launched in Germany.

1990s
1992 Unilever enters the Czech Republic and Hungary, and establishes UniRus
in Russia.
1993 Breyers ice cream (my favorite) acquired in the U.S.; Organics shampoo
first launched in Thailand.
1994 Unilever disposes of United Africa Company.
1996 Hindustan Lever and Brooke Bond Lipton India merge to create India’s
largest private sector company.
Annapurna iodized salt launched in India.
1997 Kibon ice cream acquired in Brazil.
1999 Acquired HPC business Sociedad Industrial Dominicana, in the
Dominican Republic, and a controlling interest in the Varela HPC business
in Colombia.
2000s
2000 Ben & Jerry’s ice cream and Slim Fast foods acquired in U.S.
Amora-Maille culinary business acquired in France.
Acquired controlling interest in leading Ecuadorian detergents, personal
products and food company, Corporacion Jaboneria.
Acquired Honduras-based soaps, foods and beverages company, Grupo
Cressida.
2001 By this time, Unilever has cut the number of its brands from 1600 at the
end of the 20th Century, to 900.
2002 Unilever Health Institute opens regional centres in Bangkok and Accra,
Ghana.

Our history. Retrieved February 14, 2006, from Unilever web site:
http://www.unilever.com/ourcompany/aboutunilever/history/default.asp.

Organising to win in Latin America. Retrieved February 14, 2006, from Unilever web site:
http://www.unilever.com/ourcompany/aboutunilever/history/default.asp.
 P&G and Unilever 71

Appendix X: Dynamic Resource-based Model of Competitive Advantage183

 P&G and Unilever 72

Appendix Y: Unilever’s Early Use of the Internet, 2000

“Mindful that women buy most of the food and consumer products in a household, the company
has taken equity stakes in iVillage.com, and American Web site aimed at women, and
Wowgo.com, a British site that plans to target teenage girls. It is advertising its Lynx male body
spray on the on-line sites of the so-called lad magazines like FHM, which are widely read by
British teens.”184
 P&G and Unilever 73

Appendix Z: Global Data Synchronization Network

Overview of Benefits for Manufacturer and Retailer185

“Global Data Synchronization (GDS) is fast becoming a strategic imperative for many
manufacturers and retailers,” says Nigel Bagley, Head of Customer eBusiness of Unilever and
Co-chairman of the Global Commerce Initiative’s GDS Implementation Program. “Early
adopters understand that GDS is necessary to provide a foundation for future collaborative
commerce and are realizing substantial benefits from implementing GDS.”186

Among the actual business benefits of GDS cited in this article was Unilever Colombia, which
significantly reduced their data inconsistencies and improved new item speed to market by
aligning product information with their trading partners.187
 P&G and Unilever 74

Appendix AA: Safeway, Unilever Complete Global Data Synchronization Project

Safeway, Inc. announced on July 1, 2004 the results of a successful global data synchronization
initiative with Unilever.

“The companies said the significance of this project has international reach, as it represents the
first time that product information has been synchronized by way of interoperability between the
leading supply side and demand side of data pools. …”

“Through the successful completion of this project, Safeway and Unilever have demonstrated
that by adopting industry standards, critical product information exchange between
manufacturers and retailers can be achieved in a scalable and rapid manner. …”

“Tom Barnhart, director E-Business Unilever North America, said his company is pleased to
have collaborated with Safeway in achieving the industry milestone. ‘Unilever is committed to
the GCI Global Data Synchronization vision, and we view this project as an important step
towards the realization of that vision.’”188
 P&G and Unilever 75

Appendix BB: Unilever Initiatives in Information Technology189

INITIATIVE DETAILS

Latin America – “Orchestra”
Advances made in 2004 in this information, process and system
harmonization and simplification program, which was deployed to over 110
sites and 9,400 users in Brazil, Greater Andina, Chile, River Plate and
Mexico, to cover 60% of the Latin American business. Information
Management component has won external recognition for excellence.

Asia A demand and supply network planning tool has been implemented in
eleven countries; the Unilever standard data warehouse is available in nine
countries with twelve countries using the regional e-Commerce hub.

Siebel – automation technology
Sales force automation technology – continues to be deployed across the
business. Good progress in Asia and Latin America using low-cost hand
held devices, sharing learning and best practices across regions. An Asian
trade funds management system has been implemented in two units
(remainder to follow in that region in 2005/2006).

RFID Pilot programs in North America with Wal-Mart (Unilever is one of their
lead suppliers), linked to broader data synchronization efforts to improve
quality and speed of information sharing between Unilever and its
customers.

Unilever Portal Common entry and navigation software technology, deployed to over
40,000 users in Europe and 6,000 users in North America. Enabled a
reduction of over 50 traditional intranet sites in Europe. Unilever has
agreed to a global licensing of this technology; will continue to deploy to
establish one environment for information and access within Unilever.

Appendix CC: P&G Portfolio: Product Groups and Businesses
There are numerous P&G manufacturing and distribution facilities around the world. Therefore, this list
is grouped by product line; in addition the list contains some European/UK facilities.
Segment/ Company Product line/purpose
P&G Beauty Cosmetics, deodorant,
feminine care, fine
fragrances, hair care, hair
colorants, personal cleansing,
professional hair care, skin
care.
P&G Family Health Baby care, family care, oral
care, personal health care, pet
health & nutrition,
pharmaceuticals
P&G Household Coffee, Commercial Products
Care group, Fabric care, Home
care, Snacks.
P&G Chemicals manufacture and marketing of
oleochemicals
P&G Health identifying, developing, and
Sciences using leading health care
technologies in the
development of effective
products -- 200 scientists and
collaboration with external
partners
P&G Products By Country
Europe
Procter & Gamble makes and markets fabric and
Ltd., also known as household care products, such
the Newcastle as the Swiffer Duster and Mr.
Technical Center Proper. The company's Go,
(UK) Give & Grow program
partners with the World
Health Organization and
selects a handful of graduates
from top Western European
P&G and Unilever 76
Product
Pantene, Always, Whisper, Olay, Head &
Shoulders, Tampax, Herbal Essences,
Nice n Easy, Natural Instincts, Wella,
Koleston, Wellaflex, Shockwaves,
CoverGirl, SK-11, Rejoice, Hugo Boss,
Max Factor, Old Spice, Safeguard,
Secret, Lines Feminine care, Zest,
Lacoste, Vidal Sassoon, Ivory, Aussie,
Evax, Camay, Infusium 23, Naturella,
Ausonia, Noxzema, Infasil, Laura
Biagiotti, Sure.
Pampers, Charmin, Crest, Bounty, Iams,
Eukanuba, Actonel, Vicks, Prilosec
OTC, Luvs, Asacol, Kandoo, Dodot,
Puffs, Tempo, Metamucil, Fixodent,
PUR, Scope, Pepto-Bismol, ThermaCare,
Didronel, Kukident, BlendaMed.
Tide, Ariel, Downy, Lenor, Pringles,
Folgers, Dawn, Fairy, Joy, gain, Ace,
Swiffer, Mr Clean, Febreeze, Dash, Bold,
Cascade, Cheer, Bounce, Millstone,
Bonux, Linidor, Daz, Era, Flash, Dreft,
Vizir, Salvo, Viakal, Myth, Alomatik
fatty alcohols, fatty acids, methyl esters,
glycerine, tertiary amines, SEFOSEtm and
OLEAN®.
scientific research in the areas of health,
hygiene, and nutrition

universities to work on
projects before they graduate
Procter & Gamble the division conducts research
Technical Centres related to its parent's health
Limited. Also and beauty care products. A
known as Rusham subsidiary of consumer
Park Technical products giant Procter &
Centre (RPTC), Gamble (P&G).
Procter & Gamble regional arm of parent firm
Western Europe
P&G Nordic brings many of the parent
company's top brands to
consumers in Denmark,
Finland, Norway, and
Sweden.
Graham Webb Graham Webb founded the
International, Inc international hair care
company, which is now
woven into Wella AG.
The Dover Wipes Pampers and LUVS branded
Company, a baby wipes, including their
subsidiary of P&G tubs and refills.
The Folgers Coffee Coffee and related.
Company
Global Gillette The world's #1 maker of
shaving supplies
The Iams Company Eukanuba and Iams premium
dog and cat foods (dry and
canned)
Millstone Coffee roasted coffees, as well as
flavored, decaffeinated, and
organic coffees
Olay Company, Inc. skin care products
Oral-B Laboratories manufacturer of oral hygiene
products (Oral-B was
acquired in 1984 by Gillette
and shifted to P&G in 2005)
P&G and Unilever 77
development of its hair care products,
skin care items and cosmetics, oral care
products, fragrances, deodorants, and
respiratory medicines
makes and markets personal care
products, pharmaceuticals and over-the-
counter medicines (Prilosec).
Hair care education. Its first Graham
Webb Academy opened in London in
1981. The company now has academies
in the US. Webb makes hair care, body
care, and cosmetics worldwide and sells
them through licensed beauty salons,
cosmetologists, and distributors. Wella
AG bought Graham Webb in 2001.
Procter & Gamble acquired Wella in
2004.
Paper machines to manufacture sanitary
wet paper products, converting and
packing operations, raw material storage,
a warehouse, and shipping department
(Sensor, Trac II, and the premium-priced
Mach3, M3Power, and Fusion), the firm
is also a leading battery (Duracell)
manufacturer & makes Braun electric
shavers
Iams also funds research efforts related
to animal dermatology, geriatrics,
allergies, and nutrition
Daily Facials, Total Effects, Regenerist,
Ohm by Olay, OlayComplete, and
OlayQuench.
power and manual toothbrushes, floss,
irrigation products, toothpaste, and
mouth rinse
 P&G and Unilever 78

P&G-Clairol, Inc. part of the company's P&G 130 brands include Herbal Essences,
Beauty division and makes Nice 'n Easy, Hydrience, Ultress, Natural
hair coloring products, hair Instincts, Loving Care, and Balsam
spray, shampoo, conditioner, Color. Clairol helped lay the foundation
and hair styling items for P&G's head-first dive into hair care
after P&G acquired Clairol from the
Bristol-Myers Squibb Company in 2001.
Wella AG Wella UK world's leading haircare P&G owns more than 95% of Wella
firms, it sells professional and shares.
retail haircare products,
cosmetics, and fragrances
Soap operas As the World turns, Guiding
Light
Market North America, Western Marketing, brand building.
Development Europe, Northeast Asia, Latin
Organization America, Central and Eastern
Europe/Middle East/Africa,
Greater China and
ASEAN/Australasia/India
Table Sources: Hoovers.com and pg.com
 P&G and Unilever 79

Appendix DD: Unilever Portfolio: Product Groups & Businesses

Sort By...
Company Name Location Employees Company Type

Al Gurg Unilever Co Dubai, United Arab Emirates 240 Private

Subsidiary
Conopco Inc Owensboro, KY, United States 250 Private Parent
Elais Unilever S.A. Athens, Greece 449 Public Subsidiary
Hindustan Lever Mumbai, India Public Subsidiary
Limited
[Unilever]
Lancaster Cosmetics New York, NY, United States 800 Private
International Subsidiary
PT Unilever Jakarta, Indonesia 3,010 Public Subsidiary
Indonesia Tbk
Suomen Unilever Oy Helsinki, Finland 300 Private
Subsidiary
UBF Food Solutions Franklin Park, IL, United States 400 Private
Subsidiary
Unilever Hammond, IN, United States 350 Private Branch
Unilever Clinton, CT, United States 500 Private
Subsidiary
Unilever (Malaysia) Kuala Lumpur, Malaysia 1,000 Private
Holdings Sdn Bhd Independent
Unilever (Schweiz) Zug, Switzerland 1,453 Public Subsidiary
AG
Unilever Andina Santafé de Bogotá DC, Colombia 723 Private
(Colombia) SA Independent
Unilever Andina SA Guacara, Venezuela 366 Private
Independent
Unilever Arabia Jeddah, Saudi Arabia Private
Group of Companies Subsidiary
Unilever Australia Epping, Australia 1,700 Private
Limited Subsidiary
Unilever Austria Wien, Austria 430 Private
GmbH Independent
Unilever Belgique Bruxelles, Belgium 1,195 Private
SA Subsidiary
 P&G and Unilever 80

Unilever Bestfoods Asheboro, NC, United States 130 Private Branch

Unilever Bestfoods Baltimore, MD, United States 300 Private Branch
Unilever Bestfoods Independence, MO, United States 400 Private Branch
Unilever Bestfoods New Century, KS, United States 210 Private Branch
Unilever Bestfoods Englewood Cliffs, NJ, United 42,000 Private
States Subsidiary
Unilever Bestfoods Merced, CA, United States 150 Private Branch
Unilever Bestfoods Atlanta, GA, United States 150 Private
Subsidiary
Unilever Bestfoods Ridgefield, NJ, United States 25 Private Branch
Unilever Bestfoods Dublin, Ireland 800 Private
(Ireland) Ltd Subsidiary
Unilever Bestfoods Chicago, IL, United States 300 Private Branch
Foodservice
Unilever Bestfoods Little Rock, AR, United States 125 Private Branch
Foodservice
Unilever Bestfoods Bayonne, NJ, United States 175 Private Branch
Foodservice
Unilever Bestfoods Orange, CA, United States 4 Private Branch
Foodservice
Unilever Bestfoods Inveruno, Italy 700 Private
Italia SpA Independent
Unilever Bestfoods Rotterdam, Netherlands 2,000 Private
Nederland BV Subsidiary
Unilever Bestfoods Helsingborg, Sweden 200 Private
Nordic AB Subsidiary
Unilever Bestfoods Merced, CA, United States 150 Private Branch
North America
Unilever Bestfoods Harrisburg, PA, United States 130 Private
North America Subsidiary
Unilever Bestfoods Lisboa, Portugal 175 Private
Portugal SA Subsidiary
Unilever Bestfoods Thayngen, Switzerland 1,050 Private
Schweiz GmbH Subsidiary
Unilever Bestfoods Milwaukee, WI, United States 170 Private Parent
Solutions
Unilever Bestfoods Indianapolis, IN, United States 40 Private Branch
Specialty Products
Unilever Brasil Ltda São Paulo, Wiltshire, Brazil Private
Independent
 P&G and Unilever 81

Unilever Canada Toronto, ON, Canada 3,400 Private

Subsidiary
Unilever Canada Toronto, ON, Canada 350 Private Parent
Unilever Canada Calgary, AB, Canada 35 Private Parent
Unilever Canada Ltd Toronto, ON, Canada 450 Private Parent
Unilever Caribbean Champs Fleurs, Trinidad and 600 Public Subsidiary
Tobago
Unilever Chile HPC Santiago, Chile 2,000 Private
Ltda Subsidiary
Unilever Co Ltd Shanghai, China Private
Subsidiary
Unilever Cosmetics Budd Lake, NJ, United States 100 Private Branch
International
Unilever Cosmetics Neuilly sur Seine, France 70 Private
International France Subsidiary
Unilever Cosmetics Oakville, ON, Canada 42 Private
Intl Subsidiary
Unilever Côte Abidjan, Cote d'Ivoire Private
d'Ivoire Independent
UNILEVER CR spol Praha, Czech Republic 1,499 Private
sro Independent
Unilever Danmark Glostrup, Denmark 134 Private
A/S Subsidiary
Unilever Hamburg, Germany 9,000 Private
Deutschland GmbH Subsidiary
Unilever España SA Madrid, Spain 2,020 Private
Subsidiary
Unilever Foods Barcelona, Spain 505 Private
España SA Independent
Unilever France Rueil Malmaison, France 1,120 Private
Subsidiary
Unilever France Rueil Malmaison, France 1,117 Private
Foods Subsidiary
Unilever France St Ouen, France 1,050 Public
Home and Personal Independent
Care
Unilever France Ice Rueil Malmaison, France 850 Private
Cream and Frozen Subsidiary
Food
Unilever Ghana Tema, Ghana Public Subsidiary
Limited
 P&G and Unilever 82

UNILEVER London, London, United Kingdom 240,000 Public Parent

GROUP
Unilever Hellas SA Piraeus, Greece 500 Public Subsidiary
Unilever Home & Chicago, IL, United States 350 Private
Personal Care Subsidiary
Unilever Home & Greenwich, CT, United States 250 Private
Personal Care Subsidiary
Unilever Home & Baltimore, MD, United States NA Private Branch
Personal Care
Unilever Home & Trumbull, CT, United States 135 Private
Personal Care Subsidiary
Unilever Home & Clinton, CT, United States 500 Private Branch
Personal Care Inc.
Unilever Home & Troy, MI, United States 15 Private
Personal Care USA Subsidiary
Unilever Home and Kingston upon Thames, Surrey, 2,410 Private
Personal Care UK United Kingdom Subsidiary
Ltd
Unilever HPC Clinton, CT, United States 475 Private Parent
Unilever HPC Chicago, IL, United States 50 Private Branch
Unilever HPC Englewood Cliffs, NJ, United 300 Private Branch
States
Unilever HPC USA Jefferson City, MO, United States 600 Private Branch
Unilever Hpc Usa Greenwich, CT, United States 350 Private
Subsidiary
Unilever HPC USA City of Industry, CA, United States 250 Private
Subsidiary
Unilever Hpcusa Palmetto, GA, United States 200 Private Parent
Unilever Ice Cream Loveland, OH, United States 1 Private Branch
Unilever Rueil Malmaison, France 85 Private
International Paris Subsidiary
Unilever Israel Ltd Ben Gurion International Airport, 1,700 Private
Israel Subsidiary
Unilever Italia SpA Milano, Italy 3,500 Private
Subsidiary
Unilever Budapest, Hungary 1,350 Private
Magyarország Kft Subsidiary
Unilever Maroc Casablanca, Morocco Private
Independent
Unilever N.V. Rotterdam, Netherlands 223,000 Public Parent
 P&G and Unilever 83

Unilever Nigeria Plc Lagos, Nigeria 2,000 Public Subsidiary

Unilever Pakistan Karachi, Pakistan 1,920 Public Parent
Limited
Unilever Philippines Manila, Philippines 1,100 Private
Inc Subsidiary
Unilever plc London, United Kingdom 223,000 Public Parent
Unilever Research & Edgewater, NJ, United States 350 Private
Development Co. Subsidiary
Unilever Singapore Singapore, Singapore 260 Private
Pte Ltd Subsidiary
Unilever South Durban, South Africa 4,000 Private
Africa (Pty) Ltd Subsidiary
Unilever Special Greenwich, CT, United States NA Private
Markets Department Subsidiary
(Military Div.)
Unilever Sverige AB Helsingborg, Sweden 1,981 Private
Subsidiary
Unilever Tea Kenya Nairobi, Kenya 16,000 Public Parent
Unilever United Englewood Cliffs, NJ, United 4 Private
States Inc States Subsidiary
Unilever United New York, NY, United States 17,800 Private
States Inc. Subsidiary
Unilever United Cartersville, GA, United States 225 Private
States Inc. Subsidiary
Unilever United Los Angeles, CA, United States NA Private
States Inc. Subsidiary
Unilever United Raeford, NC, United States 500 Private
States Inc. Subsidiary
Unilever United Washington, DC, United States 3 Private
States Inc. Subsidiary
Unilever Usa Englewood Cliffs, NJ, United 700 Private Parent
States

Information obtained February 12, 2006, from: http://globalbb.onesource.com.

 P&G and Unilever 84

APPENDIX EE: P&G e-Business Network

B2B data is exchanged directly through two Value Added Networks (VANs), Global eXchange
Services, Inc. (GXS) and Sterling Commerce. GXS is “a leading worldwide provider of B2B
integration, synchronization and collaboration solutions. The company operates a highly-reliable,
secure global network services platform enabling more than 30,000 businesses, including over
half of the Fortune 500, to conduct business together in real time.”190 Sterling Commerce is a
subsidiary of SBC Communications, Inc. and “is the world's leading provider of multi-enterprise
collaboration solutions for the Global 5000. Sterling Commerce software and services help
companies operate more profitably by giving them visibility and control over the processes they
share with business and supply chain partners.”191 For Data synchronization, P&G uses the
Global Data Synchronization Network (GDSN). GDSN “connects retailers and suppliers, via
their selected Data Pools, to the GS1 Global Registry.”192 P&G is also a member of 1SYNC,
formerly Transora, a B2B marketplace of data for efficient use of data synchronization.193
 P&G and Unilever 85

NOTES
1
Global personal products: Industry profile. (May 2005). Retrieved February 7, 2006, from Business Source Premier.
2
Ibid.
3
Wall Street Transcript, Analyst interview: Household & personal products. (June 20, 2005). The Wall Street Transcript
Corporation. New York, NY.
4
Grant, R. M. (2005). Contemporary strategy analysis (5th ed.). Malden, MA: Blackwell.
5
Perfumes, cosmetics, and other toilet preparations. Encyclopedia of American industries (online edition). Thomson Gale, 2006.
Reproduced in Business and Company Resource Center. Farmington Hills, Mich: Gale Group. Retrieved Feb 6, 2006 from
www.referenceforbusiness.com.
6
Global personal products: Industry profile. P 18.
7
Perfumes, cosmetics, and other toilet preparations.
8
Industry Growth Rate – Sales. Retrieved February 6, 2006, from: http://www.investor.reuters.com.
9
Personal and Household Products: Company Rankings. Retrieved from February 7, 2006, from: http://www.investor.
reuters.com.
10
P&G news: Information on exchange of Gillette shares. (February 7, 2006). Retrieved February 7, 2006, from:
http://www.pg.com/investors/exchange_of_gillette_shares.jhtml.
11
Global personal products: Industry profile. (May 2005).
12
Grant, R. M. (2005). Contemporary strategy analysis.
13
Global personal products: Industry profile.
14
Fitch: U.S. consumer products industry outlook – limited upside in 2006 (Industry overview). (December 8, 2005). Business
Wire.
15
Ibid.
16
Kamenicky, V. (1992). Cleaning preparations and cosmetics – Industry Overview. US Industrial Outlook. US Dept of
Commerce. Retrieved Feb 6, 2006, from http://www.findarticles.com.
17
Perfumes, cosmetics, and other toilet preparations.
18
Fitch: U.S. consumer products industry outlook – limited upside in 2006 (Industry overview).
19
Global personal products: Industry profile. P. 7.
20
Global personal products: Industry profile.
21
Perfumes, cosmetics, and other toilet preparations.
22
Global personal products: Industry profile.
23
Procter and Gamble: Our history. (2006). Retrieved February 6, 2006 from:
http://www.pg.com/company/who_we_are/ourhistory.jhtml.
24
The Procter & Gamble Company. (2005, August). Retrieved February 6, 2006 from:
http://www.datamonitor.com/~d79aa700b01941d1821f3071842b6035~/companies/company/?pid=C895EAE6-25E0-4D36-
B30D-69500B939DC1.
25
Procter and Gamble Annual Report. (2005). Retrieved February 6, 2006 from: http://www.pg.com/investors/
annualreports.jhtml.
26
Ibid.
27
Form 10K Procter & Gamble Co. (2006, January). Retrieved February 2, 2006 from http://biz.yahoo.com/e/060130/pg10-
q.html.
28
Ibid.
29
The Procter & Gamble company. (2006, January). Reuters Fundamentals.
30
Profile. (2006). Retrieved February 1, 2006, from: http://finance.yahoo.com/q/pr?s=PG
31
Ibid.
32
Procter and Gamble Annual Report. (2005).
33
Ibid.
34
Ibid.
35
Ibid.
36
Govindarajan, V., & Gupta, A.K. (2001). The quest for global dominance: Transforming global presence into global
competitive advantage. San Francisco: Jossey-Bass.
37
P&G North America electronics data interchange. (2006, February). Retrieved February 10, 2006, from:
http://www.pgedi.com.
38
Procter & Gamble Company Profile. (2004, May). Retrieved February 1, 2006, from: http://www.datamonitor.com.
39
Profile. (2006). Retrieved February 1, 2006, from: http://finance.yahoo.com/q/pr?s=PG.
40
Overview. (2006). Retrieved February 2, 2006, from: http://www.hoovers.com/procter-&-gamble/--ID__11211--/free-co-
factsheet.xhtml.
41
Dranikoff, L., Koller, T., & Schneider, A. (2002, May). Divestiture: Strategy’s missing link. Harvard Business Review, 80(5).
42
Procter & Gamble awarded enterprise value award by CIO magazine for work with MatrixOne on innovative product lifecycle
management application. Retrieved February 10, 2006, from: http://www.matrixone.com/matrixone/press_release_20040223_
pg.html.
 P&G and Unilever 86

43
Procter and Gamble Annual Report. (2005).
44
Jones, G. (2002, December 9). Unilever-a case study. HBS Working Knowledge. Retrieved February 7, 2006, from
http://hbswk.hbs.edu/tools/print_item.jhtml?id=3212&t=finance.
45
Ibid.
46
Van den Oever, R. (2005, December 20). Unilever simplifies ownership regime, keeps two parents. The Wall Street Journal.
(Eastern ed.). P. B8. Retrieved February 5, 2006, from Business Source Premier Electronic Database.
47
Ibid.
48
Yahoo. (2006). Yahoo finance webpage. Retrieved February 5, 2006, from http://finance.yahoo.com.
49
Unilever. (2005, June). Introduction to Unilever. Retrieved February 7, 2006, from:
http://www.unilever.com/ourcompany/aboutunilever/introducingunilever/default.asp.
50
Company Profile. Unilever.
51
Unilever. (2005, June). Introduction to Unilever.
52
Drier, M., Larsen, P., Burney, E., Jones, N., Epiro, S., Born, P., et al. (2005). Beauty's top 70. Women's Wear Daily; WWD
Beautybiz, 190(53). Retrieved February 5, 2006, from Business Source Premier Electronic Database.
53
Neff, J. (2005, October 31). Unilever 3.0: CEO not afraid to copy from P&G. Advertising Age, 76(44). Retrieved February 5,
2006, from: Business Source Premier Electronic Database.
54
Cescau, P. (2006, February). Unilever results presentation for full year 2005. Retrieved February 6, 2006 from:
http://www.unilever.com/Images/Q4%202005%20Speech_ul%2Ecom_tcm13-32067.pdf.
55
Company Profile. Unilever. (2004, May).
56
Company Profile. Unilever. (2004, May).
57
Ibid.
58
Ibid.
59 Ibid.
60
Ibid.
61
Unilever company profile. (2006). Retrieved February 19, 2006 at: http://biz.yahoo.com/ic/41/41850.html.
62
Grant, R. M. Contemporary strategy analysis.
63
Fact Sheet. (2005, October). Retrieved February 10, 2006, from: http://www.pg.com/investor.
64
Ibid.
65
Earning your trust. Annual Report. (2004). Retrieved February 7, 2006 from:
http://www.pg.com/annualreports/2004/pdf/pg2004annualreport.pdf.
66
P & G Company Profile. (2004, October).
67
Ibid.
68
Ibid.
69
Balance and Leadership. 2005 Annual Report. (2005). Retrieved February 7, 2006, from: http:// www.pg.com.
70
Ibid.
71
Kotler, P. (2003). A framework for marketing management, (2nd ed.). Upper Saddle
River, NJ: Prentice Hall. (pp. 294 & 295).
72
Balance and Leadership. 2005 Annual Report.
73
Grant, R. M. Contemporary strategy analysis.
74
Moore, M. (2003, September). 300 Brands, One Strategy. CIO Magazine. Retrieved February 15, 2006, from:
http://www.cio.com/archive/090103/case.html.
75
Dranikoff, L.,Koller, T., & Schneider, A. Divestiture: strategy's missing link.
76
Lucas H. C., Jr. (2002). Strategies for electronic commerce and the internet. Cambridge, MA: MIT Press.
77
Insana, R. (2006, February 5). Focus on strategies, core business helps P&G progress. Retrieved February 10, 2006, from:
http://www.usatoday.com/money/companies/management/2006-02-05-pandg_x.htm.
78
Fact Sheet (2005, October). Retrieved February 10, 2006 from: http://www.pg.com/investor.
79
Cook, M., & Tryndal, R. (2001, Nov.-Dec.). Lessons from the leaders. Supply Chain
Management Review,5(6). Retrieved from Business Source Premier Database.
80
Ibid.
81
Ibid.
82
Ibid.
83
Ibid.
84
Lucas, H. C., Jr. Strategies for electronic commerce and the internet.
85
Govindarajan, V., & Gupta, A. K. The quest for global dominance.
86
Procter & Gamble awarded enterprise value award by CIO Magazine.
87
Insana, R. (2006, February 5). Focus on strategies, core business helps P&G progress. Retrieved February 10, 2006 from
http://www.usatoday.com/money/companies/management/2006-02-05-pandg_x.htm.
88
Ibid.
89
Unilever. (2005, June). Introduction to Unilever.
 P&G and Unilever 87

90
Fact Sheet (2005, October).
91
Foley, J. (2005, Nov 14). Selling Soap, Razors- And Collaboration. Information Week. Issue 1064, p49. Retrieved from
ABI/Inform. Feb 14, 2006.
92
Ibid.
93
Jacobs, L. (2000, Feb 28). E-Business: Honeywell, P&G and Other Large Firms Offer their Intellectual Property Online. Wall
Street Journal, NY, NY. Pg 1. Retrieved Feb 14, 2006 from: ABI/Inform, UMUC.
94
Nelson, E. (2001, Dec 31). E-business: The Web @ Work / Procter & Gamble. Wall Street Journal, NY, NY. Pg B.4.
Retrieved Feb 14, 2006 from: ABI/Inform, UMUC.
95
Lucas, H. C., Jr. Strategies for electronic commerce and the internet P 10.
96
P&G Website. www.PG.com.
97
Ibid.
98
Ibid.
99
Ibid.
100
Sanford, L. 1/9/2006. Businesses must learn to let go. Business Week Online. Retrieved on Feb 15, 2006, from Business
Source Premier.
101
Grant, R. M. Contemporary strategy analysis.
102
Unilever. (2005, June). Introduction to Unilever.
103
Ibid.
104
Ibid.
105
Ibid.
106
Ibid.
107
Grant, R. M. Contemporary strategy analysis.
108
Govindarajan, V., & Gupta, A. K. The quest for global dominance.
109
Discover Unilever. Retrieved February 14, 2006, from Unilever web site:
http://www.unilever.co.uk/Images/Discover%20Unilever_tcm28-17220.pdf.
110
Our purpose. Retrieved February 14, 2006, from Unilever web site:
http://www.unilever.com/ourvalues/purposeandprinciples/ourpurpose.
111
Organising to win in Latin America. Retrieved February 7, 2006, from: http://www.unilever.com.
112
The DE opportunity – Winning in Asia-Africa. Retrieved February 7, 2006, from: http://www.unilever.com.
113
Unilever. (2005, June). Introduction to Unilever.
114
ITI TranscenData enables seamless global development at Unilever. (April 6, 2004). Retrieved February 14, 2006, from:
http://www.transcendata.com/pr20040406.htm.
115
Multinationals merely pay lip-service to acting local. (February 24, 2005). Marketing Week.
116
Brand mot: Unilever. (March 4, 2005). Brand Strategy. London.
117
Govindarajan, V., & Gupta, A. K. The quest for global dominance. P. 104.
118
Ibid.
119
RFID technology in flux. (January 27, 2005). IT Week. Retrieved February 11, 2006, from Welcome to Access Events
International website: http://www.access-events.com/in_the_news06.asp.
120
About Unilever. (2003). Unilever Annual Report & Accounts and Form 20-F. Retrieved February 11, 2006, from:
http://www.unilever.com/Images/2003%20About%20Unilever_tcm13-5417.pdf.
121
Lucas, H. C., Jr.. Strategies for electronic commerce and the internet. P. 10.
122
Grant, R. M. Contemporary strategy analysis.
123
Buerkle, T. (February 23, 2000). Consumer goods giant to cut 25,000 workers and push e-commerce: Unilever to jettison
brands and trim jobs. International Herald Tribune. Retrieved February 11, 2006, from:
http://www.iht.com/articles/2000/02/23/unilever.2.t.php.
124
Ibid.
125
Emigh, J. (August 5, 2004). GDSN launched for global e-business. eWeek.com – Enterprise News & Reviews. Retrieved
February 11, 2006, from: http://www.eweek.com/article2/0,1759,1633101,00.asp.
126
A2Z of B2B. (May 15, 2004). Retrieved February 11, 2006, from: http://www.a2zofb2b.com/cgi-
bin/MasterFrameReunion.cgi?http%3A//www.a2zofb2b.com/links/pages/eMarketplace/Industry_Sponsored_eMarket.
127
1SYNC. Retrieved February 11, 2006. from: http://www.transora.com.
128
Emigh, J. (August 5, 2004). GDSN launched.
129
Safeway, Unilever exchange data. (June 30, 2004). San Francisco Business Times. Retrieved February 11, 2006, from
http://www.bizjournals.com/sanfrancisco/stories/2004/06/28/daily28.html.
130
RFID technology in flux. (January 27, 2005). IT Week. Retrieved February 11, 2006, from Welcome to Access Events
International website: http://www.access-events.com/in_the_news06.asp.
131
About Unilever. (2003). Unilever Annual Report & Accounts and Form 20-F.
132
Ibid.
133
Our suppliers. (2006). Retrieved February 11, 2006, from Unilever website:
http://www.unilever.com/ourcompany/aboutunilever/introducingunilever/oursuppliers.
134
Grant, R. M. Contemporary strategy analysis.
 P&G and Unilever 88

135
Unilever. (2005, June). Introduction to Unilever.
136
Ibid.
137
Ibid.
138
Ibid.
139
Jones, G. (2002). Unilever-a case study.
140
Dranikoff, L., Koller, T., & Schneider, A. Divestiture: strategy's missing link.
141
Wasserman, T. (2005, December 19). Getting comfy in their skin. Brandweek, 46(46). Retrieved February 5, 2006, from
Business Source Premier Electronic Database.
142
Unilever. (2005, June). Introduction to Unilever.
143
Dranikoff, L., Koller, T., & Schneider, A. Divestiture: strategy's missing link.
144
Grant, R. M. Contemporary strategy analysis.
145
Global personal products: Industry profile. (May 2005).
146
Wall Street Transcript, Analyst interview.
147
Ibid.
148
General information. Retrieved February 12, 2006, from: http://pgsupplier.com/GI_General_Information.htm.
149
Fitch: U.S. consumer products industry outlook – limited upside in 2006 (Industry overview).
150
Global personal products: Industry profile.
151
Ibid. P. 3.
152
Ibid.
153
Perfumes, cosmetics, and other toilet preparations.
154
Toiletries and cosmetics.
155
Ibid.
156
Ibid.
157
Ibid.
158
Who’s who guide to personal care. (November 2005). Global Cosmetic Industry, 173(11).
159
Toiletries and cosmetics.
160
Global personal products: Industry profile. P. 3.
161
Ibid.
162
Ibid.
163
Jain, V.K. (2002). Note on industry structure. Retrieved January 9, 2006, from
http://info.umuc.edu/mba/public/AMBA607/IndustryStructure.html.
164
Fitch: U.S. consumer products industry outlook – limited upside in 2006 (Industry overview).
165
Global personal products: Industry profile.
166
Jain, V.K. Note on industry structure.
167
Industry: Household and personal products. (April 18, 2005). Retrieved February 7, 2006, from:
http://money.cnn.com/magazines/fortune/fortune500/industries/Household_and_Personal_Products/1.html.
168
Toiletries and cosmetics.
169 Ibid.
170
Sanford, L. (January 9, 2006) Business Week Online. Retrieved February 15, 2006, from Business Source Premier.
171
Ibid.
172
Ibid.
173
Govindarajan, V., & Gupta, A. K. The quest for global dominance.
174
Procter and Gamble: Our history.
175
Ibid.
176
Ibid.
177
Ibid.
178
Ibid.
179
Ibid.
180
Form 10-Q for PROCTER & GAMBLE CO. (2006, January).
181
Reuters, P & G. (2006 Jan).
182
Procter and Gamble: Our history. (2006).
183
Lucas, H. C., Jr. Strategies for electronic commerce and the internet. P. 10.
184
Buerkle, T. Consumer goods giant to cut 25,000 workers and push e-commerce.
185
Global data synchronization network: Overview of benefits for manufacturer and retailer. Retrieved February 11, 2006, from
uccnet web site: http://www.uccnet.org/Docs/pdf/benefits%20of%20GDSN.pdf.
186
Capgemini News: Global data synchronization. (March 8, 2005). Retrieved February 11, 2006, from Capgemini website:
http://www.capgemini.com/resources/news/global_data_synchronisation.
 P&G and Unilever 89

187
Ibid.
188
Safeway, Unilever Complete Global Data Synchronization Project. (July 1, 2004). Supply & Demand Chain Executive.
Retrieved February 11, 2006, from: http://www.sdcexec.com/article_arch.asp?article_id=5769.
189
About Unilever. (2004). Unilever Annual Report and Accounts.
190
Global eXchange Services Inc. http://www.gxs.com/industry_cp.htm.
191
Sterling Commerce. http://www.sterlingcommerce.com/About/CompanyInfo.
192
What is Data Synchronization? http://www.pg.com/frameset_fs.jhtml?frameURL=http://www.transora.com.
193
www.pg.com.