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DDP Final Assignment
DDP Final Assignment
DDP Final Assignment
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Course: Product Design and Development Professor: Estuardo Lu
1.1. Analysis of the Mission, Vision and Values and/or Business Principles.
Mission:
We will provide branded products and services of superior quality and value that
improve the lives of the worlds consumers, now and for generations to come. As a
result, consumers will reward us with leadership sales, profit and value creation,
allowing our people, our shareholders and the communities in which we live and
work to prosper.
Vision
Be, and be recognize as, the best consumer products and services company in the
world.
Values
o Integrity:
-We always try to do the right thing.
-We are honest and straightforward with each other.
-We operate within the letter and spirit of the law.
-We uphold the values and principles of P&G in every action and decision.
-We are data-based and intellectually honest in advocating proposals, including
recognizing risks.
o Leadership:
-We are all leaders in our area of responsibility, with a deep commitment to delivering
leadership results.
-We have a clear vision of where we are going.
-We focus our resources to achieve leadership objectives and strategies.
-We develop the capability to deliver our strategies and eliminate organizational barriers.
o Ownership:
-We accept personal accountability to meet our business needs, improve our systems
and help others improve their effectiveness.
-We all act like owners, treating the Companys assets as our own and behaving with the
Companys long-term success in mind.
o Passion for Winning:
-We are determined to be the best at doing what matters most.
-We have a healthy dissatisfaction with the status quo.
-We have a compelling desire to improve and to win in the marketplace.
o Trust:
-We respect our P&G colleagues, customers and consumers, and treat them as we want
to be treated.
-We have confidence in each others capabilities and intentions.
-We believe that people work best when there is a foundation of trust.
Business Principles:
o We Show Respect for All Individuals:
We believe that all individuals can and want to contribute to their fullest potential. We
value differences. We inspire and enable people to achieve high expectations,
standards and challenging goals. We are honest with people about their performance.
o The Interests of the Company and the Individual Are Inseparable:
We believe that doing what is right for the business with integrity will lead to mutual
success for both the Company and the individual. Our quest for mutual success ties
us together. We encourage stock ownership and ownership behavior.
o We Are Strategically Focused in Our Work:
We operate against clearly articulated and aligned objectives and strategies. We only do
work and only ask for work that adds value to the business. We simplify, standardize
and streamline our current work whenever possible.
o Innovation is the Cornerstone of Our Success:
We place great value on big, new consumer innovations.
We challenge convention and reinvent the way we do business to better win in the
marketplace.
o We Value Mastery:
We believe it is the responsibility of all individuals to continually develop themselves and
others.
We encourage and expect outstanding technical mastery and executional excellence.
o We Seek to Be the Best:
We strive to be the best in all areas of strategic importance to the Company.
We benchmark our performance rigorously versus the very best internally and externally.
We learn from both our successes and our failures.
o We Are Externally Focused:
We develop superior understanding of consumers and their needs.
We create and deliver products, packaging and concepts that build winning brand
equities.
We develop close, mutually productive relationships with our customers and our
suppliers.
We are good corporate citizens.
We incorporate sustainability into our products, packaging and operations.
o Mutual Interdependency is a Way of Life:
We work together with confidence and trust across business units, functions, categories
and geographies.
We take pride in results from reapplying others ideas.
We build superior relationships with all the parties who contribute to fulfilling our
Corporate Purpose, including our customers and suppliers, universities and
governments.
In 2015, hair care in Peru recorded growth of 1% in volume terms. In current value terms,
growth was 4%, which was lower than the 8% rise in 2014 due to lower economic growth in
the country. The category continued to grow dynamically in 2015, with the deceleration of the
economy having little impact on this. Shampoo is already a category considered to contain
products of a basic necessity and, as such, will continue growing. In addition, Peruvians are
very aware of the importance of clean and good-looking hair. The percentage of penetration
is 79%.
1.2.2. Market Size - Historical Evolution
Hair care is the largest category within beauty and personal care, representing a 19% value
share in 2015. Hair care is expected to grow at a CAGR of 1% at constant 2015 prices over
the forecast period. It will continue outperforming growth expected for the economy since
consumers consider hair care as a basic need. Any contraction in the economy will not have a
strong effect on hair care; however, it would stimulate purchases of small pack sizes.
1.2.3. Existing Segmentation
The behavior of the NSE, the levels A / B and C, which have further broadened the base of
households buying the categories. In the analyzed about the percentage of distribution of the
purchase of shampoo by socioeconomic levels, we can observe that it does not find any
significant difference because the shampoo is known as a product of the basic basket, since
it is an important element for personal hygiene So all socioeconomic segments use it.
Procter & Gamble Per SRL 31.8 30.4 27.7 27.7 28.4
L'Oral Per SA 16.0 15.4 15.2 15.6 17.2
Unilever Andina Per SA 8.1 10.0 13.0 12.7 12.8
Henkel Peruana SA 10.5 10.1 10.1 10.2 10.8
Cetco SA 10.4 10.3 10.3 10.2 8.4
Natura Cosmticos Sociedade Annima 4.2 4.3 4.4 5.5 4.8
Productos Avon SA 5.1 5.0 4.8 4.2 3.7
Mayorsa SA 3.1 2.7 3.2 3.0 3.5
Plus Cosmtica SA - - - - 0.3
Colomer Andina SA 0.1 0.2 0.3 0.3 0.3
Genomma Lab Per SA - 0.2 0.3 0.3 0.3
Oriflame Per SA 0.3 0.3 0.3 0.2 0.3
Qumica Suiza SA 0.3 0.3 0.3 0.2 0.3
Distribuidora Las Poncianas SA 0.2 0.2 0.2 0.2 0.2
Unique SA 0.2 0.2 0.2 0.2 0.2
Percosm Peru SAC 0.2 0.1 0.1 0.1 0.2
California 2000 SAC 0.1 0.1 0.1 0.1 0.1
Colgate-Palmolive Per SA 0.1 0.0 0.0 0.0 0.0
Alicorp SAA 1.0 0.2 - - -
Hipermercados Metro SA - - - - -
Others 8.4 10.1 9.5 9.2 8.1
Total 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade
sources
1.2.7.3. Brand Preferences
Source: Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews,
trade sources
SUPPLIERS
Suppliers for manufacture of shampoo: inputs, machinery, equipment,
products, merchandise
Information on courses, classes and institutes for manufacture of
shampoo
Local, land and office for manufacture of shampoo
EXPORT
Steps and procedures for export
Export Simplified: Exportafcil, Serpost, FEDEX, DHL, TNT, UPS
Easy Export
Customs Brokers, freight forwarders, transport, insurance,
DUA Customs Declaration, Certificate of Origin, Health Record,
Record Plant Health, Animal Health Check, Visa Textile,
+ Incoterms: FOB, CIF
+ Purchase agreement international
BUSINESS PARTNERSHIP
Excess manufacturing shampoo
Business Association
Joint venture
Contract Management
Joint Venture
Consortium
BIG CLIENTS
Supplier of large companies
Shopping state
1.2.8.3. Resale Prices and Commercialization Margins
EXTERNAL ANALYSIS
INTERNAL ANALYSIS
1.6.2. Volumes
There is not an exact report of volumes(units) that the company sales, but we have
reports in percentages about it.
Procter & Gamble, the world's largest maker of household products, reported sales
declines due to the strength of the dollar continued to weigh on its external
markets. P & G said it expected sales next year will fall by about 5% due to
strong dollar. P & G has sold around 50 brands since 2014 in a bid to restructure
its portfolio and focus on product lines fastest growing. The latest round of
divestitures comprised 43 brands. Revenue fell 9.2%. P & G, which gets almost
two-thirds of its revenue from international markets, has been raising prices to
offset the impact of the dollar, but this led customers to favor cheaper local
alternatives. Net income attributable to P & G fell 80% to US $ 521 million, or 18
cents per share, in the fourth quarter, the company said.
The table above shows that the company Procter & Gamble has a penetration of 54.4% in
the Lima market only in its three main brands.
When we talk about loyalty of the brand, we could find the percentage of consumers that
prefer only one brand of shampoo available in the peruvian market, which are the following:
High Low
1.7.2. Receivables
1.7.3. Inventories
1.7.4. Plant and Equipment and Infraestructure
- CPFR Pre scenario - Bullwhip Effect: The concept emerged when the logistics
executives at Procter & Gamble (P&G) examined the order patterns for one of their
best-selling products Pampers. Its sales at retail stores were fluctuating, but the
variability was certainly not excessive. However, as they examined the distributors
orders, the executives were surprised by the degree of variability. When they looked
at P&Gs orders of materials to their suppliers, such as 3M, they discovered that the
swings were even greater.At first glance, the variability did not make sense. While the
consumers, in this case, the babies, consumed diapers at a steady rate, the demand
order variability in the supply chain were amplified as they moved up the supply chain.
P&G called this phenomenon the "bullwhip" effect:Separate demand forecast done by
players in supply chain.Price fluctuations manufacturers and distributors periodically
have special promotions like price discounts, quantity discounts, coupons, rebates,
and so on.Players in supply chain after receiving order accumulates demands (Order
Batching) before issuing an order. Rationing and shortage gaming.
- Benefits
Improved responsiveness to consumer demand , the reduction of out-of-
stocks and shorter cycle times leads to a more responsive and reliable supply
chain for P&G, thereby improving on-shelf availability and increasing
consumer satisfaction. Through CPFR P&G reduced replenishment time by
20%.
Greater forecast accuracy with single shared forecast Sharing a single
forecast along the supply chain enables P&G to benefit from potential
synergies and brings together trading partners efforts. Depending on their
position in the supply chain and supply chain activities, trading partners may
have different views of the market and information. Combining this knowledge
is the foundation for greater forecast accuracy. Through CPFR forecast
accuracy improved by 20%.
Increase in sales Collaboration on planning and forecasting potentially
reduces out-of-stocks, lost sales and increases on-shelf availability which
leads to increase in sale of P&G.
Cost reduction P&G has aligned the production schedule with the agreed
forecast, so costs has been reduced by decreasing set-up times, effort
duplications and variations.
Improved relationship between the trading partners, the relationship between
P&G, wall mart has improved when collaboration takes place. Trading partners
will gain a better understanding of their respective businesses by regularly
exchanging information and establishing direct communication channels.
Inventory reduction Increased forecast accuracy facilitates a decrease in the
safety stock, reducing inventory levels and increasing on-shelf availability.
Thus the inventory cost for P&G has reduced.
2. Consumer Driven Supply Network (CDSN)
1.8.4. In Marketing
In marketing spending, they have delivered strong savings over the last two years in non-
working agency fees and commercial production costs. They have been reinvesting these
savings in marketing programs that improve the reach, frequency or continuity of our
advertising, and in programs such as product sampling that generate trial of the superior
products.
1.8.5. In Sales
On the annual report for 2016 up until now these are the following results for sales:
We have to wait until the end of the year to conclude if sales declined in the year 2016 or not.
In the following world map the distribution of sales can be seen. This shows that Latin America
is not a big market comparing it with the rest of the world. They are still developing their
products here, but this will take time since these countries might not yet be ready for the
innovative products.
1.8.6. In Outbound Logistics or Distribution
The evolution in the lines of distribution and logistics allow them to generate more value for
their consumers and commercial customers. They believe in the products, and highlight the
strategy that P&G efficiently reaches retail and wholesale customers, backed by innovative
marketing programs. As the industry began to shift from plant-based sourcing to global
corporate-based sourcing, consumer goods companies, which traditionally leveraged on in-
person negotiations with supplier found the process slow and nontransparent. Further, P&G's
logistics was highly fragmented because procurement decisions for outbound logistics were
made in local and regional customer service units spread globally.
1.8.9. In Finance
Inside their company they have multiple employees for different financial aspects:
Financial Analyst
Cost Analyst
Customer Business Development Analyst/Market Strategy Analyst
Customer Accounting Manager
Assistant Service Manager
Internal Controls Auditor
Corporate Accountant
Tax Analyst
This all in order to go from managing the profitability of one of the brands to being a key
financial leader at one of the manufacturing operations or in our cutting-edge shared services
organization. Looking at the facts of 1.8.5 other financial details are showed.
1.8.12. In Supplying
P&G has a network of over 75.000 suppliers. They work together with local companies in
order to be environmentally more friendly. Every year P&G gives awards for the most
excellent suppliers and put their names on the website to known by others and give them that
extra support and recognition. All to keep them as a supplier because they need a globally
widespread supplier network to reach all of their customers.
STRATEGIC DIAGNOSTIC
ANEXS
Presentacin final
The plans have to be presented oral and written in class. Each team have a maximum
of 40 minutes to expose their proposal with 5 minutes for questions.
Plans must be concise, clear with high level of analysis and synthesis.
High impact presentation would receive extra grades.
Qualification criteria:
Criteria Grades
Group 80%
Individual 20%
Participation in Presentation 6
Answers to questions 6