MOSP Project

By –
Siddharth Sood – 180103213
Sarthak Khandelwal – 180103186
Yuvraj Bhatia – 180103263
Shivani Rana – 180103199
Soumya Jain – 180103219
Srinjoy Sen – 180103226
 Procter and Gamble

P&G is one of the largest and amongst the fastest growing consumer goods companies in
India. Established in 1964, P&G India now serves over 650 million consumers across India.
Its presence pans across the Beauty & Grooming segment, the Household Care segment as
well as the Health & Well Being segment, with trusted brands that are household names
across India. These include Vicks, Ariel, Tide, Whisper, Olay, Gillette, Ambipur, Pampers,
Pantene, Oral-B, Head & Shoulders, Wella and Duracell. Superior product propositions and
technological innovations have enabled P&G to achieve market leadership in a majority of
categories it is present in.

P&G operates under three entities in India - two listed entities “Procter & Gamble Hygiene
and Health Care Limited” and ‘Gillette India Limited’, as well as one 100% subsidiary of the
parent company in the U.S. called ‘Procter & Gamble Home Product.

Business Group/
Corporate Entity

P&G

Selected SBU

Personal
Skin Cream Detergents Razors Toothbrush Shampoo Diapers
Vision and Mission Framework
Hygene

Procter & Gamble’s vision statement is “Be, and be recognized as, the best consumer
products and services company in the world.”
Procter & Gamble’s mission statement is to provide branded products and services of
superior quality and value that improve the lives of the world’s consumers, now and for
generations to come.

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 Corporate Strategy of the Firm

 Being proactive in the digital

space (30% increase in sales
from FY16 to FY17)  Keen focus on
 Reinventing media from Organizational Structure
wasteful mass blasting to  Talent acquisition
mass reach with one-to-one strategy
precision, enabled by data  Responsibility towards
and technology the shareholders
 Moving from mass cluttering Arena
to precision advertisement
 Reinventing agency
partnership by moving from
outsourcing to in housing

Economics
Staging Logic
 Core EPS growth Vehicles
in high single
digits
 104% free
cashflow
productivity
 Returning $14
billion cash to
Differentiator
shareholder s
FY18-19
 Superior products
 Superior packaging
 Portfolio Strengthening conveying brand equity
 Multi category production site –  Exceptional brand messaging
plants supply several category,  Collaborative retail execution
production on demand, Globally  Maximizing shareholder
scalable technology value
 Co locating subscribers in plant to  Digitized planning –
reduce truck traffic & distribution supporting customer for an
cost incremental order in less than
 Increased synchronizations with 24 hours
supplier to lower inventory &  Drives innovation as a market
other costs leader (1.6X R&D spend as
compared to the competitor )

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 GE MCKINSEY MULTIFACTOR PORTFOLIO MODEL
ALLOCATING 2000 CRORE

It is a framework that evaluates business portfolio, provides further strategic implications and
helps to prioritize the investment needed for each business unit. The four SBUs that we chose
were (Refer Table 1)
1. Detergents
2. Shampoo
3. Razors
4. Toothbrush
Detergents
P&G has two brands in the fabric care category Ariel and Tide. They have a combine market
share of 10.2% and a total revenue of 26,824 Million INR. We will allocate 750cr for this
SBU as investment for seeking opportunities in its market size, demand variability and its
margin.
Razors
Gillette is the dominant market leader in the razors and disposable blade category. It lies in
the strong competitive positioning as it has huge market share (52%) with revenue of 19,053
Million INR. For this category 750cr needs to be allocated. The investments should be
provided for R&D, advertising, acquisitions and to increase the production capacity to meet
the demand in the future.
Shampoo
The brands owned by P&G in this category are Head&Shoulders and Pantene. Both have a
combined market share of 24% and the revenue is 19,043 Million INR. We can allocate
500cr for Shampoo sbu as it has returns but less as compared to other sectors, so it should
allocate funds to segment the market for better positioning
Toothbrush
Oral B has a market share of 26% with revenues of 7,280 Million INR. The market
competitiveness in this category is very medium. No investment should be made on the
toothbrush category as it falls under the box of holding investments.

SWOT Analysis

SBU – Shampoos
External Environment -

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  Opportunities: A business opportunity is an area of buyer need in which a firm can
perform profitably
 O1: Salon professional haircare market is the fastest growing hair care
segment with a growth rate of 15%
 O2: Colorants market is the next fastest growing segment with a growth rate
of 12.5%
 O3: premium haircare segment is growth, though with at a slower rate (5.6%
in 2017 to 5.9% in 2018)
 O4: Even though the market for haircare was declining, it has now growing
back slowly again (2015 – 8.1%, 2016 – 7.6%, 2017 – 7.9%, 2018 – 8%, 2015
– 8.1%, 2015 – 8.1%,)
 O5: 93.8% store-based retailing & 2.3% non-store based offline retailing,
remaining through e-commerce
 O6: Asia pacific forms the biggest market for haircare in the world
 O7: Increasing purchase power of the consumers. Also, average unit price of
products is increasing as consumers are willing to spend more on personal care
now
 O8: Growth in rural market
 O9: India being one of the highest populations of the world and fastest
growing too
 O10: Shift of consumer preferences towards herbal & natural ingredients

Payoff Matrix: It is use as an indicative of how much money a firm can make in various
based on the combination of success probability and opportunity payoff

Opportunity that must High

be exploited off
O1, O2, O5 O7, O9
Suc
ces
s
Pri
orit
O3, O6, O8, O10 O4
y
Low
off

High Low
off Pay off off

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  Threats: A business threat is a change in the external environment which if not
defended against, would lead to a reduction in firm’s revenue/profits
 T1: Haircare segment is growing slower than most other industries e.g.: -
package foods, soft drinks, home care, beauty & personal care
 T2: Slower growth of shampoo markets compared to rest others haircare
segments (5%)
 T3: Year on year leadership of Marico Parachute hair oil
 T4: Loss in market share of P&G (6.7% in 2017 to 6.4% in 2018)
 T5: Dabur takes on a lead over P&G as compared to last year
 T6: Saturation of shampoo market
 T7: Increased competition in the market from the new entrants in herbal &
ayurvedic space
Probability of occurrence

Contingency Plan
High
T3, T4, T6, T7 O7, O9
off

Low T5 T1, T2
off

High Low
off Impact seriousness off

 Opportunity-Strength: It is an internal resource(money/people) or

competency(processes/technology) that enables the firm to exploit an opportunity
 O1 S1 – Pantene has its presence in the salon care segment and is being very
well received by the customer. Therefore, leveraging on its brand equity here
Pantene can capture significant market share
 O1 S2 – P&G’s strong R&D wing can help in launching ace products thereby
offering competitive advantage to its companies
 O2 S1 - P&G’s strong R&D wing can help in launching ace products thereby
offering competitive advantage to its companies

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  O3 S1 – Being an untapped market for P&G, they can strategize and launch
products to acquire some share in this market as well
 O4 S1 – Since P&G’s brand already have its hold on the market, therefore it
can leverage its brands to capture this increasing market
 O5 S1 – Since most of the selling in haircare is still happening from the stores,
hence P&G can leverage its already establish distribution network for
increasing its reach
 O6 S1 – Being Asian market, it is expected to have similarities in consumer
preferences when compared to India. Hence P&G can use their learning from
Indian market in order to acquire share in Asian markets as well
 O7 S1 – Increase in the purchase power of consumers means more spending in
personal care segment by the people. Therefore P&G can market itself better
so that it reaches out to the maximum audience
 O7 S2 – Leveraging their distribution network in order to ensure that they are
always present on the shelf
 O8 S1 – Launching smaller SKU’s to increase trialability
 O8 S2 - Leveraging their distribution network to increase their penetration in
the rural markets
 O9 S1 – Expanding population means increase in the market size, hence
making a strategy in anticipation to acquire this new market
 O10 S1 – Even though this would be a new market for P&G, even though
through its strong brand recall P&G can expect to mark its presence by
launching appropriate variants & products

 Opportunity-Weakness: It is an inadequacy within the firm which prevents the firm

from exploiting the opportunity
 O1 W1 – Since P&G has not been one of the big names in this market, hence
it means strong competition from the market leaders
 O2 W2 – Having no presence in the market can mean a huge investment in
R&D and also large advertisement expense to position themselves well in this
category
 O2 W2 – Strong competition from the big players in this category
 O3 W1 – Since P&G mostly has its presence in the affordable category, hence
launching premium products would require a well-planned strategy for the
group
 O4 W1 – Saturation in the market, would mean that consumers will now only
respond to innovative products, which means increased R&D expense

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  O5 W1 – E commerce presence needs to be strengthened too
 O6 W1 – Huge investments would be needed for entering new markets
 O8 W1 - Since P&G is not a market leader in the rural haircare market, hence
it will have to combat competition in order to acquire this market
 O9 W2 – Since the hair care market is already saturated, hence capturing the
share of pie would be difficult in the lieu of competition
 O10 W1 – Since P&G has never had any presence in this segment, therefore
for entering the market, they will have to come with a well-defined strategy
 O10 W2 – Also, they can expect some resistance from the consumers in this
segment, since it doesn’t align well with their brand image

 Threat Strength - It is an internal resource or competency which enables the firm to

withstand a threat that might occur in future.
 T1 S1 – Being a big brand name in the hair care segment, P&G can target to
acquire more market share so that despite the slow growth it is able to
maximize its profit
 T2 & T6 S1 – P&G can leverage its resources such as R&D, brand recall,
advertisement, distribution channel to launch new products and increase their
reach within the consumers
 T7 S1 – Since P&G has never had any presence in this segment, therefore they
can launch appropriate products and tap the unexplored market

 Threat Weakness – It is a firm’s internal inadequacy that makes the firm vulnerable
to a threat.
 T1 W1 – Saturated market would mean more competition and more resources
spent in order to carve out their niche
 T2,6 W1 – Since shampoo is one of the major products of P&G, hence slower
growth would mean lesser opportunities for the group
 T3,4,5 W1 – More hold of the competition would require P&G to spend more
resources and comeback with a sound comeback strategy
 T 7 W1 – Since P&G has never had any presence in this segment, therefore for
entering the market, they will have to come with a well-defined strategy
 T 7 W2 - Also, they can expect some resistance from the consumers in this
segment, since it doesn’t align well with their brand image

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 SBU – Laundry care
External Environment -
 Opportunities: A business opportunity is an area of buyer need in which a firm can
perform profitably
 O1: Slow recovery of laundry care market (2014 – 10.9%, 2015 – 5.9%, 2016
– 4.3%, 2017 – 5.6%, 2018– 6.2%, 2019 – 6.3%)
 O2: Laundry detergents expected to grow at a CAGR of 7%
 O3: Fabric care softeners registers highest current value growth of 17% in
2018
 O4: Fabric care softeners to remain a part of urban households’ laundry care
regime
 O5: 99.7% store-based retailing, 0.1% non-store based direct selling &
remaining 0.2% through e-commerce
 O6: Expansion in modern retailing is bolstering the category growth of
laundry care and detergents
 O7: Increasing urbanization & purchasing power has led to increased
expenditure on cleanliness and hygiene related products, thereby leading
market growth
 O8 – Asia pacific forms the biggest market of fabric care

 Payoff Matrix: It is use as an indicative of how much money a firm can make in
various based on the combination of success probability and opportunity payoff

Opportunity that must High

be exploited off
O3, O4, O5, O6
Suc
ces
s
Pri
orit
O2, O7 O1
y
Low
off

High Low
off Pay off off

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  Threats: A business threat is a change in the external environment which if not
defended against, would lead to a reduction in firm’s revenue/profits
 T1: Domestic companies continue to offer tough competition to international
players
 T2: HUL continues to lead the market with a share of 37% in 2018
 T3: Laundry care market has the slowest growth as compared to the other
industries such as home care, package foods, beauty and personal care, soft
drinks
 T4: Loss in market share of P&G (10.8% in 2017 to 9% in 2018)
 T5: Slower YOY growth in the laundry care market

T2, T3, T4 T1
Probability of occurrence

Contingency Plan
High
off

T5

Low
off
High Low
off Impact seriousness off

 Opportunity-Strength: It is an internal resource(money/people) or

competency(processes/technology) that enables the firm to exploit an opportunity
 O1 S1 - Since P&G’s brand already have its hold on the market, therefore it can
leverage its brands to capture this increasing market
 O2 S1 – Since the market for laundry care is expected to grow P&G can launch more
relevant products to capture the new market
 O3&4 S1 – Since fabric care softeners are the fastest growing market, hence P&G
should explore this category and try to capture as much market share as possible,
leveraging their R&D and brand equity
 O5 S1- Since most of the selling in laundry & detergent category is happening from
the retail stores, hence P&G can leverage its already establish distribution network for
increasing its reach

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  O6 S1 – Since the category is highly influenced by retail selling, hence P&G can
focus on in store advertisements
 O7 S1- Increase in the purchase power of consumers means more spending on
cleanliness & hygiene segment by the people. Therefore P&G can market itself better
so that it reaches out to the maximum audience
 O8 S1 - Being Asian market, it is expected to have similarities in consumer
preferences when compared to India. Hence P&G can use their learning from Indian
market in order to acquire share in Asian markets as well

 Opportunity-Weakness: It is an inadequacy within the firm which prevents the firm

from exploiting the opportunity
 O1&O2W1 - Strong competition since the market is highly saturated
 O1&O2 W2 – Low switching costs for the consumers
 O3&7 W1 - Huge investments to be made for entering the new markets
 O5 W1 - E commerce presence needs to be strengthened too, so as to prepare
ourselves for the future shift towards online channels

 Threat Strength - It is an internal resource or competency which enables the firm to

withstand a threat that might occur in future.
 T1,2&4 S1 - P&G can leverage its resources such as R&D, brand recall,
advertisement, distribution channel to launch new products and increase their
reach & relevance within the consumers
 T3&5 S1 - Being a big brand name in the hair care segment, P&G can target
to acquire more market share so that despite the slow growth it is able to
maximize its profit

 Threat Weakness – It is a firm’s internal inadequacy that makes the firm vulnerable
to a threat.
 T1 W1 – Local players will have better understanding of consumer’s needs &
demands
 T1 W2 – Generally the local players resort to cheaper ingredients which
significantly reduce their manufacturing costs, thereby allowing them to
launch at cheaper prices
 T2 W1 - More hold of the competition would require P&G to spend more
resources and comeback with a sound comeback strategy
 T3&5 W1 - Saturated market would mean more competition and more
resources spent in order to carve out their niche

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  T4 W1 - More hold of the competition would require P&G to spend more
resources and comeback with a sound comeback strategy

Porters 5 forces Model Analysis

(Refer Table 2 and Table 3)

1) Rivalry to competitors
Shampoo: This industry faces cluttered competition with a lot of small and big
players. Since there is very less differentiation amongst products rivalry is high in the
category
Razors: Very few major players are in this category. Also Gillet as a brand stands out
with product differentiation
2) Barriers to exit
Shampoo/ Razor: As a lot of investment goes into the manufacturing costs and
building the brands exiting the business is a costly affair, hence for shampoo as well
as razor category this is high
3) Barriers to Entry
Shampoo: Effective manufacturing operations benefit from Economies of Scale when
logistics costs are taken into consideration. But overall since differentiation is not
very high entry to the category is easy.
Razor: Just like shampoo category economies of scale is important. Also within the
category to sustain one needs to invest in R&D and have new product development in
place.
4) Threats from Substitutes
Shampoo: Shampoo category’s substitute is any other form of cleaning products. But
due to already a wide variety of products available in different sku’s at different price
points hence threat from substitutes is low.
Razors: With the innovation of trimmers and precision cutting, this category is fast
growing with the young consumers shifting towards these products. Therefore the
threat is high.
5) Bargaining Power of the Buyers
Shampoo: a lot of Variety is available within the category. The bargaining power is
medium for buyers as they can shift easily within the category
Razors: For razor category innovation plays a key factor and for Gillette is low

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 6) Bargaining power of Suppliers
Shampoo/ Razor: Industry witnesses huge number of suppliers with moderately lower
switching cost for the company when it switched from vendor to the other. Also a lot
of manufacturing is inhouse with strict quality control measures taken into account.
Hence their bargaining power is low
7) Government Action
Shampoo/ Razor: A set legal framework is in place for both categories. The parameter
is medium for both categories

Recommendations

• P&G needs to stay in touch with changing consumer preferences and offer innovative
products

• Maintain good relationships with customers and channel partners to maintain service
excellence

• Focus on Razors due to shift in consumer preferences in young adults and low market
penetration in this tier 3 areas

• Clearly differentiate between shampoo brands i.e. Pantene and Head&Shoulders to

capture maximum market share

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 References

1. http://www.portal.euromonitor.com/portal/
2. https://www.emis.com/php/dashboard?
3. https://www.statista.com/
4. https://www.ibef.org/research/reports
5. https://mordorintelligence.com/industry-reports/shampoo-market
6. https://customnews.pk/2018/04/26/customs-values-of-disposable-razors-and-parts-
revised/razor-2/
7. https://uplandsoftware.com/ultriva/resources/blog/how-to-meet-the-challenge-of-
demand-variability-in-your-supply-chain/
8. https://www.patriotsoftware.com/accounting/training/blog/how-do-you-determine-a-
profit-margin/
9. https://www.marketresearch.com/
10. https://www.livemint.com/
11. https://www.hindustantimes.com/

Appendix
M e d iu m

Table 1

Shampoo Detergents
H ig h
Market Attractiveness

Razors Toothbrush
Low

9.00

6.00

3.00

0.00
0.00 3.00 6.00 9.00

Low Medium
High
Competitive Positioning

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 Table 2

Table 8: Overall assessment

Wt % Detail Attractiveness Remarks
Score Low High
1 2 3 4 5
Table 1: Rivalry among competitors 15.00% 2.90 Y 0.435
Table 2: Barriers to exit 5.00% 3.60 Y 0.18
Table 3: Barriers to entry 5.00% 2.57 Y 0.1285
Table 4: Threat from substitutes 10.00% 4.00 Y 0.4
Table 5: Bargaining power of buyers 30.00% 3.50 Y 1.05
Table 6: Bargaining power of suppliers 10.00% 3.20 Y 0.32
Table 7: Government actions 25.00% 3.40 Y 0.85
Table 8: Overall assessment 100.00% 3.36

Table 3
Wt % Detail Attractiveness Remarks
Score Low High
1 2 3 4 5
Table 1: Rivalry among competitors 15.00% 3.10 Y 0.465
Table 2: Barriers to exit 5.00% 3.10 Y 0.155
Table 3: Barriers to entry 5.00% 3.06 Y 0.153
Table 4: Threat from substitutes 10.00% 2.50 Y 0.25
Table 5: Bargaining power of buyers 30.00% 2.50 Y 0.75
Table 6: Bargaining power of suppliers 10.00% 3.30 Y 0.33
Table 7: Government actions 25.00% 3.60 Y 0.9
Table 8: Overall assessment 100.00% 3.00

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