THE SUCCESS OF PROCTER & GAMBLE

Founded in 1837, Procter & Gamble is the world's largest producer of household and personal

products by revenue, with its products reaching 4 billion people worldwide. P&G’s product line

includes 23 brands across beauty, healthcare, and food including Tide detergent, Pampers

diapers, and Gillette razors, that generate over $1 billion in revenue annually, with the company's

total revenue in fiscal 2009 in excess of $79 billion (Proctor & Gamble Company. Wikinvest).

This case study analysis is on the Proctor & Gamble Company (also referred to as “P&G”).

Procter & Gamble is the world's largest producer of household and personal products by revenue,

with its products reaching 4 billion people worldwide. The Case Study includes an Introduction,

Company Overview, Company Mandate, Internal Analysis, and External Analysis, followed by

various Strategic Options (see below). The author then makes a Final Strategy Option

Recommendation.

Strategic Option #1: Market to Lower-Income Consumers in both Developed and Emerging

Markets (Expand and Build Beauty Segment strictly aimed at Low-Income Consumers). Industry

Consolidator.

Strategic Option #2: Given the maturity of the North American/Western European market,

combined with the emerging popularity and demand for Natural/Organic ingredient products,

P&G should look to create New Natural Products and Products tailored to the Male market -

Strategic Option #3: Related Diversification through Acquisition.

Strategic Option #4: Joint Ventures in Emerging Markets such as China and India.

Final Strategy Recommendation: The Recommendation is to go for a combined Low-Income

segment and New Natural Product strategy as this facilitates P&G’s need to capture a greater
slice of the Low-Income consumer market both in Mature and Developing markets, which also

capturing a greater slice of the Natural Ingredient market and the growing Men’s Market. Unlike

in the case study, the author advocates New Natural Ingredient product development in multiple

segments, and not just confined to the Skin Care segment of the Beauty /Feminine Care segment.

Such a combined Strategy will require the creation of new products and the expansion of existing

ones, combined with Related Diversification via Acquisition if suitable Acquisition targets are

identified and can be purchased at an attractive price. P&G can well afford this combined

approach and is sitting in an elevated position given its financial clout and ability to “cherry-

pick” potential Acquisitions.

 WALT DISNEY AND STRATEGIC SOURCING

Activity 3

Disney, the kingdom of entertainment founded by Walt Disney and Roy O. Disney in 1923, is

hands down a benchmark in its industry. The Walt Disney Company continues to bring joy and

happiness to its consumers around the globe and would never stop surprising us with its visions.

Strategic sourcing is a method of managing procurement processes for an organization in which

the procedures, methods, and sources are constantly re-evaluated to optimize value to the

organization. Strategic sourcing, which is considered a key aspect of supply chain management,

involves elements such as examination of purchasing budgets, the landscape of the supply

market, negotiation with suppliers, and periodic assessments of supply transactions.

Procurement Strategy
Technology Focus

The Walt Disney Company continues to invest in technology to bring efficiencies to the 

procurement and accounts payable processes.

They work with their suppliers to:

 Create electronic Catalogs to maximize use of preferred Suppliers, products and services.

  Enable electronic Purchase Order and Invoice transactions to minimize cost, including

support for EDI.

 Receive electronic payment via ACH (direct deposit)

 Implement Evaluated Receipt Settlement (ERS) to simplify the PO and Invoice process.

  Utilize electronic bidding to reduce cycle time and increase consistency.

Strategic Map

The main objective of Walt Disney is to create happiness for their guests, which is supported by

three goals: guest experience, telling stories, and family entertainment.

 Guest Experience

o Meet and exceed the needs of customers.

o Comfortable surroundings

o  Data Collection

o Embrace new technology.

 Telling Stories

o Deliver unexpected moments of magic.

o Consumer merchandise

o Live characters

o Setting atmosphere.

 Family Entertainment

o Renew themes and rides.

o Parades

o Stage shows.

o Photo services

o Cruise trips
 o Accessible environment

o Customize packages.

JAIME DE AYALA ZOBEL AND AYALA CORPORATION

Activity 4
1. What are the qualities of Jaime Zobel de Ayala which made him pioneer in urban

development through real estate?

Answer

In this kind of industry, perseverance and determination helped in the pioneering of real estate

development and banking in the country. Ayala is transforming itself into an organization that

empowers individuals, cultivates thought leadership, and rewards initiative. It is also committed

to a development agenda that sees entrepreneurship as the engine for progress to a better future.

2. Trace the various industries that Ayala ventured into through the internet. Trace the

financial strength, high product quality, and professionalism he has inculcated in these

businesses. Comment on these.

Answer

a. Ayala has built a pioneering legacy in various industries and to this day maintains

leadership in key sectors of the Philippine economy. Through its strategic investments,

Ayala realizes its mission to ensure long-term profitability, increase shareholder value,

provide employment, participate in the national development agenda and enhance the lives

of Filipinos through its innovative products and services.

b. Ayala Land (PSE: ALI) is the Philippines’ largest fully integrated property developer and

one of the most successful developers of prime commercial spaces in the country. It is

engaged in master planning and developing growth centers with a mix of residential,

shopping center, office, hotel, and leisure components.

c. Bank of the Philippine Islands (PSE: BPI) is the largest Philippine bank in terms of market

capitalization and the third largest in terms of total assets. It has a lead position in

intermediation capacity, corporate and consumer lending, remittances, and electronic

banking.

d. Globe Telecom (PSE: GLO) is a major provider of telecommunications services in the

Philippines. Formed out of a partnership between Ayala and Singapore Telecom, the

company operates one of the largest and most technologically advanced mobile, fixed line,

and broadband networks in the country. •Manila Water (PSE: MWC) is the sole provider

of water and wastewater services in the East Zone of Metro Manila. It now has existing

operations in other parts of the Philippines, and in Vietnam. •Integrated Micro-Electronics

(PSE: IMI) is leading electronics manufacturing services (EMS) provider in the region.