Business & Marketing Assignment: P&G Globalization Strategy (Essay Sample)
Evaluate some aspect of Procter & Gamble's global strategy over the past 20 years, using concepts or models that is in the sources I will download. Make sure you use evidence which is clearly referenced to support your assertions and conclusions. You may want to consider what you think are the strongest or weakest aspects of Procter & Gamble's global strategy, and why you think that? You may wish to consider how does P&G address the central questions posed by Lafley & Martin in their book "Play to Win". You may wish to consider how well P&G has been able to achieve strategic alignment in its global organisation.source..
P&G Globalization Strategy
P&G Globalization Strategy
Proctor & Gamble Company globally reaps the greatest revenue from the personal care products and the company’s products reach approximately 4 billion people annually (Galbraith, 2008). The company aims to offer household consumables of superior quality and which improve people’s living standards. In the early 1990’s the company was experiencing serious challenges leading to declining in share value and loss of market capitalization (Galbraith, 2008). This situation forced the company to embark on a globalization strategy aimed to turn around the company’s culture, profit making ability and the way in which the subsidiaries in various countries are managed. Therefore, this paper examines the strategies pursued by P&G in the last 20 years as well as the key strengths and challenges that face P& G., besides, the paper examines how Unilever addresses the main questions raised in the book “Play to Win.” Finally, this paper evaluates how well P& G has been able to execute its global strategy.
P&G Global Strategy
The Global Matrix
P& G implemented the Global Matrix in 1989that reorganized the global product structure. In the new structure, each class of product was headed by a president who was directly answerable to the CEO. The business unit’s general managers retained functional activities such as human resource and profit and loss responsibilities. The brand presidents were given full control over research and development (Galbraith, 2008). The functions of manufacturing, purchasing, and engineering were also integrated into a single function headed by a senior vice president with an aim to facilitate the integration of the business units with the global supply chain (Ghemawat, 2013). The reorganization of sales in 1994 also aimed at strengthening global sales and resulted in improved global coordination and consolidation of cross-border operations
Strategic Decision Critical Analysis
During the 1990’s the then CEO Jager identified a problem of slow growth in sales. Therefore, Jager introduced Organization 2005 strategy that aimed to streamline the decision-making processes, promote innovation and embark on a cost-cutting strategy to lower the cost of operations and increase profitability (Ghemawat, 2013). In the Organization 2005, the profit responsibility was assigned to the global business units with duties to carry out product development, marketing and manufacturing within the business units (Galbraith, 2008). The strategy also aimed at promoting improved integration through greater integration of cross-border activities so that to achieve standardization in manufacturing and uniformity in operations.
P&G’s Levels of Strategy
The company aimed at implementing the strategic process at all levels of the organization so that the company could well implement the strategy. The corporate level strategy was in response to the increased globalization, and it would help P&G to maximize exposure in more countries to remain competitive in the international markets, to maximize profits and revenues and to increase the return on investment for the shareholders (Galbraith, 2008). The CEO implemented a Transitional Global strategy resulting in a hybrid organizational structure that took consideration of the various geographical conditions aimed at achieving economies of scale. The business unit strategy aimed at ensuring that each Global Business Unit was in charge of operations such as marketing and manufacturing while at the same time improving integration and standardization of the business units to achieve a global outlook (Lafley& Martin, 2013). The new organization of the...
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