International Business

Procter & Gamble (P&G) as a MNE

Proctor & Gamble (P&G) is a multinational enterprise which develops, manufactures, and sells consumer goods. The company markets more than 300 branded products which are sold in over 180 countries. It has on-the-ground operating units such as plants, divisions and facilities in more than 80 locations around the world. P&G currently employs approximately 135,000 people from about 145 nationalities. Its world headquarters is located in Cincinnati, Ohio, U.S.A. As a publicly owned company, P&G's stock is listed and traded on the Paris and New York exchanges (P&G, 2010).

According to P&G, its products come into contact with consumers around the world 4 billion times a day. P&G has a total of 22 billion-dollar brands globally; these brands generate combined sales of $1billion annually. They include:

Pampers®, Ariel®, Always®, Pantene®, Mach3®, Fairy®, Pringles®, Lenor®, Iams®, Crest®, Oral-B®, Duracell®, Olay®, Head & Shoulders®, Wella®, Gillette®, Braun® and Fusion®.

Table 1: P&G's business segments

Segment Products Key Brands

Beauty Cosmetics, Deodorants, Hair Care,

Personal Cleansing, Prestige

Fragrances, Skin Care Head & Shoulders, Olay, Pantene,

Wella

Grooming Blades and Razors, Electric Hair

Removal Devices, Face and Shave

Products, Home Appliances Braun, Fusion, Gillette, Mach3

Healthcare Feminine Care, Oral Care, Personal

Health Care, Pharmaceuticals Actonel, Always, Crest, Oral-B

Snacks &

Pet Care Pet Food, Snacks Iams, Pringles

Home Care Air Care, Batteries, Dish Care, Fabric

Care, surface Care Ariel, Dawn, Downy, Duracell, Gain,

Tide

Family Care Baby Wipes, Bath Tissue, Diapers,

Facial Tissue, Paper Towels Bounty, Charmin, Pampers

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P&G's Purpose Statement

"We will 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. 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." (P&G, 2010)

Figure 2: P&G's revenue by geography

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Figure 3: P&G's revenue by business segments

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SWOT Analysis

Strengths

1) Diverse brand and product portfolio

P&G carries about 300 types of products ranging from household products, baby, personal and beauty, health and wellness, pet care and nutrition. Even with this large scale of products, the company is able to customise its brands and products according to local preferences.

2) R & D About $ 2 billion (3-4% of Net Outside Sales) are invested annually in research and development for product improvement and innovation purposes. 27,000 product patents were granted to the company in 2004–2005 due to the extensive R & D. Having an elite team of Ph. D.s' working in the laboratories and a large consumer database makes P&G highly competent.

3) Big profit margin P&G's profit margin is 15 times more than the industry average. In June 2008, $21.3 billion net sales for that quarter was announced, with a growth of 10%.

4) Established brands

P&G carries more than 300 of the most globalised brands which are widely consumed in all parts of the world. 22 of these 300 brands makes up of P&G's super brands, which does over $1