INTRODUCTION

OVERVIEW OF ITS EVOLUTION AND ITS SIGNIFICANCE IN THE GLOBAL AND RETAIL TECHNOLOGY LANDSCAPE

Procter & Gamble, the small family-owned business that started in 1837 as the soap and candle maker
at Cincinnati, Ohio, is now considered as the 19 th largest public company in the world. Currently, it is
home to around 65 iconic and trusted brands that make every day just a little easier for about 5 billion
customers in greater than 180 countries.

As a prominent figure in the worldwide consumer goods sector, P&G boasts a storied past and
formidable market presence. In response to the shifting market landscape and competitive forces, the
company consistently pursues enhancements and breakthroughs to uphold its dominant role. In fact, a
key aspect of P&G’s survival over the years is how it leverages technology to address the challenges it
faces in areas like retail execution and consumer communication. Through its investments in machines
and artificial intelligence, P&G is therefore able to streamline all of its processes starting from
procurement up to shipping.

This is because P&G recognizes that the trend with customers nowadays is that they want the challenges
they face in real life to be solved quickly. In fact, research showed that around one out of three
customers choose to part with a brand they support after having a poor transaction with them. This
means that consumers demand convenience. To provide this, it is critical for brands to put technology at
the heart of their operations. Thus, the significance of P&G in the global and retail technology landscape
is that it changed the way its competitors approach innovation by inspiring them to implement modern
day solutions too.

PURPOSE AND SCOPE OF THE RESEARCH PAPER, EMPHASIZING THE IMPORTANCE OF EXTERNAL
ENVIRONMENTAL ANALYSIS IN GUIDING ITS STRATEGIC DIRECTION AMIDST CHANGING MARKET DYNAMICS

This goes to show how the retail industry has become more complex and uncertain in the recent
decades. With that, there are also increasing external risks that affect the consumer goods market such
as greater competition, especially due to the unpredictability of consumer demand. As a result, an
activity that is becoming important nowadays is analyzing the external environment as this can provide
useful insights that can guide businesses in navigating a changing market dynamic. Aside from that, it
also becomes beneficial as it allows businesses to have a clearer understanding of the different trends in
its environment. This empowers them with access to market information that can create advantages in
their strategic decision-making.

Therefore, this study is conducted to identify the external factors that present opportunities and threats
for P&G. Specifically, this includes all relevant conditions in its environment that affect how it conducts
its businesses. Additionally, this study also provides for improvement recommendations based on the
challenges identified through the external analysis done. This is in order to help P&G devise strategies
that can help maintain its favorable market position.
 COMPANY BACKGROUND

HISTORY AND GROWTH TRAJECTORY

1837: William Procter, a candle maker, and James Gamble, a soap maker, form a partnership in
Cincinnati, Ohio.

1858: P&G is officially incorporated.

1859: The company introduces its first branded product, Ivory Soap.

1890s: P&G begins using advertising and marketing innovations, such as sponsoring radio programs and
using coupon promotions.

1907: P&G becomes one of the first companies to conduct consumer research, establishing a dedicated
department for market research.

1911: P&G establishes its first overseas subsidiary in Canada.

1930: P&G begins sponsoring daytime radio serials, leading to the term "soap opera."

1933: The company launches Dreft, the first synthetic detergent.

1946: Tide laundry detergent is introduced, becoming one of P&G's most iconic brands.

1957: The first fluoride toothpaste known as Crest is introduced by P&G.

1970s: P&G focuses on research and development, introducing innovations like liquid fabric softener and
disposable diapers.

2000s: P&G launches the "Connect + Develop" open innovation program to collaborate with external
partners for product development.

2010: P&G sells its Pringles snack brand to Kellogg's and divests its pharmaceuticals business to Warner
Chilcott.

2014: P&G announces plans to divest up to 100 brands to streamline its portfolio and focus on its most
profitable businesses.

2020: P&G launches its "Lead with Love" campaign, focusing on social responsibility and community
impact.
 PRODUCT PORTFOLIO

P&G stands as a prominent player in the global fast-moving consumer goods sector, committed to
delivering top-tier branded products that offer unmatched quality and value to their diverse consumer
base worldwide.

To achieve this, the company prioritizes a portfolio comprising ten essential product categories,
structured within five distinct operating sectors:

Business Segment: Beauty

Product Categories: Skincare, hair care, personal care, cosmetics.

Major Brands: Olay, SK-II, Pantene, Head & Shoulders, Secret, Old Spice, Herbal Essences, Gillett, Venus,
Braun, Ivory, Safeguard.

Business Segment: Grooming

Product Categories: Razors, shaving products, grooming appliances, deodorants.

Major Brands: Gillette, Venus, Braun, Old Spice, Secret.

Business Segment: Health Care

Product Categories: Oral care, personal health care, digestive health.

Major Brands: Crest, Oral-B, Scope, Fixodent, Pepto-Bismol, Metamucil, Align, Vicks.

Business Segment: Fabric & Home Care

Product Categories: Laundry detergents, fabric softeners, surface cleaners, dishwashing detergents, air
fresheners.

Major Brands: Tide, Ariel, Gain, Downy, Lenor, Cascade, Dawn, Febreze, Mr. Clean, Swiffer.

Business Segment: Baby, Feminine & Family Care

Product Categories: Diapers, baby wipes, baby care, feminine hygiene, family care.

Major Brands: Pampers, Luvs, Pampers Pure, Always, Tampax, Charmin, Bounty, Puffs.
 TARGET MARKET

P&G rarely transacts directly to its customers as they are mostly only able to buy its products through
third-party sellers or via its online website. For this reason, their key customers include distributors such
as wholesalers, retailers, online platforms, supermarkets, warehouse clubs, pharmacies, department
stores, specialty beauty boutiques (including duty-free outlets at airports), convenience stores,
electronics retailers, and other business-to-business channels.

However, P&G offers its products directly to customers as well. Due to the wide range of products it
offers, the demographics of its customers are quite diverse as stated below:

Age: P&G's products cater to consumers of all ages, from infants (with brands like Pampers) to seniors.
Different product lines target different age groups, such as skincare products for younger consumers and
personal care products for older adults.

Gender: P&G serves both male and female consumers with its extensive portfolio of brands. While some
products may have a more gender-specific appeal (e.g., Gillette for men), many are designed for
universal use.

Socioeconomic status: P&G provides a range of products priced to suit diverse consumer budgets,
addressing the needs of individuals across various income brackets. Certain high-end brands such as
Olay and Tide Pods are tailored towards affluent customers, whereas alternatives like Crest and Febreze
offer cost-effective choices.

Household composition: P&G's diverse portfolio includes products for personal, home and family care
which caters to the needs of different household compositions, including singles, couples, families with
children, and even seniors living alone.

BUSINESS SEGMENT

P&G is comprised of five reportable segments, which includes the following:

1. Beauty Segment: P&G's Beauty segment includes a wide range of products such as cosmetics,
hair care, and skincare. It generated approximately $15 billion in net sales in fiscal year 2023,
with brands like Olay with nearly 5% market share as well as Pantene and Head & Shoulders with
nearly 20% market share.
2. Grooming Segment: The Grooming segment focuses on products for personal grooming,
including shaving products and deodorants. In addition, it reported net sales of around $6.4
billion in fiscal year 2023. The segment is known for brands like Gillette and Venus, which holds a
significant share of the global shaving market with more than 60%.
3. Health Care Segment: P&G's Health Care segment produces a variety of over-the-counter health
products, including oral care and personal health products. It contributed approximately $11.2
 billion in net sales in fiscal year 2023. Brands like Crest and Oral-B are key players in this
segment, commanding a strong presence in the oral care market with beyond 20% share.
4. Fabric & Home Care Segment: This segment includes products for fabric care (detergents, fabric
softeners) and home care (cleaning agents, air fresheners). It generated approximately $28.3
billion in net sales in fiscal year 2023. Brands such as Tide, Downy, and Ariel are among the
leading products in this segment, with a global reach of over 35%.
5. Baby, Feminine & Family Care Segment: This segment focuses on products for baby care,
feminine care, and family hygiene. It reported net sales of approximately $20.2 billion in fiscal
year 2023. Sharing over 25% of the global market, Pampers, Always, and Tampax are some of
the well-known brands in this segment, catering to the needs of families worldwide.

GEOGRAPHIC REACH

While P&G serves approximately 180 countries, beyond 50% of its sales come from international
operations outside the United States.

In fact, their biggest foreign markets consist of Greater China, together with Germany, United Kingdom,
Canada and Japan, which collectively brought about more than 20% of their net sales for the year 2023.

Accordingly, their geographic reach can be divided into these six regions:

1. North America: Canada and United States.

2. Europe: Albania, Armenia, Austria, Azerbaijan, Belgium, Bosnia and Herzegovina, Bulgaria,
Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary,
Ireland, Israel, Italy, Kazakhstan, Kosovo, Latvia, Lithuania, Luxembourg, Montenegro,
Netherlands, North Macedonia, Norway, Poland, Portugal, Moldova, Romania, Serbia, Slovakia,
Slovenia, Spain, Sweden, Turkiye, Switzerland, Ukraine and United Kingdom.

3. Greater China: China

4. Asia Pacific: Australia, Indonesia, Japan, Korea, Malaysia, Philippines, Singapore, Thailand,
Vietnam.

5. Latin America: Argentina, Belize, Brazil, Chile, Colombia, Costa Rica, Dominican Republic,
Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Peru, Puerto Rico,
Venezuela.

6. India, Middle East & Africa: Algeria, Bangladesh, Egypt, Ethiopia, Ghana, India, Kenya, Morocco,
Nigeria, Pakistan, Saudi Arabia, South Africa, Sri Lanka, United Arab Emirates.
 ORGANIZATIONAL STRUCTURE

FINANCIAL PERFORMANCE

2023 FINANCIAL HIGHLIGHTS (UNADITED)

2023 2022
Net Sales $ 82.00 $ 80.20
Operating Income $ 18.10 $ 17.80

Net Earnings Attributable to P&G $ 14.70 $ 14.70

Net Earnings Margin 18.00% 18.40%

Diluted Net Earnings per Common Share $ 5.90 $ 5.81

Core Earnings per Share $ 5.90 $ 5.81

Operating Cash Flow $ 16.80 $ 16.7
Dividends per Common Share $ 3.68 $ 3.52
(Amounts in billions, except per share amounts)
2023 NET SALES BY BUSINESS SEGMENT

8%

14%
35%
Fabric & Home Care
Baby, Femine & Family Care
Beauty
Health Care
Grooming
18%

25%

2023 NET SALES BY GEOGRAPHIC REGION

5%
7%

India, Middle East & Africa

Asia Pacific
21% Greater China
50% Europe
Latin America
North America

9%

8%
 KEY MILESTONES IN CORPORATE JOURNEY

REVENUE GROWTH

Based on the financial highlights of P&G for the fiscal 2023, below is a summary of the significant
revenue growth observed compared to the previous year 2022:

 $ 82,006 2023 Net Sales (Overall): 2% increase (vs. $ 80,187)

 $ 15,008 2023 Net Sales (Beauty): 2% increase (vs. $ 14,740)
 $ 6,419 2023 Net Sales (Grooming): 3% decrease (vs. $ 6,587)
 $ 11,226 2023 Net Sales (Health Care): 4% increase (vs. $ 10,824)
 $ 28,371 2023 Net Sales (Fabric & Home Care): 3% increase (vs. $ 27,556)
 $ 20,217 2023 Net Sales (Baby, Feminine & Family Care): 2% increase (vs. $ 19,736)

MARKET EXPANSION

P&G has been expanding its market by employing diverse strategies to penetrate new markets and
solidify its global presence. Here's an overview of their market expansion efforts:

Product Diversification: P&G initially focused on producing soap and candles, but soon
recognized the limitations of this narrow product range. Acknowledging the need for diversification,
they expanded their offerings to include a variety of new items. This strategic move allowed them to
address a wider spectrum of consumer demands and tastes, thereby mitigating the risks associated with
relying solely on a single product.

Innovation: P&G is renowned for its focus on innovation, constantly coming up with new
product ideas and enhancing old products to maintain its lead in the competition. By investing heavily in
research and development, P&G has been able to introduce breakthrough technologies and address
surfacing consumer trends, enabling it to expand into new markets and capture market share.

Acquisitions and Partnerships: P&G has a history of strategic acquisitions and partnerships to
expand its market presence. By acquiring established brands or entering into joint ventures with local
companies, P&G gains access to new markets, distribution channels, and consumer segments.

Global Expansion: P&G's ambition extended beyond marketing their products in one locale;
they aimed to reach consumers worldwide. To achieve this, they ventured into global markets,
expanding their presence across multiple countries. This involved adapting their products and marketing
approaches to align with the diverse preferences of each local market.

Marketing and Branding: P&G is known for its sophisticated marketing and branding efforts,
investing heavily in advertising campaigns to build brand awareness and loyalty. By leveraging its iconic
brands and employing targeted marketing strategies, P&G has been able to effectively penetrate new
markets and connect with consumers on a deeper level.
 Overall, P&G’s market expansion success can be attributed to its commitment to innovation,
strategic acquisitions, and global brand-building efforts. By staying agile and responsive to changing
consumer needs, P&G continues to thrive in an increasingly competitive marketplace.

STRATEGIC ACQUISITIONS

In the 1950s, P&G initiated an assertive campaign of acquiring smaller companies as part of its strategy
to reach into new markets and territories.

Below are some notable acquisitions made since this period:

1. Gillette (2005):

Overview: P&G acquired Gillette, a leading manufacturer of razors, shaving products, and personal
care items, for approximately $57 billion.

Impact: This acquisition strengthened P&G's position in the grooming segment and expanded its
product portfolio with iconic brands like Gillette, Venus, and Braun.

2. The Clorox Company's Cleaning Division (1967):

Overview: P&G acquired the cleaning division of The Clorox Company in return for stocks estimated
to be about $40.3 million. This included brands like Clorox bleach and Pine-Sol cleaner.

Impact: This acquisition broadened P&G's presence in the fabric and home care segment, allowing it
to offer a wider range of cleaning products to consumers.

3. Richardson-Vicks (1985):

Overview: P&G acquired Richardson-Vicks, a healthcare company known for brands like Vicks
VapoRub and NyQuil, for approximately $1.2 billion.

Impact: This acquisition expanded P&G's presence in the healthcare segment, strengthening its
portfolio with popular over-the-counter remedies for cold and flu symptoms.

4. Wella AG (2003):

Overview: P&G acquired Wella AG, a German company specializing in hair care products, for
approximately $7 billion.

Impact: This acquisition bolstered P&G's presence in the beauty segment, providing access to
Wella's portfolio of salon-quality hair care brands and strengthening its global position in the hair
care market.

5. Tambrands Inc. (1997):

Overview: P&G acquired Tambrands Inc., the maker of Tampax tampons, for approximately $1.85
billion.

Impact: This acquisition expanded P&G's presence in the feminine care segment, allowing it to offer
a comprehensive range of products for women's health and hygiene.