Final Project

Submitted to:Sir, Ayaz reshi

Submitted by:Sikandar sultan

Rafia azadSadia ahsanAdnan hayatHaider arifJihad khalid

Touching Lives, Improving Life .

Type Public   ( NYSE :   PG )

Founded 1837

Headquarters Cincinnati, Ohio ,   USA ; Toronto, Ontario, Canada

Key people Bob McDonald , President, and Chief Executive.

Industry Consumer goods

Revenue ▲   US$ 79.0 billion (FY 2009)

Net income ▲   US$ 13.4 billion (FY 2009)

Employees 138,000

Website www.pg.com

INTRODUCTION TO COMPANY

The Procter & Gamble Company (P&G) is a brand behemoth. The world' no.1 maker of household products courts market share and billion-dollar brands. P&G's business is divided into three global units: beauty, health and well being, and household care. Procter & Gamble Co. (P&G) is an American global corporation based in Cincinnati, Ohio that manufactures a wide range of consumer goods. Three billion times a day, P&G brands touch the lives of people around the world. This happens because P&G provides branded products of superior quality and value to improve the lives of the world's consumers. This results in leadership sales, profits and value creation, allowing employees, shareholders and the communities in whichP&G operate to prosper. The Company markets more than 300 branded products. P & G have on-the ground operations in more than 80 countries and employ nearly 140,000 people. Nearly five billion consumers in more than 130 countries. What began as a small, family-operated soap and Candle Company now provides products and services of superior quality and value to consumers in 140 countries. P&G is a publicly owned company. Its stock is listed and traded on the New York and Paris exchanges.As of 2008, P&G is the 8th largest corporation in the world by market capitalization and 14th largest US company by profit. It is 10th in Fortune's Most Admired Companies list (as of 2007). P&G is credited with many business innovations including brand management and the soap opera.

HISTORY OF PROCTER AND GAMBLE COMPANY:

William Procter, a candle maker, and James Gamble, a soap maker, immigrants from England and Ireland, respectively, who had settled earlier in Cincinnati, formed the company initially, who met as they both married sisters, Olivia and Elizabeth Norris.

As the result of persuation by their father in law, Alexander Norris, Procter & Gamble was born on October 31,1837, as they became business partners. By1859,when 80 employees worked for P&G, sales reached 1million dollar. The company supplied soaps and candles to the Union Army during the American Civil War. the military contracts won introduced soldiers from all over the country to P&G‟s products, along with increased profits.

1837: William Procter and James Gamble form Procter & Gamble, a partnership in Cincinnati, Ohio, to manufacture and sell candles and soap.1851: Company's famous moon-and-stars symbol is created.1878: P&G introduces White Soap, soon renamed Ivory.1890: The Procter & Gamble Company is incorporated.1911: Crisco, the first all-vegetable shortening, debuts.1931: Brand management system is formally introduced.1946: P&G introduces Tide laundry detergent.1955: Crest toothpaste makes its debut.1957: Charmin Paper Company is acquired.1961: Test marketing of Pampers disposable diapers begins.1963: Company acquires the Folgers coffee brand.1980:It began marketing a new product, an inexpensive soap that floats in water. it was named „Ivory‟.1982: Norwich-Eaton Pharmaceuticals is acquired.1985: P&G purchases Richardson-Vicks Company, owner of the Vicks, NyQuil, and Oil of Olay brands.1987:William Procters grandson William Arnett Procter began a profit sharing programme for its employees,he assumed that by giving the workers stake in the company,they would be less likely to go on strike.1988: Noxell Corporation, maker of Noxema products and Cover Girl cosmetics, is acquired.1991: Max Factor and Betrix cosmetic and fragrance lines are bought from Revlon, Inc.1992: Pantene Pro-V shampoo is introduced.1993: Major restructuring is launched, involving 13,000 job cuts and 30 plant closures.1997: Company acquires Tambrands, Inc., maker of the Tampax line of tampons.1998: Organization 2005 restructuring is launched.1999: Premium pet food maker Iams Company is purchased.

2001: P&G acquires the Clairol hair-care business from Bristol-Myers Squibb Company.2002: Jif peanut butter and Crisco shortening brands are divested.2003: Company acquires a controlling interest in German hair-care firm Wella AG.The company started building factories in other site of USA as the demand was Out growing the capacities of Cincinnati.the products were also being diversified.It also sponsored a number of radio programmes termed as “soap operas”. With its 1930 acquisitionof Newcastle upon Thomas Hedley Co,it became an international corporation. numerous new products were introduced over time, like Tide, Prell, Crest,Bounce, Pampers, Chux. ,.P&G acquired a lot of companies including Folgers coffee,Norwich eaton pharmaceuticals, Richadson-Vicks, Noxell,Max Factor, Iams company. P&G acquired Gillette in January 2005,forming the largest consumer goods company and placing Unilever in the 2nd place. P&G has expanded significantly,but its its hesdquaters still remains in Cincinnati.

“ Logo controversy”

The company received unwanted media publicity in the 1980s when rumors were spread that their previous corporate logo was a Satanic symbol. The company has sued and attempted to sue a number of companies like Amway and individuals who have spread rumors of this type, in some instances because they sell competitive products and have spread such rumors for the purpose of tarnishing P&G's image to increase sales of their own brands.

However, the continuous media coverage prompted P&G to adopt an entirely new logo consisting of just the letters P&G. In television commercials in China, the former P&G logo still appears at the end of each commercial, and up until 2004, it appeared at the end of each commercial in Japan

VISION

What organization want to become in future is known as vision. The vision of Procter and Gamble company is

“Be, and be recognized as, the best consumer products and services in the world”

MISSION

What is the purpose of the existence of the organization is known as mission. The mission of Procter and Gamble Company is

““Procter and Gamble will continue to serve consumers by continuously innovating products that will allow us to be leaders in household and personal care, health care, and food products. To produce products with the utmost care to give nothing but quality to our communities and to continue to grow so that we can maximize our shareholder’s

wealth.”

VALUES

P&G is its people & the values by which they live.

They recruit the finest people in the world.they build the organization from within,promoting and rewarding people without any difference unrelated to performance.thry work on the conviction that the people of P&G are the most rewarding asset.

Integrity

Being right in deeds, honest and straight to each other operating within the spirit of law, upholding the values and principles in every decision and action, staying data-based and intellectually honest in advocating proposals and recognizing risks.

Leadership:

Having clear vision of where they are going, focusssing the resources to achieve leadership objectives and strategies, developing the capability to deliver the strategies and eliminate organizational barriers.

Ownership

Accepting personal accountability to meet the business needs. improve the system and helping others improve their effectiveness. everyone acts owner, treating the company’s assests as own and behaving with company’s long term success in mind.

Passion for winning

Determination to be the best, having healthy dissatisfaction with the status quo, compelling desire to improve and win in the workplace.

Trust

Respecting &treating others as they want to be treated, having confidence in each others capabilities and intentions. foundation of trust.

PRINCIPLES

~Showing respect for others

~Being strategically focused in the work

~Valuing personal mastery

~Seeking to be the best

~Making the interests of the company nad workers insepsrable

~Innovation is the cornerstone of success

~Making mutual interdependency a way of life

~Staying extremely focused.

OBJECTIVESThe objective of Procter & Gamble is that“They 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 toprosper.

ORGANIZATIONAL STRUCTUREP&G has an organizational structure that is comprised of three Global Business Units (GBUs) and a Global Operations group. The Global Operations group consists of the Market Development Organization and Global Business Services. The heads of the three GBUs and Global Operations each report to the Chief Executive Officer. Here is the Organizational Chart for Procter and Gamble.

CEO

The three GBUs are Beauty and Health, Household Care and Gillette. The primary responsibility of the GBUs is to develop the overall strategy for their brands. They identify common consumer needs, develop new product innovations and build their brands through effective commercial innovations, marketing and sales. This new structure took effect in April 2006 when they announced a number of changes to certain of their key leadership positions, which resulted in changes to their GBU structure and their segment reporting. The company believes that they get the full value of the company’s strengths with a unique organizational structure and supporting work systems. P&G is the only consumer products company with global business unit profit centers, a global shared business services, all supported by innovative corporate functions. They are essentially running a number of highly focused companies that share common go-to-market operations and business services. They have made it possible for each business unit to focus on its individual consumers, customers and competitors while capturing all the capability, knowledge and scale of a $75 billion global company. In addition, they have created the capability to collaborate, learn quickly from one another, and reapply successes across P&G businesses. This is a more agile, flexible and responsive structure, allowing the global business units to focus on necessary growth. It is also hard for a competitor to duplicate this structure.

VP of the BoardP & G Family Health

Vice Chairman of the BoardP & G Household

Vice Chairman Vice ChairmanGlobal Operations

Group PresidentGlobal Prestige Care

PresidentGlobal Skin Care

PresidentGlobal Prestige Products

PresidentGlobal Feminine Care

PresidentGlobal Professional Care

PresidentGlobal Hair Care

PresidentGlobal

PresidentGlobal Pet

PresidentGlobal Cosmetics

PresidentGlobal Family

PresidentGlobal Baby & Adult

PresidentGlobal Oral Care

Senior VP HRGlobal

PresidentGlobal Snacks

PresidentGlobal Home

Group PresidentGlobal Fabric

PresidentLatin America

PresidentGreater China

President IndiaAnd Australia

PresidentNortheast Asia

Group PresidentNorth America

Group PresidentWestern Europe

Group PresidentEastern Europe & Africa

Procter & Gamble brands:

Category Segment BrandPaper Diapers

Baby WipesSanitary Products

PampersLuvsAlwaysAlldays

Laundry & CleaningProducts

DetergentsFabric SoftenersDish Washing LiquidsAir Freshener

TideArielCheerBonuxDownyFairyFebreze

Health & Beauty Care Personal Care & HomeAppliancesGroomingDental CareHair CareSoapsShower GelsShampoosTooth PasteBody Wash GelsCosmeticsMale Toiletries

BraunGilletteOral-BWellaCamayZestOlayCamayHead & ShouldersPert PlusPanteneOlayOil Of OlayOld SpicePringles

Food Potato Chips PringlesBatteries Consumer & Industrial

BatteriesDuracell

Manufacturing operations are based in the following regions:

Procter & Gamble manufactures its products across the globe. Manufacturing operations are based in the following regions:

United States Canada Mexico Latin America Europe China (31 wholly-owned factories) and other parts of Asia Africa Australia

PRODUCTIONS

Procter & Gamble produced and sponsored the first radio soap operas in the1930s. Past serials produced by Procter & Gamble include: Another World Lovers and Friends The Brighter Day The Catli Our Private World The Edge of Night The First Hundred Years For Richer, for Poorer From These Roots

Search for Tomorrow Somerset Texas Young Doctor Malone

TOP COMPETITORS

1. Johnson & Johnson2. Kimberly Clark3. Unilever

Kimberly-Clark:

Kimberly-Clark competes with P&G in the household products market, particularly in tissues, paper towels, diapers, and feminine products. In 2006 K-C reported sales of $16.7 billion, 76% of which came from sales of diapers, wipes, feminine products, tissues, paper towels, toilet paper, and other related paper tissue products. Major K-C brands include Huggies diapers, Kotex feminine products, Scott paper towels and Kleenex tissues.

Unilever:

Unilever operates in many countries, including Asia, Africa, North America, the Middle East, Western Europe, and Latin America. The company's products cover two categories -- food and home and personal care – with known brands such as Axe, Dove, sunsilk,Pond's, Suave, Vaseline, Signal, Snuggle, Surf, Slim Fast, Lipton, Ben & Jerry’s, Brayers, and CountryCrock.

Johnson & Johnson:

It's nearly impossible to get well without Johnson & Johnson (J&J). The diversified health care giant operates in three segments through more than 250 operating companies. Its pharmaceuticals unit makes drugs – including Best-selling schizophrenia medication Dispersal -- for an array of ailments, such as neurological conditions, blood disorders, autoimmune diseases, and Chronic pain. J&J's medical devices and diagnostics division offers surgical equipment, monitoring devices, orthopedic products, and disposable contact lenses, among

other things. Its consumer products segment makes over-thecounter drugs and products for skin and hair care, baby care, oral care, first aid, and women's health.

STRATEGIES

A strategy is a long term plan of action designed to achieve a particular goal, most often winning.P&G announced “connect & develop” strategies P&G has announced a goal of accessing 50% of its new ideas, technologies, and products from external sources. A key element in this open innovation strategy is the effective utilization of the Internet to match technical needs with the right innovators around the world who have technology solutions and "ready-to-go" products that P&G can utilize. Nine Sigma is one of the leading companies in the field of innovation sourcing. Through its proprietary Internet-based Managed Exchange process, Nine Sigma delivers connections to sources all over the world to meet its clients' most challenging needs. In the past 18 months, P&G and Nine Sigma have worked together to find solutions and opportunities across P &G's global business units.

Leadership

P&G market shares are growing in more core categories, on more leading brands, at more top customers and in more big countries this year than last. P&G has the leading brand in 29 of 47 core categories in the U.S. today.

Global Presence

we have on-the-ground operations in 80 countries. Our structure is based on Global Business Units spread across the U.S., Europe, Latin America, and Asia.

Growth

P&G’s business is strong. We are delivering on our goals of:4 percent to 6 percent topline growth, excluding foreign exchange effects.Double-digit core earnings-per-share growth.Total shareholder return in the top third of P&G's peer group.

InnovationWe're innovating in every core P&G category, and creating new categories. For example, in 2001, six of the top ten best-selling new non-food products in the U.S. were P&G brands. We've developed whole new categories like disposable diapers and laundry detergents in the U.S, and most recently, home dry cleaning (Dryel) and fabric refreshers (Febreze). We consider product research and innovation to be the cornerstone of our success. P&G invests more than

$1.2 billion a year on research and development, an investment that pays off. We file for nearly 20,000 patent applications every year, making P&G among the most innovative companies in the world. P&G employs more PhD scientists than MIT, Berkeley, and Harvard combined.

Promotional strategies

Coupons have been a promotional strategy for more than 100 years, it is estimated that 3000 manufactures print 310 billion coupons. While coupons are believed to be effective in enticing consumers to try and to continue to buy a product, less than 2% of distribution coupons areredeemed, leading manufactures and retailers to question how effective couponing really is in today’s market-place.

Pricing strategies

Procter & Gamble's new low price strategy on some of its product lines has been getting a lot of play in the consumer and business press, but the spotlight has fallen almost entirely on supermarkets. Given the volume that food stores command and the strong symbiosis between P&G and the grocery trade, perhaps that's natural.

Connect and Develop strategy

P&G has announced a goal of accessing 50% of its new ideas, technologies, and products from external sources. A key element in this open innovation strategy is the effective utilization of the Internet to match technical needs with the right innovators around the world who have technology solutions and "ready-to-go" products that P&G can utilize. NineSigma is one of theleading companies in the field of innovation sourcing. P&G and NineSigma have worked together to find solutions and opportunities across P&G's global business units. By utilizing NineSigma's unique process, P&G can be more proactive in accessing the tremendous innovation assets and ideas that exist outside of Procter & Gamble.

Present and future

With a presence in more than 140 countries, Procter & Gamble serves a potential consumer market of five billion, and employs around 103,000 people. Turnover last year was $3 5 billion and net profit more than $3 billion. On BSE, while P&G is currently valued at Rs 1,988 crore, Gillette's market cap is Rs 2,199crore Engineering products would soon be sourced from India instead of Japan.

SWOT ANALYSIS

STRENGTHS

1. Business and community partnerships

Improving lives in all countries and communities has led to a focus on building effective business and community partnerships in areas where they can make a meaningful difference : education, economic development,

2. Leadership focus and accountability

To assess progress and reinforce leadership accountability for corrective actions, management shows strong visible leadership, commitment and constant focus.

3. Talent support and development

P&G recruits the best talents ,leverages the full talent of each individual through effective assignment and promotion planning processes and executing critical systems that affect and support retention of employees .employee support groups and network teams perform effective recruiting, join-up and development efforts.

4. Organizing facts

For many years, P&G has been recognized across the globe as one of the "best places to work" and for improving lives in the communities where they operate. This recognition is reflected in many publications, like, Fortune, Working Mother and Latina Style.

5. Employee networks

Employee support groups and network teams operating throughout the organization contribute strongly to effective recruiting and development efforts. 

6. Inclusive culture

P&G leaders create an inclusive environment that welcomes and embraces diversity in the employees, regardless of their individual differences, talents or personal characteristics. This is an environment that provides everyone equal access to information, opportunities and

involvement, so each person learns, grows, excels and maximizes his or her personal contribution.

WEAKNESSES:

1.The company introduced toll-free numbers for the costumers but in October 1981,this facility turned into a backdrop for the company as public used it for enquire about the rumour of the ownership of the company by the Church of Satan and the president and chief of P&G John Smale being its member. in July 1982,the calls peaked up to 15,000.

2. Although the company changed its logo in 1985,it still appears at the end of certain commercials in China and Japan, stock certificates and at the entrance of of some P&G facilities.

3. P&G is one of the largest corporate producers of air pollution, emitting green house gases and toxic chemicals.

OPPURTUNITIES:

1.P&G,being a highly diversified organization, can out think, out innovate and out perform an homogeneous organization.

2.P&G may understand the needs of the diverse consumers and work effectively with customers and suppliers to fulfill its values ,principles and purpose.

3. It can delight the consumer with sustainable innovations that will improve the environmental profile of the products, and thereby increasing the sales.

4. Working transparently with the stakeholders can enable freedom to innovate in a responsible way.

5. P&G can focus on shifting its product portfolio to faster growing high margin businesses.

6.The company may concentrate on its core business (through innovation), to expand penetration in the developing countries and restructuring its existing businesses.

THREATS

1.The likelihood of one of their products cannibalizing the sales of another. the products may directly compete with one another

2.Due to high cultural diversity, problems may arise as a course of miss communication.

3.As a result of language difference, dubbed commercials may be miss interpreted.

4.There is an enormous chance of competion in the market at the higher positions.

5.As the range of its products is very vast,there are even greater number of their substitutes.

6.A change in the consumers’ taste can affect the demand for the products.

P&G’s GROWTH OVER LAST 5 YEARS :

Amounts in millions, except per share amounts 2009 2008 2007 2006 2005

Net Sales $79,029 $81,748 $74,832 $66,724 $55,292

Operating Income 16,123 16,637 15,003 12,916 10,026

Net Earnings 13,436 12,075 10,340 8,684 6,923

Net Earnings Margin from Continuing Operations 14.3% 14.4% 13.4% 12.7% 12.0%

Diluted Net Earnings per Common Share from Continuing Operations $ 3.58 $ 3.56 $ 2.96 $ 2.58 $ 2.43

Diluted Net Earnings per Common Share 4.26 3.64 3.04 2.64 2.53

Dividends per Common Share 1.64 1.45 1.28 1.15 1.03

NET SALES

DILUTED NET EARNINGS

Diluted Net Earnings (per common share)  

05 $2.53

06 $2.64

07 $3.04

08 $3.64

09 $4.26

OPERATING CASH FLOW

Operating Cash Flow (in billions of dollars)

05 $8.6

06 $66.7

07 $74.8

08 $15.0

09 $14.9

Net Sales (in billions of dollars)

05 $55.3

06 $66.7

07 $74.8

08 $81.7

09 $79

Summary of 2009 Results

Net sales decreased 3% to $79.0 billion. Net earnings increased 11% to $13.4 billion.. Diluted net earnings per share increased 17% to $4.26. Cash flow from operating activities was $14.9 billion.

Financial Condition

Financial condition continued to be of high profile as operations generated substantial cash and accessing capital markets at competitive rates,.the overall cash status of the company indicates strong business results and global cash management strategy.