- 1 Company background
- 2 Introduction:-
- 3 Company Overview:
- 4 Strengths In The SWOT analysis of P&G
- 5 Weaknesses In The SWOT analysis of P&G
- 6 Opportunities in the SWOT analysis of P&G
- 7 Threats In The SWOT Analysis of P&G
- 8 Limitations of SWOT Analysis for Procter & Gamble
- 9 Weighted SWOT Analysis of Procter & Gamble
- 10 Summary & Recommendations – SWOT Analysis of The Procter & Gamble Company
Procter & Gamble Health Ltd (PGHL) The Strategic and Financial SWOT Analysis Review offers you an in-depth SWOT review of the business’ operations.
The profile has been created by the publication’s editor to provide you with an unbiased and impartial overview of the company’s main strengths and weaknesses as well as possibilities for opportunities and threats.
The profile will help you create strategies to improve your business’s performance by allowing you to know your customers and partners and compete more effectively.
|Name||The Procter & Gamble Company (NYSE: PG)|
|Industry||Personal and Household products|
|CEO||David S. Taylor (30/10/2021), Successor: Jon Moeller (01/11/2021)|
|Revenues||$76.21 Billion, 2021 & $70.9 Billion, 2020.|
|Net loss||$14.04 Billion, 2021 & $ 13.1 Billion, 2020.|
|Competitors||Unilever, Colgate-Palmolive, Henkel, Coty, Kraft, The Clorox Company, Reckitt Benckiser, Johnson & Johnson|
Procter & Gamble is a prominent consumer goods brand across the world that has a huge international sales and distribution network.
In addition to its extensive range of products that meet the demands of various customers, it has concentrated on creating an image that is distinctive and has maintained its market position.
As the industry of consumer goods is experiencing fierce competition, the need to focus on innovation is increasingly important for brands that sell consumer goods like P&G to maintain impressive operating and net profit margins.
P&G spends a significant amount every year on promotions and marketing to ensure that it maintains its market share as well as its customer base. Since it is a global brand its strength is in its brand’s credibility.
It is nevertheless focused on innovation to improve efficiency in operations, efficient marketing, and continual product improvement.
In the last few times, it decreased the number of brands, focusing solely on ten product categories and 65 brands that proved to be more profitable.
In the U.S. economy is performing well, and consumer spending is increasing. In this scenario, P&G is thinking of raising prices on some of its most popular products. US market makes up much of the total revenue and sales of P&G.
It was in 1837 that P&G began to be founded 1837 in Cincinnati at the time that British candlemaker William Procter and Irish soap-maker, James Gamble, merged their companies.
With a market cap of $339.5 billion, P&G is an international consumer goods company that produces and distributes personal home, and health-related products.
P&G is a major retailer of products across 180 countries across five operating segments that include beauty, health grooming, home care, and care for children and families.
P&G was ranked 43rd on the US Fortune 500 rankings and was ranked 27th out of the top 50 companies with the most innovation in the US and was ranked 36th out of the 100 leading brands. Let’s look at the SWOT analysis of P&G.
Strengths In The SWOT analysis of P&G
❤️ brand equity: one of the biggest benefits of P&G is that it has brands that are highly important in and of themselves. It has Gillette which is ranked 138th globally and boasts 20 billion dollars in brand value. The company also has Tide as well as Ariel which are among the Top 500. Duracell, Pampers, Pantene, Vicks, Whisper, and Olay are all popular brands in their own right. It is no surprise that P&G has a broad brand and its parent brand boasts an impressive value.
❤️ The economy of Scale – With these top brands within the range of collection, the ability to scale is an advantage for P&G. They share resources, such as factories, warehouses, accounts as well as any other fixed incomes that are, in other words, a non-scalable cost-of-living expense. When the company expands in size, the economy of scale will also grow.
❤️ Excellent R&D One of the advantages of P&G is its outstanding R&D. It has come up with new ideas and introduced numerous new products on the market that have been a hit on the market. This is the reason why P&G has a strong bottom line. The products it offers are all innovative and innovative in the sense that they are not conventional.
❤️ Multinational as well as Multi products line presence P&G is one of the multinational companies that was founded in the United States. It is a formidable presence across the globe and operates in more than 180 countries. In addition to operating in a variety of countries and regions, it also offers an impressive line of products. At the time of writing it was 65 brands, all of which will have their own line of products. You can see the breadth of operations at P&G.
Profit margins that are high due to their spending on R&D and distribution and marketing, P&G believes in keeping greater profit margins. A strategy that has paid off greatly since they enjoy the highest profit margins in the FMCG sector. This results in the brand investing more in branding and thus revenue generation.
❤️ Wonderful distribution channel Fantastic distribution channel Be it rural, Urban, Moden, or online, P&G brands have covered all distribution channels. There is such a huge need for the item itself, that if they’re not in the market, another competitor is likely to be able to take over. However, the work done by distributors is admirable since managing the supply and delivery of a variety of products in numerous areas is an extremely difficult task.
❤️ is known for its marketing tactics The company P&G is well-known for its strategies for marketing and its strategies employed in the field. P&G is one of the companies that employ pull marketing successfully and can be seen in the results through Tide, Ariel, and Olay. Additionally, the integrated marketing communications of P&G are great and utilize various channels to connect with its target audience.
Weaknesses In The SWOT analysis of P&G
❤️ Loss due to the closing of brands The loss was due to the closing of brands Before 2014 P&G was home to more than 300 companies, but in 2014 it reduced its brand portfolio to just 65 brands which contributed to 95% of its total earnings. This change led to P&G also suffering losses due to a large amount of capital devoted to expanding the remaining 235 brands. However, it was a necessary decision that set the tone for the fast growth in P&G.’s P&G brand.
❤️ Organization structure can lead to slow decisions It is slow decision making because it’s an outdated Organization and there are a lot of SBUs and portfolios to manage and manage, decision making is thought to be slow and consequently impacts the entire organization in general.
❤️ A low organic rate of growth Ratio of Growth in the number of customers is slow when the saturation point is reached and less innovation occurs. In the end, P&G is currently in the phase of low organic growth. In order for P&G to be able to overcome this, it needs to come up with some innovative promotional and product tricks to increase sales.
❤️ A regular change has required The need for regular change is a must For products for personal and beauty it is the norm that each month the market requires that the product be replaced. A new scent is launched or a new one is released to the market. Regular changes are an essential demand of the market, which can affect the earnings of the firm.
Opportunities in the SWOT analysis of P&G
❤️ The rural markets One of the biggest challenges for all FMCG companies is to penetrate the market in rural areas, which are price sensitive and insensitive to ads. Accessibility and price are the two main factors that affect the decisions of markets in rural areas. This could be an opportunity for the likes of HUL as well as P&G.
❤️ Grow organically – Through launching new products or stepping up marketing efforts, P&G can get its brand back in the game. Even old-fashioned brands such as Gillette have been affected by private labels such as Dollar Shave Club. Therefore, a growing organic growth rate is a sign of an optimistic future for Gillette’s name.
❤️ Greater purchase power the purchasing capacity of consumers is likely to grow within the next few years as the economies of many countries boom. These emerging economies will lead to more favorable markets, and consequently, they will become the ideal market segments for brands like P&G.
❤️ mergers and Acquisitions The acquisition of local competitors that is successful with their product or distribution channels is a method to get rid of the rivals and to include the brand new item within the portfolio.
❤️ Growth in overseas markets – As we said earlier in the context of increasing purchasing power in less developed and emerging nations, P&G will observe better growth in its overseas markets as opposed to its home market, which is the USA.
Threats In The SWOT Analysis of P&G
❤️ A fierce competition P&G must be constantly concerned about competition, especially from HUL. HUL competes in a number of product lines as well as the brand is always at war, which affects the profit of brands from BTH.
❤️ Localized / Unbranded competition With local governments backing local brands as well as the Make in India campaign, and foreign countries backing their own manufacturing and infrastructure products, I too am increasing and, consequently, offering better local and unbranded competition to brands like P&G.
❤️ Private labels Many retailers like D Mart and Reliance Fresh are launching their own brand names and are developing private labeling as well for personal care products, and more. In the near future, similar offerings can expect by E-commerce companies that create and sell products at lower costs since they don’t need the costs of distribution that they have to pay. Naturally, these private labels will affect the total sales of P&G.
Limitations of SWOT Analysis for Procter & Gamble
While it is true that the SWOT analysis is used widely as a tool for strategic planning, However, the analysis has some drawbacks.
- Certain aspects or capabilities of an organization can be both strengths and weak points at the same. This is among the main drawbacks that SWOT analysis has. For instance, changing environmental regulations can be an issue for the company but as well as an opportunity in the sense that it can allow the company to compete on the same level or gain an advantage over its competitors when it can develop its products more quickly than its competitors.
- SWOT doesn’t provide a way to gain competitive advantages It is not a strategy to gain competitive advantage, therefore it should not be considered a solution in and of itself.
- The matrix serves as an initial point of reference for discussions on how the suggested strategies can be implemented. It also provided an evaluation window, but it did not provide an implementation plan based on strategic competitiveness. Procter & Gamble
- It is a static evaluation that analyzes the existing conditions and a small number of potential modifications. As the environment, circumstances threats, strategies, and circumstances evolve, the dynamics of a competitive setting will not be apparent in one single matrix.
- SWOT analysis can cause a company to focus too much on one external or internal element in formulating strategies. There are interrelations among important external and internal aspects that SWOT doesn’t reveal, which can be vital in formulating strategies.
Weighted SWOT Analysis of Procter & Gamble
Due to the previously stated weaknesses of the SWOT analysis/ matrix, the corporate management determined to give an appropriate amount of weightage to each of the strengths and weaknesses of the business.
Companies also evaluate the probability of events that will occur in the near future, and what the effect will be on the company’s performance.
This is referred to as weighted SWOT analysis. It is superior to basic SWOT analysis as using weighted SWOT analysis, Procter & Gamble managers can concentrate on the most important elements and ignore the less crucial ones.
This also helps solve the long list issue which is when organizations make an exhaustive list of factors but none is considered to be important.
Summary & Recommendations – SWOT Analysis of The Procter & Gamble Company
Procter & Gamble’s competitive position allows it to be resilient in the face of weaknesses within the company and threats from the external world.
For instance, this SWOT analysis reveals the advantages of economies of scale as well as strong brands.
These strengths make it difficult for other companies to directly compete with Procter & Gamble.
Procter & Gamble also enjoys an advantage in terms of competitiveness due to the scale of its operations.
This results in the company being able in maximizing the opportunities for Procter & Gamble in the consumer goods sector.
Despite its high profitability and solid standing in its marketplace, the Procter & Gamble Company must create measures to address its weaknesses and deal with external dangers.
Competition is among the biggest of these dangers. However, it is a lack of online presence, as well as a lack of business diversification, is the biggest weakness of Procter & Gamble.
Based on these weaknesses Procter & Gamble must improve its competitive advantages and capabilities for business in the marketplace for consumer goods.
Based on the findings that were derived from the SWOT analysis and the recommendations below are to address these issues faced by Procter & Gamble: