On July 30, 2015, Procter & Gamble (P&G) announced headline double digit earnings per share growth for the year ended June 30. A closer look at the numbers suggested a less healthy picture. Sales, volumes, and operating profits were down. Investors were not impressed; shareholders were becoming increasingly impatient with the results of Chairman and CEO A.G. Lafley's attempted turnaround. Five-year shareholder returns were well below those of the S&P 500 and the S&P 500 Consumer Staples index. After returning to the company in 2013 in the face of stalling growth, Lafley had announced that P&G would focus on 10 high-growth categories and divest 100 smaller brands in the portfolio. As of September 2015, Lafley had negotiated the sale of 93 brands. Shareholders were left wondering whether this would be enough. Two days before the results were published, P&G announced that 35-year P&G veteran David Taylor would become CEO on November 1, 2015. Lafley would remain Chairman. At the time, Taylor respectfully declined to be interviewed by the press. He had a lot to think about.
Swot Analysis of "Procter & Gamble, 2015" written by John R. Wells, Galen Danskin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Lafley 2015 facing as an external strategic factors. Some of the topics covered in Procter & Gamble, 2015 case study are - Strategic Management Strategies, Competition, Customers, Globalization, Mergers & acquisitions and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Procter & Gamble, 2015 casestudy better are - – technology disruption, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google,
increasing commodity prices, geopolitical disruptions, etc
Introduction to SWOT Analysis of Procter & Gamble, 2015
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Procter & Gamble, 2015 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lafley 2015, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lafley 2015 operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Procter & Gamble, 2015 can be done for the following purposes –
1. Strategic planning using facts provided in Procter & Gamble, 2015 case study
2. Improving business portfolio management of Lafley 2015
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Lafley 2015
Strengths Procter & Gamble, 2015 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lafley 2015 in Procter & Gamble, 2015 Harvard Business Review case study are -
Innovation driven organization
– Lafley 2015 is one of the most innovative firm in sector. Manager in Procter & Gamble, 2015 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Strategy & Execution industry
– Procter & Gamble, 2015 firm has clearly differentiated products in the market place. This has enabled Lafley 2015 to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Lafley 2015 to invest into research and development (R&D) and innovation.
High brand equity
– Lafley 2015 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Lafley 2015 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Lafley 2015 in the sector have low bargaining power. Procter & Gamble, 2015 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Lafley 2015 to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Lafley 2015
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Lafley 2015 does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Lafley 2015 has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Procter & Gamble, 2015 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Lafley 2015 has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Procter & Gamble, 2015 Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to lead change in Strategy & Execution field
– Lafley 2015 is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Lafley 2015 in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Lafley 2015 is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Lafley 2015 is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Procter & Gamble, 2015 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Lafley 2015 in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Procter & Gamble, 2015 Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Analytics focus
– Lafley 2015 is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by John R. Wells, Galen Danskin can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses Procter & Gamble, 2015 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Procter & Gamble, 2015 are -
Increasing silos among functional specialists
– The organizational structure of Lafley 2015 is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Lafley 2015 needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Lafley 2015 to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Lafley 2015 products
– To increase the profitability and margins on the products, Lafley 2015 needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Lafley 2015 has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Procter & Gamble, 2015 should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Lafley 2015, firm in the HBR case study Procter & Gamble, 2015 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Lafley 2015 has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Workers concerns about automation
– As automation is fast increasing in the segment, Lafley 2015 needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High operating costs
– Compare to the competitors, firm in the HBR case study Procter & Gamble, 2015 has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Lafley 2015 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Procter & Gamble, 2015, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Skills based hiring
– The stress on hiring functional specialists at Lafley 2015 has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Aligning sales with marketing
– It come across in the case study Procter & Gamble, 2015 that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Procter & Gamble, 2015 can leverage the sales team experience to cultivate customer relationships as Lafley 2015 is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Lafley 2015 is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Procter & Gamble, 2015 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Procter & Gamble, 2015 | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Procter & Gamble, 2015 are -
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Lafley 2015 in the consumer business. Now Lafley 2015 can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Lafley 2015 is facing challenges because of the dominance of functional experts in the organization. Procter & Gamble, 2015 case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Lafley 2015 can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Procter & Gamble, 2015, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Lafley 2015 to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Lafley 2015 to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Lafley 2015 can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Procter & Gamble, 2015 suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Building a culture of innovation
– managers at Lafley 2015 can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Lafley 2015 in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Developing new processes and practices
– Lafley 2015 can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Lafley 2015 can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Lafley 2015 has opened avenues for new revenue streams for the organization in the industry. This can help Lafley 2015 to build a more holistic ecosystem as suggested in the Procter & Gamble, 2015 case study. Lafley 2015 can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Lafley 2015 to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Lafley 2015 can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Lafley 2015 can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Threats Procter & Gamble, 2015 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Procter & Gamble, 2015 are -
Shortening product life cycle
– it is one of the major threat that Lafley 2015 is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Lafley 2015 in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing wage structure of Lafley 2015
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Lafley 2015.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Lafley 2015 in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Consumer confidence and its impact on Lafley 2015 demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Lafley 2015 will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Regulatory challenges
– Lafley 2015 needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Lafley 2015 business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Lafley 2015 can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Technology acceleration in Forth Industrial Revolution
– Lafley 2015 has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Lafley 2015 needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Lafley 2015 needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Procter & Gamble, 2015, Lafley 2015 may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Weighted SWOT Analysis of Procter & Gamble, 2015 Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Procter & Gamble, 2015 needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Procter & Gamble, 2015 is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Procter & Gamble, 2015 is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Procter & Gamble, 2015 is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Lafley 2015 needs to make to build a sustainable competitive advantage.
