After discussing the issues confronting P&G and how the company responded to these, we will now move on to Procter & Gamble’s prospects for the future by examining the fit between its growth strategy and internal resources vis-a-vis the pressures of the company’s external environment. Procter and Gamble’s historical growth has been mainly driven by its strategy of global conglomeration through diversification and acquisitions.This has allowed the company to easily establish its global operations and to continue penetrating new markets. However, one of the challenges confronting Procter and Gamble is the increasing maturity and growing competition in global markets in which it operates (Dodgson 2006, p. 338).
Procter and Gamble is also threatened by the declining market share of some brands in its portfolio as a result of changing consumer preferences and the emergence of competitor products.On the other hand, there is reason to believe that Procter & Gamble’s strong emphasis on product innovation will enable the company to pursue growth both within and outside the home and beauty products market. Already, the company has successfully penetrated the Japanese and East Asian market with its home and beauty products (Bartlett 2004, p. 3). At the same time, the opening up of previously unavailable markets in Asia, such as China, will provide Procter & Gamble with the necessary market it needs to continue its global expansion.However, unless Procter & Gamble is able to leverage its focus on innovation in the development of new and better products to take advantage of the changes in consumer preferences, its global strategy is not likely to be sustainable over a long period of time as markets become more and more competitive and mature.
Consequently, one of the most important benchmarks for Procter & Gamble’s continued success is its ability to attain considerable growth by holding its current market share in the domestic and global markets.In this effort, the company’s reputation as one of the world’s leading corporate brands would give it an advantage in the introduction of new products into the market. Another measure of success would be the company’s ability to maintain the appeal of its existing brands in the face of stiff competition while developing new brands and products. Likewise, Procter & Gamble’s ability to enter, develop, and capture new markets as well as penetrate existing ones would be an indicator that the company still has positive growth prospects.There are positive signs that the company is working hard to achieve continued growth. First, Procter & Gamble recently overhauled its organizational structure through Organization 2005, which made new business and product development a top priority instead of marketing (Bartlett 2004, p.
4). This move reinforced and renewed the company culture of innovation and risk-taking by enhancing the company’s ability to develop new products and shortening the period that it took to take an innovation to the market (Dodgson 2006, p. 337).In the same manner, Organization 2005 also encouraged the entire organization to explore the introduction of new products in response to consumer needs and demands. One of the opportunities it has to seriously address, however, is the emerging trend for consumer preference towards ethical consumption and society’s increasing demand for ecological efficiency from companies.
It is safe to assume that this renewed focus on innovation would enable the company to address ecological constraints and market trends, including the increasing social demand for products that pose minimal or no risk at all to people and the environment.Thus, it can be said that Procter & Gamble is far from bowing out of the household and beauty markets despite the challenges confronting it. Although it cannot be denied that the company has experienced a series of ups and downs in its bid to conquer the global market, its return to the basic driver of its business, which is innovation, promises shareholders and consumers that the company will continue to grow through its chosen strategy.
