Background

Strategic analysis is a process of conducting research on operating environment of a company. The company has to prepare the strategies to achieve the objective and high market share in the market. The environmental analysis has been done to make the strategies (Rauch, et al., 2015). There are many methods to analyse the environment of the company and even though the company has to analyse the financial conditions. In this report, the case of Proctor and Gamble has been taken into consideration to analyse the strength and weakness and financial condition. There are many methods are used to analyse the strategic condition of the company.

In this report, the mission and vision statement of the company will be discussed. In order to achieve the mission the competitive profile matrix of the company will be analysed. External and internal analysis has been done to analyse the company position in the market. Matrix analysis of the company has been done to develop the strategies in the market.

Proctor and Gamble is an American Multinational consumer goods corporation which delivered the personal care and hygienic product care products. These products are also classified in the different segments such as beauty, health care, baby product and many more. In the previous records, the sale of the company is $83.1 billion (P&G, 2018). 

The vision of the company is to provide the best consumer products and services deliver in the world.

In order to achieve this vision the company set the mission and the mission statement of the company is to provide the branded products and services to consumer. It also provides the value that enhances the life style of world’s consumers. By providing the quality services, the company will get the reward by the consumer in terms of the value creation, leadership sales, and profit (P&G, 2018).  

Competitive profile matrix is an important strategic management tool which helps in comparing the firm with the other firm in the industry. In this matrix, the strength and weak point can easily evaluate. This matrix is measured on the basis of critical success factors and these factors evaluate in weight, rating and score (Capps III, & Glissmeyer, 2012). In this matrix, the rating of ranks are differs but the weight stay same of every firm. The greatest thing about CPM is that it helps the company in analysing the company position by comparing with the other competitors.

The competitive profile matrix of the company is showed in the below table:

EFE Matrix defines an analytical technique that helps to analyse the external position of the company or its strategic intents (Hill, Jones, & Schilling, 2014).

Strengths

The company achieved high growth in the market with the high goodwill value. The company achieve the high market share and got the 14^th rank out of 17^th countries. There are many other achievements and uniqueness which are used by the company as strength and these are as below:

• Earnings per share of the company is 3.94(Pizzini, Lin, & Ziegenfuss, 2014).
• The company operates under the SBU (strategic business unit) structure
• The company invest high amount in Research and Development over the $2 billion due to which the company get the all updates of the market.
• Financial position of the company is very strong; 23 brands routinely earn $ 1billion as revenue per year(Abbott, Daugherty, Parker, & Peters, 2016).
• Proposed sale of Pringles is increases by $1.5 billion.
• The company mainly focused on the consumer care products business and earned high goodwill value in the world.
• The company also rewarded for the number 1 soap and cosmetic in the world under the Fortune.
• The new CEO of the company also focused on the lower price products and it’s aimed to target the price sensitive customers. Due to which the company get the high market share by increasing the demand of all types of customer.
• Bounty, Braun, Crest, Downy, Charmin, Gillette, and Pampers are all top brands that are owned by the company.

The company can use these strengths to achieve the objective and improve the weaknesses.

Mission and Vision

Weakness

There are many weakness point in the company due to which the company fails in achieving their objectives. The points are given below:

• There is no published vision statement due to which the company do not focus on a single statement.
• The company have high goodwill value which is shown as per the good value mentioned in balance sheet and that is $57 billion.
• The company has weak profitability ratios due to which the company is not able to provide high return to their shareholders.
• The company spent $772 million in advertising of the products which is high amount as per the other investments.
• It does not operate as efficiently as Johnson & Johnson operates.
• The profits of the company declined by the 5% in 2011 and yet the revenues increased by rate of 2.9%.
• The consumers do not associate the all brands with the name of P&G they view them as their own distinct company(Albers, Baum, Auerbach, & Delfmann , 2017).

As per the above table, it has been analysed that the liquidity ratio of P&G is constant in the three years but Johnson & Johnson liquidity ratio is increases with the increasing rate. Although, the profitability ratio of P&G is increases with the continuous rate but the ratio of Johnson & Johnson has high profitability ratio. As per the analysis, it can be said that the Johnson & Johnson Company has a strong competitive position in the market.

IFE matrix is a strategic management tool which is used to auditing and evaluating the major internal strength and weakness (Management Mania, 2016). This method is used for the company internal analysis which is described as the table below:

Strength

Weakness

SO Strategies

To produce three lines of higher end fragrances the company spent $400 million in Research & Development (Uhl, & Gollenia, 2016). The higher amount of investment on R&D helps the company in analysing the competitor’s strategies and their strength. The company use this investment as strategies to achieve the objective.

The company invest $ 100 million in advertising of the skin care products (Bull, et al., 2016). It uses the celebrities as a spokesman which increases the demand of the company and that would be used by the company as strategies.

WO Strategies

The company spent more amounts on social media advertising to target the youth by the amount of $100M.

ST strategies

The company engage in talks with the Pepsi to purchase Pringles if the demand is satisfies by Diamond Foods.

The company focused on the low prices cosmetics and fragrances by targeting the price sensitive consumers. The company may suffer loss in the market but if it uses this method as a strategy it will achieve success.

WT strategies

The company can reduce advertising of well-established products in which the company spent large amount of $300 million and it can invest some other products. This strategy helps the company in reducing their weakness.

The SPACE Matrix is a management tool that is used by the company to evaluate the type of Strategy that the company should undertake to achieve the success (He, Song, & Wang, 2015). The Strategic Position & Action Evaluation Matrix focuses on the strategies which help to achieve the competitive position (Ehlers, White & Noack, 2017). The matrix divide into four quadrants and each different quadrants suggest different type of strategy such as aggressive, competitive, defensive, and conservative.

Grand Strategy Matrix is a tool which used by the company to analyse the gain insight by using the strategies. It consist the four quadrants such as weak competitive position, strong competitive position, rapid market growth, and slow market growth.

The company stable at the quadrant II, where the company has strong competitive position and continuously grow in the market. It has been seen that the company is growing with the continuous rate. Revenue of the company is increases every year with the rate of 5%. The company has effective strategies which help it to gain the competitive advantage in the market. The company has 14^th rank in the 17 the countries which states it has strong competitive position which can easily compete the other companies. The company growth and competitive position states that P& G is mentioned at the appropriate side.

Competitive Profile Matrix

From the above analysis, it has been recommended that the company has to take some steps to improve the performance to achieve the objective. The points are given below:

The company can spend $400 million in research and development to produce the different level of higher fragrances (Wheelen, Hunger, Hoffman, & Bamford, 2017).

The company invested $ 772 million in advertisement department which is high amount; it has to reduce this amount and invest in the other departments (Zainudin, & Hashim, 2016). The investment in the other departments helps the company in grabbing the high market share in the market.

The company can expand the business by aware the more number of consumers. Increasing social media advertising helps to target the large number of young people in the world. The company has to improve the social media advertising.

The company has to maintain the raw material to fulfil the demand of consumers with the quality. The high quality of product attracts the large number of consumers so that the company can achieve the high market share.

Conclusion

From the limelight discussion, it has been concluded that the analysis should be done to develop the strategies to achieve the objective of the company. In this report, matrix has been prepared to analyse the competitive position of the company. As per the grand strategy matrix, the company is continuously growing with strong competitive position but it has to develop the new strategies. The company also has to focus on some important areas so that the company can achieve the high market share.

References

Abbott, L. J., Daugherty, B., Parker, S., & Peters, G. F. (2016). Internal audit quality and financial reporting quality: The joint importance of independence and competence. Journal of Accounting Research, 54(1), 3-40.

Albers, S., Baum, H., Auerbach, S., & Delfmann, W. (2017). Strategic management in the aviation industry. Routledge.

Bull, J. W., Jobstvogt, N., Böhnke-Henrichs, A., Mascarenhas, A., Sitas, N., Baulcomb, C., & Carter-Silk, E. (2016). Strengths, Weaknesses, Opportunities and Threats: A SWOT analysis of the ecosystem services framework. Ecosystem Services, 17, 99-111.

Capps III, C. J., & Glissmeyer, M. D. (2012). Extending the competitive profile matrix using internal factor evaluation and external factor evaluation matrix concepts. Journal of Applied Business Research, 28(5), 1059.

Ehlers, G., White, S. R., & Noack, R. M. (2017). Hybrid-space density matrix renormalization group study of the doped two-dimensional Hubbard model. Physical Review B, 95(12), 125125.

Ethiraj, S. K., Gambardella, A., & Helfat, C. E. (2018). Theory in strategic management. Strategic Management Journal, 39(6), 1529-1529.

Gupta, M. (2015). Strategy Formulation for Performance Improvement of Indian Corrugated Industry: An Application of SWOT Analysis and QSPM Matrix. Journal of Applied Packaging Research, 7(3), 3.

He, B., Song, W., & Wang, Y. (2015). Computational Conceptual Design Using Space Matrix. Journal of Computing and Information Science in Engineering, 15(1), 011004.

Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an integrated approach. Cengage Learning.

Lashgari, S., Antuchevi?ien?, J., Delavari, A., & Kheirkhah, O. (2014). Using QSPM and WASPAS methods for determining outsourcing strategies. Journal of Business Economics and Management, 15(4), 729-743.

Management Mania. (2016). IFE Matrix. Retrieved from: https://managementmania.com/en/ife-matrix

P&G. (2018). Annual Reports. Retrieved from: https://www.pginvestor.com/CustomPage/Index?keyGenPage=1073748359  

P&G. (2018). Who We Are. Retrieved from: https://us.pg.com/who-we-are/

P&G. (2018). Our Brands. Retrieved from: https://us.pg.com/brands/

Pizzini, M., Lin, S., & Ziegenfuss, D. E. (2014). The impact of internal audit function quality and contribution on audit delay. Auditing: A Journal of Practice & Theory, 34(1), 25-58.

Rauch, P., Wolfsmayr, U. J., Borz, S. A., Triplat, M., Krajnc, N., Kolck, M., & Mühlberg, C. (2015). SWOT analysis and strategy development for forest fuel supply chains in South East Europe. Forest Policy and Economics, 61, 87-94.

Uhl, A., & Gollenia, L. A. (Eds.). (2016). Business transformation management methodology. Routledge.

Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2017). Strategic management and business policy. pearson.

Zainudin, E. F., & Hashim, H. A. (2016). Detecting fraudulent financial reporting using financial ratio. Journal of Financial Reporting and Accounting, 14(2), 266-278.