Evolution of Strategy at Procter Gamble - Essays -

Procter and Gamble What strategy was Procter and Gamble pursuing when it first entered foreign markets in the period up until the 1980s?

In the beginning the the company pursued International strategy. International strategy refers to activities that happen crosswise over multinational enterprises in the private sector. Although international strategy refers to doing business across nation-state boundaries, it is based on home home market market resourc resources. es. Similar Similarly ly Procte Procterr and Gamble Gamble develop developed ed the new produc products ts in incinnati and after that depended on semiautonomous foreign subsidiaries to make advertise and circulate those items in various countries. !his strategy started to fail and P"G started to e#perience sluggish profits and sales in $%%&. Why do you think this strategy became less viable in 1990s?

!he strategy became became less viable viable because P"G's P"G's was facing high costs costs because of of high duplication of assembling, and marketing in various national subsidiaries. (uplication was the ma)or cause of high costs. Secondly, the barriers to low cost trade were falling rapidly around the globe, and fragmented national markets were converging into bigger international markets. markets. *ikewise, *ikewise, the retailers retailers through through which the organi+ation organi+ation disseminated disseminated its items were  becoming bigger and more global, and were demanding price discounts from Procter and Gamble. What strategy does P!G appear to be moving toward? What are the benefits of this strategy? What are the potential risks associated with this strategy?

!he company appears to be moving toward transnational strategy. As it was an international  business structure where P"Gs business activities were composed by means of collaboration and relationship between its head office, operational divisions and globally found backups or  retail outlets. !he company now comprised comprised of seven business business units which were centrali+ed. "enefits# !he ma)or advantage a transnational strategy offers is the centrali+ation advantages

give given n by glob global al proc proced edur uree alon alongs gsid idee the the near nearby by resp respon onsiv siven eness ess norm normal al for for locat locatio ion n methodologies. Another

benefts is that

the transnational organi+ation is adaptation to all

environmental situations and achieving fle#ibility by capitali+ing on knowledge flows which take take the form form of decisio decisions ns and value-a value-adde dded d inform informatio ation n and two-way two-way commun communica ication tion throug throughou houtt the organi+ organi+atio ation. n. In additio addition, n, a transna transnatio tional nal strategy strategy is the differ differenti entiate ated d contributions by all its units to integrated worldwide operations

$isks#  !he ma)or risk involved with this strategy is that attempting to accomplish cost

efficiencies, worldwide learning, and location and consumer responsiveness places troublesome and conflicting reuests on an association. (ealing with these clashing reuests reuires the setting of control and motivational arrangements for individuals and associations that constrain ad)usting of these reuests at various levels inside firms. !he authoritative difficulties include dealing with these inborn clashes to resolutions that serve the best advantages of the firm general.