Procter & Gamble Business Model

Introduction

Procter & Gamble (NYSE: PG) is the world’s largest consumer goods company, with an annual revenue of over $80 billion. While you might remember it for brands like Bounty paper towels and Charmin toilet paper, the company has a portfolio of household products that includes everything from Crest toothpaste to Gillette razors. With operations in 70 countries worldwide, it maintains a razor-thin focus on innovation and superior customer service—two areas where P&G continues to shine. Its name is well-known among shoppers, who associate its brands with quality and loyalty. Even though the global economy has been slowing down in recent years, P&G has managed to grow sales by 3% annually and core earnings by 8%. The most recent quarter showed signs of weakness as net sales dropped slightly compared to last year. However, management is confident that it can maintain its momentum going forward thanks to stronger investments in advertising spending combined with re-focusing on higher margin businesses.

Founded in 1837, Procter & Gamble (NYSE: PG) is known as the world’s biggest consumer goods company.

Founded in 1837, Procter & Gamble (NYSE: PG) is known as the world’s biggest consumer goods company. It sells products ranging from Tide laundry detergent to Downy fabric softener to Pampers diapers and Bounty paper towels.

In fact, PG is so big that it has a market cap of nearly $250 billion, making it one of the largest publicly traded companies in the U.S., with more than 100 brands globally. The company’s products are sold in more than 180 countries around the world.

Operating in 70 countries worldwide, the company boasts of a more than $80 billion annual revenue and over $9 billion in profit after generating more than $20 billion in free cash flow.

Procter & Gamble is the world’s biggest consumer goods company. The company boasts of a more than $80 billion annual revenue and over $9 billion in profit after generating more than $20 billion in free cash flow. Procter & Gamble operates in over 70 countries worldwide, produces hundreds of brands and products, and employs more than 100,000 people worldwide.

PG has a market cap of $200 billion. In 2017 alone, the company generated about 14% growth on top of an average annual growth rate for three years before that of around 5%. As such, P&G grew its net income by over 4% year-over-year from 2016 to 2017 despite increasing competition from other consumer packaged goods companies like Unilever and Nestle.

P&G has become a global leader thanks to its strong focus on innovation and superior customer service.

Procter & Gamble has become a global leader thanks to its strong focus on innovation and superior customer service. The company’s core competencies include product development, marketing, supply chain management and mergers and acquisitions. In addition, Procter & Gamble places an emphasis on sustainability throughout the product lifecycle.

Procter & Gamble has been recognized as one of the most admired companies in the world by Fortune magazine since it was first published in 1998.

In recent years, it has been re-focusing itself on higher-margin businesses to improve overall profitability.

In recent years, P&G has been re-focusing itself on higher-margin businesses to improve overall profitability. As a result, P&G’s margins have improved over the past two years.

It ranks among the world’s most valuable brands and enjoys a reputation for high quality and customer loyalty.

Procter & Gamble is a leading consumer products company that produces and markets brands such as Tide, Bounty, Pampers and Gillette. As of 2018, it ranks among the world’s most valuable brands and enjoys a reputation for high quality and customer loyalty.

P&G offers a wide range of household cleaning supplies including laundry detergents (Tide), dishwashing fluids (Palmolive) and hand sanitizers (Purell). In addition to these basic products, P&G has developed many other types of cleaning supplies that cater to specific needs within different types of households such as kitchens or bathrooms.

One way P&G generates demand for its products is through advertising campaigns featuring celebrity endorsers like Joe Montana for Tide detergent or LeBron James for Head & Shoulders shampoo.

The company, however, is also criticized for dumping toxic chemicals into local waterways that can cause birth defects.

The company has been accused of dumping toxic chemicals into local waterways, which can cause birth defects. P&G has been working with the EPA to address this issue, but some believe the company’s efforts have fallen short.

P&G has been streamlining its product portfolio by selling off most of its beauty products business to Coty Inc. in 2016.

Procter & Gamble has been streamlining its product portfolio by selling off most of its beauty products business to Coty Inc. in 2016. P&G’s beauty business was a low-margin business and the company wanted to focus on higher-growth businesses like health care, household products and laundry detergents.

Coty Inc., which is controlled by European luxury goods group LVMH Moët Hennessy Louis Vuitton SA (LVMUY), acquired P&G’s fragrance and cosmetics business for $13bn with an aim to own over one third share in the global industry by 2020.

The company is also divesting some of its low-margin food brands while boosting advertising spending to improve profitability.

P&G’s strategy of focusing on higher margin businesses is paying off. The company has sold or closed several low-margin food brands in recent years, including Pringles and Duncan Hines. It’s also divested some of its underperforming beauty brands like CoverGirl and Clairol.

In the first quarter, P&G said sales rose 7% to $16 billion while net income jumped 12% to $2.8 billion—the company’s strongest quarterly results since 2015.

To improve profitability, the company boosted advertising spending by 5% during that period to an average $1 million per day—a record for the brand—and launched a new ad campaign for Tide Pods detergent pods called “The Tide Effect.”

The strategy seems to be working: Procter & Gamble now expects full-year earnings growth between 8% and 10%, up from previous guidance of 6%-8%.

P&G’s strategy of focusing on higher margin businesses is paying off, with the company expecting to grow sales by 3-4% annually and generate 6-7% core earnings growth per year until 2020

• P&G’s strategy of focusing on higher margin businesses is paying off, with the company expecting to grow sales by 3-4% annually and generate 6-7% core earnings growth per year until 2020.
• This growth is expected to come from its higher margin businesses, which include Gillette (razors), Pantene (shampoo), Tide (detergents), Oral-B (toothbrushes) and Vicks VapoRub.

Conclusion

P&G’s focus on product innovation, superior customer service and higher-margin businesses have helped it become a global leader in the consumer goods space. P&G is one of the world’s most valuable brands with a reputation for high quality products and loyal customers. It is also criticized for dumping toxic chemicals into local waterways that can cause birth defects