P&G Strategy

Executive Summary Competitive analysis of P&G often focuses on hard outcomes like market share, gross margin, and number of patent applications but misses some under-appreciated but nevertheless critical strategies that drive P&G’s business. The least understood and most powerful P strategy Is leveraging Its scale. Least understood because It Is hard to measure; most powerful because It touches everything the company does.
P& G has four separate identifiable scale leveraging strategies: 1 a retail trade strategy a top down Corporate vs.. Division/brand funding strategy a consumer cohort strategy systemic strategies Scale Is becoming Increasingly important, particularly as retailers globalize and continue to drive out supply chain costs. We bring Industry-leading supply chain management and the Intellectual capital of our people to retail partnerships. We have higher-than-average market shares at our top global retailers.
As big customers grow, P’s overall market share grows. Leverages Its Scale In Ways That Competitors Don’t Fully Appreciate Leveraging scale with the retail trade These are programs that have a high perceived value to the retailer and reinforce P’s competitive advantages. Of course, these programs are most aggressively sold to the more enlightened retailers who are gaining share in the marketplace. In fact, gaining share with growing retailers is another major P&G strategy. Everyone recognizes that retailers are becoming more and more powerful, demanding more price concessions from manufacturers while themselves marketing private brands of higher and higher value to consumers. Most manufacturers respond by dumping cash into the retailer’s wallet. P responds by leveraging its scale. P is investing tens of millions of dollars in Supply Chain efficiencies to come the low-cost distributor, developing innovative distribution concepts and then “marketing” their advantages to retailers with sophisticated Activity Based Costing software tools.

In addition, high volume from multiple categories permits P account handlers at all levels to offer retail customers benefits such as: Account- specific consumer research Major theme events with genuine substance which make the retailer look good to their consumers (e. G. , the Women’s Health Initiative at Wall*Mart) Multi-category consumer studies (e. G. Mothering) Software analytics We see retail consolidation as an opportunity that P&G is uniquely capable of leveraging.