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SUSTRA - Procter & Gamble (P&G) Case Analysis

P&G created economic value through global expansion by gaining access to new international markets, resulting in over half their $80 billion in annual sales coming from overseas. Their multinational strategy in the 1980s involved developing new products in Cincinnati and relying on semi-autonomous overseas companies to produce, market, and distribute those products locally. While this localization strategy allowed subsidiaries significant autonomy, it also presented coordination problems. P&G's strategies over the years likely met Rumelt's criteria for effective strategies as the company was successful long-term.

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52 views

SUSTRA - Procter & Gamble (P&G) Case Analysis

P&G created economic value through global expansion by gaining access to new international markets, resulting in over half their $80 billion in annual sales coming from overseas. Their multinational strategy in the 1980s involved developing new products in Cincinnati and relying on semi-autonomous overseas companies to produce, market, and distribute those products locally. While this localization strategy allowed subsidiaries significant autonomy, it also presented coordination problems. P&G's strategies over the years likely met Rumelt's criteria for effective strategies as the company was successful long-term.

Uploaded by

Sol Luna
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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SUSTAINABILITY AND STRATEGIC AUDIT

(03 Activity 1)

1. How did the global expansion by P&G create economic value for the company and its
shareholders?

According to the text, P&G does over 80 billion dollars of sales annually. However, 54
percent of these sales come from overseas, as P&G does business in more than 180 different
countries. Thus, P&G created an extensive amount of economic value, as it added additional
markets for their products via global expansion. Capitalizing on this space was inevitably
beneficial to both the company and its shareholders. P&G sells about 80 billion dollars a year,
as per the text. As a result of its global expansion, P&G generated a significant quantity of
economic value. The company has a strong foothold in the markets & industries in which it
performs. P&G's success stems from its ability to tailor its marketing mix to the needs and
cultures of the countries in where it operates.

2. Identify and evaluate P&G’s multinational strategies. What were the problems with this
strategy?

During the 1980s, Procter & Gamble created new goods in Cincinnati and then relied on third-
party suppliers. On semi-autonomous overseas companies to produce, market, and distribute
those products. Overall, the plan appeared to be a hybrid of a little foreign strategy and a little
domestic strategy retained some of its fundamental expertise in international markets and
conducted basic exports, although primarily a localization strategy because P&G let most
subsidiaries to own manufacturing facilities and customize the packaging, brand name, and
marketing message to local tastes preferences.
3. Considering P&G’s strategies over the years, decide and justify if Rumelt’s criteria for
evaluating strategies were met. You may support your answer with additional research.

Considering the P&G’s strategy over the years, I think they met the rumelts criteria
because their business didn’t become successful if they didn’t meet the criteria.

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