Procter and Gamble$$s Diversification Strategy

Procter & Gamble $($P&G$)$ has been seeking to create relatedness between various consumer product businesses for many years. In $2005,$ P & G Companies acquired the Gillette Company with high expectations to create synergies between these businesses. Because Gillette$$s consumer health care products$$including products marketed under Gillette, Braun, Duracell, and Oral$-$B brands, among others $$ were focused mainly on more masculine market areas and P&G had more focus on beauty products for women and baby care products, management saw complementary opportunities between these two corporations. However, both businesses needed to sell off other product lines. For example, Gillette had to sell off its Rembrandt toothpaste brand and P&G had to sell off its Spin Brush toothbrush brand.

One area in which they sought to create the potential synergy was combining the toothbrush and toothpaste businesses. In a strategy designed to regain the lead in the market, P&G sought to combine the Crest Toothpaste brand with the Oral$-$B Toothbrush using the $$Pro$-$Health$$ label in seeking to sell both these complementary products. Previously the oral care retail shelves were fragmented with toothbrushes in one area and toothpaste in another. As such, the combined approach may provide P&G an advantage that allows retailers to save precious shelf space and makes it easier for customers to find the separate products. However, because they had to sell off some of the other leading brands in the oral health segment, they lost some prospective market power.

Although this strategy appeared to have potential, it was much more difficult to create actual operational relatedness between the products than either P&G or Gillette had expected. First, the management decided that they needed to put the employees in one place. Accordingly, they moved the essence of the operations to Ohio, near P&G$$s headquarters. In the process, however, many of the Boston$-$area Gillette employees decided not to move, leading to an exit of talent. Second, P&G and Gillette had different ways of making business decisions. At Gillette, managers were used to having freedom to make decisions, whereas the culture of P&G was more of a consensus$-$seeking process in making major decisions. Eventually, some of the managers retired. The business cultures never truly united, even after the combination of employees in Ohio, because these firms had previously been competitors.

The combination of the research unit in charge of providing new products for the Pro$-$Health project proceeded much better than the combination of the production and marketing personnel in Ohio. The most likely reason is that the research unit employees were able to stay in their general locations and collaborate through conferences and electronic means.

Read the above case and answer the following $4$ questions:

Question $1$: What can you say about the strategies adopted by P&G$?$ Discuss and elaborate on each by giving your opinion. $(20$ pts$)$

P&G

Question $2$: What were the problems faced at the implementation phase? Discuss. $(10$ pts$)$

Question $3$: Develop a SWOT Matrix for the case$/$organization$,$ making sure to describe and justify at least $3$ strategies for each of the $4$ pairs $($SO$,$ ST$,$ WO$,$ WT$).(15$ pts$)$

Strengths Weaknesses Opportunities Threats

Question $4$: What are your recommendations for P&G$?(10$ pts$)$