Does Procter & Gamble’s Marketing Still Hold Up?

A marketing-focused SWOT analysis of one of the world’s giants

SWOT is a very simple marketing theory that holds so much power if used in the right way. I believe that a SWOT analysis is vital, not only in general but also in looking at specific content, such as how a company would perform if it entered a foreign market. In this piece, we’ll have a look at a more general perspective of Procter & Gamble.

But first, a look into what a SWOT analysis is.

We can use this tool to help us as marketers towards our prediction of the market as well as the performance of the business itself. Even if SWOT analysis looks at the broader picture, I think it’s still a strong tool in portraying the position of a company in general or within a context.

I have chosen Procter & Gamble because of its sheer size as well as its influence in different markets. I believe that there are many points to be discussed and analyzed to see where this organization stands. Managing over 180 markets and owning 65 brands (most at the top of the market in their own segment), it’s known as a corporation of the future that’s also proven its market control through marketing.

SWOT looks at four very different and specific points that help to offer a strong analysis:

1. Strengths
2. Weaknesses
3. Opportunities
4. Threats

You can decide to use this tool to either have a simple description of the business to date, or you can use it to create a complex report. You can also take into consideration different factors that can be added to one of the points, depending on whether the factor being analyzed is considered a strength or a weakness.

Strengths

Strengths should represent the base points of a company that make it stand out in the market and impact in a positive way on the company’s overall performance. At this point, we should also outline what makes the company stable, not only within a specific market but also overall.

You need to keep in mind that the strength of one company may be the weakness of another. For this reason, make sure that the research you do is reliable, both to gain a good analysis and to ensure that the SWOT analysis can be used at its greatest efficiency.

Strengths can come in many forms, such as the financial power of a company or the number of acquisitions the company has made in a certain country.

In the case of Procter & Gamble, we have a huge number of strengths. These strengths have not only have brought the overall performance of the organization above many companies in different markets, but they’re also what will keep the company stable for many years to come.

Mergers and acquisitions

The company itself is not actually very well known by the public as it’s an organization that controls many other MNEs (Multinational Enterprises). Therefore the name isn’t marketed — it doesn’t need to be. Procter & Gamble is known for owning over 50 brands and continuing to acquire more and more every year.

It’s not only acquiring MNEs because of their big financial success. Some of them have been acquired when they were quite cheap because they ended up being overtaken by their competitors. This means that P&G plays a big role not only in developing the management of human resources but also in the way products are marketed in different markets to come out on top of competitors.

With the economy of the world reaching its highest point ever, we’re offered a wider market that makes more space for newer competitors that can take the audience by surprise with new and innovative ideas.

As P&G has been in the market for quite some time, it’s acquired lots of experience in marketing, especially from owning so many different brands. Therefore it has the most strength as a company in marketing in the markets where they do business.

It’s not been very dependent on mergers as they do not always come to success. Acquisitions, however, are its strong point in doing business. In some smaller markets, it has actually used this strategy to take out the competitors by literally buying them out. Because of its strong financial muscle, P&G sees that, in some cases, it’s more convenient to just buy out the competition rather than investing lots of money in marketing research and analysis.

Organizational management

As of 2019, P&G has 492 subsidiaries that it has to manage under different brands located in different countries and markets. We should look at them not only as subsidiaries but also as assets that have the potential to make a more significant footprint in the market if the right resources are invested, as well as expertise.

P&G is well known for not changing the businesses it acquires but enhancing them. It’s true that its managerial model is very good, but this does not mean that it will work in every venture it acquires. A good example was when P&G acquired Gillette. P&G saw that Gillette was doing some things very well, such as performance within production and the efficient use of resources, which P&G has not changed. However, Gillette’s marketing campaigns were mediocre at best, which was what was dragging it down in the market.

Many, even to this day, don’t realize the importance of a good marketing campaign, especially with the age of digitalization that’s just begun. You may have a good product that’s of high quality; however, the market will not always recognize this by itself.

From a managerial point of view, it may seem difficult to maintain so many subsidiaries under control. However, as P&G likes to say, if you have people who are experts in their fields or departments, the job is easy. You need good human resources in order to make such a big organization function, and P&G has one of the best, if not the best, organizational structures in such a big company.

Divided growth

A very strong point of P&G is the variety of brands that it owns, which has allowed it to grow and expand all over the world, entering all world markets. This has allowed it to set a very strong base, not only from a financial point of view but also because of a structure that offers an incredible advantage upon future expansion, as well as the security of never being overthrown by any competitor.

By dividing its growth in so many directions around the world, P&G has gained insight into different foreign markets. This has allowed it to develop its international business strategies for future expansions, such as:

• Merging with other existing companies
• Acquiring tier-three companies to further develop within the market
• More partnerships to evolve within the market

The ability to have insight into many different markets from different cultures is amazing and a huge competitive advantage for the future. This is the reason why it’s quite easy for P&G to implement within a new market or foreign country, even if the statistics may not look so bright. It’s not only the experience brought by expertise in the firm but also the patterns that they have created through gathering data.

By dividing its growth, it has also enhanced the process of creating awareness for the firm. If you’re planning to market on an international level, you need to understand that brand recognition is simply vital for the future of the business itself. Furthermore, this ideology certainly applies even more in 2019 with the start of the digital age, where most of the marketing is online via social media platforms and online advertising campaigns.

Weaknesses

This is the point where we discuss the weak points of a business that pull it toward collapse. It’s imperative to understand that negative points or facts about the business are not necessarily weaknesses. However, this depends very much on the context, as well as on the reason you’re doing a SWOT analysis.

It may be a surprise that Procter & Gamble has any weaknesses, given its financial power, as well as the size of the firm. However, from all of my years in business studies, I can tell you with certainty that every firm or organization has at least one weakness.

In the case of P&G, we’re looking at two weaknesses that may seem at first as not so impactful. However, every small rock supports a big stone.

Strong dollar

First of all, I shall explain what the statement strong dollar means as it’s not often used. If a business has a strong dollar, it’s not good news at all because the business is exchanging dollars for other currencies at a high rate. This makes exporting quite expensive, and, especially when exporting at such a large scale, it can make quite a big hole in profits, even for a firm such as P&G.

Actually, for a firm such as P&G, the impact is even bigger. Because it’s making more exports and more profits, it has to exchange a lot more. As the economy of the world keeps evolving, the dollar becomes stronger, which makes it more and more expensive for P&G to export.

Because P&G originated as an American company, it tends to change most of its profits into U.S. dollars from Euros. With the high increase in the value of the Euro in 2019, this can have a huge impact on P&G as their profits can reach as much as $100 billion.

Small interests for investors

This weakness can be seen as another small stone. The financial power of P&G is impressive, to say the least; however, as it expands further and further within foreign markets, it requires more financial resources to maintain growth.

P&G has one of the smallest interests when it comes to its shareholders, and it seems to decrease year by year. Many of the shareholders are starting to see that P&G shares are not so profitable in the long term, so they can always decide to sell out and buy shares in another firm.

If P&G wants to maintain this constant growth, it must understand the importance of its shareholders and how it can ruin its overall growth as well as its ongoing success as a firm.

Opportunities

In this part, we discuss all the future opportunities that the business can take advantage of, as well as ways to grow. We also should consider opportunities that raise more of a gamble, opportunities that come with a risk of failure. In many cases, opportunities come under the category of seeing a high potential for success within a certain firm.

In the case of P&G, we’re looking at a very long list of opportunities. That’s because it has a superior place within most markets and even controls some markets by owning a high number of brands within that market.

Acquisition of competitors

A year ago, I worked with a marketing firm to not only do marketing research for Oral-B but also to create a social media marketing campaign to raise sales and awareness in its younger demographic. The biggest rival of Oral-B is and always has been Colgate. Throughout the research, looking at some financial figures, I always wondered why P&G didn’t just buy Colgate and take control of the dental hygiene market once and for all by controlling the strongest two brands within the market.

It’s true that this is an opportunity that brings higher risks because the cost of Colgate would be exceptionally high if it were interested in selling the firm to P&G. However, the profits that can be made by taking control of the dental hygiene market are unbelievable.

As mentioned before, if we were to talk on a smaller scale, that would present less risk. We can talk about acquisitions of tier-three firms within smaller markets. Even if they may not work out in the end, we still have acquired some assets that are tangible.

Attract new investors

Proctor & Gamble has a chance to acquire potential new investors or to overtake the investors of competitors. However, they need to increase the interest rate for shareholders in order for them to make a bigger profit out of their investment. There’s a trick here. Because the shareholder is making more out of their investment, they would like to invest more or purchase more shares of the business.

If P&G wants to expand more and gain opportunities for larger future projects (as well as acquisitions or mergers), it needs all the financial support it can get to also keep profits high. The idea is to have a system where you keep all your stakeholders happy in order for them to cooperate with you and to continue towards your goal as an organization.

Threats

In this section, we’re talking about some factors that may threaten the stability of the business from all points of view. Just as the opportunities can be associated with strengths to some extent, so can weaknesses be associated with threats: Some competitors may threaten the stability of the business by taking advantage of any weakness.

Investors leaving

The investor problem may not seem big because everyone thinks that such a big firm must have a lot of financial power. However, a big part of the corporation has been built with the help of investors. It’s true that the corporation has huge financial muscle. However, this is not enough for it to expand on its own.

Start-ups as new competitors

This is a major problem that not only P&G but all major corporations have been facing. For many years, P&G has been stocking the shelves of supermarkets with hygiene products, toothbrushes, and razor blades. Start-ups are innovative, and they are thinking ahead. Many of them see such things as a waste of resources and damaging to the environment because they’re difficult to recycle.

One example of this is where Gillette is having trouble with an upcoming start-up that’s investing a lot of resources in a shaving blade that uses laser technology. That means that the consumer isn’t required to buy razor blades for a lifetime. It will be very difficult to respond; however, the threat is not as high as it seems. The laser blade will be quite expensive, so people will still count on Gillette razor blades.

Conclusion

Last but not least, we need to analyze all of these points, in general, to make an assumption about not only the performance of the business but also the future potential the business has.

Strengths

From the strengths that have been presented, we can see that the business is holding up very well because the strengths touch upon the most vital factors for running such an enterprise. We can also look at the weaknesses to compare them to the strengths and see if they outweigh one another or, in some cases, if they balance themselves.

Weaknesses

The weaknesses are showing us that we have a factor that we control and one that we do not. As one of the factors can be altered to not be necessarily a weakness anymore, P&G should make the change. It’s never bad to have as much financial power (investors) on your side as possible, no matter the size of the firm.

Opportunities

As mentioned before, the list of opportunities is immense for an enterprise so big. However, P&G needs to be cautious with such opportunities as they can also have a negative impact.

Threats

I believe that the biggest threat all major corporations face is start-ups because they can have a huge impact on the market overnight. In order to stop this, P&G needs to pay close attention to the behavior of its consumers and all the trends that are going on in different markets.

From all this, I would say that despite any negative points presented in these analyses, P&G is still holding up its weight pretty well. It needs to understand that despite the sheer size of the company and its strong footprint in different markets, small factors, if neglected, can impact the business in a negative way, to the point where it can start losing.

Most markets are evolving at the fastest rate so all businesses must keep up with the changes, not only in consumer behavior but also in the industry itself. At the same time, we are talking about an enterprise that owns 65 brands so it definitely knows what it’s doing.