Of its five business segments, the majority of P&G’s sales and earnings are derived from its Fabric Care and Home Care business.
The company’s Baby, Feminine and Family Care segment is the second-largest grossing segment at Procter & Gamble.
Procter & Gamble’s Beauty segment includes products such as deodorants, cosmetics, personal cleansing, skin care, and hair care.
In the six months ending December 31, 2014, P&G’s net sales stood at $40.3 billion. Of this, 9.6% came from the Grooming segment.
P&G currently makes up 2.8% of the SPDR Dow Jones Industrial Average ETF (DIA). Some of the most popular companies in this ETF are Apple (AAPL) and Walt Disney (DIS).
Procter & Gamble continues to look at large developing markets where it thinks it can win enough market share to take a leadership position.
Procter & Gamble aims to harness opportunities in developing countries like China, India, and Russia to enhance its market share as well as stabilize its top-line growth.
Organic revenue grew by 1% or more in all segments of emerging markets in 3Q15, except for in the Beauty segment. Growth was driven by innovations and pricing.
P&G reported $0.15 billion in gains from divestitures in fiscal 2014 and $0.63 billion in 2013. The sale of Wella and Clairol could be the biggest divestments yet.
Since January 1, 2015, P&G’s stock price has fallen by over 10%. The stronger dollar is mainly to blame. It reduced reported sales from overseas.
P&G pays dividends to its shareholders. In fact, it’s been paying them for 124 consecutive years, ever since its inception.
In an effort to partially digitize its supply chain, P&G has introduced an automated re-ordering system. It maintains a count of inventory in stores and relays the information to its suppliers.
Last August, P&G announced it was working on exit options for ~100 brands to improve sales and profitability. All of the brands contributing little to growth will be disposed of.
In 2001, P&G established an innovation strategy program called “Connect and Develop.” The program has allowed the company to better understand consumer behaviour.
Lafley moved to close the gap between P&G’s high prices and those of competitors such as Colgate-Palmolive (CL) and Kimberly-Clark (KMB). He also introduced new low-price products.
P&G is one of the world’s biggest advertisers. The company has defined many of the marketing strategies used globally.
The emerging markets of Asia, Eastern Europe, and Latin America offer ample growth opportunities for the consumer staples sector.
The Health Care segment is P&G’s smallest segment. The segment’s net revenue for the year ending June 30, 2014, was $7.8 billion, or 9.5% of the company’s total net revenue.
P&G’s Fabric Care and Home Care segment’s annual revenue was reported to be $26.1 billion in fiscal 2014. It contributed 31.7% of the company’s total net sales.
In examining Porter’s five forces at work at P&G, we find that three competitive forces are horizontal in nature and two are vertical.