Company Analysis

Company Analysis Executive summary Founded as a small company in 2008, Google has grown to be a major technology company operating in almost all countries around the globe. Like many global companies, Google management and major operations are based in Amphitheatre Parkway, Mountain View California.Advertising We will write a custom research paper sample on Company Analysis Google specifically for you for only $16.05 $11/page Learn More Google is the leading world technology firm that aims at improving people’s information and attachment. The company’s aspiration is to improve the lives of multitude number of world inhabitants. To categorize information and make it helpful and easily reached in the globe is the mission of the company. The company’s website is the most acknowledged in the whole world. This is because of innovations in the advertisement and web search. Furthermore, the company conveys relevant cost-effective online advertisement to genera te income. It also provides other businesses with its Ad Words program to promote their products and services. Additionally, Google network uses Ad Sense program to provide relevant ads to improve user experience and to breed profits. It engages in public offering initially completed in August the year two thousand and four. The company overview The foundation of this company was long back in the year nineteen ninety-eight. The company is a major internet services provider both in United States and all over the world. It is based in Amphitheatre Parkway, Mountain View California. In the fiscal nineteen ninety-eight the company was fully incorporation in accordance to the California state company laws and regulations (Google, 2010). Another subsidiary of the company established later established in August the year two thousand was incorporated in the in the state of Delaware. Currently the company is found in many countries around the world.Advertising Looking for research pa per on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Google is a hi-tech company that upholds online website index contents for providers, advertisers, and users. It provides program advertisement based on auction known as Ad Words and Ad Sense. This enables liberation of ads through Google network websites. Programs like Google Display and Ad Word advertisers include interactive ads, images, texts, and videos. The company has Exchange Double Click Ad that is concurrent to public sale for trade of display ad space (Google, 2010). Furthermore, You Tube provides use to advertisers for ad formats, interactive, and videos. The company’s Google Mobile has optimized Google mobile phone application. These devices allow the advertiser to sprint campaign on ad search, download, and browse. Additionally, it has Google local to deliver information locally on the web. The company offers an open mobile source software platf orm and operating system that is Android and Google Chrome OS. It enables different individuals share a variety of ideas online using Google+, Web browsers, and Google Chrome. The company has also provided a podium for customers to exploit internet and TV on a solitary screen. Google Books employed by the company exhibits a place for consumption, searching, and discovering books printed online (Google, 2010). Moreover, the company supplies Google Applications such as Google site, Google translate, Google Calendars, Google Doc, and Gmail for device collaboration and computerizing obscured messages set. The company governance The company s committed to maintaining the highest standards of corporate governance and business conduct according to the corporate governance guidelines (Google, 2011).Advertising We will write a custom research paper sample on Company Analysis Google specifically for you for only $16.05 $11/page Learn More The company also believes t hat these guidelines are essential in running the business in an efficient manner and in serving its stakeholders as well as maintaining the integrity in the market place. Board of Directors currently manages this company (Google, 2011). Eric Schmidt is the Principal Executive Officer. He is the chairperson of the board of directors and chief executive officer. Patrick Pichette is the senior vice-president and chief finance officer (Principal Accounts and Finance Officer). Mr. Sergey Brin holds the position of director and president of technology. Subsequently, Larry Page is the director and president of products. Finally, Shirley Tilghman, Ram Shriram, Paul Otellini, John Hennessy, and John Doerr all serve as Directors. The directors’ responsibility is to oversee the day-to-day operations of the company. The directors run the company with the help of various committees including executive compensation committee (Google, 2011). In addition, shareholders make the company major decisions. The company shareholders are composed of the individual shareholders, institutional shareholders and the mutual fund owners. The company governance efficiency is evident in growth rewards. For instance, the company has experienced a substantial growth of major users, advertisers, and consumers reallocating to online from offline (Dwivedi, 2008). In addition, the company is experiencing rapid improvements in search technology. As a result, speedy deliverance of relevant search outcome and comprehensive index has expanded. Furthermore, speedy innovations have enabled the company to develop products including Place Search, Instant Previews, and Google Instant. Besides, aggressive venture into new businesses such as enterprise, cell phone, and display has led to faster growth of the company. A strategic investment in decisive products like Chrome OS, Chrome, and Android is evident in the past years.Advertising Looking for research paper on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More This has followed the company’s philosophy of open platforms and infrastructure for the achievement of web users. Investment in technologies, services, products reflects the management focus on efficiency and customer satisfaction (Dwivedi, 2008). Ethics and Social responsibility Google has broad defined values that are shared by all the stakeholders particularly the employees and management. The central values are geared towards providing users with dispassionate access to information (Chaffey, 2007). In addition, the central values are designed in such a way that it helps the company to focus on the needs of customers and provide the best services or products. In essence, the company values are meant to abide by the legal requirements, industrial regulations and respect to the competitors (Chaffey, 2007). These common values form the basis in which the company formulated its code of conduct. The approach of the company is to have a code of conduct that fosters highest stand ards of ethical business (Mahaney, 2005). The belief is that high ethical business standards help the company employ great individuals, build great products and services that attract loyal users. The company beliefs are coined in its mission statement that emphasizes mutual respect and trust among employees and users. The company believes that trust and mutual respect are the basis for its success. The company code of conduct is geared towards serving their users. For instance, the company upholds integrity, privacy in addition to freedom of expression while serving users. Moreover, the code of conduct encourages respect among the stakeholders as well as avoiding conflict of interest. Most important is the preservation of confidentiality and protection of the company assets. These include the intellectual property, the confidential information, and the company equipments (Reuters, 2009). Further, the code of conduct promotes financial integrity and responsibility as well as abiding by the legal requirements. Besides setting up the ethical standards, the company engages in corporate social responsibility (CRS) activities. These include creating awareness in various fronts such as the climate change, education, public health, and sanitation (Chaffey, 2007). However, these activities are connected in some way to the company long-term revenue generation. Google Foundation is an institution created by the company to implement its corporate social responsibility programs. It has undertaken various initiatives including developing renewable or green energy, predict, identify, prevent, and enable rapid response to various risks associated with climate change and infectious diseases. It is equally intended to improve public services through public awareness and empowerment. Google foundation also promotes the development of small and medium sized enterprises through capitalization and risk management. In its commitment to provide appropriate services to its users and t o act responsibly with communities where it operates the company has been fraught with problems. For almost all its operating period, there have been concerns whether the company products infringes the privacy of users as well as others (Chaffey, 2007). Concerns about the company practices regarding the collection, use disclosure as well as the security of personal information or any other privacy related matters have resulted in the damage of the company reputation. However, most of these concerns have been unfounded. While the company thrives to comply with its code of ethical regulations, any perceived failure has resulted in court actions by other entities and that have potential adverse effect on the company reputations and the brand image. Compliance with both local and international regulations has also posed a great challenge to the company. For instance, the difficulties experienced by the company operations in China and compliance with the Chinese regulations resulted in i ts censorship by not only the Chinese government but also various governments (Reuters, 2009). These censorships portrayed the company as antisocial and undemocratic. This hugely negated the company reputation. As a result, the company loses much of its market share especially in highly government controlled economies. As regards to social responsibility, the company commitment to green energy program has become under scrutiny. The environmental protection agency (EPA) tends to follow the alleged release of a refrigerant in one of the company’s data facilities. The EPA also follows and scrutinizes other issues relating to environment protection. The investigations could have resulted in administrative actions, criminal or civil penalties or fines (Google, 2010). However, these allegations have been proved unfounded as the EPA as most of the documents investigated were justified by the energy regulations. Organization Board of directors is the highest decision making organ by the company. Though the company tends to minimize the bureaucratic structures, the board of directors makes all decisions. The bureaucratic structures are minimized through various committees as well as encouraging teamwork in almost all operations of the company. The company culture of enhancing equality of employees, teamwork as well as encouraging individual talent growth is critical in structural organization. In addition, the freedom in individual and team decisions enhances effectiveness and efficiency in the operations of the company (Google, 2011). The short vertical structure and the encouragement of horizontal integration have been essential in enhancing creativity among the employees, which in effect create better products for customers. The company adopts the modern management practices and organization structure that enhances free decision-making, encourages teamwork and creativity. The company takes great pride in its culture that is based on creativity and collaborati on (Mahaney, 2005). The company culture of collaboration promotes the iteration of ideas used as solutions to complex challenges. The company also encourages transparency and open dialogue among its employees. In essence, the company embraces a culture of transparency, dialogue, collaboration, and creativity. In addition, the company encourages the culture of diversity. Employees of the company have the freedom to act on individual ideas despite the company responsibilities (Mahaney, 2005). The employees are also employed based on their diverse ideas, backgrounds, and perspective. The company provides a favorable environment where such work diversities are effectively nurtured, and thrives. In addition, the company embraces a culture that promotes and defends important talent. These policies include, effective communication, data drive decisions, stopping being evil, striving to reach consensus, encouraged creativity, making coordination easy, packing projects in, catering for emplo yees needs, and hiring through commission (Mahaney, 2005). Moreover, the company encourages employment practices that attract and retaining the best talents and skills. Further, the company practice employment procedure that is fair and based on standards to facilitate greater personality appointment by the company. The company is offering an extreme package of typical remuneration as well as good working environment to retain the best talent (Mahaney, 2005). Additionally it provides hard working engineers with commuter buses, parched cleaners, car washing, haircuts, kneading and laundry room, gymnasium, and dining facilities. Planning According to Olsen (2006), all businesses small or big require strategic plans to attain their goals particularly in situations where the business is fast growing. In strategic planning, the business must able to analyze trends that determine the future of the business. The company must also set measurable and realistic goals that can be attained (Ols en, 2006). Moreover, for the organization to succeed in its growth and development, it must make strategic planning continuous practice of the organization. In addition, the company must prioritize various strategies that must be implemented simultaneously. The company should also set defining vision for the company that guides all planning and strategies (Olsen, 2006). In the case of Google, all strategic planning is under the head of strategy and planning and operations. The company’s operations consist of a global team that ensures the business complex activities are efficiently managed (Mahaney, 2005). The department comprises of experts that are consistent, systematic, and pragmatic in their implementation of the company plans. This department come up with revenue plans, develops high-level goals, and instigates activity programs that speed up organizational development and improve output. In essence, the department is responsible for developing main activity areas in li ne with the organizational strategy, forecasting, and analytics. The department manager personally oversees the implementation of key strategies as well as operations projects (Chaffey, 2007). Therefore, the department is responsible for the delivery of yearly programming and reporting. The company general business planning efficiency is observed in its ability in perpendicular and aggressive analysis, business analytics, as well as the production of business intelligence to the management (Chaffey, 2007). Leadership Google leadership policy has always been laissez-faire. The company has been engaging in employing highly skilled engineers and supporting the most brilliant rich the higher leadership positions. Once in leadership, they make their own decisions and plans on how to achieve the required goals and objectives (Dwivedi, 2008). However, this has not been the case as time changes. New leadership qualities have to be incorporated apart from the technical skills that the compan y has been emphasizing. Some managers could no attain the outcome given the changing environment. Therefore, leadership qualities such as good coaching, team and micro-management, interpersonal skills, sensitive towards results and productivity, good communication, strategist and career development were highly encouraged (Dwivedi, 2008). Technical skills have not been highly emphasized since all employees have almost similar qualification in this area. These competencies are important for the company since they are the focus towards increasing returns. The reason why the company has been emphasizing these qualities is that they require little changes in personality. In addition, there is the likelihood for augmented advancement (Dwivedi, 2008). Most importantly, these leadership qualities are important in the Google culture. The company top management has adopted various leadership styles to develop a cordial relationship with the employees. For instance, the management has been emp hasizing on the clear vision and strategy for its team of technical employees (Google, 2011). Moreover, the company has been putting a lot of interest on the employee’s personal development. The employees career development. Lastly, Google leadership helps their clients and employees to think through issues that may arise. According to Armstrong and Kotler (2009), there are leadership assessment tools that organizations utilize to provide feedback on leadership styles. In the case of Google, leaders have incorporated six important strategies in their leadership styles. These include visionary strategy, affiliative strategy, participative strategy, and coaching strategy. In the visionary strategy the company leadership creates, sell, and are held accountable for the delivery of the company vision (Mahaney, 2005). The affiliative strategy recognizes the individual contribution to the company and his needs. The leadership adopts participative strategy to create teamwork that is essential in generating ideas as well as offering solutions to any unanticipated problems (Mahaney, 2005). Controlling The operational conduct and regulation of systems, apparatus, or machines means control. Institutions regulating its business processes apply this. Such processes include financing, distribution, and production. In fact, control help businesses avoid and trim down the increase of bottlenecks and mistakes (Armstrong Kotler, 2009). In the traditional context, control is an aspect of management ground rules. These aspects are, coordinating, planning, and organizing. Hence, it is the most important apparatus used by managers to persuade the staff members to work and attain the set goals. Another meaning is, to seek out observance with set conformance objectives and significance that is, quality criterion, standards, and arrangements (Armstrong Kotler, 2009). All these facilitate and confine the organization to assess performance and supervise development. For Google C ompany to organize its business management well, it must have a control system. Research has recognized four domestic control gadgets put into practice by the company. Culture, social structures, expertise, and in-house controls are the mechanisms used for implementation (Chaffey, 2007). Thus, a broad definition of the internal control entails the formula and standards employed by the company to safeguard its materials and goods. The company tends to recruit more workforces to assist in conducting its businesses as it grows. Conversely, absence of procedure and policy in implementation makes protection of assets impossible. Moreover, it will encourage disagreement between the organization staff. Google Company has discovered four forms of control tools namely, dialectic of control, civilization, social culture, and individual control (Reuters, 2009). Whereas social culture is the fixed controls amid incentive proposals, career ranking, distinct work explanation, regulations, course of action and guidelines. Similarly, culture is the employees shared customs and significance that sway attitude, regulate perception, and nature behavior (Chaffey, 2007). Shared beliefs prevent the need for open and wide-ranging decree and processes. It further stops provision of viewpoint curiosity and rules where members can assume unlimited particular statute to outfit unstable condition. These objective reinforcements are by employees’ internalized socialization and rules. On the other hand, dialectic of control explains the poised category for assistants’ trial power to their superiors. The knowledge of personnel is the key positive feature in Google Company. This is important in controlling the conduct of workers, bureaucrats, and executives. Corporate governance guidelines are set by a panel of directors to enable the management to function efficiently. The corporate configuration has also instituted both internal management and suitable financial control. Thou gh this company rapidly expands, it upholds modest company management practices (Mahaney, 2005). Therefore, hiring the right person ensures control implementation in the company. The hiring policy favors aptitude rather than knowledge and is discrimination free. Hence, a reflection of world audience served by the search engine. Furthermore, the expansion in Google developments has demanded recruits who distribute a compulsive commitment (Chan, 2007). The recruiting process is one of the control measures put by the company. For first-class control to be established, employees fill up the forms of application in their own inscriptions. The company conducts two to three interview follow-ups to potential employees over other associates. In the Google Company, the committee does hiring to prospective candidates by soliciting hard-hitting questions to direct incompetent interviewee (Mahaney, 2005). Specialized and responsible panels make the company projects. This makes determination of s uccessful and well-organized job easy through separating responsibilities. Thus, administration schedule realization is much easier. Specialization helps one become conscious in the intellect of making work execution more resourceful and successful. The company has also put control measures in financial management. The major controls are in the financial disclosures that must comply with the set of procedures. The company management normally institutes these procedures, and they include the statutory regulations such as the exchange act. The management must evaluate the financial control and disclosure procedures in pursuant to the regulations provided in the exchange act. The financial disclosure control and procedures must be effective and provide a reasonable assurance that the information provided is reliable (Chan, 2007). According to the act, the financial information must be processed, recorded, summarized, and reported within the required period. The management require that such information should be communicated more so to the executive officer and chief financial officer before its release to the public. Moreover, the management must approve such information and must make decisions regarding disclosure (Chan, 2007). Internal controls include evaluating the effectiveness of the company financial reporting based on the framework issued by the Committee of Sponsoring Organizations of the Tread way Commission. The framework is known as the Internal Control – Integrated Framework. However, the assessment results should be reviewed with the audit committee or an independent auditor (Google, 2010). In designing and assessing the disclosure controls and procedures, the management should recognize that any control measures only provides reasonable guarantee of attaining the preferred control aims. Despite this limitation, the company internal financial controls and procedures reflected the resource constraints. Therefore, the management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. References Armstrong, G Kotler, P. (2009). Principles of marketing. Upper Saddle River, NJ: Pearson. Chaffey, D. (2007). Google case study-covering Google business strategy and technology case. Retrieved from davechaffey.com/E-commerce-Internet- marketing-case-studies/Google-case-study/ Chan, J. (2007). Google’s acquisition strategy. Retrieved from http://fishtrain.com/2007/09/13/googles-acquisition-strategy/ Dwivedi, J. (2008). Google’s robust strategy and business model. Retrieved from iproceed.com/blog/2005/02/googles-robust-strategy-business-model.html Google (2010). 2010 annual report. Retrieved from investor.google.com/pdf/2010_google_annual_report.pdf Google (2011). 2011 annual stockholders meeting. Retrieved from http://investor.google.com/proxy/2011/index.html Mahaney, M. (2005). GOOG: increased conviction in Google. San Francisco: Citigroup Global Marke ts, Inc. Olsen, E. (2006). Strategic planning for dummies. Hoboken, NJ: John Wiley Sons. Reuters (2009). Google drives into navigation market. Retrieved from independent.co.uk/life-style/gadgets-and-tech/news/google-drives-into- navigation-market-1811289.html Company Analysis The purpose of this company analysis is to discuss the strengths, weaknesses, opportunities, and threats of Procter Gamble. However, this report concentrates more on Porter’s five forces, resources, and capabilities of PG, present strategies, and Resource Base View (RBV) model to recommend the company.Advertising We will write a custom essay sample on Company Analysis specifically for you for only $16.05 $11/page Learn More Current Strategic Situation: Growth Strategy: Chairman and CEO of PG Bob McDonald stated that Purpose-inspired growth strategy is beginning to work because this strategy is touching and improving more consumers lives in all over the world, for instance, expansion tasks of Ambi Pur with Febreze contract; Operational strategy: Procter Gamble reported that it would carry out an environmental sustainability program throughout its operations to reduce carbon emission by 20% and it would also focus on water and energy utilization and w aste removal from corporate plants; Product development strategy: PG always interested in introducing new products considering consumer demand and they concentrate more on product innovation, and it has already developed few new brands, such as introduce of the second wave in toothpaste or oral care brand, coverage of Western Europe by Pampers Dry Max and ingredient variation in Pantene and so on. However, Home Care, Fabric Care, Hair Care, and Oral Care are the most successful segments; Figure 1: 1950-2009 PG Product Strategy Source: Smith (1) Customer Relationship Management: Now, PG is concentrating more on serving more customers by implementing new CRM policies along with continuous innovation and expansion of brand portfolio upper, vertical or downward value integration; Organizational Chart: It reshaped organizational chart to implement its strategies properly where global business units focus more on global buyers, competitors, and brands, which function as the media of in tended innovation, profitability, and ROI by using its efficient and expert employees to deliver the best performances to gain competitive advantage; however, the following figure shows the organizational chart of PG Figure 2: Organizational chart of PG Source: Procter Gamble (1)Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Pricing Strategy: Smith (1) pointed out the view of the CEO and argued that PG offers low price to introduce new products in the existing market, and the aim of CEO is to increase competition and at the bottom and the decade long stagnation to decline in middle-class income; however, PG offers only 10% price reduction on average. Figure 3: 2010 PG Product Strategy Adjustments Source: Smith (1) Resources and capabilities of PG: Figure 9: Resources of PG Source: Self-generated Financial Resources: According to the annual report, the financial position 2010-11 was outstanding as PG’s organic sales grew 4%, Organic volume grew 5%, Core earnings per share grew 8%, PG’s dividend has increased at an annual compound average rate of approximately 9.5%; however, it returned about $7 billion to shareholders through the repurchase of PG stock. According to the income statement, balance sheet and cash flow statement of PG, its present key financial variables are Key variables 2011 ($ million) 2010 ($ million) 2009 ($ million) Total Sales Revenue 82,559.0 78,938.0 76,694.0 Gross Profit 41,791.0 41,019.0 38,004.0 Operating costs 25,973.0 24,998.0 22,630.0 Operating Income 15,818.0 16,021.0 15,374.0 Net income (loss) 11,797.0 12,736.0 13,436.0 Total Assets 138,354.0 128,172.0 134,833.0 Total Liabilities 70,714.0 67,057.0 71,734.0 Total Stockholder Equity 68,001.0 61,439.0 63,382.0 Total Cash Flows From Financing Activities (10,023) (17,255) (10,814) Table 1: Financial information of PGAdvertising We will write a custom essay sample on Company Analysis specifically for you for only $16.05 $11/page Learn More Source: self-generated from Yahoo Finance (1) Organizational resources: Staff of the PG is one of the significant assets, and it has 127,000 employees according to the annual report 2011 of PG who worked in inside and outside the US market and the help the company expanding business; Physical resources: This resource includes constructions, property, equipment, furniture, and so on; however, the following table shows the total amount of property of PG Key variables 2011 ($ million) 2010 ($ million) 2009 ($ million) Property Plant and Equipment 21,293.0 19,244.0 19,462.0 Technological resources: Graul et al. (54) reported that this company invests more than $2 billion for the development of technology in 2005, it has more than 29,000 patented technologies along with twenty technical centers in four continents; Intellectual and human reso urces: According to the annual report of the PG, RD teams enrich with more than 200 scientists, chemists, and so on; besides, they are responsible for identifying, developing, and using leading health care technologies to develop health care products; Reputation resources: Procter Gamble affords a high brand value, which tends to expand in the future and this reputation is the outcome of consumer perceptions about the quality, trust, and ethical factors in every market segment; however, the subsequent table demonstrates goodwill of PG for three years Key variables 2011 ($ million) 2010 ($ million) 2009 ($ million) Goodwill 57,562.0 54,012.0 56,512.0 SWOT Analysis of PG: Figure 4: SWOT Analysis of PG Source: Graul, et al. (71) Strengths: The internal strengths of PG are significant scales of scope and economies, share price, sales growth, human resources, financial capabilities, supply chain, product innovation and overall performance in the global market. Leadership Brands: According to the annual report of PG, its fifty leadership brands are some of the world’s most famous household names and twenty-four of these fifty brands each make above $1 billion every year, which indicates 90% profits generate from these brands; Market Share: it has a worldwide business operation and has a significant share in the global market; Innovation: It is one of the most critical factors for this company to compete with high customer satisfaction. Also, the demand of the customers change on time, and the management of PG maintains a specific strategy to meet the demand of the buyers; Sales Volume: Sales revenue from the consumer product line has increased all over the world; Human Resources: PG has more than 127,000 dynamic and high educated employees to carry on the business in the adverse economic situation, and it also has research team to introduce new products; Experience: PG established in 1837 and served the US Army, so, it has long-experience alon g with the glorious historical background to operate global market with strong brand awareness; Other: Corporate social responsibility, investment plan, human resource management are key strategies of the company. Weaknesses: Besides strong points, PG has to concentrate on many other factors, such as Market expansion: It has many familiar brands in global market, but the perforce of the company in developing countries is not outstanding as it earned only 35% of total profits from the operation in developing countries; however, it has opportunity to increase loyal customer base in developing countries by decreasing price of the products; Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Figure 5: Net sales by market maturity and geographic region Source: Procter Gamble (62) Operating expenses: The total operating expenses of PG are increasing each year, for instance, these expenses were $25,973 million in 2011, which was more than $985 million from last year expenses; Political factors: Unrest situation in many countries may effect on the supply chain management system of the company, and it could adversely affect sales revenue; Strategic decision: Unilever, Johnson Johnson and other competitors have taken measures to diversify product line and implemented new marketing strategies; for instance, these companies arranged integrated marketing communication campaign to increase customer base. Opportunities: External opportunities of PG includes New product development: PG has a strong capability of developing new products using existing resources and capabilities along with long experience perform; thus, it has the opportunity to capture marketing leading pos ition; Joint venture: It has the financial strength to joint venture with large competitors like Unilever to reduce market competition; Stock Performance: the performance of PG in Stock market is satisfactory from the very beginning though the share price of the company decreased in 2009; however, the following figure demonstrates the position of PG in Nasdaq Figure 6: Basic chart of PG Source: Yahoo Finance (1) Performance in Recessionary Economy: PG has experienced huge success in spite of global financial crisis while most of the companies have endeavored to survive, which gives confidence to the management of the company to go ahead with existing resources and capabilities; Threats: External threats of PG includes Legal: Nowadays, multinational companies need to concentrate more on the legal issue to reduce unexpected costs, for instance, BBC News (1) reported that PG was fined â‚ ¬211.20 million to fixing the price of washing powder in eight European countries; Compet ition: Strong competition among the market players is one of the main challenges for PG because competitors captured a significant market share of consumer products, for instance, Sunsilk of Unilever captured shampoo market; Compensation: Controversial issues could adversely affect on the company such as toxic shock syndrome and tampons, price fixing controversy and logo controversy created hindrance for the business operation and increased costs. Porter’s five forces model analysis of PG: Figure 7: Porter’s five forces model of competition for PG Source: Self-generated form analysis Barriers of new entrants: The consumer product industry has to face intense competition both in the national and international market due to the existence of local competitors of different products and many brand items have produced by these companies to attract segmented customers. As a result, threats of new entrants are moderate to high for this company while it should not require hi gh investment to produce few items in the local market, but the aggregate risk is low; thus, it not difficult for the new companies to occupy the market share of PG; Bargaining power of suppliers: The bargaining power of suppliers is moderate because of the availability of suppliers; however, this power accelerates when PG like to switching off suppliers; Bargaining power of buyers: the bargaining power of buyers is now high because of the current pressure of the global economic crisis, low switching off costs, availability of similar products, frequent change of customers’ demand, and unrest political position in Asian and European countries and so on; Threats of substitute products: PG faced intense competition from direct and indirect competitors, and these companies produced many consumer products those can reduce the demand of any brand of PG, for instance, PG’s feminine products replaced by the substitute due to toxic shock syndrome and tampons controversy; Rival ry among existing firms: PG has to compete with many direct and indirect companies at both home and abroad, for example, major competitors of this company are Unilever, Kimberly-Clark Corporation, Johnson Johnson, Clorox, Colgate-Palmolive, etc. However, the rivalry among existing companies is extremely high, and these companies frequently change their functional plans to increase sales volume and take measures to get undue advantages from the market, for example, PG and Unilever fixed the price of washing powder in eight EU nations to increase sales. To compare the position of PG in industry, the subsequent figure shows direct comparison Figure 8: Direct Competitor Comparison of consumer product industry Source: Yahoo Finance (1) Resource Base View (RBV) model: Resources Sources of Competitive Advantage Rare Valuable Inimitable Non-substitutable Core Competencies Innovation: it has 50 established brands along with 300 consumer products in four segments like PG Beauty, Family Health, Household Care, and Gillette and it has now seven core segments like beauty, Health, Baby Care, Fabric, Home Care and so on Yes Yes Possible as it has already established as successful inventors in consumer product markets; however, it is hard to measure the volume of innovation It is feasible if PG can use research and development team properly Patents: it has more than 29000 patented technologies Yes Yes It is feasible, not probable It is feasible, not probable as it should involve huge investment Go to Market Expertise: Capabilities Yes Yes Hard to attain It is tough to attain as competitors, for example, Unilever is functioning on this now. Brand Management: Development of brand image along with the trust of consumers Yes Yes Achievable through market leadership hard to overtake Difficult in market leading Brand Leadership: 50 brands each produce $1 billion sales annually (90% of total earnings) Yes Yes Feasible except hard in non-commoditized markets Feas ible though it is hard in non-commoditized markets Resources Capabilities Existing RD: twenty technical centers in four continents Yes Yes Yes, however, it involves high entry expenses hard to substitute or compete with IP Global Scope Advantage: business operation in more than 180 countries Yes Yes Feasible in spite of high reproduction costs Feasible in spite of high reproduction costs Large scale manufacturing operations; locations in 42 countries Yes Yes Yes Yes Economies of Scale with leveraged Buying Power and supply chain management Yes Yes Yes, it is necessary to have collaboration from keen partners and top-management Yes, it is necessary to have the cooperation from keen partners and top-management Economies of Scale with Global operations Yes Yes Yes Yes Expansion in Emerging Markets like China, India Bangladesh Yes Yes Feasible though it needs high reproduction costs Feasible though it needs high reproduction costs Value Added Networks for B2B Customers Yes Yes Yes, it is essential to have cooperation from enthusiastic associates and management Yes, it is essential to have cooperation from enthusiastic associates and management Electronic Data Interchange only available in the US and it should require development Yes Yes Yes Yes Enterprise IT Strategy for cost reductions, positive customer impact, functioning competence, and return on investment Yes Yes Yes but it hard to apply due to requiring high investment Yes but it hard to apply due to requiring high investment Recommendation Strategy 1: Integrated Marketing Communication (IMC) Campaign Decision Criteria for Strategic Alternatives Evaluation Criteria Evaluation Criteria or why choosing this strategy Image creation This company has fifty leadership brands in the global consumer product markets; however, it has to face intense competition, so, the decision-maker should focus on IMC campaign to develop brand awareness; Aligns with mission Since this company wo uld like to provide the best quality products, IMC campaign would help the company to aware target customer regarding the quality of the products Exploits core competency It has already developed the product quality to avoid any controversy like toxic shock syndrome and tampons, and IMC campaign could give this message to the customer Competition To compete with large competitors, it will play a vital role Creating a loyal customer base As competitors offer similar products at a low price, then it is difficult to say that IMC help creating loyal customer base though it would increase sales Financial risk Considering previous experience, it can say that the IMC campaign has no financial risks for PG The short and long term Growth rate It would only meet the short-term growth rate Think customer first As IMC Campaign would emphasis on the positive factors of PG, the customer must be benefited from it. Strategy 2: Reformation of the Pricing Strategy Decision Criter ia for Strategic Alternatives Evaluation Criteria Evaluation Criteria or why choosing this strategy Create a brand image It would help PG creating the brand image in developing countries Aligns with mission Sales may decrease anytime due to adverse economic condition; therefore, restructuring pricing strategy match with the mission of the company. Exploits core competency Operating at economies of scale is one of the PG’s core competencies, so, capacity utilization development by reducing production cost assist the company offer low price; Competition PG would be able to hit this competitive market Creating a loyal customer base The purchasing power of the customers reduced due to recession; so, reforming pricing strategy is the only solution to sustain as a market leader; Financial risk Adopting this strategy has minimal financial risk; however, the European Commission could impose fines for breaking competition law in the EU zone The short and long term Grow th rate It can meet long-term growth in the global consumer product market Think customer first It upholds the concept of think customer first. Strategy 3: Reduction of operating costs Decision Criteria for Strategic Alternatives Evaluation Criteria Evaluation Criteria or why choosing this strategy Create a brand image It is an internal factor to hold an existing market Aligns with mission This strategy would increase profit and match with the mission of PG Competition Help the company compete with existing resources Creating a loyal customer base This strategy would not help PG building a large customer base but increase profits from existing sales volume Financial risk Reduce financial risk in the global financial crisis through this company experienced success in the economic challenges The short and long term Growth rate Meet both short and long-term growth Think customer first It mainly focuses on reducing the switching off costs for the customers of competitors. BBC News. Unilever and Procter Gamble in price-fixing fine. 2011. Web. bbc.co.uk/news/business-13064928. Graul, Lee Ann, et al. Procter Gamble, Unilever, and the Personal Products Industry. 2006. Web. http://info.umuc.edu/mba/ep/Presentation/EP_Olp/data/GSA.pdf. Procter Gamble. Annual report 2010-11 of PG. 2011. Web. http://annualreport.pg.com/annualreport2011/financials/. Smith, Tim. â€Å"PG Shifts Pricing Strategy to Meet Post-Recession Market.† The Wiglaf Journal. 2010. Web. wiglafjournal.com/pricing/2010/09/pg-shifts-pricing-strategy-to-meet-post-recession-market/. Yahoo Finance. Balance Sheet of Procter Gamble Co. 2011. Web. http://finance.yahoo.com/q/bs?s=PG+Balance+Sheetannual. Yahoo Finance. Direct Competitor Comparison of Procter Gamble Co. 2011. Web. http://finance.yahoo.com/q/co?s Yahoo Finance. Income Statement of Procter Gamble Co. 2011. Web. http://finance.yahoo.com/q/is?s=PG+Income+Statementannual.