Saturday, May 5, 2012

P&G Core Strengths

The article for this week, “G.E. Goes With What It Knows: Making Stuff” emphasizes the importance of sticking to your core expertise to succeed in the long term. Proctor and Gamble has 3 core competencies and it sticks to them which the reason why it is such a successful brand today despite going through the same economic crises the other companies have over the past few decades.

P&G basically has 3 core strengths and all their activities and strategies are built around these strengths.
      1.       Consumer Understanding
P&G conducts over 20,000 research studies every year and invests over $400 Million annually to understand the needs of its consumers

      2.       Innovation
Over the past 16 years, P&G has come up with over 132 products and has received 22 “Product of the Year” recognitions.
      3.       Brand Building
P&G is recognized for creating and building brands like Gillette, Old Spice, etc. They have 24 brands that generated over $1 Billion in annual sales.

By sticking to these strengths P&G has been able to create a mammoth brand with annual revenues of over $82 Billion2. However, as the market changes and newer disruptive technologies compete with established brands, will P&G will be able to stick to its strengths and innovate at the same pace?

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