SWOT Analysis of Procter and Gamble
This is a detailed SWOT analysis of Procter and Gamble. It offers insights into the strengths and the weaknesses of Procter and Gamble. It also explores the opportunities and the threats to the company. Procter and Gamble is an American multinational consumer goods company, headquartered in Ohio, the USA.
Strengths of Procter and Gamble
Procter and Gamble was founded more than 180 years ago as a soap and candle company. At present it is one of the largest consumer goods companies in the world and sells many world renown branded products such as Pampers, Gillette, Head and Shoulders, Fairy, and Olay (Procter and Gamble, 2021).
Procter and Gamble sells products that are needed daily. This in turn increases demand and sales. The company sells nearly 300 brands in over 160 countries and has factories around the world. It has become a household name over the years which consumers trust and consider to be reliable.
Procter and Gamble is a diversified company and many different types of products that it sells, have contributed to its financial strength. Its products are widely available and easily accessible in a variety of supermarkets, grocery stores and online.
Another key strength of Procter and Gamble is its research and development. This has enabled the company to develop many different types of new products which have generated large income streams. It does not test its products on animals and have invested millions on developing non-animal testing methods. Half of the non-animal testing alternatives have been invented or co-invented by Procter and Gamble.
Over the years Procter and Gamble has managed to gain a loyal customer base. Sponsorships of events around the world has helped it gain more customers.
Weaknesses of Procter and Gamble
Procter and Gamble has had to recall some of its products which in turn has resulted in it gaining negative publicity and incurring unforeseen costs. The closure of some brands resulted in it having to incur losses too.
Losing loyal customers due to competitors selling quality products at more affordable prices. Its products have high competition from other brands that are recognized globally as well.
In the beauty and personal care industry, new products are regularly introduced by the competitors. Therefore, to keep in line with the competitors Procter and Gamble needs to spend regularly which affects its profits. Vizard and Fleming (2020) report that its marketing spend in categories including beauty, healthcare and baby has increased recently.
Opportunities for Procter and Gamble
Opportunity is the next issue to address in the SWOT analysis of Procter and Gamble. Acquiring small competitors and forming new strategic alliances to compete better and reduce costs is worth exploring. Likewise, Procter and Gamble has an opportunity to use its global brand recognition to diversify into different markets.
An increase in the purchasing power of customers in some countries will increase the demand for products. Procter and Gamble has an opportunity to attract more customers in the rural market. It can also attract niche segments in highly competitive markets globally.
Threats to Procter and Gamble
Product recalls will result in bad publicity and loss of revenue which in turn increases overall costs. Counterfeit products of low quality being sold in the market will result in consumers losing their trust in the brands.
When operating in different countries, Procter and Gamble is exposed to fluctuations in foreign currency and changes in government regulations. Since its a global brand, recessions and economic crisis will also affect its business operations.
The present economic lockdowns have resulted in consumers being more careful with their spending. This reduces the demand for non-essential products.
A rise in competition has led Procter and Gamble spend more on research and development and marketing. Some of its major competitors are Colgate-Palmolive, Johnson & Johnson, Church and Dwight, Kimberly-Clark and Unilever.
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Last update: 14 January 2021
Procter and Gamble (2021) Policies and practices, available at: https://www.pg.co.uk/policies-and-practices/animal-welfare-policy/ (accessed on 14 January 2021)
Vizard, S. and Fleming, M. (2020) P&G ‘doubles down’ on marketing as demand soars, available at: https://www.marketingweek.com/procter-gamble-doubles-down-marketing/ (accessed on 14 January 2021)
Photo credit: Wikipedia
Author: Fahim Shah
Fahim Shah has been working in the UK as a visiting lecturer in Business and Tourism for the last 10 years. After completing a Bachelor’s degree in Business and Marketing, he went on to gain an MBA from the University of Bradford, the UK. He is a Fellow of Advance HE (FHEA) and a full member of the Association of Business Executives (ABE).