Procter & Gamble (P&G) is to focus on achieving US$10 billion in cost savings by 2016 and prioritising the major markets and brands within its portfolio.
Business processes to be reviewed
Speaking at the Deutsche Bank investor conference in Paris, P&G's chief executive Bob McDonald highlighted the need to overhaul its business processes in order to remain competitive. As part of the overhaul, P&G aims to lead in innovation, drive productivity improvements and deliver cost saving through improving the consistency of execution across its operations.
By making these changes, the company recognising the need to streamline its operations in order to turnaround performance.
Focus on existing markets and products
To achieve its objectives, P&G will prioritise investments in its most profitable and largest markets, on recent innovations and in its biggest emerging countries. In addition, the company clarified it intends to maintain strong investment levels in markets it has recently entered. It is thought P&G will slow its entry into new markets and instead look to consolidate its position in developing economies as part of this strategy.
As part of this strategy, P&G will prioritise forty of its most successful products in its biggest markets. These include Tide detergent in the US, Pampers nappies in the UK, and Olay face creams in China. These produce about 50% of P&G’s total sales and 70% of its profits.
CEO Bob McDonald said: “We are making the necessary adjustments to our growth strategy to increase focus on our core business and to achieve more balanced growth across geographies, product categories and the top and bottom lines.”