In 1837, in The United-States, William Procter, candles maker, and James Gamble, soap maker, got together to market their first branded product, the candles ‘Star Candles' (Jean Boissonnat, 20/12/1993). As their business went along they started to broaden their range of products by buying new brands in the United States and by creating new products. Through the years the P&G company has set up an internationalization strategy, and in 2005 Procter & Gamble has been recognized in the Figaro (French newspaper) as the global leader in mass consumption products (Puech G., 29/10/09).
Today, P&G is a publicly owned company and is considered as one of the most significant multinational enterprise. To understand how Procter & Gamble became this significant multinational we have to describe its position in terms of its strategies to expand abroad.
In the first part, I will explain to what extent Procter & Gamble can be regarded as a multinational; and I will enlighten its characteristics that demonstrate its status as a multi-domestic. To display the statements above, I am going to analyze the following questions: Does P&G invest in value adding activities abroad? Does it focus on international resource bases? Does it control and manage production establishments located in at least two countries?
[...] (, 1993), ‘Le Groupe Etranger Procter & Gamble pousse ses pions en Europe', L'Expansion, 20th December. Available from: http://www.lexpansion.com [Accessed on 04/11/09] • Edenia, G. (, 2009), ‘Procter & Gamble, Ericsson, EADS, MTN, G4S et Publicis Groupe comptent parmi mes valeurs favorites', Investir, 30th October. Available from: http://www.investir.fr [Accessed on 04/11/09] • Puech, G. (2009), ‘Procter & Gamble : plus de 2 milliards d'euros de bénéfice', Le Figaro, 29th October. Available from: http://marches.lefigaro.fr [Accessed on 04/11/09] • Santrot, F. (2001), ‘Henri-Jacques Letellier, Associate Director Interactive Marketing Procter & Gamble', Le Journal du Net, March 13. [...]
[...] Current Strategy a. Strategic Technologic Alliances The last few years P&G has created technologic alliances to develop its technology skills. Its first purpose was to develop some communication strategies to reduce the travel costs and set up new offices, to keep growing and being able to face the globalisation. The technologic alliances reside in bringing together skills and assets that neither company has or can develop. Thus, each partner can regard the alliance as a means to safeguard or enhance its competitive position by gaining from the comparative advantages/core competences of the other partner(s). [...]
[...] Chronological and Incremental Strategy 1. Introduction P&G has set up an incremental approach, founded on a resource based view, in two steps to become a multinational enterprise: first of all a non- equity mode, the indirect export; and then an equity mode, wholly owned subsidiaries corresponding to acquisitions. P&G has followed the growth of the domestic consumption market and has made decisions about exportations and acquisitions based on its global movement. This strategic approach is a way to learn about each market before making any acquisitions, and to then buy the best companies with the best brands for its internationalization, by thinking and planning each open-up (Hibbert E. [...]
[...] Procter & Gamble selling Tide detergent in Italy is an example of multi- domestic strategy. P&G has changed the formula but the name of the brand is still the same. The fact that P&G sells Joy dishwashing liquid virtually worldwide and Salvo dishwashing liquid in Latin America leans also toward a multi-domestic strategy. Indeed even if Joy alone is a Global strategy on the dishwashing liquid market, the fact that this is combined to the Salvo one adjusts the strategy to conform to local preferences, and that means the overall corporate strategy looks multi-domestic. [...]
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