P&G's Global Strategy: Balancing Local & Global Demands

Introduction - P&G's Core Competencies

MNCs must strike a steadiness among localization and globalization in order to be victorious in the international market. They must be able to settle into the specific demands of local markets while also being able to operate efficiently on a global scale. This often requires a combination of centralized and decentralized management structures and a focus on effective communication and collaboration across borders. The report is made to develop an understanding of the relevant strategies and principles in support of the case company P&G.

Figure 1: P&G Logo

P&G is a transnational customer possessions business based in Cincinnati, Ohio, USA. Founded in 1837, the corporation has an extensive history of producing and distributing a wide variety of household and individual care products, including brands such as Tide, Pampers, and Charmin. With operations in over 180 countries, P&G is individual of the principal purchaser goods company in the world (P&G.com, 2023). The key feature of the report covers the strategic decision-making process applied through the analytical techniques provided for the solutions to organizational problems. The report also highlights the critical evaluation of the business mission and vision with the self-reflection skills to understand the process of solving strategic problems.

Question 1: Managing the demands for localization and globalization

The concept of globalization can be implicit as the method of growing interconnectedness and integration among people, businesses, and countries around humanity (Alsaqaf et.al. 2017). From the perspective of multinational corporations (MNCs), globalization involves viewing the world as a single market and seeking to achieve synergies through standardization and uniformity of products and operations across borders. Those who support this perspective believe that international standardization is important and that MNCs can benefit greatly from cross-border synergies.

1.1 Two key strategic considerations for multinational corporations (MNCs) operating globally

• Geographic expansion pertains to the methods and strategies used by companies to enter and establish operations in new regions and markets.
• Local adaptation refers to the extent to which MNCs adjust their products, services, and operations to meet the specific cultural, economic, and regulatory conditions of the local market (Arena and Uhl-Bien, 2016).

The localization perspective for multinational corporations (MNCs) suggests that in order to be successful in different markets, these companies need to take into account and respond to the unique cultural, economic, and political conditions of each market. This means that MNCs must be locally responsive by acknowledging and adapting to the specific demands of local markets.

1.2 Potential impact of a possible post-Covid-19 era

The benefits of international initiatives have not been distributed equitably across sectors, nations, and trading systems. Recent years have seen a rise in worldwide criticism and dispute over the provision of value as a result of these disparities, taken together with significant changes in the nature of expertise in goods and services (Augustin et.al. 2021). There will be more because the worldwide epidemic of COVID-19 has sharply heightened the response. With a focus on 2021 and beyond, businesses will be confronted with a range of preventative issues regarding current trade, taxation, and regulation of crucial supply networks and industries.

1.3 The financial statement of Procter & Gamble (P&G)’s a financial report

The Procter & Gamble Company
Consolidated Statements of Earnings
Amounts in millions except per share amounts; Years ended June 30	2022	2021	2020
NET SALES	$ 80,187	$ 76,118	$ 70,950
Cost of products sold	42,157	37,108	35,250
Selling, general and administrative expense	20,217	21,024	19,994
OPERATING INCOME	17,813	17,986	15,706
Interest expense	(439)	(502)	(465)
Interest income	51	45	155
Other non-operating income, net	570	86	438
EARNINGS BEFORE INCOME TAXES	17,995	17,615	15,834
Income taxes	3,202	3,263	2,731
NET EARNINGS	14,793	14,352	13,103
Less: Net earnings attributable to noncontrolling interests	51	46	76
NET EARNINGS ATTRIBUTABLE TO PROCTER & GAMBLE	$ 14,742	$ 14,306	$ 13,027
NET EARNINGS PER COMMON SHARE: (1)
Basic	$ 6.00	$ 5.69	$ 5.13
Diluted	$ 5.81	$ 5.50	$ 4.96

An analysis of Procter & Gamble's (P&G, 2021) financial statements typically involves examining the company's financial performance over time, comparing it to industry averages and other companies in the same sector, and evaluating its current financial health. This can be done by looking at key financial metrics, such as revenue, net income, gross profit margin, return on equity (ROE), and debt-to-equity ratio.

• Revenue: Analysts typically look at P&G's revenue growth over time to assess the company's overall financial performance (Day and Shea, 2021). A consistent increase in revenue is generally considered a positive sign, while a decrease may indicate financial challenges.
• Net Income: Analysts will also look at P&G's net income, which is the company's total revenue minus expenses. Net income is an important indicator of a company's profitability.
• Gross Profit Margin: This metric shows the proportion of revenue left over after deducting the cost of merchandise sold A higher gross profit margin indicates a more efficient use of resources and better profitability.

Analysts will also examine P&G's liquidity and solvency ratios, such as the present ratio, rapid ratio, and debt-to-equity ratio, to review the company's capability to convene short-term and long-term monetary obligations.

Procter & Gamble (P&G) releases their financial report on a periodical and annual basis. The annual report typically includes information on the company's financial performance, such as revenue, net income, and earnings per share, as well as details on its operations, strategies, and plans. The report also includes information on the company's management, financial statement, and other matters of importance to shareholders. The annual report is typically released near the end of the company's fiscal year, which for P&G is in June. The most recent financial report of P&G is the Fiscal Year 2022 which is from July 1st, 2021 to June 30th, 2022.

1.4 P&G approach to sustain competitive advantage

As part of its overall strategy for increasing its competitiveness, P&G deploys extensive differentiation. This broad strategy places a lot of emphasis on features or special qualities that set the company's products apart from those of competitors.

• Market penetration (main tactic): Market saturation is the Company's main concentrated growth strategy. In this focused plan, the organization boosts sales volume to boost revenues and stimulate company expansion.
• Product development (secondary strategy): This role serves as a less demanding technique that the corporation takes for industry expansion. The corporation uses this focused enlargement plan by launching new goods that concentrate on the wants and needs of its clients.
• Diversification (sustaining approach): The business employs diversification as an approach for steady, focused growth. This thorough strategy concentrates on establishing n/*-/ew businesses to expand the business. The case company gradually acquires other firms, including the success of the personal care industry, to achieve diversification.
• Market Development (sustaining strategy): It is used as a long-term, comprehensive growth plan in the business operations of the corporation. With this strategy, the company expands by entering new markets and market segments.

1.5 Paradox of profitability and social responsibility in P&G

The paradox of profitability and social responsibility refers to the tension that can exist between a company's desire to maximize profits and its responsibility to act in a socially responsible manner. This can be a particular challenge for companies like Procter & Gamble (P&G), which operate in consumer goods and services sectors and have a wide range of stakeholders, including shareholders, employees, customers, and communities (De Vente et.al. 2016). On one hand, P&G may be under pressure to maximize profits in order to meet the expectations of shareholders and maintain a strong financial performance. This may involve cutting costs, increasing prices, or prioritizing activities that generate immediate returns.

Figure 2: CSR Activity of P&G

1.6 The holistic nature of the plan and the connection between strategic organization and leadership

To maximize the chance for success and beneficial outcomes, the plan aims to create synergy and consistency between resources, aims, and concepts. The goal of strategic planning is to bring consistency and configuration to the company's operations, which can be done using a range of tools and techniques. A strategy is an agreement of different actions that are done in supportable circumstances to accomplish certain goals or address certain issues. The preparation of strategy is a key activity through which the organization can interact with its surroundings. The strategy enables the firm to interact with the elements of the external environment and take the necessary actions to achieve its objectives (Dougherty, 2017). The creation of a strategy is a crucial first step in giving the venture direction so that it may make relational decisions and accomplish organizational targets and goals. It aids and guides the business in making crucial choices that will increase power and enable it to confidently combat environmental concerns.

1.7 The systematic technique to resolve difficult problems in real-life organizations

In today's dynamic market, executives are faced with a variety of jobs, duties, and goals that can be met with a solo mindset and leadership style. As the borders between nations gradually disappear as a result of increased globalization, managers must gain an awareness of global markets, prices, competitors, suppliers, distributors, governments, creditors and shareholders, and consumers. It is crucial for executives to have the plan to communicate their mission and vision statements and support the successful execution of their corporate strategies. In the accomplishment process, when businesses put up their developed rules, annual goals, and reserve assets to assure the successful execution of strategies, strategic management is primarily linked to leaders. This includes formulating a plan to foster a supportive culture, refocusing marketing initiatives, developing an effective organizational structure, generating budgets, developing and leveraging information systems, and linking employee compensation to organizational performance (Epstein et.al. 2015). To complete this procedure, the business would need employees to pledge to complete assignments and projects on time and to their satisfaction.

Question 2: Building on core competencies and dynamic capabilities

Business organizations must go from beginning to end through the procedure of identifying center competencies to build them. This could be accomplished by forging strategic relationships, ensuring that parts of the businesses are loaded down with assets, and making investments in enticing technologies (Warner and Wäger, 2019). Competence, competitive advantage, and capabilities vary among various organizations. The company's capacity to create business strategies and strategic skills determines its ability to consistently provide consumers with increased value and high-class items. Core competencies refer to the distinctive strengths and capabilities that a firm possesses that enable it to create and deliver value to its customers. For example, Procter & Gamble (P&G) is known for its core competencies in consumer goods research and development, branding, and marketing. These capabilities have enabled P&G to create and bring to market admired customer products such as Tide laundry detergent, Pampers diapers, and Crest toothpaste (Harraf et.al. 2015). Dynamic capabilities refer to a firm aptitude to become accustomed and transform in response to the changing market environment. This includes the ability to identify and exploit new opportunities, as glowing as the capacity to reconfigure internal resources and capabilities to respond to new challenges. An example of P&G's dynamic capabilities is its ability to dissociate from non-core businesses and invest in new growth opportunities, such as its recent acquisition of the consumer health company, Merck KGaA's consumer health unit.

2.1 Critical evaluation of the benefits and limitations facing P&G

The business has a long history of being a responsible and innovative enterprise. On the other hand, P&G also has a responsibility to proceed in a socially accountable manner, such as protecting the environment, promoting sustainability, and supporting the communities in which it operates (Karimi and Walter, 2015).

The organizational leadership perspective focuses on the role of leaders in shaping the direction and culture of the organization, and in motivating and aligning employees to achieve its goals. Strong leaders can also help to navigate and manage the complexities and challenges of a rapidly changing business environment and can anticipate and respond to emerging trends and opportunities.

However, there are also some limitations that P&G may face by adopting this perspective, such as:

• A heavy focus on leadership can create a culture of "heroic leadership" in which employees rely heavily on leaders to solve problems and make decisions, rather than taking ownership of their work and developing their leadership skills (Khan, 2017).
• An overemphasis on strong leadership can also lead to being deficient in accountability and simplicity in decision-making, which can weaken trust and engagement among employees.
• Leadership development and succession planning can be costly and time-consuming, and may not always result in the desired outcomes.

The organizational dynamics perspective focuses on understanding and managing the complex relationships, interactions, and processes that shape the behavior and performance of the organization.

2.2 Critically evaluation of the ability of the CEO/BoDs in P&G to simultaneously develop the competencies and capabilities crucial for the organization’s survival and growth

The paradox of abundance and social responsibility refers to the tension that exists between a company's need to generate profits for its shareholders and its responsibility to address social and environmental issues (Lasserre, 2017). This can be a challenging balancing act for companies, including Procter & Gamble (P&G), as they strive to assemble the difficulty of multiple stakeholders while also remaining competitive in the marketplace. The CEO and Board of Directors (BoDs) play a crucial role in balancing these competing demands and in developing the competencies and capabilities needed for the company's survival and growth. They are responsible for the surroundings the overall plan and direction of the company, and for allocating resources and making key decisions.

However, there are also some limitations that P&G may face in addressing this paradox. For example, meeting social and environmental responsibilities can be costly and can divert resources away from other strategic initiatives (Ottman, 2017). Additionally, the company may face resistance from some stakeholders, such as shareholders who prioritize short-term profits over long-term sustainability.

2.3 Critical understanding of the challenges of reconciling the conflicting demands for abundance and social responsibility simultaneously in an international context

Integration of the contradictory anxiety for profitability and social responsibility in a worldwide background can present several challenges for the company. Some of these challenges include:

• Cultural and legal differences: Companies operating in different countries may face different cultural and legal expectations and requirements regarding social and environmental responsibility.
• Supply Chain challenges: Companies may also face challenges in ensuring that their suppliers and partners are meeting the same social and environmental standards as the company. This can be particularly challenging in countries where labor laws and regulations are weaker, and where workers may be paid lower wages and have fewer rights.
• Stakeholder expectations: Companies may also face different stakeholder expectations and priorities depending on the country or region.
• Balancing competing demands: Companies may also face competing demands from different stakeholders, such as shareholders, customers, employees, and regulators. Balancing these competing demands can be challenging, particularly when they conflict with each other.
• Limited resources: Companies may also face limited resources, particularly in developing countries, which can make it difficult for them to invest in the technology and processes needed to meet their social and environmental responsibilities.

To address these challenges, companies operating in an international context can adopt a holistic approach that aligns business and social goals, advance in technology and processes that facilitate companionship to meet its social and environmental commitments, engage with stakeholders in a transparent and accountable way, and develop a clear and coherent strategy that balances the contradictory burden for profitability and social responsibility. Additionally, companies can also use international frameworks such as the UN Global Compact and ISO 26000 to guide corporate social responsibility.

2.4 The strategic decision-making process which enables an association to relate to change in its international business environment

The process of decision-making in an international company has contributing components and is important for the security or outcome of performance. Making strategic decisions involves taking into account how decisions are communicated and how they will affect the business to obtain an edge. Creating the wrong choice at the incorrect time could have a shattering cost. Companies must make choices that minimize long-term risks and maximize short-term effects to remain viable and competitive. Making strategic decision reveal an industry's perspective and the option that can be used to accomplish success. Decisions must be made quickly in a frequently uncertain international environment if businesses are to grow internationally, and each prospect has a chance of success.

Figure 3: US P&G

Figure 4: P&G company's new logo

2.5 Critically estimation and observation of the business vision, mission, objectives, and policies of global organizations

The company's mission announcement is to "Provide branded products and services of superior quality and value that improve the lives of the world’s consumers, now and for generations to come". P&G's visualization declaration is to "Be, and be recognized as, the best consumer products and services company in the world". P&G's brands and products are widely recognized and trusted by consumers around the world, and the company continues to be an important player in the global consumer goods market.

Procter & Gamble’s Vision Statement

Procter & Gamble's vision statement expresses its desire to be considered the top customer goods and services company in the world. This statement indicates the company's goal to be the best in its industry and how they see itself concerning other companies (Pucik et.al. 2017). The mission statement of Procter & Gamble emphasizes providing superior quality and value in their branded products and services, which will progress the lives of customers worldwide, currently and in the future. The mission statement also highlights that by providing these superior products and services, they will be rewarded with leadership in sales, profit, and value creation, ultimately leading to prosperity for their workers, shareholders, and the community in which they operate (Purwanto and Purwanto, 2020).

Question 3: Personal reflections on learning

I have gained knowledge on how to prepare an academic report, specifically focusing on the importance of format in research reports and how it improves my writing skills. Additionally, I have learned about strategic management, which is a systematic approach that utilizes efficient processes and management principles to align with a company's objectives and mission. This approach helps identify goals, opportunities, and limitations in the external environment, and develop a logical plan to achieve the company's objectives. Through studying P&G, a company in the consumer goods industry, I have learned about the importance of thinking globally while also acting locally. The nature of P&G's products necessitates economies of scale in certain functions and the need to be close to local markets, making the efficient transfer of data and information across the organization crucial. I have also come to understand that P&G's unique strengths include a progressive approach to social responsibility, maturity, and the ability to acquire and successfully manage smaller brands (Sahay et.al. 2020). The company's corporate social responsibility efforts enhance the power of its consumer goods brands and prioritize stakeholders according to their significance to the company. As a leading company in the global consumer goods market, P&G's business responsibility strategy is a sustainable approach to maintaining business sustainability and industry position.

Procter & Gamble (P&G) is an international company that operates in over 180 countries; it has developed several approaches to supervision localization and globalization, structure competencies and capability, and running prosperity and social accountability with an observation to continued existence and growth (Sassen, 2016). Examples from the case organization, which highlight the organization’s approaches to ‘managing localization and globalization, are:

• Managing Localisation and Globalisation: P&G has a strong focus on localization, which allows it to get used to its products and marketing strategies to meet the specific requests and preferences of consumers in dissimilar countries and regions.
• Building competencies and capabilities: P&G has a strong focus on building competencies and capabilities, which allows it to create and deliver value to its customers (Staurt Mitchell, 2018). P&G has also invested in building a strong distribution network and supply chain, which allows it to deliver its products to customers quickly and efficiently.
• Managing profitability and social responsibility: P&G has a strong focus on sustainability, which it has integrated into its business strategy. For example, P&G has set a target to diminish its greenhouse gas emissions by 30% by 2020 and has also dedicated itself to sourcing 100% of its palm oil from sustainable sources by 2020 (USpg.com, 2023).

Recommendation and Conclusion

In conclusion, in cooperation, the organizational leadership perspective and the perception of the organizational dynamics have their profit and restrictions. P&G can achieve its corporate purpose by adopting a holistic approach that combines both perspectives, this way it can achieve a balance between the two and can use its strengths to overcome the limitations. The company can focus on the development of strong leadership, while also paying attention to the internal dynamics that shape the behavior and performance of the organization. It is also concluded that while addressing the paradox of profitability and social responsibility can be challenging, the CEO and BoDs of P&G can expand the competencies and capability essential for the organization's endurance and enlargement by adopting a holistic approach that aligns business and social goals, investing in technology and processes that enable the company to meet its social and environmental commitments, and engaging with stakeholders in a transparent and accountable means.

However it is recommended to the chosen organization continuously monitor and adapt to changing global market trends and conditions: As the global market is constantly evolving, P&G should regularly assess the economic, political, and social trends in the countries in which it operates to identify new opportunities and potential challenges. It is also suggested that P&G should develop a comprehensive CSR strategy that addresses the social and environmental issues relevant to the company and its stakeholders. The strategy should prioritize the company's impact on the environment, its employees, and the communities in which it operates.

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