Proctor and Gamble :: Consumer Goods Industry PG P&G

Executive Summary P&G was founded in 1837 by William Procter and James Gamble as a maker of soaps and candles. P&G was known in Corporate America as a company to be admired and imitated. In addition, it was envied for its profitability as well as strong brand name. P&G has a long standing reputation as having life long employees. This dedication and loyalty by P&G's employees created the notion that outside sources were unwelcome and all products and ideas must come from within, however, this is not the way of the future. Durk I. Jager was named CEO in January 1999 but tried to accomplish too much too fast. Jager entered into this position at a very difficult time in P&G's history and tried everything he knew to keep the company going. He introduced new high end products, which did not fit within P&G's culture. His solution to keep P&G going was to cut costs, however this was not a long term solution. He alienated the employee population in 17 short months. Acknowledging Jager's failure, P&G's board forced him to submit his resignation. P&G employees needed a face lift and fast. A.G. Lafley, a Harvard graduate who spent his entire career with P&G was named CEO. He showed P&G employees that a family culture within the company was still attainable. Lafley focused on the employees and ensured the employees maintained focus on the consumers, as consumers are the basis of the market. He slowly began to change the old views of P&G. Not long after Lafley's appointment to CEO he replaced more than half of the company's top 30 officers and cut 9,600 jobs. P&Gs old view of internal creation was halted by Lafley. He acquired Clairol in 2001; P&Gs largest acquisition in its history. He also outsourced P&G's information-technology operation to help maintain its focus on the consumer and its brands. Lafley was able accomplish these non-traditional moves without alienating the family that was P&G. Although Lafley has had success, the underlying problem remains. How will Lafley return P&G to its rightful place in Corporate America? P&G's solution to its problems is through product line extensions, expansion into non-premium brands, as well as acquisitions, licensing, reinforcing market orientation through consumer focus, and outsourcing. This recommendation was based on following items;