Adams 1
Strategic Plan Report
Kristen Adams
Management Strategy
Professor Novak
September 17, 2012
Adams 2
Table of Contents
INTRODUCTION……………………………………………………………………..
3
Strategic Plan…………………………………………………………………..
4
Strategic Management…………………………………………………………
5
ENVIRONMENTAL SCANNING……………………………………………………
6
Competitive Advantage……………………………………………………….
8
STRATEGY FORMULATION……………………………………………………….
9
STRATEGY IMPLEMENTATION…………………………………………………..
10
Social Responsibility………………………………………………………….. 11
Ethical Considerations………………………………………………………… 12
Measurement Guidelines……………………………………………………… 13
Structural Leadership………………………………………………………………….. 14
Business Continuity……………………………………………………….…… 15
EVALUATIONS AND CONTROL………………..…………………………………. 16
WORKS CITED……………………………………………………………………….. 17
Adams 3
INTRODUCTION
This strategic plan report was created with the goal to research the best practices and
provide recommendations to the board of directors of Procter & Gamble. This detailed
report will cover the areas of environmental scanning, strategy formulation, strategy
implementation, and evaluation and control.
About P&G
“P&G
is a global, publicly traded Fortune 500 company, and the largest consumer
packaged goods company in the world. P&G’s work is driven by a Purpose of providing
branded products and services of superior quality and value to improve the lives of the
world’s consumers now and for generations to come. P&G’s growth strategy, inspired by
our Purpose, is to touch and improve more consumers’ lives in more parts of the world,
more completely (Fox).”
Adams 4
STRATEGIC PLAN
A company’s strategic plan “lays out its future direction and business purpose,
performance targets, and strategy. Typically a strategic plan includes a commitment to
allocate resources to the plan and specifies a time period for achieving goals (Thompson
38).”
Example
We expect to deliver improved results by “continuing to be the industry leader in
innovation, by driving productivity improvements and cost savings at an accelerated
pace, and by improving the consistency of execution in all facets of its operations
(P&G).” Our objectives are to deliver $10 billion in cost savings by the end of fiscal year
2016.
Adams 5
STRATEGIC MANAGEMENT
The strategic management process defines the organization’s strategy where
management sets strategies for the organization to achieve better performance. This is a
“continuous process that appraises the business and industries in which the organization
is involved; appraises it’s competitors; and fixes goals to meet all the present and future
competitor’s and then reassesses each strategy (“Management Study Guide”).”
The strategic management process consists of five organized and incorporated stages:
1. “Developing a strategic vision; of the company’s future, a mission that defines the
company’s current purpose, and a set of core values to guide the pursuit of the
vision and mission.
2. Setting objectives; to convert the vision and mission into performance targets and
using the targeted results as yardsticks for measuring the company’s performance.
3. Crafting a strategy; to achieve the objectives and move the company along the
strategic course that management has charted.
4. Executing the chosen strategy; and converting the strategic plan into action.
5. Monitoring development, evaluating performance, and initiating corrective
adjustments; in light of actual experience, changing conditions, new ideas, and
new opportunities (Thompson 44).”
Adams 6
ENVIRONMENTAL SCANNING
Environmental scanning refers to “possession and utilization of information about
occasions, patterns, trends, and relationships within an organization’s internal and
external environment (“Management Study Guide”).” It helps the managers to decide the
future path of the organization by identifying the threats and opportunities existing in the
environment.
We have identified threats and opportunities for the existing environment to help
management “recognize the present state of the environment and be able to predict its
future positions (“Management Study Guide”).” These include:
1. “Growing existing sales and volume profitably despite high levels of
competitive activity, an increasingly volatile economic environment, and
lower than expected market growth rates
2. Successfully manage ongoing acquisition, divestiture and joint venture
activities to achieve the cost and growth synergies in accordance with the
stated goals of these transactions without impacting the delivery of base
business objectives
3. Successfully manage ongoing organizational changes and achieve
productivity improvements designed to support our growth strategies, while
successfully identifying, developing and retaining key employees, especially
in key growth markets where the availability of skilled employees is limited
4. Resolve the pending competition law inquiries in Europe within current
estimates
5. Manage currency (including currency issues in certain countries, such as
Venezuela, China and India), debt, interest rate, pension expense, and
commodity cost exposures, as well as any significant credit or liquidity issues,
including maintenance of our current credit rating
Adams 7
6. Manage continued global political and/or economic uncertainty and
disruptions, especially in the Company's significant geographical markets, due
to a wide variety of factors, including but not limited to, terrorist and other
hostile activities, natural disasters and/or disruptions to credit markets,
resulting from a global, regional or national credit crisis
7. Effectively manage competitive factors, including prices, promotional
incentives and trade terms for products
8. Obtain patents and respond to technological advances attained by competitors
and patents granted to competitors
9. Stay on the leading edge of innovation, maintain a positive reputation on our
brands and ensure trademark protection (Fox).”
Adams 8
COMPETITIVE ADVANTAGE
Competitive advantage comes from “an ability to meet customer needs more
effectively, with products or serves that customers value more highly, or more efficiently,
at lower cost (Thompson 8).” P&G has developed a distinctive strategy that sets us apart
from rivals and provides a competitive advantage through our core strengths; customer
understanding, innovation, brand-building, go-to market capabilities, and scale.
past decade has come from new brands or
improved products (P&G).”
Brand-Building
P&G is the brand-building leader, building
“the strongest portfolio of brands in the
industry with 50 leadership brands that are
among some of the world’s best-known
household names (P&G).”
Go-to-Market Capabilities
Leading retailers in industry surveys
constantly rank P&G as a preferred
supplier. We’re also regularly ranked as
“the industry leader in a wide range of
capabilities, including clearest company
strategy, brands most important to
retailers, strong business fundamentals
Consumer Understanding
P&G is the only company that has
and innovative marketing programs
invested the most market research . We
(P&G).”
invest more than $400 million annually in
Scale
consumer understanding, gaining insights
Harnessing the strength of our brands and
to help identify opportunities for
categories as one Company can allow us
innovation and better serve and
to better serve more consumers around
communicate with our consumers.
globally. P&G can create scale advantages
Innovation
working in unison by “allocating
“P&G is the industry’s innovation leader.
resources more strategically and
Nearly all organic sales growth over the
efficiently than any individual business
can do on its own (P&G).”
Adams 9
STRATEGY FORMATION
Strategy formulation is the process of “establishing the organization's mission,
objectives, and choosing among alternative strategies (Ryszard Barnat).” This includes
planning and decision-making involved in developing our company’s strategic plan. The
P&G 2012 Annual Report provides a great overview of our strategy formation:
“We’re growing from our core to win with consumers where it matters most by
focusing on the biggest, most profitable opportunities for growth.
o 40 largest and most profitable category / country combinations
o 20 largest and most promising innovations
o 10 most important developing markets
We’re focused on innovations that create or redefine product categories, while
making base-business innovations bigger.
We’re operating with the discipline of a true productivity culture – including our
$10 billion cost savings and productivity plan – to fund innovation, growth and
shareholder value.
We’re executing our time-tested business model with excellence to drive superior
consumer value: We discover meaningful insights into what consumers need and
want.
We translate those insights into noticeably superior products.
We communicate product superiority through advertising that includes
compelling claims, performance demonstrations and superior benefit visuals.
And we price our products so that consumers experience superior overall value.
We are moving forward with urgency, but with balance – balancing developingand developed-market growth, balancing the top and bottom lines and balancing
short- and long-term returns (Chelune).”
Adams 10
STRATEGY IMPLEMENTATION
Strategy implementation translates the chosen strategy into organizational action
so as to achieve strategic goals and objectives. Strategy implementation is also defined as
“the manner in which an organization should develop, utilize, and amalgamate
organizational structure, control systems, and culture to follow strategies that lead to
competitive advantage and a better performance (“Management Study Guide”).
Adams 11
SOCIAL RESPONCIBILITY
Corporate social responsibility refers to a company’s duty to “operate in an
honorable manner, provide good working conditions for employees, encourage workforce
diversity, be a good steward of the environment, and actively work to better the quality of
life in the local communities where it operates and in society at large (Thompson 310).”
P&G focuses on improving life for disadvantaged
children through our Live, Learn and Thrive
programs. “By focusing our expertise, technologies, and resources to address these
issues, we can help children get off to a healthy start, receive access to education, and
build skills for life (P&G).” Thousands of P&G employees are making a meaningful
difference by helping children live and flourish in their communities.
“We believe companies can be a force for good in the world, and this is who we
are as a global corporate citizen. Live, Learn and Thrive is woven into our philanthropy,
cause marketing, product donations, disaster relief, and employee engagement. The cause
is a reflection of our Purpose, and it embodies our goal of being closer to consumers from
all walks of life and in touch with the needs of communities around the world (P&G).”
Adams 12
ETHICAL CONSIDERATIONS
Business ethics provide a structure of moral principles and code of conduct of
what is right and wrong from a business point of view. At P&G, our ethical
considerations are relative to our employees and employers, and interaction between
organization and customers. The purpose of our core values allows our company to
conduct business “in a manner beneficial to the societal as well as business interests
(“Management Study Guide”).”
Our company values;

“INTEGRITY





We always try to do the right thing.
We are honest and straightforward with each other.
We operate within the letter and spirit of the law.
We uphold the values and principles of P&G in every action and
decision.
 We are data-based and intellectually honest in advocating proposals,
including recognizing risks.
LEADERSHIP





We always try to do the right thing.
We are honest and straightforward with each other.
We operate within the letter and spirit of the law.
We uphold the values and principles of P&G in every action and
decision.
 We are data-based and intellectually honest in advocating proposals,
including recognizing risks.
OWNERSHIP


We accept personal accountability to meet our business needs,
improve our systems and help others improve their effectiveness.
 We all act like owners, treating the Company’s assets as our own and
behaving with the Company’s long-term success in mind.
PASSION FOR WINNING




We are determined to be the best at doing what matters most.
We have a healthy dissatisfaction with the status quo.
We have a compelling desire to improve and to win in the
marketplace.
TRUST



We respect our P&G colleagues, customers and consumers, and treat
them as we want to be treated.
We have confidence in each other’s capabilities and intentions.
We believe that people work best when there is a foundation of trust
(P&G).”
Adams 13
MEASUREMENT GUIDELINES
In order to verify strategy effectiveness, our company uses benchmarking to
measure performance of particular activities and business processes against “best-inindustry” and “best-in-world” performers (Thompson 365).” Through benchmarking, we
are able to identify, analyze, and understand how top-performing companies carry out
specific value chain activities and processes. This allows P&G to measure the
“effectiveness and efficiency of internal operations (Thompson 365).”
From benchmarking and Best-Practice Implementation to operating Excellence
Engage in
benchmarking
to identify the
"best practice"
for performing
an activity
Adapt the "best
practice" to fit
the company's
situation; then
implement it
Continue to
benchmark
company
performance of
the activity
against "best-inindustry" or
"best-in-world"
performers
Move closer to
operting
excellence in
performing the
activity
Adams 14
STRUCTURAL LEADERSHIP
Strategic leadership refers to “a manger’s potential to express a strategic vision for the
organization, or a part of the organization, and to motivate and persuade others to acquire that vision. It is
the potential to influence organizational members and to execute organizational change (“Management
Study Guide”).”
We strive to enhance strategic productivity through our leadership development. P&G is recognized as a
top company for leaders for the following reasons:
o
We Share P&G’s Purpose and Values
o
We Hire the Best
o
We Challenge P&G People from Day One
o
Business and Functional Leaders Actively Recruit, Teach and Coach
o
We Plan Careers
o
We Never Stop Learning (P&G).
Adams 15
BUSINESS CONTINUITY
A business continuity plan helps companies keep important business functions
operating during an emergency. The main objectives of a business continuity plan are to
“identify critical operations and risks, provide a plan to maintain or restore critical
operations during a crisis, and create a plan to communicate with key people during the
crisis (Jensen).” The following ideas have been incorporated into our plan, helping our
company recover from disaster:
• Establish an emergency call-in number and
data, then keep them (as well as a map of the
call trees to keep employees informed during a
infrastructure) at an offsite location, preferably
crisis.
in another region.
• Get as much employee contact information as
• Teach employees about disaster-recovery
possible: spouses’ cell phone numbers, home e-
planning not only for the business but for their
mail addresses, phone numbers of close, out-of-
families.
state relatives. Update it twice a year.
• Develop a strong relationship with your
• Consolidate business-critical systems and
business partners. When disaster strikes, they
keep them in a location with a backup power
can prove to be invaluable allies in terms of
generator.
replacing equipment, offering advice and
• Mirror mission-critical systems and backup
assistance and negotiating last minute deals
with manufacturers.
• Include in your disaster-recovery plan a list of
systems you would like to upgrade to at some
point. If those systems are destroyed and
you’ve done the research already, it may be
more economical to upgrade.
• If systems or Internet access is lost during an
emergency, update virus signatures as soon as
connectivity is restored.
• Update and test disaster-recovery plans
annually (Web Projects)
Adams 16
EVALUATION AND CONTROL
The final phase of strategic management is evaluation and control. This step
assesses the efficiency and effectiveness of the complete plans in achieving the desired
results. Strategy evaluation is significant because of various factors such as “developing
inputs for new strategic planning, the urge for feedback, appraisal and reward,
development of the strategic management process, judging the validity of strategic choice
etc (“Management Study Guide”).”
The process of Strategy Evaluation consists of following steps1. Fixing benchmark of performance
2. Measurement of performance
3. Analyzing Variance
4. Taking Corrective Action (“Management Study Guide”)
Adams 17
Works Cited
"Business Continuity — Disaster Recovery." Web Projects. CDW, n.d. Web. 15 Sep
2012.<http://webobjects.cdw.com/webobjects/docs/PDFs/Structuring_For_Sustai
nability.pdf>.
Chelune, Jennifer. "P&G’s 2012 Annual Report." P&G. Procter & Gamble., 24 Aug
2012. Web. 12 Sep 2012. <http://news.pg.com/blog/2012-annual- report/pgs2012-annual-report>.
"Environmental Scanning." Management Study Guide. managementstudyguide.com, n.d.
Web. 12 Sep 2012. <http://www.managementstudyguide.com/environmentalscanning.htm>.
Fox, Paul. "P&G Outlines Strategic Focus and Preliminary Financial Outlook for Fiscal
Year 2013." P&G Outlines Strategic Focus and Preliminary Financial Outlook
for Fiscal Year 2013. Procter & Gamble., 20 Jun 2012. Web. 12 Sep 2012.
<http://news.pg.com/press-release/pg-corporate-announcements/pg-outlinesstrategic-focus-and-preliminary-financial-outlo>.
Jensen, Michele. "Definition of Business Continuity Plan Objectives." Small Business.
Hearst Communications Inc., n.d. Web. 12 Sep 2012.
<http://smallbusiness.chron.com/definition-business-continuity-plan-objectives4528.html>.
"Live, Learn and Thrive Overview." P&G. Procter & Gamble., 24 Aug 2012. Web. 12
Sep 2012. <http://news.pg.com/blog/2012-annual-report/pgs-2012-annualreport>.
"Purpose, Values and Principles." P&G. Procter & Gamble., 24 Aug 2012. Web. 12 Sep
2012. <http://news.pg.com/blog/2012-annual-report/pgs-2012-annual-report>.
Ryszard Barnat, . "Strategy Formation." Introduction to Management. NOW:
Design, n.d. Web. 12 Sep 2012. <http://www.introduction-tomanagement.24xls.com/en222>.
Thompson, A. Strickland, A.J., Gamble, J.E. Crafting and Executing Strategy. 18th
Edition. New York: McGraw-Hill, 2012.