P&G Merger
This management report explores the proposed acquisition of Gillette by Procter & Gamble (P&G) and whither the merger is good for the shareholders of these companies. The investigation has analysed the companies’ business markets through the success factors of the industry, what the motivation behind the merger is and what possible synergies the merger would create. A financial assessment and SWOT analysis has been completed along with a review of competitors’ potential responses.
P&G started life in 1837 as a small family business in Ohio. Today it is a multi-brand, multi-billion, multi-national corporation specialising in consumer good products such as washing detergent, shampoos and snack foods. They have first class Research & Development (R&D) capabilities, are respected for their marketing expertise and produce over 300 branded products in 160 countries. The table below details a SWOT analysis of P&G.
Procter and Gamble
Strengths Weaknesses
• Ability to create strong brands in multiple markets.
• Brand loyalty by many customers.
• Global market share leader in most regions.
• Large amount of free cash flow. • Customer focused on brands instead of P&G, sales can be lost if brand is sold.
• Growth strategy is based on acquisitions.
• Low emphasis on new product development.
Opportunities Threats
• International growth through existing brands.
• Development of new products and brands.
• Ability to make large acquisitions in the market.
• Diversify products through acquisitions or development. • Increasing competition in same markets.
• Environmental regulations require development of new products.
• New patents of other companies in the same market.
Gillette Corporation was founded in 1901 as a safety razor company. The company grew steadily through the 1900s but it wasn’t until after the Second...
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