ASSIGNMENT OF

STRATEGIC
MANAGMEMT
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Strategic Management

ASSIGNMENT OF STRATEGIC MANAGMEMT

Table of Contents
Who We Are................................................................................................................
Our History.................................................................................................................
Facts about P&G Pakistan...........................................................................................
Mission Statement......................................................................................................
Vision Statement........................................................................................................
Slogan........................................................................................................................
Our Goal.....................................................................................................................
Our Values..................................................................................................................
STRATEGY-FORMULATION FRAMEWORK......................................................................
Learning Objectives.................................................................................................
Objectives:..............................................................................................................
A Comprehensive Strategy-Formulation Framework................................................
input Stage ( SWOT)...................................................................................................
IFE Matrix...................................................................................................................
EFE matrix..................................................................................................................
CPM Matrix.................................................................................................................
Matching stage (SWOT Matrix)...................................................................................
Space Matrix.............................................................................................................
Graph....................................................................................................................
Strategies recommended......................................................................................
BCG matrix...............................................................................................................
Graph....................................................................................................................
Strategies recommended for star products...........................................................
Strategies recommended for Question Mark products..........................................
IE matrix...................................................................................................................
Graph....................................................................................................................
Grand Matrix.............................................................................................................
Strategies recommended......................................................................................
DESCISION MAKING STAGE (QSPM)..........................................................................

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Who We Are
P&G serves nearly 5 billion consumers around the world today. We have
one of the largest and strongest portfolios of trusted, quality, leadership
brands. At P&G, the people who develop and build these brands are the
foundation of our success

Our History
Procter & Gamble Pakistan, headquartered in Karachi, commenced
operations in Pakistan in 1991. Our goal was to become the finest global
consumer goods company operating locally in Pakistan. To fulfill this goal,
we are serving Pakistani consumers with 12 high-quality brands locally
that strive to make everyday lives better.
With commitment came growth, and in 1994 we acquired a soapmanufacturing facility sprawling seven acres of land at Hub, Balochistan.
In 2002, the plant tripled its soap-manufacturing capacity with an
investment of $3 million. In 2004, with an initial investment of about half a
million U.S. dollars, a PUR facility was set up with a production capacity of
50 million sachets of the water purifier annually. The P&G Hub plant is the
single plant that produces PUR globally. Today, the HUB plant is equipped
with state of art manufacturing technologies & quality assurance
processes and systems, reflecting the companys values of safe
P&G Pakistan headquarters are consistently upgraded to the company's
progressive values Investments of $1 million and a recent $600,000
investment have taken place in the work-space environment to date. The
P&G Pakistan head office today hosts high speed digital network and
advanced system and facilities
As a company with vast global experience, P&G always has believed in the
potential Pakistan has as a country. Since 1989, the total amount invested
by P&G Pakistan in assets, working capital and market development has
exceeded Rs 6 billion. In addition, Procter & Gamble contributed Rs. 3.1
billion to the national exchequer in the form of tax duties during 2005-06,
increasing 13% over the previous year

P&G has attracted outstanding individuals since the day it began

operations in Pakistan. The company employs more than 257 people and
creates more than 4,000 jobs indirectly in Pakistan, 99 percent of which
are held by Pakistanis. All this makes P&G a more locally focused
company.
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Facts about P&G Pakistan

Procter & Gamble started its operations in Pakistan in 1991.

P&G Pakistan is headquartered in Karachi.

P&G Pakistan has reinvested over $100 million in Pakistan within the
last 12 years.

P&G Pakistan has invested 63 million dollars over the last 5 years in
terms of capital, marketing and training.

P&G Pakistan has contributed close to 7 billion rupees to the

Pakistani government's revenues over the last 5 years in the form of sales
tax, customs and excise duties.

P&G Pakistan creates more than 4,000 jobs in Pakistan. 99% of the
jobs that P&G Pakistan creates in Pakistan are held by Pakistanis.

P&G Pakistan owns a sprawling 7-acre land manufacturing facility at

Hub, Balochistan, which manufactures Safeguard and Camay soaps. A
recent 5 million dollar investment has tripled the plant's capacity.

P&G Pakistan runs several social marketing programs in the field of

education and health. These programs benefit more than 3 million people
annually.

Mission Statement
We will 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. As a result, consumers will reward us with leadership
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sales, profit and value creation, allowing our people, our shareholders and
the communities in which we live and work to prosper.

Vision Statement
Be, and be recognized as, the best consumer products and
services company in the world.

Slogan
Touching lives, improving life.

Our Goal
Our goal was to become the finest global consumer goods company
operating locally in Pakistan. To fulfill this goal, we are serving Pakistani
consumers with premium quality brands that strive to make their
everyday lives better.

Our Values
Integrity
Leadership
Ownership
Passion for Winning
Trust

STRATEGY-FORMULATION FRAMEWORK
Learning Objectives
After reading this we will be able to understand the basic phenomena of
strategy formulate framework and also understand the stages of strategy
formulate frame work.

Objectives:
Objective placing an important role in strategic management, analysis and
choices largely involves making subjective decisions based on objective
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information. This topic includes important concepts that can help

strategies generate feasible alternatives, evaluate those alternative and
choose a specific course of action. Behavioral aspects of strategy
formulation are described, including politics, culture, ethics and social
responsibilities considerations. Modern tools for formulating strategies are
described and the appropriate role of a board of directors is discussed

A Comprehensive Strategy-Formulation Framework

Important strategy-formulation techniques can be integrated in to a threestage decision making framework, as shown below. The tools presented
this framework are applicable to all sizes and types of organizations and
can help strategies identify, evaluate and select strategies
Stage-1 (Formulation Framework)
1. External factor evaluation
2. Competitive matrix profile
3. Internal factor evaluation
Stage-2 (Matching stage)
1. SWOT Matrix (Strengths -Weaknesses Opportunities- Threats)
2. SPACE Matrix (Strategic Position and Action Evaluation)
3. BCG Matrix (Boston Consulting Group)
4. IE Matrix (Internal and external)
5. GS Matrix (Grand Strategy)
Stage-3 (Decision stage)
1. QSPM (Quantitative Strategic Planning Matrix)
Stage 1 of the formulation framework consists of EFE Matrix, the IFE
Matrix and the CPM Matrix called the input stage. This stage summarizes
the basic input Information needed to formulate strategies
Stage 2, called the Matching Stage, focuses upon generating feasible alte
rnative strategies by aligning key external and internal factors. Stage 2
techniques include SWOTs Matrix, SPACE Matrix, BCG Matrix, IE Matrix
and Grand Strategy Matrix
Stage 3, called the Decision Stage, and involves a single technique, the Q
uantitative Strategic Planning Matrix (QSPM).
A QSPM uses input information from Stage 1 to objectively evaltue
feasible alternative strategies identified n stage 2. QSPM reveals the
relative attractiveness of alternate strategies and thus provide an
objective basis for selecting specific strategies
RATING OF QSPM
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1.
2.
3.
4.

Should not be select

Possibly be implemented
Probably should be implemented
Definitely should be implemented

INPUT STAGE
SWOT
What is SWOT analysis?
SWOT analysis is a look at a companys strengths, weaknesses,
opportunities, and threats, and is a scientific way to gain a detailed and
thorough perspective on a company and its future.

Components of SWOT analysis

INTERNAL Strengths & Weaknesses of a firm
EXTERNAL Opportunities & Threats of a firm
Importance SWOT analysis helps to make business plan & strategies for
future.
STRENGHTS

Strong financial position

Diversification of product line
Large scale of operation
Strong branding
Product innovation
Developing markets infrastructure

WEAKNESS

Customer concentration
Lack of effective distribution in some countries
The beauty and health products by P & G are mostly for women.
Substitute products
Customer concentration

Opportunity

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Emerging markets are expected to produce strong growth in beauty

and personal care. Procter & Gamble can benefit from the shift of
consumption to the emerging markets.
Wide range of demography
Developing markets
New products
Acquisitions
Tap rural markets and increase penetration in urban areas.
An opportunity for P & G is health and beauty products for men.

Threats

Uncertainty in economy conditions

Intense competition
Unfavorable business law and political instability
Terrorist activities
New competitor
In the market many substitutes are available for P & G products at
cheaper prices.
Raw materials are increasing so cost to the company is increasing.

IFE Matrix
IFE matrix means Internal Factor Evaluation Matrix is a popular strategic
management tool for auditing or evaluating major internal strengths and
internal weaknesses in functional areas of an organization or a business.
STRENGHT

WEIG
HT
0.10

RATI
NG
4

WEIGHTED
SCORE
0.40

Financial position

0.07

0.28

Diversification of product line

0.09

0.27

Developing Marketing infrastructure

0.06

0.18

Production innovation

0.12

0.36

0.10

0.20

Strong Brand Name

Weakness
Losing market share in half of its global
brand

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The beauty & health products of P&G are

for women
Lack of effective distribution in some
region
Customer concentration

0.16

0.48

0.10

0.20

0.08

0.24

Substitute products

0.12

0.36

Total weighted score

2.97

EFE matrix
EFE Matrix is an analytical technique related to the SWOT
analysis. EFE is an acronym of the External Factor Evaluation. EFE
Matrix is an analytical technique related to the SWOT analysis. EFE is an
acronym of the External Factor Evaluation.

Opportunities

Weig
ht

Rati
ng

Weighted
Score

Increase in demand of beauty & health

products of customers

0.10

0.40

Increase amount of man who want beauty

& health products

0.10

0.40

Increase penetration in urban market &

trap rural market
Wide range of demographic

0.08

0.32

0.09

0.36

Acquisition

0.05

0.15

Threats

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Increase price of raw material

0.10

0.20

Cheaper consumer brand competitors in

market
Unfavorable business law & political
instability
Terrorist activities

0.10

0.30

0.08

0.24

0.10

0.20

New competitors

0.10

0.20

Total weighted score

2.77

CPM Matrix
CPM, or the CPM Matrix, stands for Competitive Profile Matrix and is
a powerful strategic analysis tool.CPM allows business owners,
stockholders and other interested parties to see the strengths and
weaknesses of all major competitors in an industry on a single page.

Critical success
factors

Weig
ht

P&G

Price
competiveness
Market share

0.196

Rati
ng
3

0.216

Financial position

0.186

Product quality

0.206

Consumer loyalty

0.196

Unilever
Scor
e
0.58
8
0.64
8
0,74
4
0.61
8
0.58
8
3.18
6

Rati
ng
2
4
4
3
3

Scor
e
0.39
2
0.86
9
0.74
4
0.61
8
0.58
8
3.20
6

Johnson &
Johnsons
Rating Score
2

0.392

0.432

0.558

0.618

0,588
2.588

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Matching Strategy
SWOT Matrix
SWOT analysis (alternatively SWOT matrix) is an acronym for
strengths, weaknesses, opportunities, and threatsand is a structured
planning method that evaluates those four elements of a project or
business venture. A SWOT analysis can be carried out for a company,
product, place, industry, or person.

SWOT
MATRIX

Strength

Strong Brand Name

Financial position
Diversification of
product line
Developing
Marketing
infrastructure
Production
innovation

Weakness

Opportunities

SO strategies

WO

Losing market
share in half of its
global brand
The beauty &
health products
of P&G are for
women
Lack of effective
distribution in
same region
Customer
concentration
Substitute
products
strategies

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Increase in
Invest to create &
demand of
developed a
beauty & health
multifunctional
products of
product that may
customers
satisfy the customer
Increase amount
Focused on the rural
of man who
market by product
want beauty &
development with
health products
lost cost & best
Increase
values
Introduce related or
penetration inn
urban market
unrelated product
trap rural market
for wide range of
Wide range of
demography
demographic
Acquisition
Threats
ST strategies
Increase price of
Continue product
raw material
diversification to
Cheaper
offset increase
consumer brand
chance of
competitors in
competitors
Go for the backward
market
Unfavorable
integration strategy
Continued
business law &
political
diversification to
instability
fulfill demand of
Terrorist
consumer at low
activities
cost
New competitors

Use innovative
channels of
distribution for
the product
Introduce new
product for man
segment to gain
market share
Utilize niche
market rather
than focused on
few products

WT strategies
Differentiate from
the competitors
with a precise
target
(youngster)
Introduce new
product at cheap
rate as compared
to competitors

Space Matrix
It is used to determine what type of a strategy a company should
undertake. The Strategic Position & Actions Evaluation matrix or short
a SPACE matrix is a strategic management tool that focuses on strategy
formulation especially as related to the competitive position of an
organization.

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Financial strength

Yaxi
s

Environmental stability

Financial position

Rate of
inflation
Technology
change

-2

Return on investment

Leverage

Price elasticity
of demand

-2

Working capital

Competitive
pressure

-4

Cash flow

-3

Average

5.0

Barriers to
entry in new
market
Average

Total Y-axis score

Xaxi
s

-2

-2.6
2.4

Competitive advantage
Market share

-1

Product quality

-3

Customer loyalty

-2

Technology knowhow

-2

Resource
utilization

Control over supplier &

distributer

-2

Profit potential

Average
Total X-axis score

-2.0

Industry strength
Growth
potential
Financial
stability
Ease of entry
into market

Average

7
7
3

5.6
3.6

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Graph

This graph shows that the financial position of this firm is strong and it
also achieve major competitive strength in grooming and stable industry

Strategies recommended

Background integration
Forward integration
Horizontal integration
Market penetration
Market development
Product development
Diversification

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BCG matrix
BCG matrix is a framework created by Boston Consulting Group to
evaluate the strategic position of the business brand portfolio and its
potential. It classifies business portfolio into four categories based on
industry attractiveness (growth rate of that industry) and competitive
position (relative market share)
Division

Beauty
Grooming
Health
care
Snacks &
pet care
Fabric
care &
home
care
Baby care
& family
care
Total

Revenue
s
($million
s)
19491
7631
11493

Percenta
ge of
revenue

Profit
($million
s)

Percenta
ge of
profit

Industry
growth
profit

23%
13%
16%

Relative
market
share
position
0.60
0.20
0.30

24%
10%
14%

2712
1477
1860

3135

04%

326

03%

0.10

23805

30%

3339

02%

0.80

14736

10%

2049

17%

0.40

80291

100%

11763

100%

3
3
2

Graph

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Strategies recommended for star products

Background integration
Forward integration
Horizontal integration
Market penetration
Market development
Product development

Strategies recommended for Question Mark products

Market penetration
Market development
Product development
Divestiture

IE matrix
The IE is an important strategic tool which comes under the portfolio
management considered much similar to BCG Matrix. The IE matrix used
to plot the organization divisions in nine cell diagram, each cell have
some meaning associated which suggest strategies

On x-axis we use IEF

On y-axis we use EFE

Portion 1
1
2
4

Division

Grow and
build

Portion 2
3
5
7

Hold &
maintain

Portion 3
6
8
9

Revenue
s
($million
s)
19491

Percenta
ge of
revenue

Profit
($million
s)

Percenta
ge of
profit

24%

2712

23%

2,8

Grooming

7631

10%

1477

13%

2.7

2.5

Health
care
Snacks &
pet care

11493

14%

1860

16%

2.3

2.6

3135

04%

326

03%

2.0

2.1

Fabric
care &
home
care

23805

30%

3339

02%

2.7

2.8

Beauty

EFE

Defensive /
divestiture

IFE

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Baby
care &
family
care
TOTAL

14736

10%

2049

17%

80291

100%

11763

100%

2.9

Graph

Grand Matrix
A grand strategy matrix is a tool used by businesses to devise
alternative strategies. The matrix is primarily based on four
essential elements: rapid market growth, slow market growth,
strong competitive position and weak competitive position.

Strategies recommended for portion 1 products

Background integration
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Forward integration
Horizontal integration
Market penetration
Market development
Product development

Strategies recommended for portion 2 products

Market penetration
Market development

Rapid Market Growth

Weak
Competative
Position
Strong
Competative
Position
Slow Market Growth
This graph shows that P&G is financially strong and it also has strong
competitive position in market with huge market share

Strategies recommended

Market development
Market penetration
Product development
Background integration
Forward integration
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Horizontal integration
Related diversification

DECISION MAKING STAGE

QSPM (Quantitative Strategic Planning Matrix)
Quantitative Strategic Planning Matrix (QSPM) is a high-level strategic
management approach for evaluating possible strategies.
QSPM provides an analytical method for comparing feasible alternative
actions.
The QSPM method falls within so-called stage 3 of the strategy
formulation analytical framework.
We are using this matrix to know which strategy is best for the firm

Market penetration OR Market development

STRENGHT

WEIGHT

Strong Brand Name

0.059

Financial position

0.059

Diversification of product line

0.054

Developing Marketing infrastructure

0.009

Production innovation

0.039

Weakness
Losing market share in half of its global
brand
The beauty & health products of P&G are
for women
Lack of effective distribution in same region

MARKET
PENETRAT
ION
A.S T.A.
S
4
0.23
6
4
0.23
6
3
0.16
2
3
0.02
7
3
0.11
7

0.029

0.051

0.059

Customer concentration

0.059

Substitute products

0.049

0.05
8
0.15
3
0.11
8
0.17
7
0.14

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MARKET
DEVELOPM
ENT
A.S T.A.S
4

0.236

0.236

0.177

0.236

0.236

0.118

0.236

0.118

0.177

0.177

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7
Opportunities
Increase in demand of beauty & health
products of customers
Increase amount of man who want beauty
& health products
Increase penetration inn urban market trap
rural market
Wide range of demographic
Acquisition

0.21
2
0.23
6
0.22

0.236

0.236

0.236

4
3

0.24
0.08
7

3
2

0.177
0.118

0.053

0.118

Cheaper consumer brand competitors in

market
Unfavorable business law & political
instability
Terrorist activities

0.059

0.236

0.059

0.177

0.053

0.159

New competitors

0.053

0.10
6
0.17
7
0.17
7
0.10
6
0.10
6
3.09
8

0.159

Threats
Increase price of raw material

TOTAL

0.053

0.059

0.055

0.06
0.029

3.799

Strategies recommended

Market development because its total attractiveness score is more

than market penetration.

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