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Homework answers / question archive / You will develop and submit an audit report reviewing the basic Strategic steps the company has followed in the last three years, including the pandemic of COVID19
You will develop and submit an audit report reviewing the basic Strategic steps the company has followed in the last three years, including the pandemic of COVID19.
In particular:
You will need to:
Apply and highlight the concepts and theories learned in the course
Insert in your report figures, charts and images to support your models
Refer if needed to articles, newsletters and videos you may find about the matter
Identify areas of improvement you may find whilst auditing the company
Use the document attached as basis for this report
2000-2500 words
Table of Contents Executive summary ........................................................................................................................2 The original idea ............................................................................................................................2 Introduction ..................................................................................................................................2 Mission, vision & values .................................................................................................................3 Market segmentation ....................................................................................................................3 Competitor & Environmental analysis.............................................................................................5 SWOT analysis ...............................................................................................................................8 Conclusion ................................................................................................................................... 11 Bibliography ................................................................................................................................ 12 1 Executive summary This audit report will focus on reviewing the strategic steps that Procter & Gamble and therefore Pantene have been following since their inception. The report will contain information on the original idea behind the corporation’s creation, introduction to the brand Pantene, mission, vision and values of both Procter & Gamble and Pantene, analysis of Pantene’s market segments, competitors, environmental and SWOT analyses of the brand. The original idea The company of my choice is Procter & Gamble, a Fortune 500 company that is ranked 50th in the list. Procter & Gamble is a multinational consumer goods corporation that was co-founded in 1837 by William Procter and James Gamble. The corporation’s specialisation includes a wide of products such as baby care, fabric care, family care, feminine care, grooming, hair care, home care, oral care, personal health care and skin and personal care. Initially, the company focused on producing soap and candles. In 1890 the company has acquired a diverse product line of over 30 types of soap and incorporated (Butler, 2020). Throughout next few decades Procter & Gamble have been adding more products and has become one of the most significant corporations with international presence in 180 countries. Introduction One of Procter & Gamble’s brands is Pantene a former Swiss, now American brand specialising on hair care products. Initially, Pantene that was owned by Swiss drug brand Hoffman-LaRoche made its debut in Europe as a premium care line. The brand’s creation was inspired by Pro-Vitamin B5 that was discovered in 1940s and was seen to have a dramatic effect on hair. As the news of Pro-Vitamin B5 has caught attention of 2 beauty buyers, it has become a precious and luxurious. The brand was purchased by Procter & Gamble in 1985 (Pantene | Pantene Story, n.d.). Mission, vision & values Pantene’s mission is to “give more people, more great hair days” (Pantene | Pantene Story, n.d.) as they believe that it is more than about hair. In this sense, the company has taken into account a landmark global research that Pantene has conducted in collaboration with Dr. Marianne LaFrance, Ph.D., from Yale University and social psychologist Dr. Adam Galinsky from Columbia Business School. According to the research, women’s hair is the main way to express themselves. Moreover, it has led them to the conclusion that hair affects how women perceive themselves and therefore their state of mind. Thus, the company has decided to commit to creating a hair care that is both safe and effective in order to help women to be happier. Vision The company’s values include • eliminating hair bias • safety & efficacy • sustainability Pantene as a part of Procter & Gamble is also associated with the corporation’s own mission, vision and values. Moreover, Procter & Gamble’s mission is focuses on providing superior quality and value products and services that can improve lives not only of current consumers but the future generations as well. The vision of the corporation is directly related to its mission as the Procter & Gamble as a result aims to obtain leadership sales, profit and value creation which will allow its employees, shareholders and environment to prosper. Market segmentation 3 Geographic In terms of geographic factors, Pantene targets consumers all around the world by offering its products in more than 90 countries and e-commerce. However, considering the fact that the company’s products are available at supermarket chains, one of the characteristics of such segment is urban area. Demographic Brand’s demographics comprise of the following: • 18-50 • Female • Middle income class Brand’s demographic sector focuses on females between 18 and 50 who come from middle income class and therefore can easily afford Pantene’s product yet without the risk to switching to more expensive premium brands. Psychographic In case of psychographic factors, the target audience’s interests include beauty, selfcare and improvement. They also value their health, well-being and safety of the ingredients used in the products they consume. Behavioural In case of behavioural factors, the target audience of Pantene comprises of people whose intent is to find the best shampoo that fits their hair, however considering the 4 nature of the hair care market, most of them might be occasional or temporary users who are trying out various brands. Competitor & Environmental analysis In terms of competitors, Pantene’s main competitors in the market include such brands as HairUWear, AG Hair, Joico and Keranique. Political factors Pantene is a Proctor and Gamble brand and, as this company operates in different countries, it is obliged to comply with the trade rules and regulations of these counties. The day-to-day operations of the company are impacted by political factors and the stability in these areas is also important. A notable example of the disruption caused by politics is the case of Brexit. Moreover, there have been theories about the change in policy, and the dilemma remains that the result continues to be delayed. The change in tax policies between the various supply countries would also have an impact on the profitability of the company. Moreover, the decrease in corporate tax, particularly in India, has opened up an opportunity for Pantene to boost its production capability in able to manufacture at lower prices and increase its profitability. In this sense, depending on the stability of the government is, it can be either easier or harder it is to work in the country. Economic factors Standard goods are influenced by different factors, such as the rise or decrease in the individual's disposable income, whereas luxury products are less influenced by the shift in prices as the target audience for these products is more prosperous. Moreover, the rise in production and market saturation in a more assertive tone has led to a great rise in the profitability of Pantene. The varied markets in which the brand operates have led to the creation of new products that fall under different economic categories, offering Pantene a chance to take over a bigger market. 5 Social factors Pantene offers many goods which are appropriate for various consumers. It promises to have everything to meet everyone's needs. Pantene has always proved to be the right brand to consider the needs of the different customers. Based on the findings offered by its clients, it is working towards the creation of new products to meet these needs. These weaknesses, found on the market by this customer-driven company, make it more competitive. Various new products have been introduced by the company during the last decade, demonstrating the capacity of the company to understand the needs of the customer. The business has been focused on designing sustainable packaging to meet the needs of modern customers who are related to a safer and greener world. With such developments already made, the company still has some fields that should be explored in order to continue to compete strongly. Technological factors Pantene specializes in the use of technology for the effective service, marketing and sales. Analytics has been a huge selling point in the industry, and Pantene has ensured that it makes full use of this development in order to gain higher profits from sales. The organization has been able to better predict the demands of customers in various countries and to optimize their distribution channels appropriately. With an increase in the digital shopping, the need for technology has also increased, and the outlook seems to have an enormous potential for analytics to forecast trends. Legal factors Avoiding litigation is a significant challenge for an organization of this size. If the brand name has faded, a large amount of money is spent on developing standards back to usual. The business is also required to abide various labour laws that apply in the countries in which it operates. There are numerous obligations relevant to the 6 formulation of products that need to be followed, in particular in the United States and European countries. In order to prevent litigation, the company has to keep a continuous eye on all its goods. A prominent example is when a customer used social platform to report that her Pantene shampoo had already been infected with Nair and had caused her hair loss. Previously in 2016, a salon specialist reported that her client had a hair burn during her procedure for colouring. While these incidents may have gone viral on the internet, they have been dismissed, but the time span during which these cases were active, they tarnished the reputation of the product and, thus, the company must keep a close surveillance on the quality of its goods in order to prevent potential prosecutions. Environmental factors Pantene has significant steps to bring an effect on society by attempting to be more sustainable and effective. They plan to add a cyclical process for all their goods in such a way that the waste produced is minimal. In order to do so, P&G has teamed up with other companies to use recycled materials. The project seems to have become a reality, and P&G has managed to transform 9 of its goods, including Pantene, into refillable and reusable containers. 7 SWOT analysis Strengths Weaknesses Opportunities Steady increase Low brand loyalty Growth in the hair Switching cost is low in brand value because of high care market worldwide brand switching Strong High competition sustainability in the market goals limits market Specialty stores Threats Economic crisis due to COViD-19 share of Pantene Works towards E-commerce sparking social change Wide distribution Asian-Pacific range market Extensive product Hair loss care line products Strong brand image In terms of the brand’s strengths, according to the statics, Pantene’s brand value has been steadily growing between 2016 and 2020. The table below illustrates that since 2016 the brand’s value has increased by 773 million US dollars in four years. 8 Another strength of the brand is contributed by Pantene’s commitment to incorporate sustainable practices. Moreover, the brand’s man mission in sustainability is to reduce plastic which Pantene aims to achieve through such practices as reducing, reusing and recycling. The brand also strives to achieve various sustainability goals such as making all its packaging 100% recyclable, reducing tis carbon footprint and researching alternatives to save the plant by 2030 (Pantene | Sustainability, n.d.). Pantene has also been dedicated to sparking social change through various programs that focus on eliminating hair bias, embracing LGBTQ community by creating campaigns and donating to organisations, challenging cultural pressure in Japan, collaborating with organisations to inspire girls, partnering with salons and barbers to promote gender affirming safe places and conducting social experiments (Pantene | Eliminating Hair Bias, n.d.). Another strength of the brand is its wide distribution range as Pantene’s product are available in over 90 countries. Moreover, they can be easily found in supermarkets and 9 online. The brand also has an extensive product line that can meet needs of various customers with such its miracle rescue collection, colour adapt collection, nutrient blends collection, waterless collection and core collections. In addition, the brand has a strong brand image including its recognizable logo. In terms of weaknesses, Pantene has a relatively low brand loyalty related to high brand switching of shampoo brands. Moreover, the results of a survey that addresses U.S. women about switching their shampoos illustrate that 55 percent of participants would switch their shampoo brands (Shampoo brand switching U.S. 2017 | Statista, n.d.). The nature of the brand’s market also dictates the level of competition and leads to lower market share for Pantene. For instance, in 2015 Treseme had about 9% share in shampoo sales in supermarkets while Pantene had 8.2% even though a year ago Pantene had 9.5% and Tresemme had 6.9% (Malviya, 2015). When it comes to opportunities, Global Hair Market is projected to grow to CAGR 1.58 percent between 2016 and 2025 from $72438 million to $83128 million by 2025. Because of the changing environment, the shampoo component will overtake the haircare sector as it is used to remove skin particles, oils, dandruff, dirt, pollutants and to avoid the undesirable build-up without removing much sebum to make hair unmanageable. The distribution channel for specialty stores is expected to lead the world's market for hair care. In 2016 it had $21088 million in market revenues. Specialty stores are the small retail outlet dedicated to the sale of a specific product range and related products. The hair care market in e-commerce is forecast to be the fastest growing CAGR market in the forecast period of 3.21 percent (Hair Care Market | Global Trends, Size, Share | Forecast 2017-2024, n.d.). Taking into account such growth of the market, Pantene has an opportunity to expand its product lines and shift its focus to specialty stores by supplying some of its collections specifically to such stores. Another opportunity is to grow its e-commerce sales by focusing more on online sales. Moreover, Pantene has an opportunity to increase its presence and brand recognition in Asia-Pacific market that is anticipated to hold the largest portion by 2025 due to the increase in middle-class population and 10 increased incomes (Hair Care Market | Global Trends, Size, Share | Forecast 20172024, n.d.). Another opportunity that the brand has is a line of hair loss treatment products that have been in demand in 2020. Moreover, as a result of stress or as a residual effect of COVID-19, people have been noticing hair loss issues lately, which provides Pantene an opportunity to create products aimed at solving this issue at home. In terms of threats, main threats for Pantene reflect in the economic crisis caused by a COVID-19 pandemic. Moreover, due to the lockdown, most of the companies were forced to stop production and other processes for some time which has led to losses. Apart from that, the purchasing power of many people around the world has decreased due to loss of jobs and therefore income which as a result affected their consumption habits. People who have been experiencing financial troubles might not be able to purchase Pantene’s products and be forced to switch to cheaper brands. Conclusion To sum up, Pantene is a company with a great potential in current environment as the company has strong vision, mission, values and CSR that it incorporates in its daily operations not only to accommodate its customers but make a change in the world. Moreover, taking into account the company’s history and strategies, it can be seen that Pantene can be a great place to work at and grow as a professional. 11 Bibliography Butler, D., 2020. History of Procter & Gamble: Timeline and Facts. [online] TheStreet. Available at: [Accessed 11 March 2021]. Pantene.com. n.d. Pantene | Pantene Story. [online] Available at: [Accessed 11 March 2021]. Pantene.com. n.d. Pantene | Pantene Story. [online] Available at: [Accessed 11 March 2021]. Pantene.com. n.d. Pantene | Sustainability. [online] Available at: [Accessed 11 March 2021]. Pantene.com. n.d. Pantene | Eliminating Hair Bias. [online] Available at: [Accessed 11 March 2021]. Malviya, S., 2015. Unilever's shampoo brand Tresemme overtakes P&G's Pantene in market share in modern trade. [online] The Economic Times. Available at: [Accessed 11 March 2021]. Statista. n.d. Shampoo brand switching U.S. 2017 | Statista. [online] Available at: [Accessed 11 March 2021]. Inkwood Research. n.d. Hair Care Market | Global Trends, Size, Share | Forecast 20172024. [online] Available at: [Accessed 11 March 2021]. 12 Inkwood Research. n.d. Hair Care Market | Global Trends, Size, Share | Forecast 20172024. [online] Available at: [Accessed 11 March 2021].
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