Procter and Gamble Case Study

P&GJapan (A)

Common sentiment about P&G’s Japanese business by 1983 - P&G charged into Osaka with marketing strategies that played so well in Ohio. The results were disastrous. They didn’t listen to anybody.

P&G entered Japan in Nov 1972. Large U.S. soap and detergent mftrer with WW sales 9x closest Japanese rival. Being forced out of Japan. By 1983, P&G had 10 yrs of operating losses > $250M on declining annual sales of $120 million (see Exhibit 1). How long could P&G sustain the hemorrhaging? What had gone wrong since 1978, its sole operating break-even year? Had matters spiraled too far out of control to salvage any part of the business, let alone rebuild it? These were some of the issues newly promoted President, P&G Int’l, Ed Artzt faced.

Company Background

P&G was an aggressive and successful “world class” developer and marketer of high-quality consumer packaged goods. The origins of this reputation can be traced back over the company’s 150 years of operation to the founders strong conviction. Former Chairman Ed Harness, in

summarizing P&G’s institutionalized management beliefs, noted “though our greatest asset is our people, it is the consistency of principle and policy which gives us direction.” This set of beliefs made into a “Statement of Purpose”: We will provide products of superior quality and value that best fill the needs of the world’s consumers. We will achieve that purpose through an organization and a working environment which attracts the finest people; fully develops and challenges our individual talents; encourages our free and spirited collaboration to drive the business ahead; and maintains the company’s historic principles of integrity, and doing the right thing. Through the successful pursuit of our commitment, we expect our brands to achieve leadership share and profit positions and that, as a result, our business, our people, our shareholders, and the communities in which we live and work, will prosper. This statement of...