P and G Case Study

Case Analysis: The Procter & Gamble Company: Investment in Crest Whitestrips Advanced Seal

Applied Corporate Finance

-------------------------------------------------

Ahad Farooqui

-------------------------------------------------

Akif Mahmood

-------------------------------------------------

Arsalan Javaid Siddiqi

-------------------------------------------------

Hafiz Hamza

-------------------------------------------------

Najaf Ali

-------------------------------------------------

Nomah Javed

-------------------------------------------------

Noor Us SubahHasan

Case Analysis: The Procter & Gamble Company: Investment in Crest Whitestrips Advanced Seal

This case presents a P&G financial analyst, Jackson Christopher, whose task is to analyze data for the new Crest Whitestrips Advanced Seal and determine what should be the plan of action in order to create value for the shareholders. When the Crest Whitestrips were initially launched, sales growth completely stalled after the first year and multiple line extensions failed to stimulate sales growth which only bred skepticism in major customers. The problem with the Whitestrips was their tendency to slip off teeth that being the key factor preventing good word of mouth and repeat purchases. In order to solve this issue, the product costs will increase by 75% whereas they could only charge a premium of 25% without a significant drop in sales volume. Furthermore, there was an additional problem of the Advanced Whitestrips cannibalizing the existing Crest Whitestrips products. In order to deal with both these problems, P&G would have to incur increased marketing expenditures, either on the new launch or focusing the advertising on the untapped customer base, in order to broaden the targets segment and decrease its price. They would also have to secure merchandising support in order to get the Advanced Whitestrips off to a fast start if the product was to have a chance of being...