PG Strategic Analysis - 4489 Words

------------------------------------------------- Strategic Analysis ------------------------------------------------- Procter amp; Gamble: The Beauty/Feminine Care Segment of the Consumer Goods Industry Executive Summary 3 Introduction 3 Company Overview 4 Mandate 4 Stakeholders 5 Internal Analysis 5 External Analysis 7 Competitive Forces 8 Macro Environment 8 Strategic Options 10 Strategy 1: Market Penetration 10 Strategy 2: Product Innovation and New Product Development 10 Strategy 3: Status Quo 11 Executive Summary Procter amp; Gamble (Pamp;G) is a world-leading producer of consumer goods. Today, it consists of over 20 million dollar brands (like Gillette) and operates in 42 countries†¦show more content†¦Mandate Pamp;G’s purpose is to touch and improve people’s everyday lives. This is an inspiring but demanding aspiration. There are nearly seven billion people on the planet today and Pamp;G is currently reaching about 4.4 billion of them. The company knows that if this is done well, it will be rewarded with sales and profit growth, market share leadership, a strong company reputation and, ultimately, the creation of value that allows its people, shareholders and the communities in which they live and work to prosper. Pamp;G’s growth strategy, which was established two years ago, is inspired by its purpose detailed above. Pamp;G is executing this strategy by innovating to improve people’s everyday lives in every part of the world, and by then expanding its portfolio of innovation up and down price tiers, into new markets, and into new and existing product categories (Pamp;G, 2011). Stakeholders Like any private sector organization, Pamp;G’s list of stakeholders may include its employees, the communities in which it operates, its shareholders, various suppliers, and of course its consumers and customers. Internal Analysis Strengths As a large global company, Pamp;G has strengths that have helped them to acquire such a vast market share. The company’s culture, strong product quality, the ability to understand customers, brand equity, and centralized management is at theShow MoreRelatedBusiness Analysis of Procter and Gamble. Essay925 Words   |  4 Pages17 July 2010 Presentation by Michael Rajendra Sai Tunde Yinka Saturday, 17 July 2010 Aim      of      Presenta.on †¢ To   cri.cally   analyse   PG   from   the   strategic   management    perspec,ve   using   various   models   . Saturday, 17 July 2010 Purpose   of   PG †¢ To   provide   large   variety   of   consumer   products   at   an   aï ¬â‚¬ordable    price   without   compromising   quality. †¢To    Read MoreNon Financial Performance : Human Talent1561 Words   |  7 Pagesmaximum support for attainment of desired outcomes. 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Within the familiar MaxRead MoreStrategy Formulation, Situation Analysis and Business Analysis1590 Words   |  7 PagesFormulation: Situation Analysis and Business Strategy Institut fà ¼r Strategisches Management Institut fà ¼r Strategisches Management Situational Analysis Strategy Formulation - developing a corporation’s mission, objectives, strategies and policies Situation Analysis - the process of finding a strategic fit between external opportunities and internal strengths while working around external and internal weaknesses Wheelen / Hunger, 2010, p 224 SWOT Analysis SWOT- Strengths-WeaknessesOpportunities-ThreatsRead MoreA Market Analysis Focused On Procter Gamble1520 Words   |  7 PagesA Market Analysis Focusing on Procter Gamble Dorothy Dilger Herzing University November 23, 2014 A SWOT analysis is an effective tool for acquiring insight toward a company’s internal strengths and weakness, and external opportunities and threats. PG’s greatest strengths are their aggressiveness toward understanding consumer needs, strong research and development, and a diversification strategy. The company’s weaknesses are substantial competition in the consumer goods industry, andRead MoreSwot Analysis Of Procter Gamble856 Words   |  4 PagesCase Study Analysis Procter Gamble (P G) Proctor and Gamble is an American corporation dealing in consumer products. The company markets its range of goods to different global regions having expanded to new markets over time. Among the consumer products offered by Procter and Gamble include cleaning products, pharmaceuticals, and personal care supplies among other products (Proctor Gamble Company Case Study Analysis, 2016). The corporation prides itself on innovations and collaborations asRead MoreCemex Case1142 Words   |  5 PagesIn which industry does Pamp;G compete? Apply Porter’s Five Forces Model to the industry. Is this an attractive industry? Pamp;G is one of the leading companies that are operating in the household consumer product industry. Pamp;G’s threat of substitution is extremely high as there are many companies producing household consumer products, both national and international such as Clorox, Kimberly-Clark and Colgate-Palmolive  CL. Also, Pamp;G is also competing with retailers private label brandsRead MoreStrategic Management1308 Words   |  6 Pageskind of competitive forces are industry members facing and how do the forces influence the outlook for industry profitability? 3. What are the strengths and weaknesses of TomTom? What are the threats and opportunities facing the company? 4. Which strategic problem/challenge is TomTom facing for the future? 5. 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Berkshire Hathaway Free Essays

Introduction Warren E. Buffett, the chairperson of Berkshire Hathaway (BH), is the world’s greatest investor of the current era. From 1965 to 2007, BH has compounded annual gain of 20. We will write a custom essay sample on Berkshire Hathaway or any similar topic only for you Order Now 3% while SP has 9. 3% (Berkshire Hathaway Inc. , 2009). Most investors get normal returns and believe the market is in semi strong form. However Buffett believes the market is inefficient and acts on his own investment philosophy. This report will analysis BH’s acquisition of PacifiCorp, evaluate Buffett’s performance against EMH and discuss his ethical standards. Berkshire Hathaway Ltd. VS Scottish Power Plc. After the acquisition was announced, BH Ltd. nd Scottish Power Plc. both experienced price ran up. Reilly and Brown (2009) state that, the acquired firm’s stock price usually increases; resulting from the premium offered by the acquiring firm, whereas stock price in the acquiring firm usually decreases as the concern of overpaid. However, the deal between BH and Scottish Power was a different case. BH and PacifiCorp share price increased by 2. 4% and 6. 28% on the announcement day, it indicated that most investors and markets recognized the bid of PacifiCo rp was fair and believed that acquiring PacifiCorp was a good investment that could benefit BH. Malatesta and Thompson (1985, p. 249) stated that an acquisition program is desirable and profitable for active acquirers and successive acquisition attempts associated with positive announcement effects. Therefore, as an active acquirer, BH could benefit from the successful acquisition of PacifiCorp and have positive share price performance. In addition, the share price performance of PacifiCorp proved the existence of its intrinsic value and Buffett made a right decision in recognizing the fact. Jennings and Mazzeo (1991, p. 40) suggested that the acquisition process is usually associated with significant unexpected stock returns and bidder would only make an offer to the target when the value of target is less than the market price. Therefore, Buffett’s calculation of PacifiCorp’s value must have supported this notion. Although the share price performance might be an affect of Warren Buffett’s fame, it was sufficient enough to reflect the exactly value created by the deal between BH Ltd. and Scottish Power Plc. Valuation for PacifiCorp Bruner, Eades and Schill(2010, p. ) stated that MidAmerican Energy Holdings, Buffett’s utility company, acquired PacifiCorp from its parent, Scottish Power Plc, for $5. 1 billion in cash and $4. 3 billion in liabilities and preferred stock. The bid for PacifiCorp can be proved as â€Å"fair† through three methods, including discounted cash flow, intrinsic value, comparable and precedent acquisition. Present Value of Operating Free Cash Flows DCF method can be viewed as the conceptual basis for most relative valuation criteria (Titman and Martin 2007, p. 215) However, the growth rate was unknown in this case. In order to use the model, the growth rate was assumed to equal to the growth rate of 2004 to 2005 which was 0. 0145. In five years investment horizon, NPV of $5. 1 billion’s bid is negative if the growth rate equal to 0. 0145 (Appendix I; table 1 and table 2). If the growth rate is equal or larger than 0. 594, the $5. 1 billion bid would have positive NPV. Therefore, it can be concluded that in five years, the bid for PacifiCorp is â€Å"fair† if the net income of PacifiCorp can increase by 59. 4% or more Intrinsic Value Bruner, Eades and Schill (2010, p. ) indicated that Buffett believes intrinsic value is effective in evaluating the relative attractiveness of investment. (Appendix II, table 3)The $5. 1 billion bid for PacifiCorp could be defined as â€Å"fair† since every dollar to acquire PacifiCorp becomes $1. 22 in the 10 year investment horizon. Comparable Boeh and Beamish (2007, p. 102) stated that it is common to revalue a firm based on the trading multi ples of a group of similar firms. By looking at the direct competitors who have comparable sizes and growth stages, a more appropriate valuation can be obtained. The implied values of PacifiCorp are $9. 23 billion and $9. 076 billion w. r. t. the median and mean multiple of EBITDA (Appendix II, table 4). Titman and Martin (2007, p. 228) indicated that the most popular approach used to estimate a firm’s enterprise value involves the use of a multiple of EBITDA. Therefore, compared to the $9. 4 billion bid for PacifiCorp, it can be concluded that the bid is â€Å"fair†. Precedent Acquisition Boeh and Beamish (2007, p. 102) suggested that precedent acquisition is used to value a firm based on other similar acquisitions that have recently occurred. It directs firm to use the most appropriate valuation. Assessing the $9. 4 billion bid for PacifiCorp can be defined as â€Å"fair†. Bruner, Eades and Schill(2010, p. 13) mentioned that the timing of BH’s bid closely followed Duke Energy’s bid to acquire Cinergy for $9 billion. Compare their characteristics (Appendix II, table 5) PacifiCorp and Cinergy deal in the same industry and have similar amount of customers, capital structure and EBITDA. Therefore, it can conclude that they are comparable and the deal between Duke Energy and Cinergy can be used as a reference to value PacifiCorp. Buffett VS Semi-Strong Form Efficient Semi-strong form efficiency states that security prices adjust rapidly to the release of all public information; that is, current security prices fully reflect all public information (Reilly Brown, 2009, p. 153). According to BH Inc. , (2009), BH’s has compounded annual gain of 20. 3% while SP has 9. 3% since 1965 to 2009. This clearly shows that Buffett obtains abnormal return. Regarding semi-strong form, Buffett states that the only way to result in superior returns is by using private information or relying on pure luck (Buffett); supporting Buffett’s idea the market is not in semi-strong form. Assuming that market is in semi-strong form, the rationale toward Buffett‘s superior performance is that Buffett has accurate market analysis. Market is not efficient to determine undervalued or overvalued assets and capitalize on the inefficiency (Sappideen, 2009). Buffett is one example of superior performance on undervalued stocks. Buffett Investment Philosophy VS Conventional Finance Theory Risk Diversification Risk is directly related to the difference between price and value. With a smaller dollar difference, the investment is more risky. Buffett employs a margin of safety of 25% (Finkle, 2010) before investing. Based on his measure of risk, Buffett expects high returns when risk is low – not high average returns when risk is high. Buffett discounts (seemingly risk-less) cash flows at the risk free rate (similar to the certainty equivalent approach) not the risk-adjusted discount rate. As a result, Buffett rejects benefits of portfolio diversification (top down approach to investing). The use of diversification as a means to minimize risk is an extensively promoted concept in the financial industry (Polbennikov, Desclee, Hyman, 2010; Jorion, 1985); opposite that of which Buffett recommends. Conventional financial theory dictates that investors are willing to take on higher risk with the prospect of gaining higher returns (Dilmore Wilson, 1992). Whereas Buffett, expects high returns when risk is low. Leverage Buffett mentioned not to use leverage in investments (Lewis, 1992), but usually firms choose to be highly leveraged due to tax advantages (Opler and Titman, 1994). In cases of mergers, an increase in financial leverage benefits shareholders through tax deductibility of interest payments on corporate debt. It might also enhance shareholders’ wealth through an expropriation of wealth from bondholders (Ghosh and Jain, 2000). Merging firms increase their financial leverage around mergers and this can signal better acquisitions, which increases the market value (Maloney, McCormick Mitchell, 1993). Berkshire Hathaway Goldman Sachs During financial crisis in 2008, BH invested $5 billion in Goldman Sachs Group. During the time, Goldman Sachs was blamed by U. S Securities and Exchange Commission’s for placing its client at stake (McGee Frye, 2010). Buffett was sued for civil fraud by regulators and assaulted by Congress for business dealing; without concern for the crisis situation (Patterson, 2010). As a result of investing in Goldman Sachs, Buffett was benefitted and obtained a large return from it. Even though in general, Berkshire’s movements have been ethically sound, Buffett should be aware of unethical behaviours issues that can impact company reputation. Berkshire Hathaway Petro China In April 2003, BH bought 11% of Petro China (Oster Cui, 2007); one of the largest oil companies in the world. BH shareholders fear the issue of genocide between China and Sudan. Consequently, BH sold its stake in 2007 at the cost of losing potential returns (Kostigen, 2007); most prominently because BH became concerned with Petro China’s connection with the Sudanese civil war. Thus action taken by Warren Buffet has influenced large numbers of colleges, universities and states to take action in divesting companies that help fund the genocide in Darfur (Investors against Genocide, 2007). Ethics and Social Responsibility Even though Buffett has been criticized for using political power for personal gain, Buffett and BH do show evidence of having strong ethical behaviour. Buffett as an active philanthropist has donated 5,000 Class B shares of BH stock, worth approximately $16 million, to an unnamed charitable foundation (Associated Press, 2006). As well in 2006, BH was nominated by Fortune to be one of the twenty most admired companies in America and eighth most admired in the world based on their ethics and social responsibility. (Vogl, F. 2006). This pledge shows that Buffett’s concern for the society and can reflect that the company is one that maintains the importance of social responsibility. Based on this rationale, it is worthwhile to invest in BH Conclusion In conclusion, comparable company estimates suggest the price bid for PacifiCorp was pretty fair and within the valuation range. Buffett believes that markets are inefficient; opportunities to profit arise from searching undervalued or overvalued assets. Buffett’s tenure consists of not using leverage in investment and merging firms to enlarge market value to outperform the market. Besides Buffett’s investment records, he’s considered ethically and socially responsible. All in all, it is sensible to invest in Berkshire Hathaway. 15  December 1810) was a writer and critic of 18th-century British children’s literature. Her periodical, The Guardian of Education, helped to define the emerging genre by seriously reviewing children’s literature for the first time; it also provided the first history of children’s literature, establishing a canon of the early landmarks of the genre that scholars still use today. Trimmer’s most popular children’s book, Fabulous Histories, inspired numerous children’s animal stories and remained in print for over a century. Trimmer was also an active philanthropist. She founded several Sunday schools and charity schools in her parish. To further these educational projects, she wrote textbooks and manuals for women interested in starting their own schools. Trimmer’s efforts inspired other women, such as Hannah More, to establish Sunday school programs and to write for children and the poor. Trimmer’s works are dedicated to maintaining many aspects of the social and political status quo. As a high church Anglican, she was intent on promoting the Established Church of England and on teaching young children and the poor the doctrines of Christianity. Her writings outlined the benefits of social hierarchy, arguing that each class should remain in its God-given position. Yet, while supporting many of the traditional political and social ideologies of her time, Trimmer questioned others, such as those surrounding gender and the family. How to cite Berkshire Hathaway, Papers

Hydrosphere free essay sample

The hydrosphere is the liquid water component of the Earth and it refers to all water found on, under, or over the surface of a planet. Often called the â€Å"water sphere†, it includes all the earth’s water found in the oceans, glaciers, streams, lakes, soil, groundwater, and in the air. The hydrosphere covers about 70% of the surface of the Earth with 97% sea water and 3% fresh water. b.Hydrologic Cycle: The hydrological cycle is the endless circulation of water molecules transferring from the oceans and the land surface into the atmosphere by evaporation, dropped on the land as precipitation, and transferred back to the sea by rivers and groundwater. It is the constant movement of water through the earth system. c. Cryosphere: The cryosphere is the frozen water part of the Earth system. It is the scientific name for all the frozen water on the Earth’s surface: ice caps, glaciers, sea ice, land ice, frozen lakes, snow, permafrost, etc. It also plays a vital role in the earth’s climate. 2. Using the video tour of the Cryosphere list 5 important facts about water content and Antarctica. -Antarctica contains 90% of the Earth’s ice 70% of the fresh water. -Antarctica ice averages 2. 7 kilometers thick 4. 8 kilometers in some places. -Ice shelves hold 2% of Antarctic ice but cover 50% of the coastline. -Ocean currents and surface winds drive icebergs northward. -Snowfall provides more than 75% of water resources in the West. -Permafrost covers 18% of exposed land in the Northern Hemisphere. Altogether, the world’s ice sheets contain 77% of the global total of fresh water. 3. List the 8 areas where water is stored on the planet and give their percentages. -The world’s oceans contain 97. 2% of the water in the hydrosphere 2. 8% of it is freshwater -Ice caps and glaciers contain 2. 15% of the world’s water -Groundwater contains 0. 63% -Freshwater lakes contain 0. 009% -The Atmosphere contains 0. 001% -Soil water contains 0. 005% -Streams contain 0. 001% -Saline lakes and inland seas contain 0. 008% 4. Explain in a number of paragraphs how the water cycle works.The sun heats the waters of the ocean by radiation, causing it to evaporate from the ocean’s surface into the air as vapour. The water vapor is carried into the atmosphere by rising currents. At higher altitudes the temperature is cooler. This causes the water vapor to undergo condensation to become clouds. When clouds reach saturation and become too heavy, precipitation is formed as rain or snow. Precipitation that falls onto land instead of back into the ocean flows over the ground as surface runoff, and moves with gravity and the natural geography of the area on which it falls. Some of the runoff enters rivers, and the stream flow moves this water towards the ocean. Other surface runoff waters and the ground waters that do not move, seep into the ground, and can accumulate to become stored as freshwater lakes. Precipitation that soaks into the ground is referred to as infiltration, which can percolate through the ground to the aquifers that store freshwater underground. Some of this water stays close to the land surface, while some seeps back into surface-water bodies as ground-water discharge. When these waters find an opening in the land surface it is called a freshwater spring.Ground waters can also be taken up by plants by their root systems. When water is evaporated out of the leaf surfaces of plants, it is called transpiration. 5. Using the site World Water Council site, explain three important ways to improve the fresh water situation the world’s population. (World Water Council site was not working correctly for me, so used different site. ) One solution is to use the technology of desalinization. This system is described as filtering salty water through membranes and removing the salt through electrodialysis and reverse osmosis.Saline water can be made into freshwater, which everyone needs. The process is called desalination, and it is being used more and more around the world to provide people with needed freshwater. To date, desalination has been an energy-intensive solution to water scarcity. Another way to improve the freshwater situation around the world is to control population growth. Because of the accelerating growth in global population, parts of the world could see a supply-demand gap of up to 65 percent in water resources by 2030.Currently, more than one billion people don’t have access to clean water. And with 70 percent of the world’s freshwater used for agriculture, water’s critical role in food production must be considered as climate and resource conditions change. Improving irrigation and agricultural practices will also help the current situation of water. Some 70 percent of the world’s freshwater are used for agriculture. Improving irrigation can help close supply and demand gaps. Raising prices in developed and high income countries will also help the situation as consumption of water will be reduced.According to the Pacific Institute the average American uses about 70 gallons of water per day while the average Gambian uses about 1 gallon per day and the average European is somewhere in the middle. The Institute estimates that we probably all need about 13 gallons per day to have a good standard of living. 6. Using the video Water Shortage explain the water problems that exist on 5 major continents. (explain a problem from each continent. Asia: They have 60% of the world’s population but they only have 36% of the world’s water. Control of water can be problematic.Israel controls the water in the West Bank and Palestinians now have water problems. 80% of West Bank is consumed by Israelis. Water is hard to come by in some villages but there is a huge Israeli irrigation project in the north of the country. There are water conflicts in Afghanistan, Pakistan and other countries. In the face of rising populations, rapid growth of the middle class, expanding irrigation and water-intensive industries, and spiraling household consumption, per capita water availability in Asia is actually declining by 1. 6% per year. Africa: Africa is facing the greatest challenges over water.Lack of access to water is a larger problem in Africa than anywhere else. Of the 25 nations in the world with the greatest percentage of people lacking access to safe drinking water, 19 are in Africa. A UN report predicts that in 25 years more than half of this continents population will be living in countries suffering as what’s known as water stress. There is violence at the local level for water. Resources are scarce and more than 50 people are killed in the north of Kenya in fighting over water. North America: In Mexico City, most of the water problems are manmade.Some buildings even sunk as water is being sucked from under the city. Another problem is that 40% of all water supplies disappear through leaky pipes. 1 in 4 people in Mexico City no longer has access to fresh piped water. But, though a general abundance of water exists in the region, some areas commonly experience water shortages. Australia: Australia is the world’s driest continent and it is currently in a terrible drought. They can’t get water as the countries major river system, the Murray-Darling Basin, which irrigates Australia’s food bowl, is in bad shape. Some parts of the Basin are facing an ecological disaster because of the lack of rainfall. Cities and municipalities are having a lot of problems. Europe: The distribution of water resources in Europe is far from even, and is beginning to be the source of some significant problems. Many parts of Europe do not have as much water as they need. In 60% of European urban and industrial areas, water resources are overexploited. Spain is in the grip of drought and thousands of farmers have left their lands and farms. Some places have an abundance of water and some places do not.