Procter & Gamble (P&G)Procter & Gamble (P&G) is the world’s largest consumer products company. Some of its category-defining brands include Ivory soap, Tide detergent, Crest toothpaste, and Pampers diapers. Among its many offerings, P&G has more than 20 consumer brands in its lineup that achieve over 66.8 billion dollars or three (3) trillion pesos in 2018. P&G’s iconic brands are a result of a clearly formulated and effectivelyimplemented company strategy. The company pursues a strategy which attempts to create higher perceived value for its customers than its competitors by delivering products with unique features and attributes. Creating higher perceived value generally goes along with higher product costs due to greater innovation efforts and promotion expenses, among other things. Successful differentiators are able to command a premium price for their products, but they must also control their costs. In addition, the company was able to achieve its market leader position through its top management commitment that collaborates even with the lower-level managers in the company. In recent years, however, P&G’s strategic position has weakened considerably and seems to be losing rather than winning. P&G lost market share in key “product-country combinations,” including beauty in the United States and oral care in China, amid an overall lackluster performance in many emerging economies. As a consequence, profits have declined. P&G posted a sustained competitive advantage in recent years; its stock market valuation has fallen, while its competitors Unilever, Colgate-Palmolive, and Kimberly-Clark posted strong gains. Many wonders when P&G will play to win again.Answer the following questions: 1. Which phase in the evolution of strategic management is present in the given case?2. Which type of strategy is being employed by P&G based on the given case study? 3. How will P&G regain its market position based on the concept of competitive advantage? The Study of Strategic ManagementAccording to Bamford, Hoffman, Hunger, and Wheelen (2018), strategic management is a set ofmanagerial decisions and actions that help determine the long-term performance of an organization. Itincludes internal and external environment, short term and long-term strategy formulation, strategyimplementation, evaluation, and control. Originally called business policy, strategic management hasadvanced substantially with the concentrated efforts of researchers and practitioners. Today, werecognize both a science and an art to the application of strategic management techniques (Bamford,Hoffman, Hunger, & Wheelen, 2018, p. 37).Now is the perfect time to practice strategic thinking, how can companies emerge from the global healthcrisis brought by Covid-19. The future is unpredictable, as such, strategic thinking may be more importantthan ever.The following phases describe the evolution of strategic management:Phase 1: Basic financial planning. During this phase, managers prepare complex proposalswhenever they are requested to provide the following year's budget. Projects are proposed basedon shallow analysis, with most information coming from within the firm. The sales force usuallyprovides a small amount of environmental information used in this effort. Such simplisticoperational planning only pretends to be strategic management, yet it is quite time-consuming.01 Handout 1BM1807Normal company activities are often suspended for weeks while managers try to cram ideas intothe proposed budget.Phase 2: Forecast-based planning. During this phase, managers attempt to propose five-yearbudget plans since annual budgets became less useful at stimulating long-term planning. At thispoint, they consider projects that may take more than a year. This phase is also time-consuming,often involving a full month or more of managerial activity to make sure all the proposed budgetsfit together. The process gets very political as managers compete for larger shares of limitedfunds. Seemingly endless meetings take place to evaluate proposals and justify assumptions.Phase 3: Externally oriented planning. During this phase, top management initiates a formalstrategic planning system due to their frustration with the highly political and yet ineffectual five-year plans. The company seeks to increase its responsiveness to changing markets andcompetition by thinking and acting strategically. Planning is taken out of the hands of lower-levelmanagers and concentrated in a planning staff whose task is to develop strategic plans for thecorporation. Consultants often provide sophisticated and innovative techniques that the planningstaff uses to gather information and forecast future trends. Organizations start competitiveintelligence units. Upper-level managers meet once a year at a resort “retreat" led by keymembers of the planning staff to evaluate and update the current strategic plan. Such top-downplanning emphasizes formal strategy formulation and leaves the implementation issues to lower-management levels. Top management typically develops long-term plans with help fromconsultants but minimal input from lower levels.Phase 4: Strategic management. During this phase, the top management realizes that even thebest strategic plans are worthless without the input and commitment of lower-level managers, sothey organize planning groups of managers and key employees at many levels, from variousdepartments and workgroups. They develop and integrate a series of plans focused onemphasizing the company's true competitive advantages. Strategic plans at this point detail theimplementation, evaluation, and control issues. Rather than attempting to forecast the futureperfectly, the plans emphasize probable scenarios and contingency strategies. The sophisticatedannual five-year strategic plan is replaced with strategic thinking at all levels of the organizationthroughout the year. Strategic information, previously available only centrally to topmanagement, is used by people throughout the organization. Instead of a large centralizedplanning staff, internal and external planning consultants are available to help guide groupstrategy discussions. Although top management may still initiate the strategic planning process,the resulting strategies may come from anywhere in the organization. Planning is typicallyinteractive across levels and is no longer strictly top down. People at all levels are now involved. Types of StrategiesThe following are the different types of strategies:Business strategy. This strategy emphasizes the act of strengthening the company's competitiveposition of products or services. Business strategies are composed of competitive and cooperativestrategies. It covers all the activities and tactics for competing in contradiction of the competitorsand the management behaviors that require strategic alignment and coordination. The focus ofbusiness strategies is on product development, innovation, integration, market development, anddiversification among others.BM1807Corporate strategy. This strategy entails a clearly defined, long-term vision that organizations set,seeking to create corporate value and motivate the workforce to implement proper actions toachieve customer satisfaction. It is a continuous process that requires constant effort to engageinvestors in trusting the company with their money, thereby increasing the company's equity.Organizations that manage to deliver customer value unfailingly are those that revisit theircorporate strategy regularly to improve areas that may not deliver the aimed results.Functional strategy. This strategy emphasizes a particular functional area of an organization. It isformulated to achieve some objectives of a business unit by maximizing resource productivity.Functional strategy is concerned with developing distinctive competence to provide a businessunit with a competitive advantage. Each business unit or company has its own set of departments,and every department has its own functional strategy. Functional strategies are adapted tosupport the competitive strategy. For instance, a company following a low-cost competitivestrategy needs a production strategy that emphasizes on reduction cost operation and also ahuman resource strategy that emphasizes on retaining the lowest possible number of employeeswho are highly qualified to work for the organization.Operating strategy. This strategy is usually created at the field level to achieve immediateobjectives. Operating strategy is formulated in the operating units of an organization. In somecompanies, managers develop an operating strategy for each set of annual objectives in thedepartments or divisions.Part of strategizing is planning on how to navigate unchartered territories. Take for example, theglobal health crisis brought by Covid-19. Nobody predicted Covid-19 and how bad it will get. As such,companies must consider how the world is changing and move towards strategic thinking. It is aboutmaking quality decisions, learning from history, and using foresight on what will be needed by thecompany to gain a competitive advantage.Competitive AdvantageCompetitive advantage means superior performance relative to competitors in the same industry orsuperior performance relative to the industry average. It can also be defined as the factor that makes anentity's goods or services superior to the available options in the market.The following are the determinants of competitive advantage:Benefit. This pertains to the value being offered by a product or service to the market. Aside fromthe product features, companies must also identify the unspoken benefits of their product orservice. This means being constantly aware of new trends that affect the value of a product orservice. For instance, newspapers slowly adapt to the current technological trends because mostnews and information are already available via Internet. Other newspaper companies mayperceive that some people are still willing to pay for news delivered on a piece of paper every day.Target market. This pertains to a selected group of customers within a business' available marketat which a business aims its marketing efforts and resources. Companies must be aware of theirtarget market to innovate their products and services based on the particular needs of theircustomers. For instance, newspapers' target market is drifted towards older people who are notcomfortable or capable of getting their news online.

Question

Procter & Gamble (P&G)Procter & Gamble (P&G) is the world’s largest consumer products company. Some of its category-defining brands include Ivory soap, Tide detergent, Crest toothpaste, and Pampers diapers. Among its many offerings, P&G has more than 20 consumer brands in its lineup that achieve over 66.8 billion dollars or three (3) trillion pesos in 2018. P&G’s iconic brands are a result of a clearly formulated and effectivelyimplemented company strategy. The company pursues a strategy which attempts to create higher perceived value for its customers than its competitors by delivering products with unique features and attributes. Creating higher perceived value generally goes along with higher product costs due to greater innovation efforts and promotion expenses, among other things. Successful differentiators are able to command a premium price for their products, but they must also control their costs. In addition, the company was able to achieve its market leader position through its top management commitment that collaborates even with the lower-level managers in the company. In recent years, however, P&G’s strategic position has weakened considerably and seems to be losing rather than winning. P&G lost market share in key “product-country combinations,” including beauty in the United States and oral care in China, amid an overall lackluster performance in many emerging economies. As a consequence, profits have declined. P&G posted a sustained competitive advantage in recent years; its stock market valuation has fallen, while its competitors Unilever, Colgate-Palmolive, and Kimberly-Clark posted strong gains. Many wonders when P&G will play to win again.Answer the following questions: 1. Which phase in the evolution of strategic management is present in the given case?2. Which type of strategy is being employed by P&G based on the given case study? 3. How will P&G regain its market position based on the concept of competitive advantage? The Study of Strategic ManagementAccording to Bamford, Hoffman, Hunger, and Wheelen (2018), strategic management is a set ofmanagerial decisions and actions that help determine the long-term performance of an organization. Itincludes internal and external environment, short term and long-term strategy formulation, strategyimplementation, evaluation, and control. Originally called business policy, strategic management hasadvanced substantially with the concentrated efforts of researchers and practitioners. Today, werecognize both a science and an art to the application of strategic management techniques (Bamford,Hoffman, Hunger, & Wheelen, 2018, p. 37).Now is the perfect time to practice strategic thinking, how can companies emerge from the global healthcrisis brought by Covid-19. The future is unpredictable, as such, strategic thinking may be more importantthan ever.The following phases describe the evolution of strategic management:Phase 1: Basic financial planning. During this phase, managers prepare complex proposalswhenever they are requested to provide the following year's budget. Projects are proposed basedon shallow analysis, with most information coming from within the firm. The sales force usuallyprovides a small amount of environmental information used in this effort. Such simplisticoperational planning only pretends to be strategic management, yet it is quite time-consuming.01 Handout 1BM1807Normal company activities are often suspended for weeks while managers try to cram ideas intothe proposed budget.Phase 2: Forecast-based planning. During this phase, managers attempt to propose five-yearbudget plans since annual budgets became less useful at stimulating long-term planning. At thispoint, they consider projects that may take more than a year. This phase is also time-consuming,often involving a full month or more of managerial activity to make sure all the proposed budgetsfit together. The process gets very political as managers compete for larger shares of limitedfunds. Seemingly endless meetings take place to evaluate proposals and justify assumptions.Phase 3: Externally oriented planning. During this phase, top management initiates a formalstrategic planning system due to their frustration with the highly political and yet ineffectual five-year plans. The company seeks to increase its responsiveness to changing markets andcompetition by thinking and acting strategically. Planning is taken out of the hands of lower-levelmanagers and concentrated in a planning staff whose task is to develop strategic plans for thecorporation. Consultants often provide sophisticated and innovative techniques that the planningstaff uses to gather information and forecast future trends. Organizations start competitiveintelligence units. Upper-level managers meet once a year at a resort “retreat&#34; led by keymembers of the planning staff to evaluate and update the current strategic plan. Such top-downplanning emphasizes formal strategy formulation and leaves the implementation issues to lower-management levels. Top management typically develops long-term plans with help fromconsultants but minimal input from lower levels.Phase 4: Strategic management. During this phase, the top management realizes that even thebest strategic plans are worthless without the input and commitment of lower-level managers, sothey organize planning groups of managers and key employees at many levels, from variousdepartments and workgroups. They develop and integrate a series of plans focused onemphasizing the company's true competitive advantages. Strategic plans at this point detail theimplementation, evaluation, and control issues. Rather than attempting to forecast the futureperfectly, the plans emphasize probable scenarios and contingency strategies. The sophisticatedannual five-year strategic plan is replaced with strategic thinking at all levels of the organizationthroughout the year. Strategic information, previously available only centrally to topmanagement, is used by people throughout the organization. Instead of a large centralizedplanning staff, internal and external planning consultants are available to help guide groupstrategy discussions. Although top management may still initiate the strategic planning process,the resulting strategies may come from anywhere in the organization. Planning is typicallyinteractive across levels and is no longer strictly top down. People at all levels are now involved. Types of StrategiesThe following are the different types of strategies:Business strategy. This strategy emphasizes the act of strengthening the company's competitiveposition of products or services. Business strategies are composed of competitive and cooperativestrategies. It covers all the activities and tactics for competing in contradiction of the competitorsand the management behaviors that require strategic alignment and coordination. The focus ofbusiness strategies is on product development, innovation, integration, market development, anddiversification among others.BM1807Corporate strategy. This strategy entails a clearly defined, long-term vision that organizations set,seeking to create corporate value and motivate the workforce to implement proper actions toachieve customer satisfaction. It is a continuous process that requires constant effort to engageinvestors in trusting the company with their money, thereby increasing the company's equity.Organizations that manage to deliver customer value unfailingly are those that revisit theircorporate strategy regularly to improve areas that may not deliver the aimed results.Functional strategy. This strategy emphasizes a particular functional area of an organization. It isformulated to achieve some objectives of a business unit by maximizing resource productivity.Functional strategy is concerned with developing distinctive competence to provide a businessunit with a competitive advantage. Each business unit or company has its own set of departments,and every department has its own functional strategy. Functional strategies are adapted tosupport the competitive strategy. For instance, a company following a low-cost competitivestrategy needs a production strategy that emphasizes on reduction cost operation and also ahuman resource strategy that emphasizes on retaining the lowest possible number of employeeswho are highly qualified to work for the organization.Operating strategy. This strategy is usually created at the field level to achieve immediateobjectives. Operating strategy is formulated in the operating units of an organization. In somecompanies, managers develop an operating strategy for each set of annual objectives in thedepartments or divisions.Part of strategizing is planning on how to navigate unchartered territories. Take for example, theglobal health crisis brought by Covid-19. Nobody predicted Covid-19 and how bad it will get. As such,companies must consider how the world is changing and move towards strategic thinking. It is aboutmaking quality decisions, learning from history, and using foresight on what will be needed by thecompany to gain a competitive advantage.Competitive AdvantageCompetitive advantage means superior performance relative to competitors in the same industry orsuperior performance relative to the industry average. It can also be defined as the factor that makes anentity's goods or services superior to the available options in the market.The following are the determinants of competitive advantage:Benefit. This pertains to the value being offered by a product or service to the market. Aside fromthe product features, companies must also identify the unspoken benefits of their product orservice. This means being constantly aware of new trends that affect the value of a product orservice. For instance, newspapers slowly adapt to the current technological trends because mostnews and information are already available via Internet. Other newspaper companies mayperceive that some people are still willing to pay for news delivered on a piece of paper every day.Target market. This pertains to a selected group of customers within a business' available marketat which a business aims its marketing efforts and resources. Companies must be aware of theirtarget market to innovate their products and services based on the particular needs of theircustomers. For instance, newspapers' target market is drifted towards older people who are notcomfortable or capable of getting their news online.

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