P&G Proctor & Gamble Entered Foreign Markets Essay

Open, View, and/or
Download this Document

Total Length: 923 words ( 3 double-spaced pages)

Total Sources: 0

Page 1 of 3

P&G

Proctor & Gamble entered foreign markets early in its existence, and relied on semi-autonomous foreign subsidiaries to manufacture market and distribute products that were developed in the United States. This tactic relied on P&G owning the subsidiary, but giving the subsidiary considerable operational leeway, so that the arrangement almost worked more like a licensing deal. This strategy persisted for P&G through the 1980s.

In the 1990s, this strategy became less viable, at least relative to the alternatives. The strategy had arisen and persisted in an era where barriers to trade between nations were high, and by the 1980s these barriers were beginning to fall -- it was the beginning of the modern era of globalization. National markets were becoming regional markets -- for example with the common market in Europe and the Canada-U.S. Free Trade Agreement. In addition, P&G's retail partners were becoming global in scale, something that demanded P&G adopt a more globalized approach to production and even to distribution. Thus, it was changes both in the legal environment of international trade and in the competitive environment of its major customers that drove the internal change at P&G.

3) P&G has in the past several years been working towards becoming a global company, rather than a multinational one. A global company is one that operates predominantly on a global scale, with little change to accommodate regional conditions. Such a strategy assumes that the product can be marketed in roughly the same way around the world.

Stuck Writing Your "P&G Proctor & Gamble Entered Foreign Markets" Essay?

View All Our Example P&G Proctor & Gamble Entered Foreign Markets Essay

Have A Custom Example Essay Written

To implement this strategy, P&G has been dismantling its regional subsidiaries and has been reorganizing the company more in line with a global company, focusing on product-based divisions rather than geographical ones.

There are some benefits to adopting a global strategy. The first is evident from the impetus for this change -- the company's products are more attractive to global customers. Major retail clients like Wal-Mart and Carrefour prefer to purchase globally, and therefore they must work with companies that can produce and deliver on that scale. P&G will be able to win greater economies of scale using such an approach as well, which will make its products more competitive not only on the distribution front but on the price front as well. This strategy might also facilitate increased market entry for P&G, as the company will no longer require setting up an entire national subsidiary to facilitate market entry. This is especially valuable in smaller countries where the cost of setting up national infrastructure had constrained market entry in the past. In addition, such a strategy reflects the reality of a globalized world, where cultures can blend into each other.

There are, however, some risks associated with this strategy. One is that the company becomes a cost leader by default. It earns economies….....

Show More ⇣

     Open the full completed essay and source list


OR

     Order a one-of-a-kind custom essay on this topic


sample essay writing service

Cite This Resource:

Latest APA Format (6th edition)

Copy Reference
"P& G Proctor & Gamble Entered Foreign Markets" (2013, April 20) Retrieved May 13, 2025, from
https://www.aceyourpaper.com/essays/pg-proctor-gamble-entered-foreign-markets-89912

Latest MLA Format (8th edition)

Copy Reference
"P& G Proctor & Gamble Entered Foreign Markets" 20 April 2013. Web.13 May. 2025. <
https://www.aceyourpaper.com/essays/pg-proctor-gamble-entered-foreign-markets-89912>

Latest Chicago Format (16th edition)

Copy Reference
"P& G Proctor & Gamble Entered Foreign Markets", 20 April 2013, Accessed.13 May. 2025,
https://www.aceyourpaper.com/essays/pg-proctor-gamble-entered-foreign-markets-89912
   

Open, View, and/or
Download this Document
order custom essay example