Internationalization of Procter & Gamble (P&G) Essay

Internationalization of Procter & Gamble (P&G) - Essay Example The popularity and acceptance of P&G was well certified by ACNielsen, which surveyed and found that 99% of U.S. households use one or the other P&G product. P& G completed the acquisition of The Gillette Company for approximately $53.43 billion on October 1, 2005. Gillette is a leading consumer products company that had $10.48 billion of sales in its most recent pre-acquisition year ended December 31, 2004. (Annual Report 2006). Globalization has brought about intense competition for global markets amongst the major multinational companies. These companies have been looking outwards to reorient their organizational structures and strategies to capture the global markets by positioning their products strategically. A recent study of the US and European companies revealed that 75 percent were taking up the above strategic reorganization in order to stay competitive and staying competitive was considered the single most important external issue on their agenda. Past experiences have shown that poor planning further embattled by rudimentary understanding of the cultural aspects of the global market places had ruined the huge marketing campaigns of even the multinational companies. ... , more penny wise, or a little more nationalistic, and they are spending more of their money on local drinks whose flavors are not part of the Coca-Cola line up. (Rance, 2000). In 21st century international marketeer should seek solution to choice problem between standardization and adaptation. (Ghemawat, 2003). A vital challenge for the international marketing strategy of a firm is the need to understand the different milieus the company needs to operate in. That is comprehending different cultural, economic, and political environments is necessary for the success of a company. Culture is one of the most challenging and devious elements of the international marketplace. These challenges encouraged numerous researchers to take up international marketing studies concerning behavioral differences in consumers across nations (e.g. Lynn, Zinkhan et al. 1993; Nakata and Sivakumar 1996: Brass 1991; McCarty and Hattwick 1991; Hafstrom, Chae et al. 1992; Steenkamp, Hofstede et al. 1999; Chu, Spires et al. 1999; Husted 2000).P& G has also been adopting a strategic globalization stance and has been a forerunner in this race as explained below. Internationalization at P&G P& G is patently a multinational corporation (MNC) with substantial direct investment in foreign markets which is in addition to its normal lines of exports.P& G is also involved in the active management of this portfolio of foreign investments without being just a passive financial investor of funds. Through its various business unit structures it has adopted an integrated management of its operations. On July 1, 2006, nine months after closing the (Gillette) acquisition, P&G completed the largest wave of business systems integration so far. P&G integrated systems in 26 countries, spanning five