PGExpansion.pdf

EXPANDING P&GJeannette Stanley

Agenda

■ Chosen Country

■ Diamond of National Advantage Analysis

■ Success Analysis Forces

■ Hindrance Analysis Forces

■ Leadership Actions

■ Recommendation

■ Conclusion

■ References

P&G in Zimbabwe■ There is no P&G location in

Zimbabwe

■ P&G has a presence in the country

■ Low start up costs

■ Large earning potential

Diamond of National Advantage

Industry Rivalry

■ Multinational companies are eyeing the same market.

■ Locals companies pose a significant threat for Procter and Gamble.

■ Convenient small scale sellers do dominate a significant share of consumer goods in Zimbabwe .

Demand Conditions

■ There is an increase in consumer goods like groceries.

■ People prefer to buy from retailers who are sensitive to their prices.

■ People demand to consume healthy consumer goods and are cautious about being exploited.

Diamond of National Advantage

Supporting Industries

■ The logistic industry is not as reliable as Procter and Gamble could wish.

■ The is banking industry that would support transaction purposes.

■ There is a private security firm that would offer good security to the premises of Procter and Gamble.

Factors Endowment

■ Affordable labour is available from Zimbabwe people.

■ Procter and Gamble have a strong capital base and thus can finance its operations.

■ It is not as hard to set a strategic location to set up stores in Zimbabwe.

Success Analysis Forces

1. Increasing growth of the economy

■ The economy of Zimbabwe is growing faster than that of its neighbours.

■ This increase supports the consumption of more consumer goods for locals.

■ The higher consumption of consumer goods would facilitate the success of Procter and Gamble in Zimbabwe.

2. Increasing purchasing power

■ With increasing economic actions, people's ability to buy is increasing (Bonga & Mugayi, 2018).

■ This implies that people would not mind paying higher prices for goods from Procter and Gamble.

■ Furthermore, they can buy more units per person.

■ This is a basic success factor for Procter and Gamble.

Success Analysis Forces

3. Improving political climate

■ The political climate is stabilizing in the country.

■ For the number of years that Procter and Gamble have operated there, it has operated a steady political climate.

■ This stable climate facilitates a suitable environment to do business from.

Hindrance Analysis Forces

1. Limited online footprint

■ Zimbabwe is growing in terms of digital migration, just like other countries.

■ This limits the ability of Procter and Gamble to reach customers over the digital space.

2. Limited diversity

■ The company has not invested in so many products.

■ This implies it only attars a limited number of customers.

■ This also limits the profitability of the company.

Hindrance Analysis Forces

3. Uncertainty of regulations on foreign companies

■ The country is yet to establish a stable regulation pertaining regulation of foreign companies.

■ This poses risks for a government that would impose strict policies for foreign companies.

■ This would make it hard for Procter and Gamble to operate in Zimbabwe.

4. Limited products

■ This implies that the company is likely to face stiff competition from locals and other foreign companies in the industry.

■ This would also reduce customers the satisfaction they would not find everything they need from one roof.

■ In the long run, these customers are likely to be lost to competitors who have more varieties of consumer goods.

Leadership Action

1. Engage locals at the executive positions

■ This is for a proper understanding of the buying culture (Foss & Pedersen, 2019).

■ Furthermore, this is to understand how locals can be triggered to buy more.

■ This would also create a good image of the company to locals so that they would buy more.

2. Embrace decentralized management

■ The company should consider allowing managers in Zimbabwe to make their decentralized decisions.

■ This makes it more flexible for them to react to different market forces.

■ This would also enhance their proactive preparedness for different market changes.

Leadership Action

3. Engage staff in decision making

■ The company should consider involving different stakeholders in the process of making decisions.

■ This is to have them support decisions made.

■ Their supporting decision would facilitate the effective operation of Procter and Gamble in Zimbabwe.

Recommendation

i.) Engage more locals in strategic management

■ This would incline the strategic decision made and purchasing behaviours of locals.

■ This would also help t protect the interest of locals while doing business simultaneously.

ii.) Consider Diversifying into more variety of products

■ This is to attract more customers (Guyader & Piscicelli, 2019).

■ This is also intended to increase shopping satisfaction since customers can get everything they need under one roof.

Conclusion

■ In conclusion, expanding to Zimbabwe is a good decision by Procter and Gamble.

■ Expanding in this market is as attractive because of different success forces discussed above.

■ However, Procter must consider hardships and possible challenges and be ready for them.

■ Procter and Gamble should incorporate leadership strategies as suggested and discussed above in the expansion strategy.

REFERENCES:

Foss, N. J., & Pedersen, T. (2019). Microfoundations in international management research: The case of knowledge sharing in multinational corporations. Journal of International Business Studies, 50(9), 1594-1621.

Bonga, W. G., & Mugayi, P. (2018). An Explanatory Analysis of the Potential Impact of Citizens’ Purchasing Power on Industry Revival in Zimbabwe. Researchjournali’s Journal of Economics, 6(4), 01-07.

Guyader, H., & Piscicelli, L. (2019). Business model diversification in the sharing economy: The case of GoMore. Journal of cleaner production, 215, 1059-1069.