P&G a Global Leader in Daily Chemical Industry

P&G (Procter&Gamble) was founded in 1837 by William Procter and James Gamble. At its inception, it mainly produced soap and candles. Over the years, it has continuously led category upgrades through independent research and development, and gradually improved its multi category and multi brand layout through internal and external expansion. After more than a hundred years, it has gradually grown into a leading global consumer goods leader.

P&G has five major business departments:
 fabric and home care
 maternal and child care,
 home care, beauty,
 health,
 men’s grooming.

Its products cover ten major categories, including hair care, beauty personal care, oral care, and fabric care.

As a global leader in daily chemical products, P&G is a global leader in multiple categories, continuously leading the growth and development of multiple sub industries.

Looking back at the growth process of P&G since 1837, based on the development characteristics and financial performance of different periods, its growth process can be divided into five stages.

Start-up period of enterprises (1837-1890): Taking advantage of the situation, small workshops are growing and gaining a firm foothold

At the beginning of its establishment, P&G mainly produced and sold soap and candles, relying on the advantages of the transportation hub in western Cincinnati to establish an early raw material supply and channel distribution system. During the Civil War of 1861-1865, P&G provided military supplies such as soap and candles to the military, rapidly increasing sales and gaining a certain level of popularity, leading to rapid growth and growth.

Between its establishment and 1890, the company gradually expanded from a single soap product to over 30 different types of soap, with Ivory soap is mainly selling points of gentleness and purity, while Chipso is suitable for clothing cleaning and more. The company has established a good reputation through creative marketing, excellent quality control, and stable supply chain, and the demand for products is growing day by day, driving continuous business expansion.

At the beginning of its establishment, P&G was the first to achieve a preliminary transformation from manual workshop production to large-scale production. In 1886, P&G established a new factory in Ivory Valley in the suburbs of Cincinnati and continued to optimize production processes, forming a stable and efficient production line.

Brand building period (1891-1945): Focus on brand building and establish a leading position in the United States

After experiencing the Great Depression and World War II, the overall external economic environment in the United States declined. P&G continuously adapted to environmental changes and implemented internal reforms. In 1931, P&G established a specialized marketing agency and market research department to integrate their advantages in research and development, production, and market research, and established a product manager system to ensure the efficient operation of a multi brand system, creating an industry-leading brand management system. In 1937, P&G’s annual sales reached 230 million US dollars during its centenary. By 1945, P&G’s annual sales approached 350 million US dollars, gradually establishing the company’s leading position in the field of daily chemical products in the United States.

Business expansion period (1946-2007): Continuous improvement of multi brand and multi category matrices, opening up global layout

After World War II, the US economy grew well. P&G seized the opportunity of post-war economic recovery and embarked on a global strategy of “endogenous research and development, external acquisition”, accelerating the layout of global business. In 1946-2007, it successively acquired multiple brands such as SK-II, OLAY, Sassoon, Pantene, and expanded its market to Latin America, Western Europe, Asia, and the Middle East, seizing the development opportunities of emerging markets, and continued to promote the internationalization process. As of 1980, P&G’s business expanded to 23 countries worldwide, with sales approaching $11 billion and profits 31 times that of 1945.


Development bottleneck period (2008-2017): a lost decade under internal and external shocks

After 2008, P&G faced a growth bottleneck and its growth rate began to slow down. After reaching $80 billion in revenue in the 2012 fiscal year, it declined year after year to $65.1 billion in the 2017 fiscal year, only about 81% of the level in 2012. During the lost decade, P&G faced multiple challenges such as global market recession, declining market share, and intensified industry competition, putting overall pressure on its performance.

Transformation and Recovery Period (2018-present): The Transformation and Reboot

Faced with the challenges of the new situation, P&G continuously optimizes, adjusts, and cultivates through a series of changes and adjustments, laying a solid foundation for its performance recovery. Starting from 2018, P&G’s performance began to recover and grow, achieving a revenue of $80 billion in the fiscal year 2022, reaching the highest point since 2006, and a century old daily chemical giant has resumed its journey.

In conclusion, the history of P&D has seen a continuous evolution driven by technological advancements, changing consumer expectations, and the need to stay competitive. From mass production to customer-centricity, from offline to online platforms, P&D has come a long way. As organizations strive to develop innovative, sustainable, and customer-oriented products, it is crucial to embrace the evolving trends and leverage emerging technologies to drive success in the dynamic marketplace.

In the next article, based on the history of P&G, we will focus on how P&G companies can return to the growth trajectory by implementing new strategies after ten years of stagnation since 2008, and then try to provide reference for the development path of daily chemical enterprises

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