The Path to Product Excellence: Avoiding Common Pitfalls and Enhancing Commun...
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P&G
1. Introduction
P&G
Restructuring
Effects
Organisation
structure at
UNILEVER
P&G
1. P&G started in Cincinnati as a candle and soap
making company in 1830âs.
2. Now a Multinational company present in all over 180
countries.
3. 9th largest company in the world with over $80billion
in sales.
4. It also operates and maintain more than a hundred
manufacturing plants across the globe.
2. Introduction
P&G
Restructuring
Effects
Organisation
structure at
UNILEVER
P&G manufacture and distribute products in ten core
categories: Baby Care, Feminine Care, Family Care,
Grooming, Oral Care, Personal Health Care, Hair Care,
Skin and Personal Care, Fabric Care and Home Care.
And, within each category, Research & Development,
Product Supply, and the Brand organization develop,
manufacture and market the brands and products they
provide to consumers.
3. UNIE
ď In 1872, two Dutchmen, Jurgens and Van Der Bergh
ď´ had ventured into the margarine business
ď In 1927, they decided to merge to form two
ď´ companies, Margarine Unie NV, based in the
ď´ Netherlands and Margarine Union Ltd, based in the UK
Introduction
P&G
Restructuring
Effects
Organisation
structure at
UNILEVER
4. LEVER
ď William Hesketh Lever founded âLever Brothersâ in 1885
ď By 1887, introduced âSUNLIGHTâ, the worldâs 1st packaged laundry
ď´ soap
ď Lever & Co. was making 450 tons of Sunlight soap a week
ď He expanded his business from UK to Australia, North America
ď´ and other parts of Europe
ď In 1890, Lever & Co became a limited company âLEVER
ď´ BROTHERS LTD, by 1894, they went PUBLIC
ď Diversified into other businesses, acquired Pears soap and Wallâs
ď Launched its innovative product , VIM
Introduction
P&G
Restructuring
Effects
Organisation
structure at
UNILEVER
8. Roadmap to P&Gâs restructuring
1987: Matrix Structure
⢠39 US product category
Bus were created run by
General Managers
1995: Global
Matrix Structure
⢠Extended to rest
of the world
⢠4 regional
presidents were
reporting directly
to CEO
2005: Global
Business Unit
Structure
⢠Annual sales
grew 40% since
2000 and stock
price nearly
doubled
2013: Hybrid
Structure
Introduction
P&G
Restructuring
Effects
Organisation
structure at
UNILEVER
9. Matrix and Global Matrix Structure- 1987 to 1999
Introduction
P&G
Restructuring
Effects
Organisation
structure at
UNILEVER
10. In 1998, P&G started a 6 years restructuring program â âOrganization 2005â
ď´ Voluntary separations of 15,000 employees by 2001
ď´ 45% job suppressions from global product - supply consolidation
ď´ Elimination of six management layers reducing the total from 13 to 7
ď´ Dismantling matrix organization structure and replacing with interdependent
organizations : GBUs, MDOs, GBS and Lean Corporate Functions.
ď´ GBUs will help to get a total feel of the local market by giving local managers
power and will make P&G locally responsive.
Introduction
P&G
Restructuring
Effects
Organisation
structure at
UNILEVER
11. Analysis of Organization 2005
ď´ One of its major objectives was to significantly improve all inefficient work
processes of P&G including its product development, SCM and marketing
functions
ď´ Focus was more on rolling out new products at a faster rate
ď´ Previously, the organization was more centralized coupled with separations
and negative growth rate which had weakened the morale of employees
ď´ Jager decided that P&G would sell its products under the same name around
the world
Introduction
P&G
Restructuring
Effects
Organisation
structure at
UNILEVER
17. 1930-1979
⢠Strategy : Independent units at various location
⢠Features : Matrix organizational structure
1980-1995
⢠Strategy : Focused growth
⢠Features : Concentration on 4 industries, 100 acquisition, 38 companies acquired in 1995
1996-1999
⢠Strategy :Breakthrough Sustainability Strategy
⢠Features :Focus on core competencies, Operations were grouped by product combination of
âGlobal Push & Local Pull"
1999-2004
⢠Strategy : Path to Grow Strategy
⢠Features : Brand portfolio of 1600 became 400 for better focus. 150 units closed down for cost
control, 55000 employees retrenched
2005-2015
⢠Strategy : Growth to vitality Strategy
⢠Features :High concentration on Emerging markets. Company simplified its management structure, 20000 job
cuts in Europe. Target: 3 - 5 % Organic growth.
Introduction
P&G
Restructuring
Effects
Organisation
structure at
UNILEVER
18. Current Objectives of Unilever
Introduction
P&G
Restructuring
Effects
Organisation
structure at
UNILEVER
⢠Become lean and mean(Retrenchment).
â˘Focus on sales maximizing products.
â˘Reduce number of SKUs.
â˘Improve working capital management.
â˘Maximize margins by minimizing costs.
⢠Expediting DM process by changing operations
⢠Want incremental change by increasing sales in tier
2 &3 cities.
19. Introduction
P&G
Restructuring
Effects
Organisation
structure at
UNILEVER
⢠UNILEVER being a multiproduct organisation, enjoys autonomy to
manage the products on their own through SBUs.
⢠VISIBILITY being their core strategy, always adopted the front bench
strategy in any retail store.
⢠Achieving price efficiency- by rationalising the middle level managerial
talents.
⢠increase from 3 to 7 marketing headquarters.