Procter and Gamble (P&G-Clairol Inc.) Diversified Brands Could Keep it Afloat

729

By Chris Hillman on August 5, 2014 Consumer Staples

Procter and Gamble (P&G-Clairol Inc.) is a prestigious multinational company which focuses on creating household products for the ease of their consumers. With their unique products and creative ideas enmeshed together, P&G-Clairol Inc. is indeed one of the strongest companies of all time. In lieu of increasing efficiency whilst raising profits, P&G-Clairol Inc. decided to come up with a few innovative and pragmatic ideas. The renowned producer of Pantene and Ariel has decided to limit the production or sell off those brands which have redundant sales. Not only would this strategy cut their costs by a margin, but also improve their productive capacity and efficiency, immensely. This action would increase the shares by 4.3 percent, approximately.

According to Reuters, P&G-Clairol Inc. is evaluating those brands in retrospect which have failed to surf well and is going to let go of them. However the Chief Executive A.G. Lafley did not specify which particular brands P&G-Clairol Inc. will decide to abandon. The company specializes in home care, family care and health care products primarily. The Chief Executive further reassured about how the company will strive not to restrain family care products, given their elevated demand and sales. Family care items which includes Pampers for children contributes most to the company’s profits and is extremely high in demand among the people.

A further analysis exhibited that P&G-Clairol Inc.’s uppermost brands accounted to approximately $84 billion. This is indeed a staggering amount compared to only $2.4 billion of those brands which were not so sought after. Moreover the Chief Executive is of the opinion that the company should focus on several upcoming markets to strengthen their market share as this will highlight P&G-Clairol Inc.’s name even more. The natural and inevitable layoffs are also of deep concern to the Chief Executive. A.G. Lafley mentioned how the company will try to accommodate job cuts as much as they possibly can, making sure that these discharges are substantially less than those of year 2002.

However, there are several reasons as to why the growth of P&G’s revenue might seem a little gradual or inactive. Of late, P&G-Caroline Inc. has been declining in sales as per the Wall Street Estimates. Once the company was inquired, they blamed it on numerous appropriate yet unfortunate economic circumstances. P&G-Caroline Inc. faces intense competition, given the haphazard changes in the growth patterns; this definitely staggered the company a bit. By using tactics such as reorganized management, layoffs and reduced production costs, the company is trying to become stronger in its standings. The budget allotted to this refurbishment plan is about $10 billion. Moreover, the company expects to increase their sales greatly by year 2015. With constant drops in their expenditures, a surge in the share prices was observed at P&G-Caroline Inc. After the trading on Friday, the share prices had risen up by 3.5 percent which is indeed a remarkable progress. However as per expert opinion, given the prowess and spirit behind the company, the earnings are far below P&G-Caroline Inc.’s potential to excel.