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Please demonstrate critical thinking abilities. No fewer than 250 words for post. Do not summarize the post and/or course concept(s), but perhaps comment on concepts directly applicable to your workplace. For this response, should outside sources be used to support the content within the postings, proper in-text citations and correctly formatted references should be prepared consistent with the APA (6th edition). The list of references should be physically positioned at the end of the postings.
A company that has undoubtedly grown and expanded by diversification strategy and business models is that of Procter and Gamble. It is the world class leader in its industry, this company is easily identified and commonly known for the manufacture and distribution of their household goods. Its beauty and grooming business line generate more than 70% of its revenue, thus, making it their most dominant business line of all times.
Through vertical integration P&G has managed to make an easy and smooth transition into other related markets and enable them to not only exploit and expand those markets but add value and competitive advantage to an already known value chain. In the process, they have learned that adding value through diversification should not only rely on brand name products such as Tide, Crest, Charming and Dawn products but through the creation of a better customer service experiences and customer excellence practices.
These changes have translated into making sure that customers are served “in different ways but all with a focus on making peoples’ lives a bit easier.” (P&G) According to Forbes article, “Here’s How P&G’s Brand Consolidation Program Could Backfire and Push Its Valuation Below $60” written by the Trefis Team, P&G developed a program to consolidate all higher revenue generating brands in an effort to purge and rid of all other product lines that were depleting their growth potential. The biggest threat to this new concept is the death “of diversification due to the brand consolidation program” (Trefis Team, 2015) but firm’s CEO cites that “as a result, P&G will be able to transform itself into a far leaner organization with minimal loss of revenues.” (Trefis Team, 2015)
Dyer, J., Godfrey, P., Jensen, R., & Bryce, D. (2016). Strategic management: Concepts and tools for creating real world strategy. Hoboken, New Jersey: John Wiley & Sons, Inc.
Proctor & Gamble . (2016). Retrieved September 07, 2017, from http://us.pg.com/our-brands(Links to an external site.)Links to an external site.
Team, T. (2015, June 30). Here’s How P&G’s Brand Consolidation Program Could Backfire and Push Its Valuation Below $60. Retrieved September 08, 2017, from https://www.forbes.com/sites/greatspeculations/201…