Procter & Gamble (P&G) SWOT & PESTLE Analysis

Strength

1. Consistently strong operating performance and financials over the years: Over the past five years, P&G has drawn significant growth across its key financial pointers. The company's revenue rose from $65.3 billion in FY2016 to $76.1 billion in FY2021 symbolizing 16.54% of growth. Its operating income also jumped from $13.3 billion in 2016 to $17.98 billion in FY2021. P&G's organic sales grew by 6% y-o-y (from 2020-2021). Biennially organic sales growth has spurred from 3% across FY17 and FY18 to 11% across FY19 and FY20 symbolizing the underlying strength of P&G's brands and its strategy that is accelerating its business. Precisely in FY2021, from its largest and most profitable segments, i.e. US and China, P&G attained growth in its organic sales by 8% and 12% respectively.

2. Focused brand portfolio of 10 categories leveraging P&G’s strengths: P&G’s 10-Category Portfolio mainly comprises of health care - personal & oral, fabric care, and home care. P&G's portfolio of daily-use products especially from health, hygiene, and cleaning segments is focused on performance, which plays a significant role in brand choice. P&G's products are repeatedly used several times a day, hence the brand has high potential to remain relevant in consumer's day to day lives. Hence, P&G typically occupies the first or second share position in most of these categories.

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Weakness

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Opportunity

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Threat

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Political

1. Changes in tax regulations: As per the statement released by the company: P&G tries to abide and follow all the norms laid by the state and the federal government in its course of business and operations. Also, the multinational company has to deal with the regulations of other countries while trading. P&G has formed a team P&G’s Global Government Relations and Public Policy [P&G GGRPP] to look into the norms while trading in the key international markets. Such activities do add to the running cost of the company. The country’s internal and external/foreign policies largely impact the scale and growth of any company. P&G being a multinational company headquartered in the US is bounded to abide by the US Federal norms and trade policies. The home country’s foreign policy largely affects the operation and growth of the company. If the country maintains good and healthy relations with other countries, it can open avenues for the company to trade with ease in the international market. As trade war and tensions tend to relax between USA and China, it has opened investment opportunities for P&G in the South Asian market. In March 2021, P&G announced to launch a new facility in Guangzhou while ramping up its old and other investments in the country. This opportunity will enable the company to grow, expand and reach new heights in the wide Chinese market.

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Economic

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Social

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Technological

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Legal

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Environmental

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