Case study: Procter and Gamble

P&G is an American multinational company based in Cincinnati, Ohio, that

manufactures wide range of consumer goods with net sales of USD 83 billion in
2008. 24 of its brands have more than a billion dollars in net annual sales, and
another 20 have sales between USD 500 million and USD 1 billion (P&G Annual
Report 2008). It is the 18th largest US Company by profit (Fortune 500, 2007) and
the 10th most admired (Fortune Most Admired Companies 2007). The company was
created in 1837 by William Procter, a candle maker, and James Gamble, a soap
maker, who had settled in Cincinnati and married sisters, Olivia and Elisabeth
Norris, whose father convinced his son-in-laws to become business partners (P&G
Heritage Brochure 2009).
Operations:
As of July 1, 2014, the company structure has been categorized into four Sectors and five Selling &
Market Organizations (SMOs).

Sector

Beauty Care

Baby, Feminine, and Family Care

Fabric and Home Care

Health and Grooming

SMOs

Asia

Europe

India, the Middle East, and Africa (IMEA)

Latin America

North America

Part I: STRATEGIC ANALYSIS

External general and Industry environment analysis
Strategic analysis of P&G Company
In 1837, William Procter and James Gamble formed a humble but bold new enterprise. What began
as a small, family-operated soap and candle company grew and thrived, inspired by P&G's purpose
of providing products and services of superior quality and value.
Strategic analysis of PG Company includes 2 factors: General environment and Industry
environment.
1. General environment
These are very effective tools to know about the power balance between organization and each
environment factors: political, economic, socio-cultural, technological, legal and environmental as
macro-level (PESTLE).
Political environment:
The P&G Political Action Committee (P&G PAC) is a voluntary, nonpartisan political action
committee. Registered with the U.S. Federal Election Commission (FEC) and appropriate state
offices, the PAC allows P&G employees to pool personal, voluntary financial contributions to support
candidates at the federal, state and local level, who support issues important to the business and the
quality of life in the communities in which they live and work.
P&G PAC operations are transparent and compliant with all applicable laws. The PAC is governed
by a set of bylaws and supervised by a diverse board of Company senior managers, U.S.
Government Relations personnel, and Legal counsel.
Support of candidates is based on their support of P&G issues and sustained constituent
relationships. The PAC generally does not contribute to Presidential candidates; industry, association
or leadership PACs; or multiple candidates running in the same race. In 2006, the P&G PAC
contributed $260,880 to candidates running for office. The average contribution per candidate was
$1,335.
Social environment:
P&G leaders are expected to build an inclusive work environment that welcomes and embraces
diversity an environment where people feel comfortable being who they are, regardless of their
individual differences, talents or personal characteristics. This is an environment that provides
everyone equal access to information, opportunities and involvement so each person learns, grows,
excels and maximizes his or her personal contribution.
Training, policy and sensing systems are utilized to reinforce development of an inclusive culture.
Focused diversity training/learning processes are utilized to equip leaders to value and nurture
differences in experiences, styles of leadership and problem-solving/decision-making approaches.
All employees have access to supportive and enabling policies and practices in the areas of flexible

work arrangements, family care, resource/referral services and wellness management to improve
work/life integration and personal productivity. Employee surveys and culture sensing, as well as the
diverse leadership networks, provide advisory data and leanings to top leadership about how to be
more effective at leveraging local customer/employee practices and perspectives.
Technological
P&Gs Global Medical organization advises and assists management and employees to assure a
safe, healthy work environment. Global medical delivers preventive health services to all employees,
at all sites. It manages health issues that may affect employees, technologies and brands.
As P&G is a principles-driven company, all medical system work follows this order of priority:
1. Save a Life (Protect P&G People)
2. Obey the Law (Protect P&Gs Reputation)
3. Protect Key Technologies (Protect Brand Integrity)
4. Enhance Speed to Market (Protect Emerging Technologies)
5. Optimize Employee Productivity
All medical standards of performance
They recognize that environmental progress is a never-ending journey of continuous effort and
improvement. By focusing on improving the lives of consumers through innovative technologies that
work better and more efficiently, they believe they can continue to sustain both the growth of their
business and the health of the environment.
Environment
P&G supports the goals of Climate R.E.S.O.L.V.E. (Responsible Environmental Steps, Opportunities
to Lead by Voluntary Efforts). Even with the slight increase in emissions, they have met the 2012
goal, but this will not stop their solve to continue reducing greenhouse gas emissions.Their actual
emissions in 2007 are less than the emissions in 2002 2,970,000 vs. a base of 3,215,031. This
was during a time when global sales increased from $40 billion to $77 billion. The most recent
acquisitions Wella and Gillette are in the most recent years but not in the base year.
Procter & Gamble believes that there is growing scientific evidence linking greenhouse gas (GHG)
emissions and global climate change. As a global citizen, P&G is concerned about the potentially
negative consequences of climate change and believes prudent and cost-effective action by
governments, industry and citizens to reduce emissions to the atmosphere are justified.
They will focus their efforts in two main areas:
Reduce the intensity of greenhouse gas emissions from their own operations through
continued energy efficiency measures throughout our facilities.
continuing to transition fuels sources toward cleaner alternatives.

 setting goals to drive continued improvement in their GHG emissions.

Help consumers to reduce their own GHG emissions through the use of our products via
product and packaging innovations that enable more efficient consumer product use and energy
consumption.
consumer education.
Laws and Regulations
There are numerous health, safety and environmental requirements worldwide. Plants are subject to
emission limits and operating requirements embodied in these statutes, regulations, laws and
permits. It is P&Gs intent to comply with both the letter and the spirit of statutes, regulations, laws
and permit requirements. Identified compliance issues are treated seriously, and all non-compliance
matters are resolved as soon as possible.
P&G is subject to various lawsuits and claims with respect to matters such as governmental
regulations, income taxes and other actions arising out of the normal course of business. They are
also subject to contingencies pursuant to environmental laws and regulations that in the future may
require them to take action to correct the effects on the environment of prior manufacturing and
waste disposal practices. Accrued environmental liabilities were not material.
While considerable uncertainty exists, in the opinion of management and their counsel, the ultimate
resolution of the various lawsuits and claims will not materially affect our financial condition, cash
flows or results of operations.
Industry life cycle Model
The 165-year-old Procter And Gamble Company (P&G) is a recognized leader in the development,
distribution and marketing of products in nearly 50 categoriesfrom laundry products and
toothpaste, to diapers and bone disease therapies. P&G products consist of nearly 300 individual
brands used by customers in over 160 countries.P&Gs supplier diversity network is comprised of
over 1,250 minority- and women-owned businesses. The company first established a minority
supplier development program in 1972. In the past ten years, minority purchasing at P&G grew
almost ten-fold from $115 million in 1989-1990 to almost $1.0 billion in fiscal 2001-2002. During the
decade of the 1990s, P&Gs spending with minority and women-owned businesses exceeded $4
billion dollars for the period.
In the year 2007, P&G has upheld its unique manufacturing mind-set and focused on developing
human resources, consolidating foundations and looking forward management strategies. Moreover,
the company also concentrates on strengthening the international competitiveness of production and
a range of initiatives to consolidate foundations and realize future growth.P&G company is
committed to steadily improving its value by continuing to pursue farsighted innovations and building
a solid management platform.
c. Summary of general environment
Opportunities

Threats

- Well defined market niche, just in time

manufacturing technology, wide range of
demography, and the removal of trade barriers in
some foreign countries.

- New entry into the household product industry,

use of substitute products, increased trade
barriers in some developing nations,
unfavorable business laws and political
instability.

- The removal of trade barriers in some foreign

countries has enabled the company to operate
- Investors do not like uncertainty. They want to
competitively without much government intervention ensure that there is democracy and stable
government in whatever country they invest and
- Trade barriers historically has been known to be
most importantly, they should be able to
one of the biggest threats for most multinational
repatriate their profits without much restrictions
businesses because of hostal takeovers by some
foreign governments, difficulty of entry, corruption
among government officials and bribery, and
unhealthy business environment.
II. Internal Analysis.
Global Operations
The Maket development organizations (MDOs)develop go-to-market plans at the local level,
leveraging their understanding of the local consumer and customer. MDOs are organized along
seven geographic regions.
Global Business Services(GBS)
GBS operates as the back office for the GBU and MDO organizations, providing world-class
technology, processes and standard data tools to better understand the business and better serve
consumers and customers. GBS personnel, or highly efficient and effective third-party partners,
provide these services.
Strengths

Weaknesses

-Strong financial position both in the

domestic and foreign markets.

-Lack of effective distribution system in some segment

as well as poor location in some foreign countries and
high cost of inputs.

- the company has the ability and capability

to push innovation to commercialization
-Another area of weakness is the employment of foreign
faster than any other competitor in the
based local management who doesnt have any
industry.
international business experience. This makes
collaboration with headquarters a little difficult because
- Another unique strength of P&G is its pool
of their inexperience in the global business arena.
of skilled labor.
- P&G has a track record of producing high
quality products which is very difficult to
match or beat.

-P&G has significant scale advantages. It is

the global leader in all its four core
categories - fabric and home care, beauty
care, baby and family care, health care
IV. Strategic options available to PG and recommendations:
In order to remain competitive and achieve growth, they must be able to retain customer loyalty
which has contributed to their success. Besides, the company should exploit new market segments
and opportunities to support for the concentrated growth strategy, gain market share, and minimize
the threats of losing market caused by its vibrant external environment and fierce competitive
market. In addition, there are some strategies that PG can implement to improve and solidify its
performance as follow:
Utilize the strengths in research and development and human resource to develop its technological
resource. This will help the company to reduce harmful biological effects on human caused by
electromagnetic emissions, meet Safety standards and government regulations about
electromagnetic emissions, and minimize the threat of substitutes due to the rapidly changes in
technological environment.
Utilize the strengths in financial resource, invest more in marketing to build up reputation with
consumers and minimize the threat of losing market due to its high extent of competitive rivalry.
They have also sustainabily strategies and goals for next years such as: Delight the consumer with
sustainable innovations that improve the environmental profile of their products, Improve the
environmental profile of P&Gs own operations and childrens lives through P&Gs social
responsibility programs.And more, engage and equip all P&Gers to build sustainability thinking and
practices into their everyday work.Finally, Shape the future by working transparently with their
stakeholders to enable continued freedom to innovate in a responsible way.
V. Recommendations for structures, systems and policies:
Innovation, flexibility, free-flowing of information, and adaptability are key factors to implement these
strategies successfully. It due to the large size of the company and the high level of environmental
uncertainty, technological complexity, and geographic dispersion that PG Company is facing.
Therefore, an organic organizational structure is most suitable for the company.
Further more,The degree of formalization is low in organic organizational structure,. It has less
written policies, rules, procedures, job descriptions, and other documents specify what actions are
(or are not) to be taken under a given set of circumstances. Rules and regulations often were not
written down or, if written down, were ignored. People must find their own way through the system to
discover what to do. In other words, the employees in organization will encourage the innovation f
they have more freedom in their work.
In addition, decision-making authority was decentralized. Power and decision making authority are
delegated to lower levels of an organization. It leads to faster decision making at the lower levels,

because most decision do not have to be referred up the top organizational levels. Thus, by adapting
organic organizational structure, PG company will be able to increase their flexibility and adaptability.
Finally, in organic organizational structure, the hierarchy of authority is not clear and simple. There
are just a few layers of management level. Therefore, the exchange and transfer of information
process within the company will be better.
PART II: Assessment of the usefulness of strategic management models for the analysis
1/P.E.S.T.E.L :
PEST Analysis is a simple, useful and widely-used tool that helps company understand the "big
picture" of your Political, Economic, Socio-Cultural and Technological environment. As such, it is
used by business leaders worldwide to build their vision of the future. PESTEL analysis is a standard
way of environmental scanning. Successful managers need an all-round view of their environment
for decision-making. PG company uses PESTEL analysis to draw attention to each of the key
external environmental factors.
5/Company structure:
Every organisation is unique in size, products or services, people, leadership and culture. It can be
useful to think in the general unformed way before plunging into the detail of an organisation design.
New organisations structure can provide new and interesting opportunities for managers and
employees.

The Strategic Development of

Procter and Gamble into a
Global Giant
Posted on April 29, 2012 by Sam Warren

Procter and Gamble (henceforth P & G) is one of the largest manufacturers and
distributors of consumer products in the world with a global reach for it 300+
brands of 180 countries. During the 1990s the company made some significant
alterations to its corporate strategy; it aimed to reduce its cost structure and
develop its differentiated business-level strategy, in an attempt to increase
revenues and profits. The rapid development of international markets and
globalisation demanded a corporate shake up. Moreover, the reduction of
trade barriers and tariffs indicated that to retain a competitive advantage
globally the company had to develop an effective International strategy, whilst
benefitting from economies of scale. Cross-functional integration and speed of
innovation increasingly became imperative to corporate strategy. In this article I
will look at the key development that took place in thus process and turned P&G
into such a powerhouse.
The cohesion between the strategy and the structure of the company is crucial.
The structure will align the company with the strategy it wishes to pursue; and,
along with the companys culture and control systems, will utilise the valuechain competencies and capabilities, and facilitate increased competitiveness,
profitability and superior return on Investment.
Procter and Gamble identified the increasing globalisation of business and
resultantly altered their business strategy and structure in order to maximise
exposure in more countries in order to: remain competitive internationally,
benefit from economies of scale; and to maximise revenues, profits, share price
and return on invested capital. To facilitate the implementation of their global
strategy CEO, Lafley, changed the structure from a Global Product Structure,
which is often associated with a standardisation strategy and implemented a
Transnational global strategy, and implemented a hybrid organisational
structure that considered the geographical dispersion of multiple marketplaces,
respective specialisation for particular brands and specialisations and
economies of scale in particular value creating functions. Ronald Jean Degen has
termed this a Front-Back Hybrid Matrix organisation structure.
This strategy allowed P&G to simultaneously amalgamate cost reductions in the
firm and retain efficient customer responsiveness; adapting to local tastes and
expectations as they vary across nations. The nature of this strategy dictates

that some functions are centralised and some are decentralised. This has been
chosen as it supports the empowerment of the various levels of management in
the companys Global Business Units (GBUs). Lafley has suggested that this
provides the ability to make faster, more locally responsive and efficient
decisions, whilst autonomy was given to key functions that required local
customisation. R&D and innovation were very much the spearhead of P&Gs
corporate strategy, so the R & D function remained centralised, so that control
could be exerted over it.

The global-matrix structure that Lafley adopted to support the transnational

strategy is a complex structure that requires significant cohesion from all
members of the workforce and complex controls. Lafley, realised the
significance of workers morale, contrary to his predecessor, and implemented a
culture that would support the structure. Lafley is noted to have implemented
pay-incentives that tied employees to the performance of the company. Lafleys
strategic leadership ensured that cross-functional co-ordination created a
significant advantage over competitors; as distribution channels, logistics,

supply chain, and manufacturing were all co-ordinated across nations; thus, P&G
was able to lower costs. The complementation of the culture and the globalmatrix structure advanced the changing nature of the corporate strategy and
developed their international competitive advantage. However, crucial to these
elements were sophisticated systems for co-ordination which Lafley recognised
would be essential and championed the use of IT systems, even setting up a
deal with Cisco systems to take full advantage of their complex systems,
systems support; in order to reduce IT costs through economies of scale
spreading their system globally.
Lafley reported significant financial progress in 2000; Weve had three major
acquisitions including Clairol, Wella and Gillette; and, we have tripled the pace of
our business initiatives over this same period. Lafley, therefore, decided to
further restructure the business units to accommodate these strategic
acquisitions and increase competitiveness thusly. The global business units were
reduced from five to three: global beauty care; global health, baby, and family
care; and global household care. This complimented the transnational global
strategy well as providing sharper focus of the respective target consumers;
whilst complimented by a decentralised empowerment of regional, subsidiary
and functional managers, which was supported by the effectiveness of cross
functional co-ordination and interlinking of complex IT systems.
The use of integrating mechanisms in general, and use of knowledge
management in particular, to gain a competitive advantage.
A transnational global strategy requires close co-ordination with key areas of the
business for increased efficiency and competitiveness. Cross functional coordination at P&G allows them to organise and utilise their resources to optimal
effect. The calculation of demand should accurately match supply, and so the
supply chain, logistics and distribution channels can be effectively co-ordinated
to manage increased/decreases in demand; hence, a Just-in-Time inventory
control system can be implemented to reduce costs. Moreover, these integrating
mechanisms support the transnational global strategy employed by the firm as
local managers can quickly relay changes in tastes in their particular regions
and the products can be updated/altered, or inventory levels can be corrected
accordingly, more efficiently and effectively.

Moreover, as Lafley has identified that Research and Development and Product
Innovation is key to pioneering the competitiveness of the corporate strategy;
integration mechanisms allow fast communication between marketing and R&D.
Additionally, inter-business function (marketing, RnD, Logistics, Finance etc)
communication facilitates value creating propensity between manufacturing and
marketing. Furthermore, inter function co-ordination is crucial as line, functional,
business, divisional, and corporate level managers within the same functions
must be able to quickly communicate between one another, in order to mitigate
against information distortion, especially when spread across many nations.
P&G facilitates the effective implementation of integration mechanisms through
direct contact with one another. This is a simple, cost effective way to
communicate problems and ensures that opinions and concerns are voiced.
Moreover, it is essential to have direct contact between different functions,
especially those that must co-operate considerably. Conversing directly between
one another ensures cohesion of the products and the market, with the overall
strategy. This reduces handoff and transfer problems. However, this can
increase bureaucratic costs and it may not always be viable to converse with
different employees face to face all over the globe, although such technological
advances, such as video Tele-conferencing may help.

Liaison roles are a good way of handling handoff and transfer problems when
structures become complex and will help co-ordinate divisions and functions.

Meeting at a regular time intervals ensure regularity. Additionally, liaison roles

ease tensions between functions and can ferry information from one to another.
Teams are used when two/more functions share common problems and these
can help relieve tensions or aid in finding a solution. P&G could use teams
when they have problem co-ordinating particular functions in a large region, for
example Asia. Teams may provide insightful solutions to problems i.e. efficient
logistics. Referenced from MIT Sloan Management Review P&G accredit
considerable success to the cohesion of their function team co-ordination, what
made the teams work was the mutual interdependency that grew. Thus,
demonstrating how integrating mechanism are vital for communication across a
global business in order for P&Gs transnational strategy and FB- global matrix
structure work effectively.
Furthermore, the importance of IT must be accredited to the effectiveness of this
co-ordination; as many of the systems and integrating mechanisms rely heavily
this interwoven web of technology. Lafley was correct to have championed it as
he did.

European strategy:
An alternative strategy is to develop new market-specific resources, a more
direct but more costly and probably a slower approach than adaptation. This
strategy is starting to be seen in the form of a number of MNCs acquiring local
brands that are added to their portfolio alongside global counterparts. In Japan,
for example, Coca-Cola carries a number of locally-oriented brands, such as
Georgia iced coffee, that enable it simultaneously to meet local taste segments
and to derive greater economies of scope from its sales and distribution
investments in the country. Alternative local resources that might be developed
are distribution assets, such as company-specific warehouses or fleets of vans or
even bicycles. P&G took this approach in certain Eastern European markets. In
these former communist states, the distribution systems were not simply
undevelopedthey had completely collapsed. Recognizing that intensive

distribution was an enabling condition for the development of their consumer

goods business, P&G invested substantial sums in developing its own
distribution network. It did so by funding distributor businesses in the form of
vans, information technology, working capital, and extensive training.This
model, known within the company as the McVan Model, produced a significant
competitive advantage over both international and local competition; in Russia,
for example, the development of 32 regional distributors, with 68 further
subdistributors, resulted in P&G having distribution coverage of some 80 percent
of the population at a time when most multinationals were still restricted to
marketing in the two main cities of Moscow and St. Petersburg. This bold
approach illustrates perfectly the trade-off between control and risk
considerable investment was required to develop this network in a country
renowned as a distribution challenge (being the largest country in the world in
terms of area), but by tackling the issue head-on rather than waiting for the
enabling condition to develop, P&G gained huge leads in market share in many
categories. While this advantage has continued in some countries, the financial
commitment makes P&G far more vulnerable to economic shocks, such as the
Russian financial crisis of the summer of 1998.
Asia Strategy:
China story
Strong distribution channel
When P&G entered China back in 1985, there was very limited national distribution for
consumer goods. Most brands and shops were local. So P&Gs challenge was to build a
network of distributors who could also handle the demands of distributing fast-moving consumer
goods like toothpaste, nappies and shampoo. P&G initially focused on the largest (Tier 1) cities
such as Guangzhou, Shenzhen, Shanghai, Beijing and Tianjin which also tended to have the
largest and most affluent consumer base. However, by 2010 P&G had extended its distribution
network well beyond the biggest cities and were supplying over 500,000 shops across much of
China using 150 distribution centres.

Building an Organisation Based on Local Talent & Investing in CSR

Another key feature of P&Gs success has been how it focused on building an
organisational structure and resource based on local employees and managers. For
example, P&G was among the first multinationals to actively recruit at Chinese
universities and it developed extensive training programmes for its China staff.
P&Gs recruitment and staff development approach has followed a similar pattern in
developed economies where it actively promotes from within as a way of instilling a
strong corporate culture, improving staff retention and building staff loyalty. As a result,
by 2010, only around 2% of P&Gs employees in China were non-Chinese.
P&G also recognised the need to focus on CSR as it developed its presence in China. It
worked closely with central and local governments on projects in areas such as
education, public health and rural development which were seen as priorities by
Chinas leaders.
One project of note for P&G in China was the Hope Schools programme. By 2010, P&G
had built more than 200 Hope Schools around China.
current Strategies
Significant changes have been made to Procter and Gambles corporate and
operational strategies as of late; it sought to reduce its cost structure and in-turn
develop a more seamless integrated business-level strategy, in an attempt to increase
revenue streams. Cross-functional integration and speed of innovation has become
extremely important to corporate strategy as the rate of innovation and technology
increase. In order to remain competitive internationally, benefit from economies of scale,
maximize revenues, profits, share price, and return on invested capital, Procter and
Gamble is altering their business strategy to facilitate the increasing complexities of the
global business structure. To facilitate the implementation of their global strategy, Chief
Executive Officer, Alan G. Lafley, changed the structure fro
m a Global Product Structure,
which is associated with a standardization strategy,
and implemented a Transnational global strategy

. This strategy takes into consideration the geographical segmentation of multiple

marketplaces, respective specialization for particular brands and specializations, and
economies of scale in particular value creating functions. These market segmentation
areas are broken down by the pie chart in a following section. This strategy allows P&G
to simultaneously merge cost reductions in the firm and retain efficient customer
responsiveness, allowing the company to adapt to local tastes and expectations as they
vary across nations. The global-matrix structure that Mr. Lafley adopted to support the
transnational strategy is a complex structure that requires significant cohesion from all
members of the workforce and complex controls. Mr. Lafley, being ever cognizant of the
signi
ficance of workers morale,
implemented a culture that would support the structure. He is noted to have
implemented pay-incentives that tied employees to the performance of the company.
Mr.
Lafleys strategic

8 Procter and Gamble

leadership ensured that cross-functional coordination created a significant advantage
over competitors; distribution channels, logistics, supply chain, and manufacturing were
all coordinated across nations, enabling Procter and Gamble to cut costs across the
board. A transnational global strategy requires close coordination with key areas of the
business for increased efficiency and competitiveness. Cross functional coordination at
Procter and Gamble allows the company to organize and utilize their resources to
achieve optimal effectiveness in the marketplace. R&D and innovation are very much at
the forefront of Procter and Gambles corporate strategy. Mr. Lafley has identified that
R&D and Product Innovation is tantamount to pioneering the competitiveness of the
corporate strategy; integration mechanisms allow fast communication between
marketing and R&D. Additionally, inter-business function communication facilitates value
creating propensity between manufacturing and marketing. Inter-business function
coordination is crucial as line, functional, business, divisional, and corporate level
managers within the same functions must be able to quickly communicate between one

another in order to mitigate against information distortion, especially when spread

across many nations. In its 2013 annual report, Procter and Gamble outlined long-term
annual growth targets that included sales growth incrementally above market growth
rates in categories and countries where the company competes; and growth in EPS in
the high single digits. For 2013, Procter and Gamble calculated EPS from continuing
operations to be $4.05, which excludes $0.18 of non-recurring restructuring charges, a
$0.10 impairment charge, a $0.08 charge related to the Venezuela currency
devaluation, $0.05 of charges for European legal matters and a $0.21 gain on the
buyout of a joint venture. In August 2013, the company guided for fiscal year 2014 EPS
to increase by 5% to 7% over the prior year, or 11% to 13% excluding the impact of
foreign currency translation. This incorporates organic sales growth of 3% to 4%.
Procter and Gamble's objective is to deliver total shareholder returns in the top one-third
of its peer group by focusing its resources on its biggest, most profitable categories and
markets. This includes strengthening and growing its core markets, such as the U.S.,
investing in emerging markets in categories and countries with the largest opportunity
and highest likelihood of success, and allocating resources to businesses where it can
create disproportionate value. In May 2012, Procter and Gamble sold its Snacks
business to The Kellogg Company in a $2.7 billion all-cash transaction. Procter and
Gamble recorded a net gain on the transaction of $0.48 per share, accounted for in
discontinued operations, located on the balance sheet. A prior agreement to sell the
Pringles business to Diamond Foods was previously terminated. (Annual report
2012/13)