P&g Case Study

1. Why P&G?    

1. Procter and Gamble is one of the most prominent global companies in the world. It is operating worldwide with over 180 products and 178 years of business experience. The wide range of products that P&G offers include health care, grooming, beauty, hair, and personal care, baby, feminine, and family care, and fabric and home care. Proctor and gamble is operating in geographic Regions such as North America, Asia Pacific, Europe, Greater China, India, Middle East, Africa, and Latin America. It has reached a 62% in developed market maturity and it is still developing in the remaining 38%.

1. Financial Statements

1. Local Vs. International Sales

1. Local (US) [pic 1][pic 2][pic 3][pic 4]

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1. International (Egypt)

2% of total revenue goes to Egyptian sales.

Jun 20, 2015 – 76,279,000*2%= 1,525,530$ 

1. The effects on the business in regards for Foreign exchange rate movements

1. Due to the appreciation of the Dollar that has eroded international sales; the company’s performance has witnessed a drop in sales as demand fell across product categories.

1. Risks P&G faces from conducting international business

1. Exposure to international economic conditions – If economic conditions in a foreign country weaken, purchase of products decline and MNC sales in that country may be lower than expected.
2. Exposure to international political risk – A foreign government may increase taxes or impose barriers on the MNC’s subsidiary.
3. Exposure to exchange rate risk – If foreign currencies related to the MNC subsidiary weaken against the U.S. dollar, the MNC will receive a lower amount of dollar cash flows than was expected.

1. Performance Tracking

1. News

1. Local Market Specific : P&G's quarterly sales drop 12 pct

Oct 23 Procter & Gamble Co, reported a 12 percent fall in quarterly sales, its biggest and seventh straight quarter of decline, hurt by weak demand across product categories and a strong dollar. P&G, which has been reducing the number of brands it owns to focus on profitable brands, said revenue fell to $16.53 billion from $18.77 billion.

1. International Market: P&G sees organic sales growth from current quarter

P&G cut its full-year revenue growth forecast, saying the hit from the dollar was now expected to be bigger than previously anticipated. Sales in all its product categories fell in double-digit percent in the quarter, with beauty, baby care and grooming products recording the worst drop.Net sales fell 12 percent to $16.53 billion, missing the average analyst estimate of $17.17 billion, according to Thomson Reuters I/B/E/S. However, the net income attributable to P&G rose 31 percent to $2.60 billion, helped by cost cuts and accounting changes in its Venezuela operations. Excluding items, P&G earned 98 cents per share, beating analysts' expectations of 95 cents. P&G shares were up 2.5 percent at $76.74 in noon trading.