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P&G
- 1. Introduction P&G Restructuring Effects Organisation structure at UNILEVER P&G 1. P&G started in Cincinnati as a candle and soap making company in 1830’s. 2. Now a Multinational company present in all over 180 countries. 3. 9th largest company in the world with over $80billion in sales. 4. It also operates and maintain more than a hundred manufacturing plants across the globe.
- 2. Introduction P&G Restructuring Effects Organisation structure at UNILEVER P&G manufacture and distribute products in ten core categories: Baby Care, Feminine Care, Family Care, Grooming, Oral Care, Personal Health Care, Hair Care, Skin and Personal Care, Fabric Care and Home Care. And, within each category, Research & Development, Product Supply, and the Brand organization develop, manufacture and market the brands and products they provide to consumers.
- 3. UNIE In 1872, two Dutchmen, Jurgens and Van Der Bergh had ventured into the margarine business In 1927, they decided to merge to form two companies, Margarine Unie NV, based in the Netherlands and Margarine Union Ltd, based in the UK Introduction P&G Restructuring Effects Organisation structure at UNILEVER
- 4. LEVER William Hesketh Lever founded ‘Lever Brothers’ in 1885 By 1887, introduced ‘SUNLIGHT’, the world’s 1st packaged laundry soap Lever & Co. was making 450 tons of Sunlight soap a week He expanded his business from UK to Australia, North America and other parts of Europe In 1890, Lever & Co became a limited company –LEVER BROTHERS LTD, by 1894, they went PUBLIC Diversified into other businesses, acquired Pears soap and Wall’s Launched its innovative product , VIM Introduction P&G Restructuring Effects Organisation structure at UNILEVER
- 8. Roadmap to P&G’s restructuring 1987: Matrix Structure • 39 US product category Bus were created run by General Managers 1995: Global Matrix Structure • Extended to rest of the world • 4 regional presidents were reporting directly to CEO 2005: Global Business Unit Structure • Annual sales grew 40% since 2000 and stock price nearly doubled 2013: Hybrid Structure Introduction P&G Restructuring Effects Organisation structure at UNILEVER
- 9. Matrix and Global Matrix Structure- 1987 to 1999 Introduction P&G Restructuring Effects Organisation structure at UNILEVER
- 10. In 1998, P&G started a 6 years restructuring program – “Organization 2005” Voluntary separations of 15,000 employees by 2001 45% job suppressions from global product - supply consolidation Elimination of six management layers reducing the total from 13 to 7 Dismantling matrix organization structure and replacing with interdependent organizations : GBUs, MDOs, GBS and Lean Corporate Functions. GBUs will help to get a total feel of the local market by giving local managers power and will make P&G locally responsive. Introduction P&G Restructuring Effects Organisation structure at UNILEVER
- 11. Analysis of Organization 2005 One of its major objectives was to significantly improve all inefficient work processes of P&G including its product development, SCM and marketing functions Focus was more on rolling out new products at a faster rate Previously, the organization was more centralized coupled with separations and negative growth rate which had weakened the morale of employees Jager decided that P&G would sell its products under the same name around the world Introduction P&G Restructuring Effects Organisation structure at UNILEVER
- 12. GBU Structure- ‘ Organisation 2005 ‘ Introduction P&G Restructuring Effects Organisation structure at UNILEVER
- 14. GBU Structure modified- 2013 Introduction P&G Restructuring Effects Organisation structure at UNILEVER
- 15. Net Earnings and Net Sales Introduction P&G Restructuring Effects Organisation structure at UNILEVER
- 17. 1930-1979 • Strategy : Independent units at various location • Features : Matrix organizational structure 1980-1995 • Strategy : Focused growth • Features : Concentration on 4 industries, 100 acquisition, 38 companies acquired in 1995 1996-1999 • Strategy :Breakthrough Sustainability Strategy • Features :Focus on core competencies, Operations were grouped by product combination of “Global Push & Local Pull" 1999-2004 • Strategy : Path to Grow Strategy • Features : Brand portfolio of 1600 became 400 for better focus. 150 units closed down for cost control, 55000 employees retrenched 2005-2015 • Strategy : Growth to vitality Strategy • Features :High concentration on Emerging markets. Company simplified its management structure, 20000 job cuts in Europe. Target: 3 - 5 % Organic growth. Introduction P&G Restructuring Effects Organisation structure at UNILEVER
- 18. Current Objectives of Unilever Introduction P&G Restructuring Effects Organisation structure at UNILEVER • Become lean and mean(Retrenchment). •Focus on sales maximizing products. •Reduce number of SKUs. •Improve working capital management. •Maximize margins by minimizing costs. • Expediting DM process by changing operations • Want incremental change by increasing sales in tier 2 &3 cities.
- 19. Introduction P&G Restructuring Effects Organisation structure at UNILEVER • UNILEVER being a multiproduct organisation, enjoys autonomy to manage the products on their own through SBUs. • VISIBILITY being their core strategy, always adopted the front bench strategy in any retail store. • Achieving price efficiency- by rationalising the middle level managerial talents. • increase from 3 to 7 marketing headquarters.