1. Fundamentals Bender Trust Project Dec. 2011
Little Investment Bankers of Rutgers
Rutgers University
Josselinne Rodriguez, Michael Kornblum, & Dor Alaluf
Dec. 2011

2. Procter & Gamble Company Overview
A Fortune 500 American multinational corporation manufactures of a wide range of consumer goods
Headquartered in downtown Cincinnati, Ohio
Serves approximately 4.4 billion consumers around the world with strong portfolio of trusted, quality, leading brands.
Known globally for its household and personal goods in the following categories:
Beauty products (e.g. Gillette, Old Spice, CoverGirl)
Health & Well-Being (e.g. Crest, Oral-B)
Household Care (e.g. Ace, Tide, Duracell)
Continuously expands its products offering through in-house development and acquisitions
P&G serves approximately 4.4 billion people around the world with its brands. The Company has one of the strongest portfolios of trusted, quality, leadership brands, including Pampers(R), Tide(R), Ariel(R), Always(R), Whisper(R), Pantene(R), Mach3(R), Bounty(R), Dawn(R), Fairy(R), Gain(R), Pringles(R), Charmin(R), Downy(R), Lenor(R), Iams(R), Crest(R), Oral-B(R), Duracell(R), Olay(R), Head & Shoulders(R), Wella(R), Gillette(R), Braun(R), Fusion(R), Ace(R), Febreze(R), and Ambi Pur(R). The P&G community includes operations in about 80 countries worldwide.
Beauty (34.0% of 2010 sales, 38% of 2010 net income)[9]PG K, Note 11, page 70</ref>: The Beauty GBU includes all hair and skin products, medications, razors, electric shavers, and batteries. This business unit includes several product lines acquired when the P&G bought consumer products company Gillette in Proctor & Gamble's global market share in blades and razors is 70%
.Health and Well-Being (18.3% of 2010 sales, 20% of 2010 net income)[9]: The Health and Well-Being GBU provides oral care, feminine health, pharmaceuticals, snacks, coffee, and pet care products.[12] In oral care, the company has the number two market share position at 20% globally. [12] In potato chips, the company's Pringles brand holds a market share of approximately 10%. [12]
Household Care (48.4% of 2010 sales, 50% of 2010 net income)[9]: The Household Care GBU manufactures a wide range of products from laundry detergent to diapers. The company's baby care market

3. Procter & Gamble Company Overview
P&G serves approximately 4.4 billion people around the world with its brands. The Company has one of the strongest portfolios of trusted, quality, leadership brands, including Pampers(R), Tide(R), Ariel(R), Always(R), Whisper(R), Pantene(R), Mach3(R), Bounty(R), Dawn(R), Fairy(R), Gain(R), Pringles(R), Charmin(R), Downy(R), Lenor(R), Iams(R), Crest(R), Oral-B(R), Duracell(R), Olay(R), Head & Shoulders(R), Wella(R), Gillette(R), Braun(R), Fusion(R), Ace(R), Febreze(R), and Ambi Pur(R). The P&G community includes operations in about 80 countries worldwide.
Beauty (34.0% of 2010 sales, 38% of 2010 net income)[9]PG K, Note 11, page 70</ref>: The Beauty GBU includes all hair and skin products, medications, razors, electric shavers, and batteries. This business unit includes several product lines acquired when the P&G bought consumer products company Gillette in Proctor & Gamble's global market share in blades and razors is 70%
.Health and Well-Being (18.3% of 2010 sales, 20% of 2010 net income)[9]: The Health and Well-Being GBU provides oral care, feminine health, pharmaceuticals, snacks, coffee, and pet care products.[12] In oral care, the company has the number two market share position at 20% globally. [12] In potato chips, the company's Pringles brand holds a market share of approximately 10%. [12]
Household Care (48.4% of 2010 sales, 50% of 2010 net income)[9]: The Household Care GBU manufactures a wide range of products from laundry detergent to diapers. The company's baby care market

4. Value Trends

5. Procter & Gamble Stock Information
Symbol (NYSE): PG
Current Price (11/25/2011): $61.00
Volume (11/25/2011): 4,734,711
52 Week Range:
S&P 500: 1,257.81
2010 A
2011 E
2012 E
EPS
3.67
4.19
4.58
P/E
17.24
15.10
13.82
S&P EPS
77.35
89.55
98.14
S&P P/E
16.26
14.05
12.82
Relative P/E
106%
107%
108%

6. Procter & Gamble Stock Behavior Chart

7. Procter & Gamble Porter’s 5 Forces Analysis

8. Procter & Gamble Buyers
Mass merchandisers
Grocery stores
Membership club stores
Drug stores
Neighborhood stores
Average
consumer
Problem: High dependency on mass consumers

9. Procter & Gamble Suppliers
Suppliers: 6 of the top 80,000 are:
Havpak Inc.
Hayco Ltd.
Nelson Packaging Company Inc.
Nippon Shokubai Company Ltd.
Novozymes
Pegas Nonwovens
Strong codependent supplier relationship

10. Barriers to Entry Entrance
Brand-building
Large and diverse product range
Consumer confidence and loyalty in brand
Understanding of consumer needs as a point for innovation
more production  more consumption  more profits

11. Threats to Market Share
Niche market firms
Example: Mac vs. Cover girl
Lack of presence in emerging markets (i.e. BRIC nations)
Due to economic downturns, consumer spending has decreased globally.
Threats
• There is a cut throat competition in the fast moving consumer’s goods markets today. Companies like Kimberly Clark, Unilever, Johnsons & Johnsons and Colgate-Palmolive etc pose a serious threat to its market share in different countries.
• The competitors are making their product portfolios diverse day b day and using different marketing and promotional strategies to increase their market share.
• In the market many substitutes are available for P & G products at cheaper prices.
• The private label growth is also a serious threat to the P & G’s market share.
• Due to recession, the consumer spending has decreased globally. Also, the prices for raw materials are increasing so cost to the company is increasing.

12. Procter & Gamble Substitutes
Large number of substitutes
Unilever (UL)
L’Oreal
Kimberly-Clarke
Clorox Company (CLX)
However
Continuing product differentiation
Strong research & development division
Go-to market capabilities always looking to expand & develop with consumer needs as a guide
Unilever-P&G generates approximately one and half times the revenue than its closest competitor Unilever (UL)
(Johnson & Johnson, Kimberly-Clarke, Unilever)

13. Leading Household Products Ranked by sales
Company
Sales
(MIL $)
Net Income
Procter & Gamble
70,029
11,291
Unilever
57,118
7449
L’Oreal
24,726
2,909
Kimberly- Clark
19,145
1,690
Colgate-Palmolive
15,330
1,957
Kao
12,993
656
Avon
19589
875
Reckitt Benckiser
9,161
1,654
Estee Lauder
7,324
218
Clorox
5,450
537
Church &Dwight
2,422
195
Alberto-Culver
1443
106
Revlon
1,347 58
Leading Household Products Ranked by sales

14. Procter & Gamble Industry Competition

15. Procter & Gamble Industry Competition
Significant competition in 3 Industries where P&G offers products and services in:
Advantages:
Strong consumer presence and confidence
Strong relations with suppliers
i.e. Target, Walmart
Diverse product range in all 3 sectors
Large market share
Disadvantages:
Needs international expansion
No strong online presence
Loss of local jobs, outsourcing manufacturing and back-office operations work overseas  cheap labor
Consumer Understanding: Interact with more then 5 million consumers a year in 100 countries. 20,000 reaserch studies & invest $400 million annually in consumer understanding. (ak.a becoming more competitive)!
Innovation: Widely recognized .P&G has had 132 products on top 25 Pacesetters list- 5th place on Fortune 2011 list of the World’s Most Admired Companies & won 22 “Product of the Year” recognitions.
Brand-Building- Strongest porfolio with 50 leadership brands & which together make up 90% of P&Gs sales and more than 90% of profits. 24 of this brands generate 1 Billillion in annual sales.
Scale: low operating cost

16. Stock Recommendation:
BUY
It’s a steady Company
People are looking for a safer investment
This may be more for people who are close to retirement
50s & up