Scenario: Consumer Products Inc. (CPI) Group Project

 Introduction

Consumer Product Inc. is located in phoenix Arizona and distributes its products to cities like Seattle, Phoenix Portland, Los Angeles, and San Francisco.  The company has good reputation and high potential to compete with its counterparts which are global business. Decision making of the company managers is the problem because they are not willing to venture into new markets available globally. The company deals with highly demandable consumer products like super clean products, tooth paste and shades of Youth which are beauty brands and cosmetics (P&G, 2010).

There is need for the company to expand through global venture and to compete with giant companies like Gillette, Procter and Gamble, Proctor and Unilever. Such a strategy would keep the company in its survival and success.  For this to happen it is important to examine the global macroeconomic issues and the microeconomic dynamics seen in the industry. Based on these aspects we as the board can decide on what to do to save the firm from collapsing.

The consumer Industry

Consumer Products industry is one of the most dynamic in the market with the highly changing and dramatically evolving needs of consumers. It is an industry that is determined by what and individual can purchase.  The main aspects that Consumer products Industry deals with are cosmetics, appliances, toiletries, other household items food and beverages.  These products are less or staple discretionary (Global edge, 2010).

The consumer products industry contributes more that two thirds to world trade economy and plays a significant role in the development and growth of world wide or global economy. In many countries, the consumer industry contributes significant portions of its gross domestic products (GDP). This industry has also promoted other industries like retail and advertising (Global Edge consumer products, 2010) the industry has many key players such as consumer product inc., Procter & Gamble, Unilever, Colgate, and Gillette (Global edge, 2010).

Market trend

By taking advantage of modern technology, the consumer products industry has the opportunity of expanding and growth.  For example, the internet can add quality of interactive communication leading to the promotion of product identification and the management of customer relationship. Another aspect of the industry is that most of the key players have increased their competitive advantage through, alliances acquisition and mergers (Global edge, 2010).

Thirdly, the trend of consumer products industry is moving towards the manufacture of emerging markets such as product for the growing population of baby boomers in need of beauty cosmetics and foods to keep them young. A big challenge facing the industry is the risks of expanding to international markets. The major key players in the industry are Eastman Kodak, Colgate- Palmolive, Nike, Unilever, Colgate-Palmolive, Johnson and Johnson, Whirlpool and Protector and Gamble. By examining Procter and Gamble Company we can compare it to Consumer Products Inc (Global edge, 2010).

Revenues and earnings

For the business sector of P&G its personal care and household products, the revenue in 2009 was $83, 508, profits $11.13, Assets $144. 4. market value $203.67. P&G merged in 2005 with Gillette for business expansion and growth. By June 2010, P&G was operating at net sale of 78, 938 which is higher than previous years; which are 2009 ($76,694 and 2008($79,257). By analyzing this company’s success over the past years, various aspects have to be considered.

These are its strategies, brands its innovation and organization design. The P&G people are the driving force of the company who are committed to the company purpose, principles and values. These are the aspects clearly visible in the P&G financial reporting for every year. Its financial reports are of high quality and reported with the highest form of integrity (P&G, 2010).

Net earnings

P&G growth is attributed to its global diversity into new market ventures around the globe. With its sets goals, the company continues to grow in all aspects. These goals have resulted in to the achievement of delivering sales of sustainable innovation and development of new products, reduction of operation cost on resources like CO2, water and energy, and increased its social roles in development such as the provision of clean water. By examining at the chart below, we can note the increasing operational cash flow of the company compared to previous years (P&G, 2010).

Cash flow operation

The cash flow of the company determines the future dividends and prices of the company.

Summary of P&G activities

Conclusion

From analyzing P&G as one of the competitor of Consumer Products Inc. (CPI), we can examine the macroeconomics of the global market. The company’s sales were affected in 2008 due to global recession.  There is also the changing consumer behavior.  Protector and Gamble has key and imperative strategies which the managers in this organization can consider.

These strategies include building brand loyalty and awareness, operating as a full chain supplier and delivering innovative products according to the needs of the consumers.  Consumer Products Inc. (CPI) can also see the importance of product differentiation through innovation and development of products. These are the strategies that can be vital for our sustainability and growth. We can make our business to have low costs of operation leading to lowered prices of our goods as we expand to international markets (Luo, 2009).

Reference

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