Procter And Gamble Co
The Procter & Gamble Company is focused on providing branded products of superior
quality and value to improve the lives of the world’s consumers. The Company was
incorporated in Ohio in 1905, having been built from a business founded in 1837
by William Procter and James Gamble. Today, we market over 300 branded products
in more than 160 countries.
The Company manages its business in five product segments: Fabric and Home
Care; Baby and Family Care; Beauty Care; Health Care; and Snacks and Beverages.
None of these segments is highly seasonal. Many of the factors necessary for
an understanding of these five segments are similar. Operating margins of the
individual segments vary slightly due to nature of the materials and processes
used to manufacture the products, the capital intensity of the businesses and
differences in selling, general and administrative expenses as a percent of
net sales.
Business Model. Our business model relies on the continued growth and success
of existing brands and products and the creation of new products. The markets
and industry segments in which we offer our products are highly competitive.
We work collaboratively with our customers to improve the in-store presence
of our products and win the “first moment of truth” – when a consumer is shopping
in the store. We must also win the “second moment of truth” – when a consumer
uses the product, evaluates how well it met his or her expectations and whether
it was a good value. We believe we must continue to provide new, innovative
products and branding to the consumer in order to grow our business. Basic research
and product development activities, designed to enable sustained organic growth,
continued to carry a high priority during the past fiscal year. While many of
the benefits from these efforts will not be realized until future years, the
Company believes these activities demonstrate its commitment to future growth.
Our customers include mass merchandisers, grocery stores, membership club stores
and drug stores. Sales to Wal-Mart Stores, Inc. and its affiliates represent
approximately 17% of our total revenue.
Sources and Availability of Materials. Almost all of the raw and packaging
materials used by the Company are purchased from others, some of whom are single-source
suppliers. Some raw materials, primarily chemicals, are produced by the Company
for further use in the manufacturing process. In addition, fuel and natural
gas are important commodities used in our plants and in the trucks used to deliver
our products to customers.
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