Dr. E. Montgomery
BUS 508 Contemporary Business
Mergers and Acquisitions
When Proctor and Gamble acquired Gillette Products in 2005, Warren Buffet stated “This was a dream deal, this acquisition would create the greatest consumer products company in the world”. (Englishe, 2011) This is one reason why P&G chose to take on the major brand. Other than being known for their razors, Gillette’s products include Duracell batteries, Oral-B, and Braun. This acquisition meant Proctor and Gamble would take much control over the grocery market shelves. Control was everything to P&G at the time of this acquisition. P&G opened a huge door for Gillette, a door ...view middle of the document...
G. Lafley, CEO was focused on building a structure that would be responsible for new improvements. P& G wanted to reestablish value creation as a top measure of success, invest more into new innovations and market tools, continue to accelerate productivity and improve operating execution.
Proctor and Gamble’s organizational structure prior to the acquisition of Gillette was not very different from its current state. The organizational structure of P&G is important in its capability to grow. The combination of global level benefits and local scale focus to win with their consumers and retailers are the central foundation of the structure. After the acquisition of Gillette in 2005, P&G decided to group its global business services as well as its corporate functions. The purpose of grouping the sectors of this business is to provide the needed attention to each piece of this organizational puzzle.(Marks, 2005) P&G anticipates the acquisition of other product lines in the future. The new structure has given P&G the opportunity to provide my job security and market development tools.
Gillette, contrary to belief maintained a strong organizational structure prior to their merge with P&G. The acquisition was not an action plan for Gillette, but a more so a development plan for P&G.(Denison, 1990) Gillette was introduced to the retail market in 1901. Known for its “grooming” products, i.e. razor, razor blades, and more; Gillette was a leader in its line of business. Gillette had a very autocratic organizational structure. More than sixty percent of the Gillette organization’s employees were based outside of the United States. More than 70% of its profit was made outside of the U.S. Proctor and Gamble saw an opportunity to bring that type of global success to the home front. (Dodgeson & Salter, 2006) Although Gillette had the U.S. im mind they still wanted to see the global increase. They wanted to build up total brand value, put more global focus on consumer products, and become the leading global competitor in product quality. Becoming the leader in the “quality market” would be one of Gillette’s toughest challenges. This would mean revamping the structure of the organization to better cater to consumer needs. The Gillette Health and Grooming Market were formed. In 1995 Gillette saw an opportunity to make its product the most consumer friendly product on the shelves. Gillette Sensitive blade and Gillette Sensor for Women were now available to consumers. (Dodgeson & Salter, 2006) These new and improved products not only met external needs but this also meant more careers for the Gillette...