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Procter and Gamble Environmental Analysis

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Environmental Analysis

The PESTEL model and mega trend analysis are used to complete the environmental analysis.

Economically, The Cosmetic and Beauty Products Manufacturing industry produces goods in two separate product lines which are nondiscretionary and premium goods. The nondiscretionary products line contains everyday essential goods including shampoos and deodorants that are in demand even when prices increase or disposable income decreases. The fact that these nondiscretionary products contribute majority of the industry revenue supports steady industry profitability. The most influential dimension of PESTEL analysis is technology. Research and Development has significantly influencing this industry. The introduction of new products has boosted demand, and the promises of younger looking skin and healthier hair have kept industry companies profitable. Companies invest in product development not only for bringing in new products, but also for advocating prestigious brand and sustaining market share. Overall, as the technology, revenue, and demand steadily growing as indicated in PESTEL analysis, so is the industry profitability. The mega trend of the industry is product innovation and reformulation. Research and development is an increasingly important investment for operators. In order to be beneficial from product development, companies also need to invest in marketing to promote and explain their products. Besides, environmental concern is growing reflected by changes in the production process and packaging of industry products.

Competitive Analysis

The Porter Five Forces model is used to complete the competitive analysis.
As analyzed, the Cosmetics and Beauty Products Manufacturing industry has moderate level of barriers to entry and threat from buyers, low level of threat from suppliers, and high level of threat from substitute

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