This paper addresses the classic case of the challenges Proctor and Gamble (P&G) faced in the 1970s and 1980s, both to its European organisational structure and to the imminent launch of its new Heavy Duty Liquid (HDL) Vizir.
It will be argued that the company’s European structure will have a direct impact on a possible Vizir launch and on future product launches, using an in-depth analysis of both the current P&G situation at that time and feasible alternative strategies available to the organisation.
Chapter two will give a brief but concise overview of the P&G situation in the 1980s; chapter three will discuss three different approaches available to P&G in organising its European operations, and recommend the most suitable approach; chapter four will then examine the launch options for Vizir and present the most favourable strategy; finally, chapter five will summarise the findings and highlight the recommendations of this report, briefly considering possible implementations and evaluations of the suggested strategies.
Table of Contents
1 INTRODUCTION
2 CASE OVERVIEW
3 FUTURE EUROPEAN STRUCTURE
3.1 A MULTINATIONAL APPROACH
3.2 A EUROPEAN APPROACH
3.3 A TRANSNATIONAL APPROACH
3.4 CONCLUSION FUTURE EUROPEAN STRUCTURE
4 VIZIR LAUNCH IN EUROPE
4.1 THE VIZIR PROJECT
4.2 SHOULD VIZIR LAUNCH NATIONALLY IN GERMANY?
4.3 SHOULD VIZIR LAUNCH AS A EUROBRAND?
4.4 WHEN SHOULD VIZIR LAUNCH?
4.5 CONCLUSION VIZIR LAUNCH EUROPE
5 CONCLUSION AND RECOMMENDATIONS
5.1 IMPLEMENTATION
5.2 EVALUATION
Research Objectives and Themes
This report examines the organizational and strategic challenges faced by Procter & Gamble in the 1970s and 1980s, specifically focusing on the transition from a traditional multinational structure to a more integrated transnational approach, and evaluating the optimal launch strategy for the new Heavy Duty Liquid detergent, Vizir.
- Analysis of multinational, European, and transnational organizational models.
- Evaluation of regional vs. Eurobrand product launch strategies.
- Assessment of market timing and competitive pre-emption.
- Implementation of cross-border knowledge transfer and coordination.
- Strategies for overcoming organizational resistance to structural change.
Excerpt from the Book
4.2 Should Vizir Launch Nationally in Germany?
In June 1981, upon review of the German test-market launch of Vizir, Ferguson, P&G’s European vice president at that time, had the option of launching the new HDL brand either in Germany or as a 'Eurobrand'.
At this time, the brand group was based in Germany, whose market comprised one-fifth of European company sales at this time. The majority of testing of Formula SB (a renamed HDL detergent) since 1977 had been carried out in the German market, resulting in positive test results in late 1976 and the eventual breakthrough against Henkel's New Persil in October 1980 by 53 to 47 per cent.
The competitive advantage of Vizir was dependent on its abilities to remove greasy stains at low temperatures and match powder performance on enzymatic stains and whiteness. Although these claims were similar to Ariel's, the market-leading low-temperature powder in 1981, selected market research data (Bartlett and Ghoshal 2000, Exhibit 4, p644) reveals that these properties were most suited to a launch in Germany where most frequent stains were cited as ‘grease-based’ and the majority of respondents desired improvements ‘in washes to 60°‘. As one general manager noted, ‘There is no such thing as a Euro-customer’ (Bartlett and Ghoshal 2000, p646). Attempting to replicate these advantages as unique selling points in other countries could potentially weaken product positioning in the European because, despite convergence in European washing habits, it was argued that significant differences continued to outweigh similarities in consumer trends.
Summary of Chapters
1 INTRODUCTION: Outlines the scope of the report regarding P&G’s organizational structure and the upcoming Vizir launch in the 1980s.
2 CASE OVERVIEW: Provides the historical background of P&G’s polycentric structure and the strategic pressure to move toward more coordinated operations.
3 FUTURE EUROPEAN STRUCTURE: Discusses the transition from multinational to transnational organizational models to improve efficiency and reduce costs.
4 VIZIR LAUNCH IN EUROPE: Investigates the specific options for launching Vizir, comparing a national German launch versus a broader Eurobrand approach.
5 CONCLUSION AND RECOMMENDATIONS: Synthesizes the findings and proposes immediate adoption of the transnational model combined with a Eurobrand launch strategy.
Keywords
Procter & Gamble, Vizir, Transnational Strategy, Eurobrand, Multinational Structure, Organizational Change, Heavy Duty Liquid, Market Launch, Competitive Advantage, First Mover Advantage, Subsidiary Autonomy, Knowledge Transfer, Consumer Habits.
Frequently Asked Questions
What is the core focus of this publication?
The paper focuses on the organizational and marketing challenges Procter & Gamble faced during the 1970s and 1980s, particularly the transformation of its European structure and the strategic market entry of the detergent brand Vizir.
What are the primary thematic areas addressed?
The report covers organizational design, the shift from local autonomy to transnational integration, product development cycles, and regional versus pan-European branding strategies.
What is the primary research goal?
The objective is to determine the most effective organizational structure for P&G in Europe and to provide a recommendation on whether Vizir should be launched as a local German product or as a regional Eurobrand.
What methodology is applied in this analysis?
The analysis utilizes a comprehensive review of existing case studies and organizational theory—specifically the work of Bartlett and Ghoshal—to evaluate strategic feasibility, cost-benefit ratios, and market risk.
What topics are discussed in the main body?
The main body examines three structural approaches (multinational, European, transnational), evaluates the specific launch timing and geographical scope for Vizir, and outlines implementation and evaluation frameworks.
Which keywords best characterize this work?
Key terms include Transnational Strategy, Eurobrand, P&G, Organizational Change, and First Mover Advantage.
How does the transnational approach specifically impact local subsidiary autonomy?
The report identifies a conflict where subsidiaries must sacrifice some traditional autonomy to form interdependent links, which is necessary to achieve economies of scale and cross-border knowledge transfer.
Why is a Eurobrand launch recommended over a national one?
The authors argue that a Eurobrand launch captures first-mover advantage across the continent and leverages economies of scale, which outweighs the risks associated with potential variations in local consumer habits.
- Quote paper
- Ben Beiske (Author), Jennifer Murray (Author), Stuart White (Author), 2002, Procter & Gamble Europe: Vizir Launch, Munich, GRIN Verlag, https://www.grin.com/document/15456
