Procter & Gamble needs to be more agile, says new CEO David Taylor
Company has been shrinking its portfolio to focus on faster-growing brands such as Tide detergent and Gillette shaving products.
Procter & Gamble Co needs to be more nimble in its decision-making, Chief Executive David Taylor said in his first interaction with analysts after taking the helm in November. Analysts have said the world's largest consumer products company should split itself up into more manageable businesses so that regional centres are given more control.
The management has also been criticized for being too slow in reacting to changing trends in key markets such as China. "A few years ago we got too central and global and too slow to address market opportunities. We need more direct ownership for our regional managers all the way to the store shelf," Taylor said at an analyst conference in New York.
P&G, which has posted declines in sales for the last six quarters, has been shrinking its portfolio to focus on faster-growing brands such as Tide detergent and Gillette shaving products."Taylor's diagnosis is correct and it is encouraging to hear someone talk about the root of the problem," said Neil Saunders, CEO of retail research firm Conlumino."While changing the company's operations is very challenging, (Taylor) does instil confidence that he is going to enact change to bring about a more nimble company."
Taylor offered few surprises during the conference but said the company would not move around talent as often as it had.
That may help P&G improve its performance in markets such as China - the world's second-largest economy - where it has lost market share to nimbler rivals and local players."In many ways we looked at China little bit too much as a developing market, as opposed to the most discerning consumers in the world," Chief Financial Officer Jon Moeller said at the conference.
Moeller said the company was now seeking to make the most of China's removal of its one-child policy and a growing preference to premium-priced products.
While the company does not break down its sales geographically, Moeller said on a post-earnings conference call in January that sales in China were "significantly down" compared with a year earlier.
P&G's shares have risen 7.3 percent since Jan. 26, when it reported second-quarter results. The stock, a component of the Dow Jones industrial average, had fallen nearly 13 percent in 2015, compared with a 2.2 percent drop in the index.