P&G 2009 Annual Report – AnnualReports.com - Procter & Gamble

Bob McDonald
President and Chief Executive Officer
THE POWER OF PURPOSE
In fact, leading change on a foundation of continuity has been at
the heart of P&G’s success throughout its history. P&G will be
172 years old this October. We have grown through multiple economic
cycles: boom years, recessions, the Great Depression. We’ve
also grown in the face of unrelenting change: two world wars,
economic crises, massive technological change, significant demographic
shifts and continuously changing consumer expectations.
Despite all this, P&G’s total shareholder return has outperformed
the industry and broader markets over the long term. Why?
I believe it comes down to one simple and remarkably constant
factor: the clarity and constancy of P&G’s Purpose. Since the
Company was founded, we’ve been in the business of providing
daily essentials that improve the quality of people’s lives. We
help people care for their babies, pets and homes. We make
everyday chores easier to do. We help people look and feel
better. We’ve stayed true to the inspiring Purpose of touching
and improving people’s lives in meaningful ways.
It’s at times like we’re living in today —when change is volatile
and unsettling, when norms we’re accustomed to no longer
seem certain —that clarity of Purpose matters more than ever.
More than a year ago, A.G. and I, along with the vice chairs and
other senior leaders, began the effort to renew P&G’s strategies.
We began this work with P&G’s Purpose in mind. We have now
updated the Company’s growth strategies and identified a few
critical interventions needed to strengthen our businesses —fully
acknowledging the economic crisis in front of us but equally
focused on the longer-term growth of our Company. I want to
use this, my first letter to shareholders as CEO, to explain our
choices and decisions. This will help you to clearly see P&G’s
vision for growth in the decade ahead.
The Procter & Gamble Company 5
P&G has a solid foundation for growth. Our strategies are working.
Our billion-dollar and half-billion-dollar brands are among the strongest
in the world. P&G’s core strengths are those that matter most to winning
in our industry. Our relationships with retailers, suppliers and innovation
partners are enormous sources of competitive advantage. And the leadership
team now in place has been carefully groomed through experience and
coaching to lead P&G in the decade ahead. We are building on a rock-solid
foundation of continuity. This is one of P&G’s greatest advantages.
PURPOSE-INSPIRED GROWTH STRATEGY:
“WHERE TO PLAY” CHOICES
Our single, unifying growth strategy is tightly linked to our
Purpose: “We will grow by touching and improving the lives of
more consumers in more parts of the world…more completely.”
Specifically, we will:
��Grow our leading global brands and core categories —
with an unrelenting focus on innovation
��Build business with underserved and unserved consumers
��Continue to grow and develop faster-growing, structurally
attractive businesses with global leadership potential.
We will create abundant growth opportunities in each of
these areas.
1) Growing our Core
Our billion-dollar brands and aspiring billion-dollar brands —
43 brands in total —represent 85% of P&G’s sales and more
than 90% of profit.
We will continue to focus sharply on our core businesses and
brands because this is the primary way we touch and improve
lives —and there is plenty of room to keep growing our core
brands and categories.
��Global Household Care is a $200 billion market —and P&G’s
global share is about 20%.
��Consumer Health Care is a $240 billion market; P&G is a
market leader with just a 5% share.
��Beauty & Grooming is a $300 billion market and P&G is
leading, but with only a 13% share.