The Procter & Gamble Company (PG), Colgate-Palmolive Company (CL), Unilever plc (ADR) (UL): Will a CEO Transition Help This Company to Regain Its Lost Ground?

The Procter & Gamble Company (NYSE:PG)’s recent quarterly results were discouraging, with the company falling short on both sales and margin numbers. To arrest this decline, The Procter & Gamble Company (NYSE:PG) re-appointed A.G. Lafley as the new CEO. He has a great task at hand to revive the company’s fortunes and he has to stand up to high investor expectations. Let’s take a look on The Procter & Gamble Company (NYSE:PG)’s future prospects in detail.

Return of the former CEO

A.G. Lafley returned to the company as Chairman, President and CEO, replacing Bob McDonald. Lafley served as CEO from 2000 to 2009, with major acquisitions worth $69 billion took place during his previous tenure including Gillette, Wella and Clairol. All of these acquisitions helped The Procter & Gamble Company (NYSE:PG) in the emerging markets as well as in their respective segments.

Lafley was quite successful in providing good results during his last tenure and created a strong reputation both inside and outside of The Procter & Gamble Company (NYSE:PG). He is familiar with the company and its investors. The company’s shares were up after the announcement that Lafley was returning. The sudden change in the top position has raised lots of questions about the company’s performance, however. We shall have to wait to see what the results coming out from his leadership are and where he is taking the company to.

Source: Google Finance, share price after Lafley’s appointment as CEO

$10 billion cost cutting plan

The company has in place a $10 billion cost cutting program. Under this program, The Procter & Gamble Company (NYSE:PG) will try to control its overall costs by cutting down on overhead costs, marketing spending and the cost of goods sold. It has already exceeded its plan of cutting down 5,700 jobs and removed 5,850 non-manufacturing employees. This program aims to cut down $10 billion in costs over a four-year period ending in 2016. This cost cutting will help the company to improve productivity and rapid expansion in both developed and developing markets. The company plans to utilize these funds for better marketing in North America and to build 20 new manufacturing units in emerging markets.

Restructuring

The Company has announced several changes in its management and has divided its entire business into four sectors. These sectors are “Baby, Feminine and family care,” led by Martin Riant, “Global Beauty,” led by Deborah Henretta, “Health and Grooming,” led by David Taylor, and “Fabric and home care,” led by Giovanni Ciserani. The company expects increased efficiency, better productivity and pointed brand expansion through this restructuring.

Procter and Gamble has also made changes in North America’s top management with the appointment of Dimitri Panayotopoulos as Vice Chairman and Melanie Healey as Group President of North America. This will help the company make concrete strategies at the business-unit level. This will also help it to better manage its portfolio of products under each segment. Through this division, the company can take on its competitors more directly.