A Strategic Game Between Unilever and Procter and Gamble in India

Competition in the detergent market in India is of interest for several reasons on both a macro- and micro-economic levels. On a macroeconomic level, one-sixth of the world’s population is in India. Furthermore, GDP per capita measurements indicate a steady rise in income levels in this newly industrializing nation. From a microeconomic perspective, this paper addresses a strategic game involving price wars between two market leaders in the detergent market, Unilever and Procter & Gamble (P&G). Lastly, ethical considerations will be discussed as it relates to the importance of considering exogenous ‘losers’ as a result of engaged players in this strategic games; namely, mom and pop Indian shops that sell detergent products.

Unilever has had a strong, unmatched foothold in India since 1888, when it sold its first bar of soap in the country. As an Anglo-Dutch company, Unilever has worked hard over a period of nearly 150 years to build its dominant position in emerging markets, such as India. The organizational success in executing this objective successfully is evident through the nearly 70-80% market share enjoyed by Unilever in the Indian detergent market.

P&G is a direct competitor with Unilever and has been using price wars, as well as aggressive advertising campaigns, to whittle away at Unilever’s market share. The cost of this strategy in the short run has been pressures endured by both company’s operating margins and bottom-line financial results; however, P&G has traditionally viewed this as a viable long-term strategy. In order for the company to be successful, P&G must be diligent and willing to accept losses today in order to profit from potential future gains.

The uphill battle faced by P&G is clear, as Unilever is an early adopter in this market, while P&G just entered the Indian market in 1993. To date, P&G have yet to establish the full value of their brand equity realized in other overseas markets. Strategically, the Indian market was essentially flooded by P&G with their products as an attempt to drive prices below Unilever’s marginal costs. P&G has been modestly successful in obtaining control of some additional market share in India over time, as Unilever has given up their once 90% market share held since 2004.

The game in which Unilever and P&G are playing will now be explored in greater detail. Neither player has knowledge of the other’s actions, as both moves simultaneously. Furthermore, each company has a strategy of either pricing competitively (i.e., high prices) or engaging in a price war (i.e., low prices). This game is similar, in some respects, to the “Battle of the Sexes” strategic game, in which the Pareto optimal move is for one player to set high prices while the other is priced low, but both players actually want to set low prices. The Nash equilibrium in this game is one in which is the Pareto optimal move involves asymmetric payoffs: P&G continues to price their products at the low price while Unilever prices competitively. Unilever would prefer to collude with P&G – in that manner, both players would charge the high price.

Nonetheless, the cost to Unilever of this market payoff is cushioned by the fact that it has a strong market leadership position in the Indian market – especially in the areas of brand recognition and customer loyalty. In the short run, anyway, P&G’s strategies are minimally effective in scaling additional market share at Unilever’s loss. Both companies lose in this game by waging a price war because it would adversely affect both companies’ bottom lines, at least in the short run.

In reality, both companies act in a somewhat surprising manner by following the strategy of rigorous price cutting. M.S. Banga, CEO of Hindustan Lever Ltd., a subsidiary of Unilever responsible for the Indian business, justifies such a scenario with a claim that reiterates Unilever’s already very strong position that was built up over years, as well as the company’s determination to not just defend it, but to strengthen its market share. A.G. Lafley, CEO of P&G, highlights the fact that Unilever has been in India for many decades, and that India is a region worth aggressively pursuing market entry in the long-term.

Two important factors have been omitted from this game: (1) smaller competing firms; and (2) India’s competition policy. Obvious losers in this game would be the small mom and pop companies in India. These small players in this market have no viable alternative means of competing for any length of time in a scenario where the major players are engaged in a price war due to their limited capital to draw on.

This begs the question of whether it is ethical (or even legal) for Unilever and P&G, as oligopolies in the Indian market, to engage in price wars. Unfortunately, there is a less clear or direct answer to this question. One way to consider a possible response is to observe India’s competition policies, in which Unilever and P&G appear to be in violation of, which gives rise to the idea that both companies’ may be behaving in an unethical manner. According to India’s New Competition Policy, public enterprises are charged with preventing monopolistic, restrictive, and unfair practices. Included, are practices that are exclusionary to other players by creating a barrier to new entrants or forcing existing competitors out of the market.

Advocates of price wars, in the short run, would be Indian consumers because they are receiving the same quality products at a highly discounted price. Another ethical consideration may highlight the fact that many consumers in the Indian marketplace would otherwise have no access to quality detergent products, which are a required good in the pursuit of an acceptable standard of living. One fact remains: this story is unfolding in real time and many answers to these and related questions will require continued observation of the market dynamics between Unilever, P&G, and other players in India’s detergent market.

Pure and Simple Clean With Camay Bar Soap

All soaps are designed to clean, but not all such products achieve this goal with the same flair. When it comes to bar soaps, there is a wide range of options on the market. Some focus on deep cleaning, while others may strive to moisturize. Despite the vast variety, very few soaps can boast of a longstanding history of quality that comes close to the legacy of Camay Bar Soap.

Camay soap was first developed in the 1920s by the home product manufacturer Procter and Gamble. At that time, many soaps were heavily dyed and had numerous additives, making them abrasive to the skin. Due to the manufacturing process back then, many companies had trouble hiding the impurities in soap, and many companies overcompensated for these shortcomings by simply adding more chemicals to mask the appearance of any problematic areas. The result was often a bar of soap that looked attractive but did not leave soft or moisturized skin.

Instead of sticking to the crowd, Procter and Gamble focused on making an alternative to mainstream soaps, with a focus on purity and simplicity. Experts at the company worked to refine the process of making soap, focusing on using quality ingredients in order to ensure that no impurities resulted. With fewer impurities, the company had to use fewer additives, making for a revolutionary cleaning option. The ultimate result was Camay bar soap, which was first available to consumers in 1926.

In fact, Camay bar soap was so widely respected that it quickly became considered an elite option in personal hygiene. To this end, Procter and Gamble focused its advertising almost exclusively on women, giving the soap a soft, floral scent and distinctive pink packaging. As Camay bar soap continued to appeal to high-class consumers, Procter and Gamble fostered that reputation with the slogan that Camay soap was the soap for beautiful women. This tactic worked, easily cementing Camay’s place in the market. The pink box was a symbol of sophistication, and one spokeswoman for the soap included Luciana Pignatelli, an Italian socialite who readily appealed to high-class circles and women of elegance.

This rich history is nowhere near from over. Camay soap continues to be sold, making it a viable option for households and businesses around the world. Over the years, Camay bar soap has stayed true to the principles that it started with, offering purity and quality to customers around the world. Modern customers can appreciate that there are minimal additives in Camay soap. More than that, Camay soap has strong moisturizing properties, leaving skin soft and smooth.

Fortunately, purchasing Camay bar soap is easier than ever. Most retailers still carry Camay soap, which is quickly identified by its trademark pink packaging. However, for those looking to save some money on their soap purchase, it is also possible to turn to online retailers for discounted prices. Many of these retailers will carry Camay bar soap with options for bulk ordering. While ordering in bulk may seem extreme, it can be a useful way to save money and ensure that there is always an ample supply of soap for any need.

Overall, Camay bar soap has a proven history of pure and simple cleanliness, making it a powerful personal hygiene product that will likely appeal to customers for generations.

Procter and Gamble: A Buy or Sell?

Producing the necessities of the bathroom and other everyday items, Procter and Gamble (PG) continues to be an excellent investment in all areas. With marginal competition and loyalty from its workers, PG will provide investors with an excellent opportunity to achieve high capital gains.

Elusive to negativity, Procter and Gamble continues to follow its high respectability with its amazing fundamentals presented each quarter. Over the last four earning reports PG had beat expectations in terms of EPS all four times and beat revenue estimates each time as well. The laud extends to the PG’s excellent margins in terms of revenue, profit, and operating margins, and especially there should be high praise for PG doubling the amount of total assets over one year for this flourishing company. The P/E remains solid at around 23 which is supported for some reluctant investors with a great dividend payout of 1.24.

PG also has the reputation of providing long term investors with a steady persistent growth without too much volatility. While PG did falter a bit during late 2000 to 2001, the situation remained dubious for all equities of all sectors. However, unlike some of these other equities, PG remained resilient and in a matter of a few years returned back to its record high of near 65 points: an almost 100% increase over about five years.

With an inevitable recession approaching in the coming months, stocks like PG, equities that rise during times of economic downturns, tend to be the best acquisition for investors wagering this storm. While some investors may argue that PG is at an all time high and may be reluctant to purchase shares at such a price, I would make the argument that because of the economic problems the country is facing, the excellent fundamentals that PG provides, and the incredible steady nature which is advocated for long term investors, PG should have no problem being bought by big institutions in the future. Such a sentiment will do nothing but increase capital gains for consumers who hold or even buy PG at such a high price.

The History Behind Pampers And The Making Of Disposable Diapers

Victor Mills, an American chemical engineer proved that a grandpa knows more about the baby than a papa by revolutionizing child care with the invention of disposable diapers through Pampers. Marketed by the esteemed and prestigious company Procter and Gamble, Pampers is one of the leading brands in baby care and baby care products throughout the globe. Pampers was the first to develop the concept of easy-to-use diapers and is thus popular among parents since the time of its birth. Pampers has come up with different products with innovative designs and perfect understanding of a baby’s need and a mother’s convenience.

Brief lowdown on the creation of Pampers

In the year 1950, Victor Mills who was working under Procter & Gamble Co. was looking for an easy way to change his grandson’s diapers as he disliked changing cloth diapers. He wanted to make diaper changing convenient thus assigned few researchers in the P&G’s Explanatory Division to look into the practicality of making disposable diapers. Mills’s started working on diapers and tested the product on his newborn grandchild. He could clearly see the disadvantages of cloth diapers and realised that disposable diapers could relieve parents from worry along with making kids happy. The first disposable diaper from Pampers was shipped in 1961 but the problem that P&G faced was that no one knew where to stock Pampers. It was found in supermarkets and even in drug stores. The early diapers were bulky and fluffy, and were attached with pins. In 1966, Pampers lofted a ‘wingfold’ design diapers. With the passing years, Pampers added an extra feature to its diapers by replacing the pin with real tape so that parents could see what was going on in the diaper without hurting their finger. By the mid 80’s Pampers had introduced value packs with additional diapers along with thin diapers that came with absorbent gels. Thinner diapers were introduced in the 1990s and were known as Ultra Dry Thins. These diapers absorbed moisture completely and sprang back to pull even more. Gender-specific diapers were introduced in the early 1990s but by the end of the decade it returned to unisex diapers. Thin diapers features stretch panel on the waist and elastic leg gathers for better fit and comfort. Currently, Pampers latest catalogue features diapers with extra breathability along with Premium and Baby-Dry diapers. Protected with a layer of body lotion, these diapers help prevent rash, dryness and itchiness leaving baby’s bottom soft and supple.

Buy Pampers diapers online

Catering you with the different products from Pampers, online shopping sites offer quick delivery and are convenient than supermarkets as you do not have to wait in a queue or go around with a basket from one aisle to the other in search of your baby’s baby care products. You can buy Pampers diapers, nappies & cloth diapers and wipes online and make your payments through credit or debit card and netbanking. You can also opt for cash on delivery.

Procter and Gamble’s Acquisition of Gillette Analysis

P&G’s businesses were organized into three product based segments: household care, health, baby and family care, and beauty care. P&G became a national consumer products company with 30 brands and production facilities across the US and Canada by 1890. P&G also experienced an increase of more than 40% in their revenues between 2001 and 2005. In 2005, P&G executed its largest acquisition with the takeover of Gillette Company.

I. Reasons for P&G’s Acquisition of Gillette

A) Companies have complementary strengths in product innovation and selling activities

P&G has a distribution system that is internationally spread out as compared to Gillette. Management is expected to take Gillette products into developing markets such as China that were served by P&G, but not Gillette immediately after the merger. P&G and Gillette also plan to share their R&D costs to further develop their products to better suit their customer’s needs.

B) Stronger lineup of brands

Gillette was a well-known brand in the razor market and it also has a 70% market share in the global razor market. It has a strong competitive position and Gillette has been successful in persuading their customers to trade up to higher-price-point personal care items. Gillette’s customers also tended to be highly loyal. Acquisition of Gillette will definitely provide a competitive edge to P&G as Gillette is will provide a stronger lineup of brands to P&G in the consumer products industry.

C) Generate additional opportunities for economies of scale

Gillette has a huge market share on its own while P&G has an internationally spread out distribution system. Combining these companies’ strengths together will enable both P&G and Gillette to reduce per unit cost by achieving economies of scale.

D) Enhance relationships and bargaining power with retail buyers

The strong competitive position that Gillette has in the consumer products industry will increase the bargaining power that P&G has over its retail buyers. P&G will be able to strengthen their market position through this acquisition. A stronger brand portfolio would also definitely help enhance relationships.

II. Ways to Generate Expected Synergies

A) Layoffs

Layoffs are generally expected when a company undergoes merger and acquisitions. It is estimated that about 4% of the total combined workforce will be laid off due to this acquisition. This is to remove management overlaps due to merging operations in more than 80 countries across the world. These lay-offs will not only come from Gillette’s former operations, but also Procter and Gamble’s management.

B) Business Elimination

Since both Gillette and P&G are operating in the consumer goods segment, they tend to have a few products that overlap each other. Both Gillette and P&G have to sell off some of their product line to remove this overlapping and generate synergy between them. The integration of the companies’ product line is important to ensure synergy exists between them and non-profitable products are removed from their product line.

III. Financial Analysis of P&G

Profit margin for P&G was pretty low from years 2000-2004. P&G experienced an increase in their profit margin after 2001. Gillette on the other hand, had a steadily increasing profit margin since 2000. They also had a higher profit margin as compared to P&G.

This indicates that Gillette’s performance has been increasing steadily since 2000 and they have been experiencing increase in their sales and net earnings yearly. P&G has much higher sales and net earnings as compared to Gillette due to their internationally dispersed distribution system. However, P&G is still unable to match Gillette’s profit margin performance which is higher than P&G.

The FCF productivity of P&G increased from 2000 to 2002 and then decreased from 2002 onwards. Gillette on the other hand, experienced a decline from 2000 to 2002, a short increase from 2002 to 2003 and then a decline again from 2003 onwards.

This indicates that both Gillette and P&G do not have much free cash flow in their company. However, P&G’s free cash flow performance has been much better as compared to Gillette’s performance. This low free cash flow may pose a problem to P&G to acquire Gillette.

P&G has much more free cash flows as compared to Gillette and this can definitely help Gillette improve their free cash flow productivity performance. However, the acquisition price offered for Gillette was $57 billion which is really high and would definitely affect P&G’s free cash flow productivity performance.

IV. Conclusions and Recommendations

Even though the free cash flows may pose a problem in the acquisition of Gillette, I believe that P&G should still acquire Gillette as Gillette can definitely help improve P&G’s financial performance and help provide P&G with a competitive edge in the consumer products industry. P&G will also be able to improve Gillette’s free cash flow performance by their large amount of free cash flows and I believe that there will be many willing investors who would find P&G’s stock very attractive during the acquisition process.

Arts and Crafts Movement – The Green & Greene Contribution

Brothers Charles Sumner Greene (1868-1957) and Henry Mather Greene (1870-1954) are best known for their architectural firm Greene and Greene, which was responsible for building the ultimate bungalow, the Gamble House in Pasadena. Their work is characterized by externalized construction and the extraordinary aesthetic intricacy this type of building creates.

The Greene brothers were born in Brighton, Ohio, but grew up on their family’s farm in West Virginia. They started learning woodworking and metalwork as teenagers at the Manual Training School of Washington University in St. Louis, MO. Later, they completed a two-year program at MIT’s School of Architecture in 1891, where they studied classical building styles. After completing their studies, both brothers took up apprenticeships, mostly in Boston, Massachusetts; Charles Greene apprenticed at architectural firms such as Andrews, Jacques and Rantoul and R. Clipston Sturgis. Henry Greene worked with Herbert Langford Warren and Winslow and Wetherell.

Eventually, they made their way to Pasadena, CA. to join their parents, who had already been living there for about a year. While traveling by train from Boston, a stop at the World’s Columbian Exposition in Chicago exposed them to Japanese architecture. Nevertheless, the Japanese influence didn’t prevail until a few years later, in 1904 after visiting another exposition in St. Louis, MO. Another influence on their work was their father, who as a homeopathic doctor educated them on the importance of sunlight and circulating fresh air. The Greene brothers embraced the importance of these elements and incorporated them into their work.

The Greene and Greene architectural firm was established in Pasadena, CA. in January 1894, leading to the construction of their most distinguished work, the Gamble House, which was constructed in 1908-1909. The former winter home of businessman, David B. Gamble of the Procter and Gamble Company, is now a National Historic Landmark and museum in Pasadena, CA.

The Gamble House is a three-story Arts and Crafts masterpiece paying homage to Japanese influences and California lifestyle. Employing teak, maple, oak, and mahogany, these woods are laid out throughout the house to enhance contrasts of color, tone and grain. The inlay in the furniture matches the inlay found throughout the home; this type of customization was also a characteristic of Greene and Greene construction. The light fixtures, furniture and woven textiles were all created to fit a specific space in the home.

The construction of the home features asymmetrical forms and scales with ceilings of different heights, second-floor semi-enclosed porches and free-form terraces. The main patio contains a large koi pond, walls of clinker brick (bearing volcanic textures of dark, purplish color) and arroyo stone paths.

After David and Mary Gamble’s passing, the home was passed down to their younger generations and almost went up for sale, until 1966 when the Gamble family deeded it to the city of Pasadena as part of an agreement with the University of Southern California School of Architecture. It was declared a National Historic Landmark in 1977.

The Gamble House currently receives 30,000 visitors a year from all over the world and several vendors offer reproductions of Greene & Greene styled furniture and d├ęcor.

Time and Motion Study – Work by Design

As an entrepreneur responsible for setting your own standards, have you ever wondered if you could speed things up a little bit, or maybe incur lower expenses every month? Reducing staff strength was and continues to be seen as a solution to substandard performance and wage appreciation. But Frank Gilbreth, a visionary in the field of Time and Motion study, thought otherwise. Breaking each physical activity into little components, which he called “therbligs”, he offered an alternate solution to low productivity – improve the efficiency of each worker in a group to collectively save time and money, rather than reduce headcount.

Gilbreth observed 18 elements of the movements performed by bricklayers and the time spent performing each, down to the millisecond, and identified those that could be circumvented to improve efficiency. You can take a leaf out of his book. To execute a Time and Motion study at your workplace, follow a few simple steps.

Gather the details: Observe processes performed at your workplace by your staff and record the time spent in each. Do not go into lengthy details; simply stick to the significant ones. Do this for at least a week so you have a clear idea of what consumes how much time. Try not to judge any action during the course of your investigation; concentrate only on who, what, when and how.

Get employees involved: You don’t want your people to get the wrong idea. It will only breed tension and nervousness. Inform them about why you are performing the experiment and assure them that there will be no job losses. This is the best way to ensure an honest response from them. Do not point out possible improvements immediately as you may alienate your people.

Prepare process charts: A picture is worth a thousand words. Transfer your observations into a flowchart. Starting with what, jot down when, where, by whom and how much time till the end of the process.

Analyze: Take a good look at your diagram and analyze it. Look for steps that can be eliminated, combine steps wherever necessary, change functions and improve individual activities. This is where you decide what changes and what stays. So, scrutinize well before you communicate the final changes to your staff. Take their suggestions into consideration as well, especially if they are experienced.

As you would already have figured, a Time and Motion study will help you simplify your process and thus help you economize on the time and money spent. The implementation, however, could vary from one organization to another, depending upon the process under scrutiny. “Motion and Time Study: Design and Measurement of Work” by Ralph M. Barnes available at has plenty more to offer on Time and Motion study. Also available at is “Motion and Time Study: Improving Work Methods and Management” by Fred E. Meyers.

Frank Gilbreth’s life inspired the book and movie, “Cheaper by the Dozen” , which give a valuable insight into the life of the Gilbreths and their 12 children. Mr Gilbreth insisted on doing things efficiently and often used his army of children to test new ideas. Watch the DVD of “Historic Time & Motion Films ~ Frank Gilbreth Study” available at to learn more about his work.

Many large firms of corporate America, like Procter and Gamble vouch for the effectiveness of Time and Motion study in rationalizing cost. Keen on making it work for you? Let the Gilbreths show you how!