- By Region
Shares in Procter & Gamble
were trading down 4.2 per cent on the week
, the lowest level in 10 months, as investors appeared unconvinced by a pledge from its chief executive to do fewer things better in key markets.
Bob McDonald, who has faced increasing flak from investors, issued a mea culpa
over a series of errors at the world’s biggest consumer goods group by sales, and vowed to be more focused.
He said the company’s priority was its 40 core businesses, each one defined as a product line in a certain country, such as Tide detergent in the US, Pampers nappies in the UK and Olay skin cream in China.
“The top 40 focus is an important step toward achieving more balanced growth across developed and developing markets,” he said.
Nik Modi, analyst at UBS, said: “My thing was ‘Slow it down’. That’s what they’re doing … But the issue for me is credibility. I’ve listened to similar things in the past, but they haven’t been able execute.”
In emerging markets, Mr McDonald said P&G would not enter any new countries but focus on its existing operations in the 10 most important – presumed to be Brazil, Russia, India, China, Indonesia, South Africa, Nigeria, Poland, Turkey and Mexico.
The strategic shift sets P&G apart from peers such as Colgate-Palmolive and Unilever, which continue trying to expand aggressively, albeit as comparatively smaller businesses
in relative terms.
Mr McDonald admitted that during his three years in the job, P&G had not come up with enough radical innovations, had not communicated to consumers what was good about its products, and had let productivity languish.