retail news in context, analysis with attitude

The Wall Street Journal reports that Procter & Gamble (P&G) has “plunked down an estimated $80 billion over the past two decades to transform itself into a beauty company, a big wager that appealing to the vanities of men and women will bring higher profit than just selling diapers and household cleaners.” However, the story suggests that even though the beauty products business generates about a third of P&G’s annual revenue, “its underlying growth is weak due to limited exposure to emerging markets and cash-strapped shoppers who have cut back on purchasing beauty products.”

In charge of making sure the investment is worth it is Ed Shirley, chief of P&G’s beauty products division, who has been bringing a new approach to the company. Here’s how the Journal frames it:

“When Mr. Shirley took over as beauty-products chief, the unit was too focused on North America and missed out on sales growth other divisions were seeing overseas, namely in developing countries. Brands weren't following related products into new markets ... His solution was to put products like men's deodorant, shaving gear and skin care in one unit, so the brands could pool their efforts. The plan ran smack into P&G's generations-old practice of managing each brand as essentially a separate business. Multimillion-dollar marketing plans, nearly all financial reporting and compensation targets would have to be reorganized.”

The story notes that P&G has been running a number of joint brand campaigns, as well as being more aggressive about its high-end business. But the jury remains out - at least among analysts - on whether the long-term strategy will prove out, no matter how much sense it seems to make on paper.
KC's View:
Here’s the paragraph that stood out to me in the Journal story:

Mr. Shirley, an outsider, had to sell this to employees who had grown up together at P&G. He even had to defend his signature mustache, which some employees viewed as disloyal because P&G now sold Gillette razors. "I shave every day, I just don't shave the mustache," Mr. Shirley says.

No offense, but what year is this anyway?

I love it. Here on MNB, we’ve been discussing the cultural challenges that occur when our employees have tattoos and body piercings, and how some companies will have to adjust so they don’t lose out on great people who may have different standards than we do.

At P&G, they see mustaches as disloyal.