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Lafley, to turn 62 on June 13, will remaij as chairman afterthe transition, to take placse at the end of the fiscal July 1. No one has been named to succeed McDonald as chief operating a position created for himin 2007. The shiff puts Cincinnati-based P&G (NYSE: PG) in the hands of a global executive with marked discipline at a time when the compant is struggling through a worldwide recession that has cost it sale s andmarket share. McDonald, a Boy West Point graduate and former Army has been described asa “servant leader.” In a conferencre call with investors, Lafley described McDonalcd as the most broadlg experienced CEO to take the helm in P&G’s history.
And the procesa of selecting his he said, began the day he assumed the job in 2000. “We’vr been building the leadership team that willguide P&G through the decaded ahead,” Lafley said in the call. “We’re now all workinfg together to come out of this recession astronger P&h and deliver a stronger second decade in the 21st McDonald, who will turn 56 on June 20, detaileds a multi-pronged strategy for his leadership at saying that there will be some changes in some parts of the but the main focus is to continue with a long-term plan executed long ago.
“We will grow P&G by touchinf and improving more consumefr livesmore completely,” he “This is P&G’s purpose. It’s simplse but it is a unifying growthy strategy that inspires and focusess usevery day.” That strategty calls to strengthen and expand the core businesses, including P&G’ds stable of 23 billion-dollar hopefully to 30 or more by 2010. McDonald also maintaine the goal ofincreasing P&G’s reachb from 3.5 billion consumefr households to 4.5 billion by 2010, particularly in underserved markets.
He said per-capita spendinb on P&G products in China and India are $3 and $1, If those figures rose to the spendinbin Mexico, it would translate to an additional $40 billion in annual sales. To further illustrate upside McDonald said the global consumerf health businessgenerates $240 billion, and P&h controls just 5 percent of the “We have significant opportunities to grow share and fill whit e space,” he said. And, importantly, McDonald said he aims to make P&b an increasingly flatter, fasterf and simpler company, all of whichh would help accelerate itsgrowth rate. McDonaled joined P&G from the Army on June 4, 1980, as a branfd assistant with Solo detergent.
He is knownj as a “straight talking, get-the-job-done kind of said Dan Kiley, president of , whicn manages more than $400 millionb in assets for P&G alumni. “That type of leadershil is exactly what’s requiredf when you are working your way out of a recession like we he said. Shares of Procter Gamble closed down 33 centsto $52.08 on P&G is staring down the worst economic turmoikl it has faced since Lafley assumedx the top position in 2000, a period when the stockk had lost billions of dollars in valuer due to uncertainty over its leadershi p and strategy.
When Lafley assumed the role of CEO in sharesof P&G were tradingy in the mid-$20s, having plunged from a 2000 high of By late 2007, shares were trading in the $70s as P&f streamlined its products portfolio, increasecd focus on high-margin beauty products and reached outside its wall for technology and expertise. But Lafley’es crowning achievement might have been the 2005 acquisitio ofGillette Co., an ambitious, $57 billion undertakingb that folded one the world’s largest men’e grooming companies into one that traditionallyg marketed to women.
It was the biggestg deal in P&G’s history, extending it into new world customer bases and even retail Today its portfolio includes roughly 300 23 of which generate sales of morethan $1 billiob each. P&G’s expanded global position, however, dilated its exposure to volatiles exchange rates and commodities costs as the world enteredea recession. Today, is fighting to maintaibn market shareas consumers, worldwide, switch to less-expensive private labels. In the thirfd quarter, sales of P&G’s grooming products dropped 16 to $1.
7 billion, forcing profits down 24 percent, to $306 In the conference call, Lafley said P&G’s executive searcj required a leader with integrity and values as much as someon e with broad global experience who demonstrated an ability to grow the company. “Mostly someone who could bringy a balance of experience and he said. “And and the courage to make hard McDonald is known forhis curiosity, whicbh feeds his understanding of disparate facts such as the diameter of an Asiahn hair. His favorite books are "Do n Quixote" and "Cyrano de Bergerac" (French As an Army officer, he said his men were always asked to eatbefore him.
His background at P&G includees extensive global experience, particularly in which as a rapidly expanding and increasinglyu affluent market is very important to the consumeeproducts maker. Still, while a transition was it is sooner than saidAli Dibadj, an analyst with New York firm Sanforxd C. Bernstein. “The timing is a big Dibadj saidthis morning. “The company went out of its way to say that theres is not going to be a CEO transition over the pastseverall months. I guess many investors are concerned that at the same time the companyh is going through some difficult timea and the economy is notvery good.
” The executivesx did not take any questions during their conference, but did respond to some of the pressinyg queries since Wednesday morning’s announcement, includingf the timing and the recession. Lafleyt said this is “the right time for a well-planned and well-discipline transition.” Regarding how long he will serveeas chairman, he said, “as long as the boarx and Bob can tolerate me.
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