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Businessweek Archives

John Pepper: His Gamble For Procter

In Business This Week: HEADLINER


Procter & Gamble is behind on Chairman and CEO John Pepper's plan to double sales to $70 billion by 2005. In the year ended June 30, revenue rose 4%, to $37.2 billion, from $35.8 billion.

So, to keep his plan on track, Pepper said on Sept. 1 that P&G will reorganize its businesses along product lines rather than geographical boundaries. Details won't be available for several weeks, but some corporate staff will be cut.

While Procter's sales are nothing to sniff at, the consumer-products powerhouse has been beset by myriad woes. There's the flu in Asia, where P&G gets 12% of its revenues, turmoil in Russia and Latin America, and the strong dollar. Pepper hopes to boost emerging-markets sales by $8 billion over the next decade, while sales from core businesses rise $15 billion and sales of new products such as fat substitute Olestra rise $12 billion. Analysts are pleased: "The plan is strategically sound," says Andrew Shore of PaineWebber. "Do you need 20 or 40 brand managers around the world for one product? No."EDITED BY KELLEY HOLLANDReturn to top


AFTER MONTHS OF LOSING ON LEGAL AND PUBLIC-RELATIONS FRONTS TO MICROSOFT, the Justice Dept. is trying to regain momentum in its antitrust case against the company as its Sept. 23 trial date approaches. Last June, a federal appeals court dealt a huge blow to Justice's case by finding that companies have a right to design products as they wish. That hurt the government's strongest line of attack--that Microsoft illegally tied its Internet Explorer browser to the Windows 98 operating system. Now, Justice is making a bold stab to rescue its case. On Sept. 1, it signaled in court papers that it's shifting its emphasis to a monopolization case. Chairman Bill Gates, it alleges, was involved in efforts to pressure rivals to stop or delay marketing new technologies. Microsoft denies it. Experts question whether Justice can succeed with a new strategy at this late date.EDITED BY KELLEY HOLLANDReturn to top


NUCLEAR POWER CONTINUES TO HAUNT NORTHEAST UTILITIES. A Federal Energy Regulatory Commission administrative law judge ruled on Sept. 1 that there was mismanagement at the company's 49%-owned Connecticut Yankee nuke, shut since 1996. If the finding is upheld, analysts say Northeast would be forced to pay about $100 million in decommissioning costs itself. Northeast had wanted to pass much of the tab on to ratepayers.EDITED BY KELLEY HOLLANDReturn to top


GOOD NEWS FOR AMERICAN FARMERS. On Sept. 1, Monsanto said it was cutting the price of its Roundup herbicide by 16% to 22%. HSBC Securities analyst Paul Leming says Monsanto is trying to build up sales of Roundup ahead of the expiration of its U.S. patent in 2000. Monsanto also announced it was raising fees paid by farmers who use its Roundup Ready soybeans, engineered to tolerate Roundup herbicides. The next day, DuPont announced a deal for exclusive rights to sell an FMC herbicide for soybean crops in the U.S.EDITED BY KELLEY HOLLANDReturn to top

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