John Pepper: His Gamble For Procter
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."