According to the Yip’s global drivers, P;G need to link the generic strategy and core competence globally by value chain, which involves configuration and location of value-adding activities, co-ordination and integration of value adding activities, also P;G should consider pressures for responsiveness (Ron Philips, 2003).
How P;G did according to that? Configuration: In P;G adopt the dispersion method in different country, every global business unit perform the value adding activities to support the local strategy, utilizing the local advantages, analysising the market features, size, growth, behaviour patterns and structural issues, according to the local resource, materials and labour, P;G’s outsourcing is successful. P&G make the production locally based on the political & legal and socio-cultural environment.
It is the orientation on market, supply and cost. In order to serve the individual market, in which the retailers and end-user operate, P&G implement its function to react to the cusomer. At the same time, P&G is pursuing the optimal architecture to meet the market, the close relationship is founded between the manufacture and retailers by category management, which help retailers differentiate their assortment, pricing and merchandising based on their overall strategy.
Co-ordination: P&G strive to create “strong brand equities, robust strategies and ongoing innovation in product and marketing to build major global brands. ” To do this they communicate with customers to ensure their marketing plans are locally understood and fully capitalized. They try to meet customer needs in each country while keeping synergy across the company and ensuring the use of programs that work in their favor. Through the support of the professional team on marketing, finance and the implementation of logistics to overcome the constrains.
Pressure for co-ordination and integration: P&G realized the importance of the multinational, decentralized the management according to the different situation to meet the different customer. Local support team and outsource to face the other mulnational competitors. Trade-off between labour and other supply costs and productivity, adaptability and manageability is for cost-orientation to reduce the cost. Reasonable capitalize locally for target market, developing the skills through the training and education.
Technological intensity, quality control of product and process development. Pressure for local responsiveness: P&G is fully conscious that the difference in customer needs and in distribution channels. On the basis of above analysis and the actual situation which the firm is operating, the conclusion is drawn according to the framework of configuration/co-ordination. High co-ordination of activities Low co-ordination of activities Geographically Geographically Dispersed Concentrated