Proctor and Gamble 2008 Annual Report Download - page 43

Management’sDiscussionandAnalysis TheProcter&GambleCompany 41

Market Development Organization
OurMDOisresponsiblefordevelopinggo-to-marketplansatthelocal
level.TheMDOincludesdedicatedretailcustomer,tradechanneland
country-specicteams.Itisorganizedalongsevengeographicregions:
NorthAmerica,WesternEurope,NortheastAsia,Central&Eastern
Europe/MiddleEast/Africa,LatinAmerica,ASEAN/Australia/Indiaand
GreaterChina.ThroughoutMD&A,wereferencebusinessresultsin
developingmarkets,whichwedeneastheaggregateofCentral&
EasternEurope/MiddleEast/Africa,LatinAmerica,ASEAN/Australia/
IndiaandGreaterChina,anddevelopedmarkets,whicharecomprised
ofNorthAmerica,WesternEuropeandNortheastAsia.
Global Business Services
GBSprovidestechnology,processesandstandarddatatoolstoenable
theGBUsandtheMDOtobetterunderstandthebusinessandbetter
serveconsumersandcustomers.TheGBSorganizationisresponsible
forprovidingworld-classsolutionsatalowcostandwithminimal
capitalinvestment.

P&Gisfocusedonstrategiesthatwebelievearerightforthelong-term
healthoftheCompanyandwillincreasereturnsforourshareholders.
TheCompany’sannualnancialtargetsare:
Organicsalesgrowthof4%to6%.Thisiscomprisedof:•
3%to5%pre-Gilletteorganicsalesgrowthtarget,plus–
1%ofgrowthaccelerationbehindrevenuesynergiesassociated–
withtheGilletteacquisition.
Dilutednetearningspershare(EPS)growthof10%orbetter,•
excludingthenetimpactofGillettedilution.
Freecashowproductivityof90%orgreater(denedastheratio•
ofoperatingcashowlesscapitalexpenditurestonetearnings).
Capitalspendingatorbelow4%ofnetsalesannually.–
Inordertoachievethesetargets,wefocusonourcorestrengthsof
consumerunderstanding,branding,innovation,go-to-marketcapability
andglobalscaleandscopeagainstthefollowinggrowthareas:
Growourleadingbrandsinourbiggestmarketsandwithour•
winningcustomers.
Shiftourportfoliomixtofaster-growingbusinesseswithhigher•
grossmarginsthatarelessasset-intensive.
Growdisproportionatelyindevelopingmarketsandwithvalue-•
consciousconsumers.
Tosustainconsistentandreliablesalesandearningsgrowthinline
withournancialtargets,wehaveidentiedfourkeyenablers:
Building a diversied and balanced portfolio of businesses,
•
brands and geographies to deliver consistent, reliable top- and
bottom-line growth. Ourportfolioofbusinessesprovidesaunique
combinationofstability,scaleandgrowth.Wecompeteprimarily
in22globalproductcategoriesandareamarketleaderinover
two-thirdsofthesecategories.Inaddition,ourportfolioincludes
24brandsthatgenerateover$1billioninannualsalesand20
brandsthatgeneratebetween$500millionand$1billioninannual
sales.Combined,these44brandsaccountfor85%ormoreofour
salesandprots.Thesebrandsareplatformsforfutureinnovations
thatwilldrivesalesgrowth,expandcategoriesforretailcustomers
anddifferentiatebrandsinthemindsofconsumers.Ourgeo-
graphicportfolioincludesahealthybalanceofdevelopedand
developingmarketbusinesses.Approximately40%ofsalesare
generatedfromtheUnitedStates,ourhomemarket,anddevelop-
ingmarketsaccountforapproximately30%ofsales.Wewill
continuetoinvesttogrowmarketsizesandshareindeveloped
regions,andwillcontinuetoexpandourproductrangeinfaster-
growingdevelopingmarkets.
Investing in innovation and core P
• &G capabilities and strengths
to enable us to reach more of the world’s consumers with
quality, affordable products. Thisincludesexpandingourpresence
inmarketsandreachingmoreconsumerswhereweareunderrep-
resented,includingvalue-consciousconsumers.
Leveraging the Company’s organizational structure to drive clear
•
focus, accountability and improved go-to-market capability. 
Wehaveanorganizationalstructurethatworkstogethertoleverage
ourknowledgeandscaleatthegloballevelwithadeepunderstand-
ingoftheconsumerandcustomeratthelocallevel.
TheGBUorganizationsleveragetheirconsumerunderstandingto–
developtheoverallstrategyforourbrands.Theyidentifycommon
consumerneeds,developnewproductsandbuildourbrands
througheffectivemarketinginnovationsandproductupgrades.
TheGBUisfocusedonwinningthe“secondmomentoftruth”—
whentheconsumerusestheproductandevaluateshowwellthe
productmeetshisorherexpectations.
TheMDOdevelopsgo-to-marketplansatthelocallevel,leverag-–
ingtheirunderstandingofthelocalconsumersandcustomers.
TheMDOisfocusedonwinningthe“rstmomentoftruth”—
whenaconsumerstandsinfrontoftheshelfandchoosesa
productfromamongmanycompetitiveofferings.
GlobalBusinessServicesoperatesasthe“backofce”fortheGBUs–
andtheMDO,providingcost-effectiveworld-classtechnology,
processesandstandarddatatoolstobetterunderstandthebusi-
nessandbetterserveconsumersandcustomers.GBSpersonnel,
orhighlyefcientandeffectivethird-partypartners,provide
theseservices.
Focusing on cost improvement and cash productivity.
• Each
organizationisevaluatedonitsabilitytosupporttheCompany’s
nancialgoalsandincreasetotalshareholderreturn.Thisincludes
anevaluationofnetsalesgrowth,earningsgrowth,protmargin
expansionandcashproductivity.Ourorganizationsareevaluated
ontheirabilitytogeneratecash,forexample,byincreasingproduc-
tivity,improvingcapacityutilization,meetingcapitalspending
targetsandreducingworkingcapitalrequiredtorunthebusiness.