Proctor and Gamble 2013 Annual Report Download - page 27

The Procter & Gamble Company 25
Fabric Care and Home Care: This segment is comprised of
a variety of fabric care products, including: laundry
detergents, additives and fabric enhancers; home care
products, including dishwashing liquids and detergents,
surface cleaners and air fresheners; batteries; and pet care.
In fabric care, we generally have the number one or number
two share position in the markets in which we compete and
are the global market leader, with over 25% global market
share, primarily behind our Tide, Ariel and Downy brands.
Our global home care market share is approximately 20%
across the categories in which we compete. In batteries, we
have over 25% global battery market share, behind our
Duracell brand. In pet care, we compete in several markets
primarily in the premium pet care segment, with the Iams
and Eukanuba brands. The vast majority of our pet care
business is in North America, where we have over 5%
market share.
Baby Care and Family Care: In baby care, we compete
mainly in diapers, pants and baby wipes, with approximately
35% global market share. We are the number one or number
two baby care competitor in most of the key markets in
which we compete, primarily behind Pampers, the
Company's largest brand, with annual net sales of more than
$10 billion. Our family care business is predominantly a
North American business comprised largely of the Bounty
paper towel and Charmin toilet paper brands. U.S. market
shares are approximately 45% for Bounty and over 25% for
Charmin.
Fiscal Year 2014 Changes to Global Business Unit
Structure
We recently announced a number of changes to our GBU
structure, which will result in changes to our reportable
segments. Effective July 1, 2013, as part of our plan to
improve business performance, we organized our Global
Business Units into four industry-based sectors, comprised
of 1) Global Baby, Feminine and Family Care, 2) Global
Beauty, 3) Global Health and Grooming, and 4) Global
Fabric and Home Care. Under U.S. GAAP, the GBUs
underlying these sectors will be aggregated into five
reportable segments: 1) Global Baby, Feminine and Family
Care, 2) Global Beauty, 3) Global Health, 4) Grooming and
5) Global Fabric and Home Care. As a result, Feminine
Care will transition from Health Care to Global Baby,
Feminine and Family Care. Additionally, Pet Care will
transition from Fabric Care and Home Care to Global
Health.
These changes will be reflected in our segment reporting
beginning in fiscal year 2014, at which time our historical
segment reporting will also be restated to reflect the new
structure. The segment discussions in MD&A and the
accompanying Consolidated Financial Statements reflect the
organizational structure that existed through June 30, 2013.
Global Operations
Global Operations is comprised of our Market Development
Organization (MDO), which is responsible for developing
go-to-market plans at the local level. The MDO includes
dedicated retail customer, trade channel and country-specific
teams. It is organized along five geographic regions: North
America, Western Europe, Central & Eastern Europe/Middle
East/Africa (CEEMEA), Latin America and Asia, which is
comprised of Japan, Greater China and ASEAN/Australia/
India/Korea (AAIK). Throughout MD&A, we reference
business results in developing markets, which we define as
the aggregate of CEEMEA, Latin America, AAIK and
Greater China, and developed markets, which are comprised
of North America, Western Europe and Japan.
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.
Corporate Functions
CF provides Company-level strategy and portfolio analysis,
corporate accounting, treasury, tax, external relations,
governance, human resources and legal, as well as other
centralized functional support.
STRATEGIC FOCUS
We are focused on strategies that we believe are right for the
long-term health of the Company with the objective of
delivering total shareholder return in the top one-third of our
peer group.
We are focusing our resources on our leading, most
profitable categories and markets.
• We will focus on our core markets, such as the U.S., to
strengthen and grow these businesses.
• We will focus our developing market investments on the
categories and countries with the largest size of prize
and highest likelihood of winning.
• We will focus the portfolio, allocating resources to
businesses where we can create disproportionate value.
To create flexibility to fund our growth efforts and deliver
our financial commitments, we are working to make
productivity a core strength for P&G. We have taken
significant steps to accelerate cost savings, including a five-
year cost savings initiative which was announced in
February 2012. The cost savings program covers all
elements of costs including cost of goods sold, marketing
expense and non-manufacturing overhead.
Innovation has always been - and continues to be - P&G's
lifeblood. To consistently win with consumers around the
world across price tiers and preferences and to consistently
win versus our best competitors, each P&G product category
needs a full portfolio of innovation, including a mix of
commercial programs, product improvements and game-
changing innovations.