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Pringles Expansion Into Israel

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This presentation explores the possibility of Pringles establishing a factory in Israel. All Hypothetical of course. Before Procotor and Gamble dumped them.

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Pringles Expansion Into Israel

  1. 1. Sonya BarkerRyan Huelsmann
  2. 2.  Founded 1837 (173 years in business) Serve 4.2 Billion Customers Worldwide Employ 127,000 People Worldwide NYSE: PG Consumer Goods Industry Revenue $78.9 Billion Net Income $12.74 Billion Total Assets $134.83 Billion
  3. 3.  Product Focus: ◦ Beauty & Grooming ◦ Health and Well-Being ◦ Household Care 50 Leader Brands Driving Force Billion Dollar Brands: ◦ Bounty, Cover Girl, Crest, Dawn, Downy, Duracell, Gain, Gillette, H ead & Shoulders, Olay, Pampers, Pantene, Pringles, Tide, A lways, Mister Clean
  4. 4.  Brands Sold in 180 Countries with Operations in 80 Countries Global Organization with Local Focus Manufacturing Operations Based In: ◦ United States ◦ Canada ◦ Mexico ◦ Latin America ◦ Europe ◦ China and other parts of Asia (31 wholly-owned factories) ◦ Africa ◦ Australia
  5. 5.  Introduced in 1968 Stackable, Fun-Shaped Potato Crisp P&G Health and Well-Being Business Unit, Snack Food Category Multitude of Flavors to Appeal to Regional Tastes Pringles Sticks Spin-off
  6. 6.  Standard of Living Expansion High Consumer Interest in New Products Potato Chips Led the Savory Snack Market in Israel, Accounting for a Share of 38.1% Pro-American Business Sentiment Population 7.2 million, Diversity Gaza Strip Embargo Lifted for Certain Products, Includes Potato Chips Purchasing Power $1 US = 3.67841 Israeli New Shekel Member World Trade Organization
  7. 7.  Unrest in Israel Unrest in Middle East Culture Distribution Local Competitors
  8. 8.  Issue:  Strategy: ◦ Political/Religious ◦ On-Going Risk Unrest in Assessments to Israel, partition of Determine if Benefits Palestine, creation of Outweigh Risk a Jewish state, an ◦ Constantly Monitor Arab state, and an New Developments UN-administered ◦ Maintain Open Dialog Jerusalem with Government ◦ Ongoing Officials/Agencies Political/Religious ◦ Neutral Status Unrest in the Middle East
  9. 9.  Issue:  Strategy: ◦ Cultural Kosher ◦ Research and Preference Development to Focus ◦ Language on Local Preferences ◦ Develop Flavors to Cater to Preferences ◦ Hire Local Talent who have the Expertise and Knowledge to Assist
  10. 10.  Issue:  Strategy: ◦ Two Primary Grocery ◦ Focus on Developing Store Chains in Israel Solid Relationship with ◦ Few Mom & Pop Small two Primary Grocery Store Community Stores Chains ◦ Open Air Markets ◦ Hire Local Talent who have the Expertise and Knowledge to Assist ◦ Marketing Blast to Get Customers Excited about Product ◦ Research Vending Machine Sales as an Opportunity for Open Air Markets
  11. 11.  Issue:  Strategy: ◦ Local Competitors ◦ Analyze Strengths Utilize Nationalism as and Weaknesses of a Means to Gain Competitors and Competitive Capitalize on Lessons Advantage Learned ◦ Analyze Local Competitor Strategies and Implementation ◦ Create a Tactical Plan to Compete
  12. 12. SWOT ANALYSISMacro Snack Food Industry Strength Weaknesses S W • Willingness to Expand • Negative Press Related to Snack • Diversified Product Foods/Health Concerns • Products Altered to Local • Workforce Spread Over a Wide Preferences Geographic Area • Spoilage Rate Opportunities Threats O T • Snack Food Consumption • Competition Growing Worldwide • Substitutes/Cheaper Products • Environment for Global Available Growth/Trade Barriers Lifting • Global Economic Downturn • Internet Marketing Sales Trends
  13. 13. SWOT ANALYSISMicro Proctor & Gamble/Pringles Strength Weaknesses S W • Branding • Limited Snack Food Industry • Financial Presence • Global Organizational Structure • Kosher Food Development • Pringles Flavors Easily Altered • Significant Capital Outlay for Local Preferences • Packaging/Labeling • Ingredients Available Locally Requirements More Strict • Israeli/Hebrew Website in Place Opportunities Threats O T • Environment for Global • Volatility of US Dollar Growth/Trade Barriers Lifting • Middle East/Israel Unrest & • On-Line Social Network & Government Volatility Internet Marketing • Competition with Diverse Techniques Product Portfolios • Environmental Goals Doubled • Substitutes Available/Cheaper for 2012 • Due to Economy, Consumer • 2010 Unemployment Rate Spending Decreases Globally 8.3% in Israel
  14. 14. SWOT ANALYSISMacro Israel Strength Weaknesses S W • Standard of Living Expanding • Security/Terrorism Remains • Consumer Interest in New Precarious Foods/Products • Kosher Requirements • Snack Growth Rate Increasing • Import Requirements Strict • Extensive Transportation • Traditional Business Week Network/Energy Infrastructure Sunday through Thursday • World Trade Org Member/US • Distribution Barrier Government Support • 2010 Unemployment Rate 8.3% Opportunities Threats O T • Hi-Tech • Israel Unrest/Government • Pro-American Volatility • Population: 7.2 million • Middle East Unrest Uncertainty • Gaza Strip Embargo Lifted • Consumer Spending Decreases • Purchasing Power $1:3.67841 Shekel • Education Level on the Rise
  15. 15.  Short Term:  Long Term: ◦ Brand Building ◦ Brand Building ◦ Develop a Winning ◦ Innovation-Translate Team Utilizing Local Consumer Desires into and Global Talent New Products ◦ Consumer ◦ Scale-Drives Efficiency Understanding- and Consumer Value Uncover the Unarticulated Needs of Consumers ◦ Go-to-Market Capability-reach retailers and consumers at the right place and time
  16. 16.  Locate in Beersheba Manage Locally Local CEO ◦ Yossi Yitzhak  Former Executive at Osem - Nestle Israel  Education LLB, MBA Staff Rabbi for Kosher Expertise P&G Israel Liaison
  17. 17.  Current Products for Israel ◦ Potato Crisps in Snack Packs and Large Containers  Original, Sour Cream & Onion, Jalapenos, and Barbeque ◦ Pringles Snack Stix Possible New Products ◦ Packaged Latkes for Hanukkah  shallow-fried pancakes of grated potato, flour and egg, often flavored with grated onion or garlic and seasoning
  18. 18.  Potential Opportunities Outweigh Risks Proceed with Manufacturing Operation/Sales Expansion into Israel
  19. 19. QUESTIONS ?
  20. 20.  Procter & Gamble Corporate Website http://www.pg.com Pringles website http://www.pringles.com Reuters Business & Financial News, by Nidal al-Mughrabi, Israel Eases Gaza Embargo to Allow Snack Food In 9 June 2010 http://www.reuters.com Market Report, Savory Snacks in Israel to 2014, http://www.pr- inside.com Doing Business in Israel—U.S. Commercial Service Israel http://www.buyusa.gov/israel/en/doing_business_in_israel.html USDA Foreign Agricultural Service GAIN Report, Global Agricultural Information Network, 23 Nov 2009. Mehadrin Tnuport Export, Israel: Potato and carrot season started. By: Wim Geurts 2 March 2010. http://www.freshplaza.com Linked In, Yossi Yitzhak personal page Alacra Store, Premium Business Information Source http://www.alacrastore.com/research/d-and- b/Israel/Snack+Foods_potato+chip

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