P&G: Betting on China, But Vulnerable to FX Fluctuations (USA Today)

More than five years into a turnaround, Procter & Gamble (NYSE: PG) executives have bet the company’s future on a plan to sell off a bunch of small brands to refocus the business on its 65 top-selling labels. Besides focusing on its biggest, most successful brands, Procter & Gamble is also focusing on growth in its biggest markets. USA Today recently noted:

P&G has also been working to fix its business in China, its second-largest market after the U.S. where it does more than $5 billion in business. In recent years, the company botched its product lineup there offering too many cheap products. While the Chinese economy has cooled, the company miscalculated the still strong demand for upscale products.

To address that, P&G executives have high hopes for a new premium diaper being launched in China in August.

However, it was also noted that:

Worldwide economic woes and sagging currencies from the Brazilian real to the Japanese yen have effectively wiped out $9 billion in total sales in the past two years. With nearly 60% of its sales outside the U.S., P&G is one of the 20 most vulnerable Fortune 500 companies to foreign exchange.

To read the whole article, Could Procter & Gamble be the next Kodak?, go to the website of USA Today.

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