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The two companies have many similarities and many differences. The Colgate-Palmolive brand is synonymous with oral care. Procter & Gamble is predominantly associated with household care products, mainly detergents. Colgate’s unmatched brand recognition helps it attract oral care consumers, who often don’t differentiate products based on features and benefits. Oral Care is Colgate’s major business division and hence commands a greater proportion of its media and advertising budget. P&G’s media spending, though markedly higher than Colgate’s due to its much larger size, is skewed towards the laundry, hair care, and male grooming (Gillette) segments.
Wharton School, University of Pennsylvania (n/a)
Case questions answered:
- Perform a DuPont System Analysis for Procter & Gamble and Colgate-Palmolive for 2008 - 2012, including sustainable growth. Include P/E and M/B for 2012 only.
- Compare and contrast the results for the two companies.
- Comment on how the ratios are related to the strategies of the two firms.
- What do you think about Cook's leadership/performance at CP?
- What do you think about the leadership changes at P&G? Be specific about the two CEOs.
- Do you think that activist investors are too short-term oriented?
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Case answers for Procter & Gamble and Colgate-Palmolive: Similar but Different
This case solution includes an Excel file with calculations.
Perform a DuPont System Analysis for Procter & Gamble and Colgate-Palmolive for 2008 – 2012, including sustainable growth. Include P/E and M/B for 2012 only.
The following tables present the results for the DuPont analysis on Procter & Gamble and Colgate-Palmolive.
Table 1. P&G’s DuPont Results. Data obtained from Percival’s compiled analysis on Procter & Gamble and Colgate-Palmolive (2013).
Table 1. Colgate-Palmolive’s DuPont Results. Data obtained from Percival’s compiled analysis on Procter & Gamble and Colgate-Palmolive (2013).
Compare and contrast the results for the two companies.
In order to understand the meaning of the numbers in the tables above and the strategies they signify for their respective companies, I separated them into categories and developed the graphic interpretations below.
Starting with Exhibit 1, which graphs the ROE values for both P&G and Colgate, one can see that…
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