Strategic Plan for Colgate-Palmolive: Vision, Mission and Assessment

Revised Vision and Mission Statements

Task:

The first section in this strategic plan involved revising Colgate-Palmolive’s old vision and mission statement, which lacked a future for the company and some of the nine characteristics for a mission statement. The new vision statement focuses on what type of business the company engages in, what it wants to become, and putting it into a customer perspective. The new mission statement places in characteristics that identify Colgate-Palmolive’s customers, products, services, markets, current technology, philosophy, public image, distinctive competence, commitment to survival, growth and profitability, and the value it holds for its employees.

The next section was performing an external assessment for Colgate-Palmolive with an External Factor Evaluation Matrix and Competitive Profile Matrix to identify the company’s external opportunities and threats and to see how it ranks compared to its two main competitors. The EFEM reveals that the company could face a hit in its sales from the harmful ingredient in its toothpaste known as Triclosan, financial burdens from the rising cost of resources, and a problem with its expansion due to international trading policies and politics with countries such as China, Russia, and Europe. From the CPM, it was shown that Colgate-Palmolive ranks the lowest out of its two main competitors, Proctor & Gamble and Unilever, but it does perform better on certain factors such as customer service, domestic market penetration, employee dedication, and price competitiveness compared to the two firms.

After the external assessment, an internal assessment was created by looking at the company’s financial statements, ratios and creating an Internal Factor Evaluation Matrix to identify the company’s strengths and weaknesses. From looking at the financial statements and ratios, Colgate- Palmolive is in a good position in handling its current obligations, but the company seems to be struggling with interest payments, sales, excess inventory, collecting credit and generating profit. The IFEM also reveals that the company’s liquidity, value and sales in the Latin American market are increasing immensely. It even shows that the company is doing a good job enforcing its cul- tural values by its numerous community programs. However, the bad is that Colgate-Palmolive’s profits in North America, Asia Pacific and Europe are decreasing and that net cash from operations, employees and treasury stock are also falling.     

A strategy analysis was then conducted by creating a Strengths-Weaknesses-Opportunities- Threats Matrix, Boston Consulting Group Matrix, Internal-External Matrix, Strategic Position and Action Evaluation Matrix, Grand Strategy Matrix, and the Quantitative Strategic Planning Matrix. All of these Matrices give a deeper look at Colgate-Palmolive’s position with each of its segments and create and show the best strategies that the company should take. They revealed that Col- gate-Palmolive should be more aggressive and focused on its market development, market penetration and its product development and that it should improve its integration, either horizontal or vertical by expanding operations internationally or focusing on production processes.

External Assessment: EFE and CPM

The organizational structure for Colgate-Palmolive was then revamped because the previous lacked the divisional design for the presidents for regions, segments and products and their relationships and responsibilities, which is now taken into account in the new design. This improved
design betters the company work flow now that the company’s lines of reporting relationships are more detailed and organized.
The plan also presents a perceptual map that shows Colgate-Palmolive’s position with its soap brand on two bases, which are price and popularity in the United States against eight other major soap brands. The company is the least popular compared to its competitors and is in-between with its pricing. The other perceptual map shows the company’s position in the toothpaste mar- ket. Colgate-Palmolive with its toothpaste brand Colgate is the most popular toothpaste in the United States and also the quality is excellent except from the Triclosan which Colgate-Palmolive should eliminate.

Measurements of the value of the company against its major competitor Unilever were also taken and done in a company valuation table. The table shows the value of the company under four corporation value methods and their averages. The results show that Colgate-Palmolive is down by over $50 million in its value and should focus on improving it.

A recommendations list that stretches over the next three years was then created and entails investing into research and development for improving products and brands, investing into Col- gate-Palmolive’s current community programs and marketing to increase its domestic and global presence, expanding operations into Latin America, producing for other companies without its brand name attached, and improving current company systems.

In order to see how the recommendations would be financed, an EPS/EBIT Analysis was con- ducted to see whether the recommendations would be financed by common stock or debt. Nei- ther common stock nor debt showed any differences in their EPS, so the decision was a 20% stock to 80% debt ratio for historical purposes and to make sure there was little dilution of ownership.

Lastly, projected financial statement and ratio tables for the next three years were made to see the effect these recommendations would have on Colgate-Palmolive’s financial position in the future. The results revealed good news for the company such as that net income would increase by over $2 billion, cash and equivalents would increase by $10 billion, retained earnings would increase by $9 million and that the operation metrics from the ratios are good so that the company can successfully expand its operations and improve its global presence, brands, products and current systems over the three-year time period.

All in all, this is the strategic plan for Colgate-Palmolive to take and the projections, but it is still difficult to know what the future truly holds for this company since we are not part of the board and because of uncertainty in the financial market.