Exhibit 2 Organizational Focus: Choices of Leading CPG Companies
Centralized Category Management
Procter & Gamble
Primarily Category Managed
Primarily globally managed, with powerful global category management units that leverage brand and customer preference similarities across markets
Execution driven by strong local arms
Nestlé (waters, nutrition)
BIC Reckitt Benckiser Kimberly-Clark
Process- Based Coordination
Managed through matrix of category- and geography-focused teams
Extensive use of coordinating mechanisms (e.g., councils, strong innovation processes)
Nestlé (food and beverages)
Primarily Geographically Managed
Primarily managed through strong regional commercial organizations in entrepreneurial culture
High focus on geographic P&L accountability for fast local decision making on heterogeneous products and customers across countries
Decentralized Category Management
Source: Booz & Company
primarily along geographies, in which the bulk of decisions and activities are managed locally with minimal coordination across markets. In between these two models of P&L accountability, with fully centralized category management at one extreme and geography-centered decentralized management at the other, are numerous other options in the continuum.
Similarly, leading CPG companies have made different choices in terms of decision-making
processes. Whereas some companies have favored a model in which the dominant category or brand sets goals and is responsible for their attainment, others have opted for a council- based model in which interest groups are represented, or for a steward-driven process with a facilitator who coordinates resources across functional groups. Some companies rely heavily on formal structures and processes (e.g., explicit lines of control and measures), and others
primarily leverage incentives or favor more informal structures.
These major differences among leading CPG companies suggest that there is no single best model. The optimal level of global category management and, more generally speaking, central coordination of activities is specific to each company.
Identifying the Right Global Management Model Are there opportunities to lever- age scale for certain brand-related
Booz & Company