Market Overview

Peltz Says Procter & Gamble Suffers From A 'Suffocating Bureaucracy'

Share:
Peltz Says Procter & Gamble Suffers From A 'Suffocating Bureaucracy'
Related PG
Jim Cramer Shares His Thoughts On Corning, Procter & Gamble And More
Lightning Round: Jim Cramer Shares His Thoughts On Alibaba, Kimberly Clark And More

Activist investor Nelson Peltz has officially launched a proxy battle against Procter & Gamble Co (NYSE: PG) and his comments on Monday may lead some to conclude it won't be as hostile compared to other campaigns.

For instance, Peltz acknowledged during a CNBC interview that P&G is a "great company" that's backed by a "phenomenal" CEO David Taylor who hasn't yet lived up to his full potential. Meanwhile, the company is losing market share in various categories yet it's the only company in the world that boasts over 20 billion-dollar brands.

And here lies the problem and the foundation of Peltz's activist campaign.

Once a company has so many brands, they start to get commoditized and end up losing market share. The activist investor believes the only way to fix this problem is to bring in a new culture in which the company is "either good at incubating new brands, building new brands, acquiring new brands" so that the company can transform small, hundred million-dollar brands into future billion-dollar brands.

The reason P&G isn't already an expert at this can be attributed to its "suffocating bureaucracy," Peltz added. The company is structured improperly as a "matrix organization" and needs help to better position itself for growth.

Related Links:

Cramer's Quick Thoughts On Under Armour, Procter & Gamble

5 Reasons To Be Increasing Your Large Cap Exposure Right Now

Image credit: Joe Mabel [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC BY-SA 3.0, via Wikimedia Commons

Posted-In: activist investor Nelson Peltz Proxy BattleCNBC Hedge Funds Top Stories Media General Best of Benzinga

 

Related Articles (PG)

View Comments and Join the Discussion!