Identify and describe two major developments in the global economy in the 1990s that forced P&G to reconsider and change its strategy.

A

New economic changes experienced in the 1990s across the globe forced P&G to change its business strategy. The first major development occurring in the global economy during the period was that of duplication. In each national subsidiary, P&G’s business model was replicated by emerging corporations. This process made it easier for different companies to manufacture similar products and market them to their customers. The development made it impossible for the corporation to achieve most of its potential. Consequently, the level of profitability began to decline. The second development experienced in the global market was the wave of market fragmentation. By the end of the 1980s, trade liberalization had increased significantly. As a result, many companies were able to offer reduced prices and discounts on numerous products. Consequently, the change affected P&G’s competitiveness in the global business environment.

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