Another interesting article on P. & G., According to Zacks, “P&G is known for its strong brand recognition, diversified portfolio, aggressive cost savings efforts, rapid growth in the developing nations, impressive product development capabilities and marketing prowess. However, P&G operates in a challenging environment. It is struggling to grow sales due to significant negative Fx impact, market share erosion and lower consumption in several countries due to pricing action, and macroeconomic headwinds in many key markets. Moreover, its portfolio restructuring and productivity initiatives, though progressing well, will take time to boost earnings growth.”

Financial reporting issues surrounding the accounting for subsidiary disposals, foreign exchange translation and cash flow statement implications could appear in your exam. From a management accounting perspective, be prepared to discuss the cost saving measures, inevitable transfer pricing agreements between the sites where fragrances are manufactured and sold, the NPV computation and impact of reduced volumes on pricing to cover any fixed costs. From a business strategy perspective, you should consider pricing strategies for developing nations based on the principles of purchasing power parity, PESTEL analysis, Porter’s Diamond, Porter’s Five Forces and the Boston Consulting Group Matrix.