Procter & Gamble (PG) was founded in 1837.The company’s success over the last 178 years is nothing short of phenomenal:

Not bad for a company that sells disposable consumer goods products. In fact, Procter & Gamble is one of only 17 Dividend Kings – dividend stocks with 50+ years of consecutive increases.

Procter & Gamble is the 3rd largest consumer goods company in the world, behind only Apple (AAPL) and Toyota Motors (TM).

Procter & Gamble has become a victim of its own success over the last decade…

Take a look at the company’s difference in earnings-per-share growth in the two periods below (fiscal years, not calendar years):

The company lost its focus on its core brands.Procter & Gamble expanded its brand portfolio too aggressively.The result was an inefficient organization that was not effectively allocating capital.

The company flourished under CEO A.G. Lafley who ran the company from 2000 through 2009.Procter & Gamble struggled under his replacement, Bob McDonald. Lafley came back to run Procter & Gamble again in mid-2013 at the request of activist hedge fund manager Bill Ackerman.

Since Lafley’s return, Procter & Gamble has shed non-core brands and pledged to significantly reduce its work force.

But Lafley is not planning to stick around…

In June of 2015, Procter & Gamble announced it would be changing CEOs again. Lafley is stepping down, and long-time Procter & Gamble employee David Taylor is taking over.

The quick change of CEO creates instability at Procter & Gamble. Few expected Lafley to give up leadership after just 2 short years as Procter & Gamble’s CEO.Taylor has been integral to the company’s renewed focus on core brands, and will likely continue Lafley’s strategy. Taylor’s career with Procter & Gamble is shown in the image below:

Source:   Procter & Gamble 2015 Shareholder Meeting Presentation, slide 34

Before discussing the continued cost-cutting and restructuring of Procter & Gamble, a quick overview of the company’s 10 ‘core’ brand categories