For several years, Proctor & Gamble (NYSE:PG) has grappled with declining revenue and market share. Despite significant changes to its brand portfolio and product strategy, a turnaround has yet to take hold.

This type of distress can often attract the attention of activist investors who hope to quickly boost the value of their holdings by pushing for changes in management, spin-offs, and more.

Let's look at the challenges the company faces and how one particular shareholder could influence its future outlook.

Image source: P&G.

Stuck in a rough patch

With revenue trending downward for four fiscal years straight, management has been trying to right the ship by selling off brands that it deemed nonessential to the core business. Major divestitures have included Duracell, Clairol, and Covergirl.

Even then, its portfolio is still home to 65 different brands sold all over the world:

Region Fiscal 2016 Sales
North America 44%
Europe  23%
Asia Pacific 9%
Greater China 8%
India, Middle East, and Africa 8%
Latin America 8%

Data source: P&G. Chart by author.

Procter & Gamble has also made the shift from a highly centralized organization with most decisions coming from top management to a more decentralized model with teams spearheading 10 different consumer goods product categories. Each business unit has its own president who is empowered to drive decisions and operate independently. With this change, the company hopes to make its business more flexible, allowing each brand category to optimize for growth and profit.

Is a break-up the best answer?

However, if you couple a decentralized business with interest from activist investors, it's only natural to wonder if a break-up is on the horizon. Company management fielded this exact question recently, saying that the decentralized business units gain a strategic advantage by operating under the larger P&G umbrella. Areas like advertising and marketing are prime examples of where being part of an industry behemoth is a big advantage -- the individual business units benefit from the scale of the entire company. 

That all sounds reasonable until you look at the stock performance. Shares of Procter & Gamble have trailed the S&P 500 by a wide margin in the past five years. That underperformance can really rankle investors who have been waiting for a turnaround to take hold, making a break-up of the company that much more appealing to unlock shareholder value.

Data by YCharts.

Will this billionaire chart a different course?

Earlier this year, Trian Fund Management revealed in an SEC filing that the firm had taken a $3.5 billion stake in Procter & Gamble. Trian CEO and co-founder Nelson Peltz is well-known on Wall Street for shaking up other major consumer companies, including PepsiCo and Heinz.   

But according to Procter & Gamble Chairman, President, and CEO David Taylor, the company is in "ongoing constructive, active" talks with Trian, according to CNBC. It is hard to tell how active Trian will be in this situation, given its relatively small position in the $230 billion company.

P&G management has also outlined a plan to reduce costs by $10 billion over the next five years, and readily points to past results of $10 billion in savings over the previous five years. That kind of track record, coupled with the sale of various brands, should buy management time to work on its own.

There are lots of moving parts to the Procter & Gamble story. But if nothing else, shareholders can expect that Trian will hold company management's feet to the fire and keep them focused on cost reductions and a less bloated portfolio.

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Frank DiPietro has no position in any stocks mentioned. The Motley Fool owns shares of and recommends PepsiCo. The Motley Fool has a disclosure policy.