Robert McDonald, CEO of Procter & Gamble, has taken some heat from analysts recently about decisions he’s made during the recession.

Recognizing that consumers have been parting with their money less readily over the past couple of years, P&G has boosted advertising and cut prices on iconic brands like Tide, Charmin, Energizer and Bounty in order to enhance market share. According to Consumer Edge Research the strategy has worked, with P&G increasing  share in eight of the biggest categories in which it competes.

The strategy has, naturally, eaten into P&G’s margins, which charging less and investing more is bound to do. They fell by 12 percent in the last quarter, and that’s what has analysts all atwitter. Said one in a recent Wall Street Journal article, “I must be missing something. If P&G cuts its price, and everyone follows, and this continues, how do you maintain any profit margins? I just don’t know the answer to that.”

Indeed, he is missing something. Specifically, P&G’s textbook approach to winning during recessionary times: Sacrifice some profitability to build market share and brand equity, and cash in when the economy turns.

It’s not as if P&G is mortgaging its future. McDonald says the price cuts are “about a 10% price reduction on average on about 10% of the business.” That’s nothing to panic about.  He also says the company is stepping up its investments in innovation with advances like less-irritating razors from Gillette, more sensitive toothpaste from Crest and fabric softener from Downy that makes sheets smell fresh for a week. In other words, P&G has products in the pipeline to cash in on the market share it has recently won. Just like business school case studies say companies should do during recessions.

Analysts are quoted by the business press because they’re ostensibly experts on the companies and categories they follow. But sometimes they should spend less time wringing their hands and more time studying history. Then they can recognize a strategy like P&G’s for what it is: Smart.