Proctor And Gamble
Innovation Strategy
Innovation Strategy Proctor and Gamble (P&G) is an innovative organization that is a household name recognized by millions of families worldwide. The company is a purpose driven organization that creates products of quality and value to help improve the lives of its current consumers and future generations (Proctor & Gamble, 2013). The firm markets its products in numerous countries and its reputation is based on the company’s purpose and its social and ethical responsibilities as a corporate citizen. P&G’s innovation strategies include creating new products and improving current products that embody the firm’s purpose and mission as an organization. The innovation strategies help the organization to remain …show more content…
competitive and successful. The following report will provide a description and evaluation of P&G’s innovation strategy.
Company Background
P&G was founded in Queen City of the West, Cincinnati by candle maker William Proctor and soap maker James Gamble. The relationship between these two businesses men was formed by a partnership agreement formalizing “The Proctor and Gamble Company” in 1837 (Proctor & Gamble, 2013). Today the iconic brand services approximately 4.6 billion people around the world. The company operates in 75 countries across the globe and their products are currently sold in more than 180 countries (Proctor & Gamble, 2012). The portfolio of integrated brands includes Pampers, Gillette, Tide, Ariel, Downy, Pantene, Head and Shoulders, Olay, Oral-B, Crest, Dawn, Fairy, and Always (Proctor & Gamble, 2012).
Through innovation, strategic planning, research and development (R&D), and collaborative efforts P&G doubled its annual revenue from $12 billion to $24 billion with the iconic brand named Tide (Brown & Anthony, 2011). Using rebranding methods such as creating new logos, new packaging ideas, and new sub-products resulted in a comeback for the 50 year old laundry detergent. According Brown and Anthony (2011), Proctor and Gamble’s spends $2 billion annually in the R&D department, which is a reflection on the performance of business growth.
Innovation Strategy Innovation is a competitive weapon used by most organizations during difficult economic transitions. Innovative strategies help companies to redefine the marketplace by gaining a competitive advantage within its industry. The firm’s innovative strategies may include engaging in strategic alliances, acquiring new technology ventures or redesigning its workforce. Internal inventions should also be considered by the organization for commercialization purposes (Rothaermel & Hess, 2010).
Presently consumers are sensitive to the price and development of products for daily consumption. In addition, consumers are conscientious of how the company performs in green development and environmental protection, namely recycling and low environmental footprints. P&G has consistently re-developed sustainable and innovative products for their entire product line in an effort to avoid waste and provide the same superior product in a more environmentally friendly package. Information of what consumers are looking for in product loyalty and knowing the social responsibility as a large manufacturing company keeps R&D for P&G active with creative ideas, increased human capital, and a willingness to evolve each product for the ever-changing, new, generation of loyal consumer.
Strategy Evaluation According to the P&G Sustainability Report (2012), the company has been successful in developing and selling $52 million of innovative products since 2007. P&G’s innovation strategy has proven to be a success for the company. Their R&D, aimed at following trends to offer consumers new products based on need is arguably most evident through their Tide line of products. As a result of P&G research, Tide Coldwater Detergent and Tide PODS were developed because of consumer trends in laundry habits. The company wanted to ensure that the product worked effectively in coldwater because nearly 40 percent of consumers wash in cold to save energy and money and to preserve their clothes (Proctor & Gamble, 2012, pg. 13). Company financial statements support their claim of success. The U.S. Securities and Exchange Commission filings for the company show an increase in sales for both a three-month and nine-month ending period. For the three-month period ending on March 31, 2013, P&G realized a $404 million increase in net sales and a $0.07 increase in basic net earnings per share from the same period in the previous year (U.S. Securities & Exchange Commission, 2013).
Conclusion
It is no secret that to remain competitive in today’s changing, fast paced, and consumer focused market, a firm is required to be innovative. P&G is perhaps one the epitome of what it takes a company to thrive and be successful. P&G’s strategies toward remaining innovative include a vast array of ideas, concepts, marketing, branding, and of course, products. The P&G mission is to: provide branded products and services of superior quality and value that improve the lives of the world’s consumers, now and for generations to come. As a result, consumers will reward us with leadership sales, profit, and value creation, allowing our people, our shareholders, and the communities in which we live and work to prosper. (Proctor & Gamble, 2012, para.
1).
Their commitment to the people, as depicted in their “The Everyday Effect” campaign (2013), states, “With innovative products from P&G in your life, seemingly ordinary acts can have an extraordinary impact” (para. 1). The statement clearly illustrates P&G’s focus on innovation is undoubtedly 100% consumer driven. Moreover, their financial success, as shown in their bottom line, is a simple side effect of meeting the needs of their target markets. It is through their commitments and purpose that P&G will remain at the forefront of innovation and success for many future generations to come.
References
Brown, B. & Anthony, S. (2011). How P&G Tripled its Innovation Success Rate. Harvard Business Review Magazine. Retrieved From: http://hbr.org/2011/06/how-pg-tripled-its-innovation-success-rate/ar/1
Proctor and Gamble, (2012) Heritage. Retrieved From: http://www.pg.com/en_US/company/heritage.shtml
Proctor and Gamble. (2013) Proctor Meets Gamble. Retrieved From: http://news.pg.com/blog/procter-meets-gamble
Proctor and Gamble. (2012) Sustainability Overview. Retrieved From:
http://www.pg.com/en_US/downloads/sustainability/reports/PG_2012_Sustainability_Overview.pdf
Rothaermel, F., & Hess, A. (2010). Innovation strategies combined. MIT Sloan Management Review, 51(3), 13-15. Retrieved from http://search.proquest.com/docview/224965786?accountid=35812
U.S. Securities and Exchange Commission. (2013). Proctor & Gamble Co. Consolidated Statement of earnings. Retrieved from: http://www.sec.gov/cgi-bin/viewer?action=view&cik=80424&accession_number=000008
Written Assignment Grading Form for Innovation Strategy Paper, Due in Week Two
Content60 Percent | Points Available6 | Points EarnedX/6 | Additional Comments: | * The paper describes and evaluates an organization’s innovation strategy. * The paper includes publicly available information, including Securities and Exchanges Commission filings and introducing new products or services. | | 6 | Great research, team. I like the choice of products and the organization is a true innovator.You make a good case for this organization. | Organization / Development20 Percent | Points Available2 | Points EarnedX/2 | Additional Comments: | * The paper is no more than 1,050 words in length. 903 * Paragraph transitions are present, logical, and maintain the flow throughout the paper. * The tone is appropriate to the content and assignment. * Sentences are complete, clear, and concise. * Sentences are well constructed, strong, and varied. * Sentence transitions are present and maintain the flow of thought. | | 2 | The paper is nicely organized and easy to follow. I am really impressed with the research and the writing is appropriate. | Mechanics 20 Percent | Points Available2 | Points EarnedX/2 | Additional Comments: | * The paper—including tables and graphs, headings, title page, and reference page— is consistent with APA formatting guidelines and meets course-level requirements. * Intellectual property is recognized with in-text citations and a reference page. * Rules of grammar, usage, and punctuation are followed. * Spelling is correct. | | 2 | I see no violations of APA and applaud your research (did I say that already?)Good job. | | Total Available | Total Earned | | | 10 | 10 | |
Innovation Strategy Proctor and Gamble (P&G) is an innovative organization that is a household name recognized by millions of families worldwide. The company is a purpose driven organization that creates products of quality and value to help improve the lives of its current consumers and future generations (Proctor & Gamble, 2013). The firm markets its products in numerous countries and its reputation is based on the company’s purpose and its social and ethical responsibilities as a corporate citizen. P&G’s innovation strategies include creating new products and improving current products that embody the firm’s purpose and mission as an organization. The innovation strategies help the organization to remain …show more content…
competitive and successful. The following report will provide a description and evaluation of P&G’s innovation strategy.
Company Background
P&G was founded in Queen City of the West, Cincinnati by candle maker William Proctor and soap maker James Gamble. The relationship between these two businesses men was formed by a partnership agreement formalizing “The Proctor and Gamble Company” in 1837 (Proctor & Gamble, 2013). Today the iconic brand services approximately 4.6 billion people around the world. The company operates in 75 countries across the globe and their products are currently sold in more than 180 countries (Proctor & Gamble, 2012). The portfolio of integrated brands includes Pampers, Gillette, Tide, Ariel, Downy, Pantene, Head and Shoulders, Olay, Oral-B, Crest, Dawn, Fairy, and Always (Proctor & Gamble, 2012).
Through innovation, strategic planning, research and development (R&D), and collaborative efforts P&G doubled its annual revenue from $12 billion to $24 billion with the iconic brand named Tide (Brown & Anthony, 2011). Using rebranding methods such as creating new logos, new packaging ideas, and new sub-products resulted in a comeback for the 50 year old laundry detergent. According Brown and Anthony (2011), Proctor and Gamble’s spends $2 billion annually in the R&D department, which is a reflection on the performance of business growth.
Innovation Strategy Innovation is a competitive weapon used by most organizations during difficult economic transitions. Innovative strategies help companies to redefine the marketplace by gaining a competitive advantage within its industry. The firm’s innovative strategies may include engaging in strategic alliances, acquiring new technology ventures or redesigning its workforce. Internal inventions should also be considered by the organization for commercialization purposes (Rothaermel & Hess, 2010).
Presently consumers are sensitive to the price and development of products for daily consumption. In addition, consumers are conscientious of how the company performs in green development and environmental protection, namely recycling and low environmental footprints. P&G has consistently re-developed sustainable and innovative products for their entire product line in an effort to avoid waste and provide the same superior product in a more environmentally friendly package. Information of what consumers are looking for in product loyalty and knowing the social responsibility as a large manufacturing company keeps R&D for P&G active with creative ideas, increased human capital, and a willingness to evolve each product for the ever-changing, new, generation of loyal consumer.
Strategy Evaluation According to the P&G Sustainability Report (2012), the company has been successful in developing and selling $52 million of innovative products since 2007. P&G’s innovation strategy has proven to be a success for the company. Their R&D, aimed at following trends to offer consumers new products based on need is arguably most evident through their Tide line of products. As a result of P&G research, Tide Coldwater Detergent and Tide PODS were developed because of consumer trends in laundry habits. The company wanted to ensure that the product worked effectively in coldwater because nearly 40 percent of consumers wash in cold to save energy and money and to preserve their clothes (Proctor & Gamble, 2012, pg. 13). Company financial statements support their claim of success. The U.S. Securities and Exchange Commission filings for the company show an increase in sales for both a three-month and nine-month ending period. For the three-month period ending on March 31, 2013, P&G realized a $404 million increase in net sales and a $0.07 increase in basic net earnings per share from the same period in the previous year (U.S. Securities & Exchange Commission, 2013).
Conclusion
It is no secret that to remain competitive in today’s changing, fast paced, and consumer focused market, a firm is required to be innovative. P&G is perhaps one the epitome of what it takes a company to thrive and be successful. P&G’s strategies toward remaining innovative include a vast array of ideas, concepts, marketing, branding, and of course, products. The P&G mission is to: provide branded products and services of superior quality and value that improve the lives of the world’s consumers, now and for generations to come. As a result, consumers will reward us with leadership sales, profit, and value creation, allowing our people, our shareholders, and the communities in which we live and work to prosper. (Proctor & Gamble, 2012, para.
1).
Their commitment to the people, as depicted in their “The Everyday Effect” campaign (2013), states, “With innovative products from P&G in your life, seemingly ordinary acts can have an extraordinary impact” (para. 1). The statement clearly illustrates P&G’s focus on innovation is undoubtedly 100% consumer driven. Moreover, their financial success, as shown in their bottom line, is a simple side effect of meeting the needs of their target markets. It is through their commitments and purpose that P&G will remain at the forefront of innovation and success for many future generations to come.
References
Brown, B. & Anthony, S. (2011). How P&G Tripled its Innovation Success Rate. Harvard Business Review Magazine. Retrieved From: http://hbr.org/2011/06/how-pg-tripled-its-innovation-success-rate/ar/1
Proctor and Gamble, (2012) Heritage. Retrieved From: http://www.pg.com/en_US/company/heritage.shtml
Proctor and Gamble. (2013) Proctor Meets Gamble. Retrieved From: http://news.pg.com/blog/procter-meets-gamble
Proctor and Gamble. (2012) Sustainability Overview. Retrieved From:
http://www.pg.com/en_US/downloads/sustainability/reports/PG_2012_Sustainability_Overview.pdf
Rothaermel, F., & Hess, A. (2010). Innovation strategies combined. MIT Sloan Management Review, 51(3), 13-15. Retrieved from http://search.proquest.com/docview/224965786?accountid=35812
U.S. Securities and Exchange Commission. (2013). Proctor & Gamble Co. Consolidated Statement of earnings. Retrieved from: http://www.sec.gov/cgi-bin/viewer?action=view&cik=80424&accession_number=000008
Written Assignment Grading Form for Innovation Strategy Paper, Due in Week Two
Content60 Percent | Points Available6 | Points EarnedX/6 | Additional Comments: | * The paper describes and evaluates an organization’s innovation strategy. * The paper includes publicly available information, including Securities and Exchanges Commission filings and introducing new products or services. | | 6 | Great research, team. I like the choice of products and the organization is a true innovator.You make a good case for this organization. | Organization / Development20 Percent | Points Available2 | Points EarnedX/2 | Additional Comments: | * The paper is no more than 1,050 words in length. 903 * Paragraph transitions are present, logical, and maintain the flow throughout the paper. * The tone is appropriate to the content and assignment. * Sentences are complete, clear, and concise. * Sentences are well constructed, strong, and varied. * Sentence transitions are present and maintain the flow of thought. | | 2 | The paper is nicely organized and easy to follow. I am really impressed with the research and the writing is appropriate. | Mechanics 20 Percent | Points Available2 | Points EarnedX/2 | Additional Comments: | * The paper—including tables and graphs, headings, title page, and reference page— is consistent with APA formatting guidelines and meets course-level requirements. * Intellectual property is recognized with in-text citations and a reference page. * Rules of grammar, usage, and punctuation are followed. * Spelling is correct. | | 2 | I see no violations of APA and applaud your research (did I say that already?)Good job. | | Total Available | Total Earned | | | 10 | 10 | |