Procter & Gamble Business Model Innovation

This assignment analyzes Procter & Gamble's (P&G) business model through the lens of the Business Model Canvas. It examines how P&G has incorporated smart connected products into its existing model, highlighting the value proposition and competitive advantages this creates. The analysis also explores the future implications of these innovations for P&G's sustainability and growth.

Running head: INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT
Innovation and Sustainable Business Development
Name of Student
Name of University
Author Note

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INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT
Introduction
P&G is one of the most reputed and greatest multi consumers companies who deliver
multi retail products and services to the customers across the globe. They have their head office
located in US. The company is established in the year 1837. It has the revenue of around 6529
crores in 2016. P&G provides branded products having superior quality and provide impressive
value to the different consumers in this world through their wide and diverse range of products
(Hong & Fauvel, 2013). The company has more than 300 branded products and having the
operations in more than 80 countries now. They have the employee size of around 135,000. It
has began as the family operated shop and candle company and now it delivers more than 300
branded products in around 180 countries.
The study is mainly focused on the review of literature on the business model and
disruption. It should also be describing the existing threats as well the opportunities to be
provided to the existing business model of P&G due to the development and implementation of
smart connected products. It is also reflecting on the analysis of the business model in the
context of business model as value proposition and the business model as the set of capabilities
and resources. It should briefly conclude by analyzing the importance and the future of business
model implementation in business for P&G.
Review of Business model of P&G
In accordance with DaSilva & Trkman, (2014) the business model is defined as the
strategic tool which is useful in visualizing the entire operations of any business organization.
The internal as well the external capabilities could be recognized and assessed with the effective
use of the business model for any business organizations. This is useful in depicting and

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assessing the specific revenue and profitability of any business. The business model could be
able to depict and analyze the competitive positioning of any business organization. The business
model is considered as the heart of any business as this model leads how business will be
operating. According to DaSilva & Trkman, (2014) in the rapid development of technology and
rise in competition the business organizations are not going to trust their operating model for a
very long period of time. They tend to make their business model innovative which should be
adding value to their business and for the stakeholders involved with the business.
The business model has the link with disruption. In the modern day business
organizations businesses are competing with each other and try to develop new concepts and
strategies by which they can be able to compete against each other for increasing profits day by
day (DaSilva & Trkman, 2014). Due to the high profitability and increasing expectations from
the business, the business model is not fixed and it is trying to changing at a brisk rate. So
sometimes there is disruption in the business model to be taken place if the model is not so
appropriate and stable for the running of that specific business.
Christensen, Raynor & McDonald, (2015) states that the business models are not so much
stable in nature which were created in the past and this due to the fluctuations in the internal as
well in the external environment. The disruption in the business model is due to some of the
internal as well the external factors which involves the organizational structure and culture. It
should also involve external operations, the macro environmental influences on the business
model.

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The smart connected products are basically the products which are interfaced with the
software so that it can influence the operations of any business through stability and flexibility.
The smart connected products provide flexibility to the existing business models. The smart
connected products completely change the structure of the business model which is derived in
the past (Schneider & Spieth, 2013). With the smart connected products to be implemented, the
business sustainability of P&G enhances (Amit & Zott, 2012). The smart connected products
helps in the development of the lean, efficient and cost effective ecosystem which runs from the
supply chain through to the end users (Chakravarti & Jain, 2017). This helps in receiving the real
time data and deep information regarding how the product should be used. For example, P&G
has developed smart connected product which is a smart toothbrush. The name is Oral B genius
have two detection sensors which is present in the brush with a mobile app. This will be helping
the customers for the identification of the spots they are missing with the oral hygiene
approaches.
The smart connected products helps in monitoring the products and continuously update
them. For example, Diebold can update new features to the smart connected ATMs remotely.
The smart connected products in P&G helps in fixing the problems of their products they
deliver quickly and recall the processes by which the products are manufactured by P&G. For
example, Samsung Galaxy Note recalling took place costing the company around $5.3. The
smart connected products also provide the opportunities to offer new functionalities in the
products developed by P&G. It provides more reliability and higher utilization of the products.

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The threats caused due to the introduction of the smart connected products in the existing
business model of P&G is that the products are redeveloping the model which might not be
suitable for all the stakeholders involved with P&G (Schaltegger, Lüdeke-Freund & Hansen,
2012). It should also be exploring the strategic and operational implications due to changes in the
strategy to be taken place by P&G in its existing business model (Massa & Tucci, 2013). There
is also the threat that the smart connected products do not have the ability to send the information
to the internet without the internet is connected. There is also the threat of no platform getting
connected with the smart connected devices and this slows down the growth of the products in
the market (Higginbotham, 2015). For example, P&G has launched Oral B toothbrush connected
with Amazon dash devices where the customers should be pressing button to get the delivery of
Oil of Olay facial cleansers and Bounty brand paper towels.
Markides, (2013) stated that the business model canvas is important in representing the
business model of P&G in a proper manner. The business model canvas is termed as the tool for
the analysis of the business model and what should be the various elements to be represented in
the development of the business model (Osterwalder & Pigneur, 2010). It is the visual way of
laying out the strategies and the operations in a canvas which is useful for the strategic decision
makers to make effective decisions based on the visual way out of the model. This illustrates the
initial findings about the business model.
The existing business model of P&G develops value proposition for the company as well
for the customers. The existing business model for P&G generates high revenues and
profitability with their effective and huge resources they have it adds value for the shareholders
of the company (Hong & Fauvel, 2013). The innovation is to be done with the products as they
have huge spending on R&D activities better than the competitors. The greatest competitor for

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P&G is Walmart. The high spending in R&D will help in the launching of the improved and
innovative products and this helps in enhancing their market share adds value for the
shareholders of the company (Joyce & Paquin, 2016).
The existing business model also adds value for their consumers across the world. They
have wide product portfolio as they have five different portfolios which adds value for them. The
superior technology and the development of innovative and high quality products add value to
them (Bucherer, Eisert & Gassmann, 2012). P&G also sell their products directly to the
customers through their official website and this develops reliability and convenience for the
consumers to get the right type of products from their homes respectively. The delivery of the
leading brands and high customer satisfaction level also add value to their existing business
model. They have huge number of stores which makes the consumers from all around the globe
to get the products at the right time and meeting the needs and demands of them (Schaltegger,
Lüdeke-Freund & Hansen, 2012).
They have the capabilities of becoming one of the largest FMCG companies in this world
competing rigorously to the world largest multinational consumer goods company Walmart.
They have the skilled and professional expertise who can be able to provide high quality
products and innovative services to the consumers coming across the globe (Schneider & Spieth,
2013). They have huge number of stores located in different regions across the world has the
capability of delivering the products according to the needs and demands of the consumers (Amit
& Zott, 2012). They also have the capability of operating in more than 180 countries and dealing
with more than 300 brands across the world. They also have the innovation at its best for product
development and product designing process by which they can improve and adds new features to
their products they deliver (Casadesus‐Masanell & Zhu, 2013).

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P&G owns and operates 20 manufacturing sites which are located in 20 states in US. It
also owns 100 manufacturing sites in more than 40 countries (DaSilva & Trkman, 2014). They
have the leading brand portfolio of 65 developing 95 percent of the profit for the company.
Conclusion
From the study it is significant that the there is the development of the business model
canvas in order to explain the existing business model of P&G effectively and efficiently. This is
significant in adding value proposition to the business due to the smart connected products
implemented in the existing business model. It is evident that P&G has revolutionized the
business model. It concludes that the future of the business for P&G is very good as innovation
could be incorporated and there is greater sustainability of the business for P&G to be taken
place.

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References
Amit, R., & Zott, C. (2012). Creating value through business model innovation. MIT Sloan Management
Review, 53(3), 41.
Bucherer, E., Eisert, U., & Gassmann, O. (2012). Towards systematic business model
innovation: lessons from product innovation management. Creativity and Innovation
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Casadesus‐Masanell, R., & Zhu, F. (2013). Business model innovation and competitive
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Christensen, C. M., Raynor, M. E., & McDonald, R. (2015). What is disruptive innovation.
Harvard Business Review, 93(12), 44-53.
DaSilva, C. M., & Trkman, P. (2014). Business model: What it is and what it is not. Long range
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Markides, C. C. (2013). Business model innovation: What can the ambidexterity literature teach
us?. The Academy of Management Perspectives, 27(4), 313-323.

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Massa, L., & Tucci, C. L. (2013). Business model innovation. The Oxford Handbook of
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Fortune