Procter & Gamble's Innovation Strategy

This assignment requires you to analyze Procter & Gamble (P&G)'s innovation strategy. You should explore P&G's core strengths as described in their official materials, examine their business model for innovation, and discuss the impact of their strategies on their overall performance. The analysis should be supported by relevant academic literature and real-world examples.

Running Head: Managing Innovation
Managing Innovation

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Contents
Introduction.................................................................................................................................................1
Question 1: What are the key threats and opportunities in the current environment of the company? What
do your findings indicate about future innovation trends?...........................................................................2
Threats.....................................................................................................................................................2
Opportunities...........................................................................................................................................3
Question 2: What are the perceived strengths and weaknesses of the company? Based on your findings,
discuss the competitive analysis of the company with an innovation perspective.......................................5
Strengths..................................................................................................................................................5
Weakness.................................................................................................................................................6
Direction of P & G Company in upcoming ten years..................................................................................8
 Consumer understanding.................................................................................................................8
 Productivity.....................................................................................................................................8
 Go to market....................................................................................................................................8
 Scale................................................................................................................................................8
 Brand building.................................................................................................................................9
 Innovation........................................................................................................................................9
Conclusion...................................................................................................................................................9
References.................................................................................................................................................10

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Introduction
SWOT Analysis in an organization is used to evaluate in the internal factor affecting the growth
of the organization. It further assists the company in analyzing the factors with the help of which
they can earn profits in the market. Every company present in the market initiates their business
activities to expand their market base and run in long run. Thus for that purpose, every company
needs to implement innovation in their business process. In today's world, all companies aim to
achieve higher position by eliminating competition from the market (Northouse 2015). The
SWOT analysis comprises of strengths, weakness, opportunities, and threats of an organization.
This analysis helps them in gaining adequate knowledge about the working of the organization.
Further innovation is the tool which helps an organization in gaining competence in the market.
The tool also guides the company on the basis of which they shall work accordingly to reach its
peak (Ngo, and O'cass 2013).
The Proctor and Gamble Company, commonly known as P & G, is an American company which
produces consumer goods. The company is headquartered in the United States of America and it
was founded in the year 1837 by William Proctor and James Gamble. The company has created
specialization in cleaning and hygiene products. P & G Company was originated with a mission
to initiate the growth of the company by providing maximum satisfaction to the customers and
enhance their standard of living (P & G 2017).
The report further identifies the SWOT Analysis of the P&G Company which will assist the
company to achieve their future targets defined. Furthermore, the report provides an overview of
the company with respect to innovative ideas implied within the organization. The details about
the report are explained below:

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Question 1: What are the key threats and opportunities in the current environment of the
company? What do your findings indicate about future innovation trends?
Threats: it refers to major problem s which can attract the company and reduce its growth. The
threat which the company P& G faces in the current market situations are described below:
 The threat which can decrease the growth of the company is that there is cut throat
competition in the market which results in creating a negative impact for the company.
There is intensified competition between the FMCG companies which is somehow badly
affecting the market share of the company (Cheng, Yang, and Sheu 2014).
 Also, another aspect of competition is that the FDI in retail is constantly providing
license to international companies so that they can come and start their business in new
environment. Due to this reason the companies like p & G which are already prevailing in
the market face problem in keeping the customers interested their business. As
international brand already have a flourished market all around the world and they also
provide new offers to attract the target market which negatively impacts the growth of the
company.
 Another factor which acts as a barrier to the growth of the company is the competition of
the company with local products and brands prevailing in the market. As the p & g
company provides casual household cleaning etc. products, so there is many other local
brands as well which provides door to door services in localities (Visnjic, Wiengarten,
and Neely 2016). Due to this reason, the sale of the company is reduced. Local products
are cheap and easily feasible thus people also prefer to use these non-brand products
which act as a threat for the growth of the company.

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 P & G being a global brand faces difficulty in managing the human resource of the
organization. The company is having vast empire which makes it even more difficult to
manage different employees having different cultures and ideas. Also many times the
company faces difficulty in resolving the conflicts rose in the internal management of the
company due to which communication gap occurs in the organization. Thus, it shall be
noted if the internal management is unstable then the external environment can never
help the company to gain competence in the market (Wild, Wild,and Han, 2014).
 Fluctuation in the prices of dollar creates disturbance in performing financial transactions
by the company. The recession and economic crisis affect the performance of the
business in long run. The company faces difficulty in operation their transactions
worldwide as the prices of dollar changes frequently leading the company to shift their
existing market position present in the company (Olavarrieta, and Villena 2014).
Opportunities: it refers to changes with the use of which the company can gain profit. The
opportunities which the company p & g attains are described below:
 The company Proctor & Gamble efficiently exploits the opportunities available to the
company and uses them to expand their share in global market. One of the major
opportunities which grasped the interest of the company is that the manager of the
company adopted the business diversification policy to reduce risks. Having business in a
particular region can create problem for the company as a slight change or variation in
the features of the market can make big effect on the position of the company. Due to this
reason the company utilized the policy of diversification which spread is risks for the
company as well (Arlbjørn, and Paulraj 2013).

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 Another opportunity which the company shall take into accounts to gain market
capitalization is that the company p & g shall focus on merger and acquisition which can
strengthen the position of the company. Also if the company will join their workings with
other companies having similar or higher brand image then it will act as an opportunity
for p & g to create a strong brand image of the organization.
 By noticing the market activities, the fact was observed that the purchasing power in the
hands of customers has increased due to which now it has become easy for people to buy
more and more products. With this effect, the demand in the market for the product has
also increased in the market. As the economies of scale increased, this results in an
increase in expenses of the customers. With the customers having cash in hand requested
for the products due to which the sale of the products gained (Xiaoren, Ling, and
Xiangdong 2014).
 Talking about the opportunities which the company received is that, the company p & g
being a diversified company had an opportunity to gain the interest of different target
market as well by expanding the types of product. If the company initiates to create a new
consumer product to offer in the market then the company earn optimum return out of it,
the name of P & G Company is already famous in the eyes of the customer to their
quality. So if the company will introduce a new product while thinking of expansion then
the company will o face problem to create its image in the market (Holm, Günzel, and
Ulhøi, 2013).
In the limelight of above events discussed it shall be noticed that the company may attract or face
many penalties and threats if it will not work cautiously. Thus, it shall be noted that the company
should aim to reduce mistake so that the future activities become effective. Also, the company

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can expand its business and generate more profit due to its brand image present in the market.
Further, in order to manage future innovation along with threats and opportunities, the company
initiated innovation the organizational culture and developed capabilities in the organizational
system to enhance the customer satisfaction (Wheelen, and Hunger 2017).
Question 2: What are the perceived strengths and weaknesses of the company? Based on
your findings, discuss the competitive analysis of the company with an innovation
perspective.
Strengths: strengths of a company help them to utilize the capabilities adequately and work in
direction of success. The strengths of P & G Company are discussed below:
 There are various strengths of the company P & G which helps them to gain the
competitive edge in the market. The company is having more than 300 brands working
under them due to which the company earns good revenue from every product. The
market of the company s spread in around 180 countries, thus it can be analyzed that the
company holds huge financial transactions in their business activity. From such number,
the fact was known that P & G is a diverse company holding it business globally and
carrying goodwill in the market (Easterby-Smith, Thorpe, and Jackson 2015).
 Another benefit is that as the sale margin of the company has high due to which it
receives a good margin of cash in hand which the company can invest to gain assets for
the company. Thus, the company invests their fund to optimize the resources which can
further help the company to earn a good return. Also, it also helps the company provide
incentives to the employees to maximize their satisfaction level.

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 As the company holds its operations in more than 80 countries worldwide, thus the
company has huge human resources. Therefore the company enjoys cross culture
transaction as well. Because of having employees who belong to different culture the
company get to know taste and preferences of people of different region. Due to this sale
is initiated (Wong, Tseng, and Tan 2014).
 Further in case of innovation as the company enjoys employees with different culture,
thus they provide new and innovative ideas to the management for the growth of
company. This process also assists the company in success.
 The company holds good supply change management system due to which the products
of the company are easily available in the market (Kew, and Stredwick 2017). Due to
adequate availability of the product in the market, the sale of the company is increased.
The customers rely on the product due to the brand image and it is the first choice of
every person due to availability and goodwill. Also, the goodwill of the company is made
because the quality delivers to the customers is good. The company constantly believes to
satisfy the requirement of the customer and provide them maximum satisfaction from
their products (Lafley 2017).
Weakness: it refers to the drawback in the system of the company whether internal or external.
This drawback can hamper the growth of the company. Further the weaknesses which the
company P & G face is described below:
 One of the major issues which the company is facing now a day is the problem of face
imitation of the original products of P & G. this is causing distress in customer and
raising a question on the quality of original products of the company. The customers of
the company are unable to differentiate between fake and original product and then keep

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on purchasing the fake product due to which the face problem in quality of the product.
The customers feel that the company is cheating by providing products of low quality
under the brand name of P & G. Thus, due to this reason the image of the company is
having a negated impact (P & G 2017).
 As discussed above, competition is one of the major threats for the company which ruins
the growth of the company in the global market. So this factor acts as a weakness for the
company, tough competition in the market gives more choice to the customers. Because
of having more and more options the customer base of the company is breaking as they
are shifting to different company. A company does not earn profits when they have a
huge customer base instead they earn the profit when there is repetitive sale of the
product in the market. Thus if repetitive sale is declined then the company can face
losses.
 The image of the company is declining day by day and it is creating an adverse effect on
the mind of existing customers.
Considering the above-mentioned factors with respect to future innovation the fact shall be noted
that the company P & G has numerous strengths in their business which assist them in
maintaining the future growth of the company, but fact shall be taken into account that imitation
is hampering the growth of the company. thus in order to generate optimum profit for the
company, the management need to creatively implement innovative techniques and
differentiation in their product so that it is easily identified by the customers in the market (Velu,
and Stiles 2013).

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Direction of P & G Company in upcoming ten years
With respect to future growth and innovation of the company, it shall be noted that the company
P & G is initiating to develop excellence below mentioned six core aspects:
 Consumer understanding: the main focus of the company is to develop an
understanding of the target market in which the company is going to carry on its business
function. Another aspect of which the company shall focus is that it aims to drive
maximum benefit to the customers. The management of the company is continuously
aiming to create innovate products which can satisfy the requirements of the customers.
 Productivity: although the company produce is good in terms of profit and sale, the
company is mainly focusing to strengthen the productivity of the organization. For future
context, the company is aiming to improve the sale profit and cash performance. In this
aspect P & G wants to increase the ongoing growth of making a systematic program for
the accounting process of the organization. This will also initiate transparency in the
organizational culture. Productivity aspect also includes product innovation and new
channels of distribution which the company shall introduce to increase future sales (P &
G 2017).
 Go to market: P & G is constantly ranked one of the best company which supplies
products on demand. The product is all time available in the market, thus through this
process, the company aims to reach every place in the region where the product is
demand. Irrespective of the geographical boundaries p & G wants to increase its sale by
supply more products.
 Scale: looking at this aspect of the company, as discussed earlier the production of the
company is effective and efficient and it also helps provides optimum sales to the

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company. Thus, the focus of this aspect of the company is to provide maximum
satisfaction to customers at low prices. As these are household product so the company
does not want it to make too expensive. The scope of the company is to provide
affordable products and enhance economies of scale (Brown, & Anthony 2011).
 Brand building: the company P & G is a leading brand due to which it is easy for the
company to create goodwill of its new product. Thus the company aims to create a
positive image in the mind of customers.
 Innovation: it is the basic tool which the company is highly stressing on. The aim of the
company is to develop innovative features in their products so that the problem of
imitation is resolved. Also, they want to maximize the satisfaction level of customers due
to which they aim to initiate innovation to provide products as perceived by customers
(Thompson 2017).
Conclusion
Thus in the limelight of above events, it shall be noted that the company P& G is a diversified
business having many products under the name of the company. Thus, it is for the company to
expand its business by introducing a new product with different specifications. The name of the
company is enough to publics the product and create sale for the same. But the face shall be
taken into account that due to the threat of imitation, the company shall creatively design its
product and with new features so that the customers can also differentiate between real and fake
product.

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References
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from a supply chain perspective: current status and opportunities for future research. Journal of
Supply Chain Management, 49(4), pp.3-11.
Brown, B., & Anthony, S., 2011. How P&G Tripled Its Innovation Success Rate. Viewed on
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Cheng, C.C., Yang, C.L. and Sheu, C., 2014. The link between eco-innovation and business
performance: a Taiwanese industry context. Journal of Cleaner Production, 64, pp.81-90.
Easterby-Smith, M., Thorpe, R. and Jackson, P.R., 2015. Management and business research.
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lessons from the newspaper industry. International Journal of Technology Management, 61(3/4),
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Kew, J. and Stredwick, J., 2017. Business environment: managing in a strategic context. Kogan
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Lafley, A.G., 2017. P&G’s Innovation Culture. Viewed on September 8, 2017 from
https://www.strategy-business.com/article/08304?gko=b5105
Ngo, L.V. and O'cass, A., 2013. Innovation and business success: The mediating role of
customer participation. Journal of Business Research, 66(8), pp.1134-1142.
Northouse, P.G., 2015. Leadership: Theory and practice. Sage publications.

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Olavarrieta, S. and Villena, M.G., 2014. Innovation and business research in Latin America: An
overview. Journal of Business Research, 67(4), pp.489-497.
P & G., 2017. Our Approach to Innovation. Viewed on September 8, 2017 from
http://us.pg.com/who-we-are/our-approach/our-approach-innovation
P & G., 2017. Our Core Strengths. Viewed on September 8, 2017 from http://us.pg.com/who-we-
are/our-approach/core-strengths
P & G., 2017. Purpose, Values & Principles. Viewed on September 8, 2017 from
https://us.pg.com/who-we-are/our-approach/purpose-values-principles
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Velu, C. and Stiles, P., 2013. Managing decision-making and cannibalization for parallel
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Visnjic, I., Wiengarten, F. and Neely, A., 2016. Only the brave: Product innovation, service
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perspective on organisation performance. Total Quality Management & Business
Excellence, 25(5-6), pp.602-617.

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Xiaoren, Z., Ling, D. and Xiangdong, C., 2014. Interaction of open innovation and business
ecosystem. International Journal of u-and e-Service, Science and Technology, 7(1), pp.51-64.