Procter & Gamble Case Study - Innovation, Marketing, R&D and Recommendations

This case study explores Procter & Gamble's innovation, marketing, R&D methodology, and recommendations for improvement. It covers the company's internal structure, market research techniques, and key external factors affecting P&G. The study suggests embracing online advertising, diversification, and collaboration to enhance P&G's innovation capacity.

Procter & Gamble Case Study
Student’s Name
Institution Affiliation

Company Background
The company was established May 5th, 1905.
Main products produced are household items
such as baby care, fabric, healthcare, beauty care
etc. (Tran, 2005).
Comprises of almost 300 brands in about 80
countries worldwide (Nee, Song and Ong, 2013).
Its annual revenue is estimated to be about $1
billion

Innovation Outline
 Over the years there has been great advancement at P&G in
terms of innovation capability (Terziovski, 2007).
 Based on their innovativeness P&G is classified to be 5/10 and
7/25 according to recent marketing reports (Ferdousi, 2015).
 From 1995 when the pacesetters released a general report
concerning P&G company currently the company has
established an additional of 170 products which are
categorized in the non-food sections which outfits its
competitors (Karniel and Reich, 2011; Hartmann and Schmidt,
2007)

Marketing: Organisation’s Internal
Structure
The divisions of the P&G prototype
organizational structure based on its feature
are:
Product type division
Geographical division
Functional division

Marketing: Market Research
Techniques
The Marketing Research Tools employed by P&G company
include:
Qualitative techniques
Quantitative Research data collection Tools
Exercising online marketing research analysis (Connell and
Teo, 2010). Ideation on online market search technique enhances
globalization (Desai, 2013).

Marketing: R&D Methodology
Acquiring deep Consumer knowledge
Innovate with Superior Technology
Use of Branding Technology
• Creation of mutually valuable venture with
outdoor organizations and companies
(Eftekhari and Bogers, 2015)
Drawing and aiding of excellent innovators
around the world

P&G Cumulative R&D Spend

R&D Advantages to P&G

R&D Advantages to P&G
Structuring of brand new production skills for
the generation of innovative items within the
P&G firm.
Build up of latest inventive production
processes with the aid of simulation models
Filtration and qualification of different models
in order to increase manufacturing capacities
(Stieler, 2017)

Key External Factors
Porter’s 5 Forces:
Purchasing power of consumers – Mixed Strong
Power of suppliers - Low
Threats to new entrants – Moderate
Substitutes threats (High)
Threat to Rivalry (High)

Key External Factors
External factors affecting P&G are Macro
environmental forces. These include:
Macro-economic
Demography
Global
Social
Innovation

Recommendations
 Review Procter and Gamble brand image strategies by producing new
products using ideation
 Embrace the power of online advertising to globalize
 Diversification to new stores to limit P&G’s market risks and exposure
Explanation
Despite the fact that P&G productivity is at a competitive edge, the company
need to formulate measures to overcome potential threat and weaknesses in
business. The company’s limited online presence and market
diversification is a weakness that P&G management needs to exclude.
Provided these recommendation in the marketing activities of the
company, P&G will be capable to establish as stronger brand image and
marketing abilities to globalize.

Technological Perspective
The organization focuses on delivering
disruptive services and products
P&G utilizes research and development
(R&D) team to develop novel idea about
unique product creation (Tranekjer, 2017).
The company works with expert innovators
(Björk, Boccardelli and Magnusson, 2010).

Innovation Process
The company uses Open Innovation Process
(Zainol et al., 2016).

The company wanted to:
Succeed in technological innovation
Assuring P&G’s success in future
Embracing the power of partnership
(Vanhaverbeke, 2013).
Why the Innovation Process was
Applied

Enhancement of P&G’s
Innovation Capacity
 The company has a sophisticated research network. P&G
applies both open and proprietary networks that constantly
generate new information about product development
Zupančič (2018)
 Patents degree of products has been increased to 50% from
10%
 The success rate of P&G’s product has increased from 35% to
50%
• The company’s new products percentage has increased in their
elements to 35% from 15% (Tsai and Liao, 2017).
•

Parties Facilitating Open
Innovation

Recommendation
 Embrace the capacity of absorption by allowing workers to collaborate in other
facilities
 Formulating IPR arrangements fairly
Explanations
 R1: The Company should allow its workers to collaborate with others in
different facilities. Absorption capacity enhances the transfer of expertise
and knowledge from one facility to another. Resultantly, open innovation is
be distributed throughout the company’s stores globally.
 R2:formulation of IPR arrangement that should be designed fairly between
parties. Apply this strategy will enable P&G to shorten its duration of
partnership contract and save more resource and time during the whole
process.

References
• Björk, J., Boccardelli, P. and Magnusson, M. (2010). Ideation Capabilities for Continuous
Innovation. Creativity and Innovation Management, 19(4), pp.385-396.
• Connell, J. and Teo, S. (2010). Strategic HRM. Prahran, Vic: Tilde University Press.
• Desai, P. (2013). Methods beyond interviewing in qualitative market research. London: Sage.
• Eftekhari, N. and Bogers, M. (2015). Open for Entrepreneurship: How Open Innovation Can
Foster New Venture Creation. Creativity and Innovation Management, 24(4), pp.574-584.
• Ferdousi, F. (2015). Impact of microfinance on sustainable entrepreneurship
development. Development Studies Research, 2(1), pp.51-63.
• Hartmann, G. and Schmidt, U. (2007). Product lifecycle management with SAP. Bonn: Galileo
Press.
• Karniel, A. and Reich, Y. (2011). Managing the dynamics of new product development
processes. London: Springer. Leydesdorff, L. and Ivanova, I. (2016). “Open innovation” and
“triple helix” models of innovation: can synergy in innovation systems be measured?. Journal
of Open Innovation: Technology, Market, and Complexity, 2(1), pp.66-89.
• Nee, A., Song, B. and Ong, S. (2013). Re-engineering manufacturing for sustainability.
Singapore: Springer.
• Stieler, M. (2017). Creating Marketing Magic and Innovative Future Marketing Trends. New
York: Springer.

References
• Terziovski, M. (2007). Building innovation capability in organizations. London: Imperial
College Press.
• Tran, V. (2005). Advances in household economics, consumer behaviour and economic
policy. Aldershot, Hants, England: Ashgate.
• Tranekjer, T. (2017). Open innovation: effects from external knowledge sources on abandoned
innovation projects. Business Process Management Journal, 23(5), pp.918-935.
• Tsai, K. and Liao, Y. (2017). Innovation Capacity and the Implementation of Eco-innovation:
Toward a Contingency Perspective. Business Strategy and the Environment, 26(7), pp.1000-
1013.
• Vanhaverbeke, W. (2013). Rethinking Open Innovation Beyond the Innovation
Funnel. Technology Innovation Management Review, 3(4), pp.6-10.
• Zainol, A., Mohd Yusof, W., Mastor, K. and Mohd Sanusi, Z. (2016). Ideation in Industrial
Design Context: The importance of group process in brainstorming. Asian Journal of
Environment-Behaviour Studies, 1(1), p.19.
• Zupančič, M. (2018). Employees: Invisible Added Value of a Company. Naše
gospodarstvo/Our economy, 64(2), pp.52-61.