MGMT20132: Business Models, Disruption, and P&G's Smart Products

This essay examines Procter & Gamble's (P&G) business models in the context of market disruption and the rise of smart products. It defines disruptive business models as those that challenge existing industry norms and create new opportunities by improving cost analysis and reaching wider customer segments. Smart products are identified as key drivers of disruption, enabling firms to replace hardware with software, connect data sources, and adapt to changing customer demands. The essay discusses P&G's opportunities, such as reaching rural markets and acquiring other firms, as well as threats from new entrants and local brands. It highlights P&G's value proposition and capabilities as central to its business model, emphasizing the use of technology, customer feedback, and product diversification. The conclusion asserts that adapting to changes in the industry through disruptive business models and smart products is crucial for P&G's continued success and competitive advantage.

Business Models and
Disruption
(A case study of Procter and Gamble)

What are Disruptive
Business Models
 A business model is the basis for every company’s rationale
that governs the economic, social cultural and other
aspects. It is in fact a framework based on which
companies plan out the objectives and goals for that
financial year. The different components of a business
model include revenue sources, supply chains, economic
plans, resources, customers, technology and values.
 Disruption is another phenomenon that gives firms greater
visibility to ongoing issues in the industry and breaking old
business models and building new business models that
help exploring better and newer opportunities for firms.
Disruptive business models also help in the construction of
better cost analysis and helps perform better budget
analysis and reach out to a wider section of clients by
including a wider demography of clients in its base.

What are smart products and
how do they help in disruption?
 Smart products help in transforming the already built beliefs and values of firms
about all the decisions they make starting from making money to gathering
information and analyzing the same for collaborating with other firms so that they
can extend the limits of the existing industry as a whole. Smart products help
replace hardware with software and help replace multiple working systems with one
single system that can secure, analyze and process data. Smart products also help
provide connectivity in between one source of data to another, from one source to
multiple sources and amongst different sources also. Hence the use of the same for
transformation and disruption of old business models is very important. In other
words, change of values and working of every business using information gathered
by smart products is continuously needed to cater to the changing demands of the
clients and the changing models of firms which may be partners or competitors.

Opportunities and Threats
of P&G
 Opportunities include reaching the
rural market, acquiring other firms and
increased purchasing power of
customers
 Threats only include competition from
new entrants and local brands

Value Proposition and Capabilities
as Business model for P&G
 The most important way in which P&G remains one of the top firms is
through its use of business models based on value propositions where
it aims at meeting changing customer demands by using latest
technology and trained employees in the different sectors. Its value
proposition also involves decision making with the use of customer
feedback and diversification of products and manufacturing of new
products based on customer preferences. Another way through which
the firm uses business models is through the use of extensive
resources and its immense capabilities in the field of production and
acquiring of other firms using smart products.

Conclusion
 To conclude it can be asserted that business models
are increasingly becoming unreliable and hence the
use of disruptive business models and getting
adapted to changes in the industry is necessary at
every moment. P&G being one of the top
manufacturing firms also follows the same strategies
to compete in the market and uses smart products to
constantly remain updated and cater to the changing
market conditions and demands of its customers.
Undoubtedly P&G is one of the biggest firms and has
a bright future as it adapts to the changes while
maintain stability which most other competitors fail
to do.