Analyzing P&G's Business Model: Disruption and Smart Connections

This essay provides an overview of business models and disruption, analyzing the opportunities and threats presented by smart connected products to Procter & Gamble (P&G). It defines key terms, explores P&G's adoption of smart technologies like the Oral-B toothbrush with position detection and Amazon Dash integration, and discusses associated threats like employee awareness and data privacy. The essay then utilizes the business model canvas framework to illustrate P&G's key partners, activities, value proposition, customer relationships, customer segments, resources, cost structure, channels, and revenue streams. It further delves into two specific aspects of the canvas: value proposition, focusing on delivering high-quality, affordable products, and resource and capabilities, highlighting P&G's human resources, manufacturing units, and distribution channels. The essay concludes that the business model is a significant tool for analyzing resources, capabilities, and achieving success, and that P&G effectively targets and satisfies customer needs through innovation.

Running Head: Innovation and Sustainable Business
Innovation and Sustainable Business

Innovation and Sustainable Business 1
“Business model and disruption of P & G Company”
A business model refers to a plan that explains the fundamentals of the development in an
organization. This model provides and captures the value of environment and induces them in
the activities of the organization so as to attain competitive advantage in the target market. This
model explains all the major aspects that are connected with the activities like objectives,
process, organizational structure, target market, operational activities, infrastructure etc. Every
organization uses business model to initiate their activities in the environment as this model
helps an organization in successfully implementing their goals in the environment. Further, the
purpose of this essay is to provide a brief overview about the literature business model and
disruption. It also includes opportunities and threats connected with the use of smart connected
products in the activities of P & G Company. The latter part of the paper includes business model
canvas and interpretation two of the aspects of this model. Resource and capabilities and value
proposition are the two aspects which are discussed in this paper. More details about the paper
are discussed below:
According to (de Jong, & van Dijk, 2015) business model is a framework that includes different
aspects and their relationship with activities of the organization. This model helps the
organization to inculcate the business idea in the organizational process. This model includes the
information about the values involved in the organization that they offer in the environment to
initiate success in the target market. This model is basically is set tools that are modified with the
help of innovation and induced in the organization so as to bring an efficient output in the
external environment (Osterwalder, & Pigneur, 2010). This aspect talks about the infrastructure
of the firm along with their partnership with organization for the supply and development of their
goods and services. This model assists an organization in generation of optimum profits and
increases the revenue through their business activities. To elaborate the business model, an
approach of business model canvas was formulated that includes nine building blocks related to
the activities of the organization (Zott, Amit, & Massa, 2011). Further, it should be noted that
this model provide basically provides three values to the organization that are, value delivery,
value creation and value capture. Value delivery helps the organization in providing the value to
the customers with the help of ways defined by the system. The value creation and an
organization to provide better experience to the customers by adding value in their products.

Innovation and Sustainable Business 2
Lastly, value capture helps of organization in capturing value from its business operations
(França, Broman, Robèrt, Basile, & Trygg, 2017).
Relating the business model with the disruption, it should be noted that use of disruption
increases the efficiency of the business model canvas to perform effectively in the changing
environment (Foss, and Saebi 2017). Disruption in technology helps an organization to
innovatively use their business model increase the satisfaction level of customers present in the
market. It refers to the use of innovative technologies in the business so as to attain competitive
edge in the market (Dijkman, Sprenkels, Peeters, & Janssen, 2015). Use of disruptive technology
and innovation in the company provides a new face that changes its position in the external
market. Also, disruption in technology and innovation molds complex and expensive products
into things that are simple and affordable to people (Gobble, 2014).
Disruptive technology is now days used by organizations to initiate advancements in the business
using smart connected products. These products refer to the products that are technological
advancements that are implied in the business to expand the opportunities and gain competitive
advantage. The smart connected products are developed with the software, processors, sensors
that allow the organization to effectively share data between the business environment and
producers, products and other systems. (DaSilva, and Trkman 2014). P & G is one of the largest
organization that produces and serves consumer goods in the environment. The organization
effectively uses the smart connected products to manage their activities in the internal process of
the organization. The organization comes under the major organizations present in the market
that uses these tools to integrate their system and bring output for the organization. P & G
adopted knowledge capture software internally in almost 60 nations and other P&G brands (P &
G, 2018). Talking about the use of this tool in the products of the company, it should be noted
that P&G created Oral-B toothbrush with position detection sensor that helps the customers to
identify the places where they are missing hygiene. This process was initiated in such a way that
the sensor of the brush was connected with the app that helped the user to analyze the defected
areas by the user. Further, this feature helped the company to retain the customer to the
maximum level because all customers likes innovation in their daily usage products as its
increases the efficiency of their routine work (Chakrabarti, & Chaudhuri, 2017). This aspect
brings more opportunities for the company. The company uses the smart connected tools in

Innovation and Sustainable Business 3
many other products of the company and increased its value. Just like the company involved with
the Amazon Dash devices helped the customers to get paper towels and facial cleansers on just
one click. With this one click the customer can easily get these products. Also, with the help of
these products the company gained the ability to easily transfer the information to its different
departments. The inventory control and monitors system of the company became efficient as this
product helped the management to effectively record the inventory and supply it to respective
departments as well. Waste management activities were effectively managed as information was
easily circulated in all parts of the company that reduced the waste production activities
(Christensen, Raynor, & McDonald, 2015).
Further, the biggest threat which the company gained with the use of this tool is that the
employees of the company were not much aware about the pros and cons of these tools. This
created various negative implications in the activities of the organization. The company faced the
threat of privacy as by hacking this tool the competitors can easily gain information of the
company (Guttentag 2015).
Further the business model canvas of P&G Company is created below:
Key Partners
 Different brands
i.e. Ambi Pur.,
Ariel, Gillette,
Head &
Shoulders and
pampers.
 Advertisement
Agencies and
media
 Contractors
 distributors
 Retailers
 Sponsors
Key Activities
 Production of
customer goods
under diverse
brands.
 Marketing
 Research and
development
 Brand
management
 Distribution
Value Proposition
 Many personal
cares, child
care products.
 Market
competitivenes
s
 Many retail
channels.
 Products with
goods quality.
 Diversified
market
segment
worldwide.
Customer
Relationships
 Good
customer
satisfactio
n
 Feedback
 Brand
considerat
ion
 After sale
services
and
follow up
 Direct
communi
cations
 Discounte
d coupons
and gift
vouchers
 Products
Customer
Segments
 Large market
segment.
 Different
Target
audience
according to
products.
 Target all
income level
people.
 Daily house
hold items.

Innovation and Sustainable Business 4
available
online as
well.
Key Resources
 Major brand
assortment
 Personnel
 Efficient channel
of distribution
network
 20 manufacturing
plants in 20 states
of United States.
 Facilities
 Retail stores and
departments
Channels
 Distributors and
suppliers
 Baby products
shops
 Shopping malls
 Grocery Stores
 Promotion,
advertisements
and online
marketing.
Cost Structure
 Production costs
 Distribution cost
 Supply chain and logistics management
 raw materials expense
 Taxes
 wages
Revenue Streams
 Revenue from retail store goods
 Online stores
 Payment through debit and credit cards
 Cash on delivery on products
The two selected aspects which are to be discussed from the business model canvas are value
proposition and resource and capabilities. Value proposition of an organization includes the
competencies attained with them to handle the risks and mitigate them in such a way that
opportunities are attained to the company. The value proposition of the company P&G company
includes it manufacturing and distribution process of goods and services according to the
requirements of their target customers (Flaherty, & Rappaport, 2015) . The organization aims to
deliver high quality products and cheap and affordable prices. As the organization provides
consumer goods so that aim to introduce qualitative efficiency in them so as to increase its sales.
The company offers a diversified range of personal, healthcare and child care products. Also,
they offer house hold products in the market as well. Thus, it should be noted that the value
proposition of the company P&G includes their aim to improve their products in such a way that
the needs of the customers are appropriately fulfilled (Covin, Garrett, Kuratko, & Shepherd,
2015).

Innovation and Sustainable Business 5
The resource and capabilities block of the business model talks about the assets attained with the
company which they use to grab the opportunities present in the market. The major resource of
the company is its human resource which helps them in attain value proposition as well. The
company owns 20 manufacturing units in 20 regions of United states that iitiates the production
process. The company has initiated an extensive distribution channel that aligns all the stores
effectively and supply products to the end customers in the market. The company adequately
uses its resources and capabilities in tempting the customers towards their products and services
in the market that helps them in sustaining their competitive advantage (P&G, 2018).
Thus, in the limelight of above mentioned events, it should be noted that the business model is a
significant tool that helps organization in analyzing their resources and capabilities and inducing
them in the business to gain success. P & G adequately target the audience and satisfy their
requirements accordingly. With the use of this business model the company innovate their
products and services to enhance their skills. The paper adequately supports the requirements of
the task.

Innovation and Sustainable Business 6
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Innovation and Sustainable Business 7
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