P&G's Journey with Open Innovation: Challenges and Solutions Explored

This essay delves into Procter & Gamble's (P&G) adoption of the open innovation model, which involves leveraging both internal and external knowledge for innovation. It highlights the company's successful implementation of this model, citing its extensive network of global partners and its Connect and Develop program. The essay also discusses the various success factors, such as prioritizing customer needs, embracing constructive disruption, and fostering innovation in action. Furthermore, the positive impact of open innovation on P&G's performance is examined, including reduced costs, increased competitiveness, and improved innovation efficiency. However, the essay also addresses the challenges faced by P&G in implementing open innovation, such as strategic, operational, legal, and cultural hurdles. A case study is presented, outlining the steps P&G took to overcome these challenges, including setting clear objectives, defining target markets, conducting thorough research, and implementing innovative techniques. The lessons learned from the case study emphasize the importance of clear goals, market focus, and customer feedback in ensuring the success of open innovation initiatives.

ESSAY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Open innovation model................................................................................................................3
Open innovation in Procter and Gamble.....................................................................................4
Challenges faced by P&Gin adopting open innovation model....................................................5
Case study of P&Gfacing challenges in integrating the open innovation model and the...........6
solution to meet the challenges....................................................................................................6
Lessons learned from the case study...........................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................1

INTRODUCTION
Open innovation is the gaining the knowledge and ideas from internal and external sources
for innovation or for finding some solutions (Jugend, 2020). This involves innovative ideas and
techniques and thoughts about the products and the services. Procter and gamble is a big
manufacturing industry of United Kingdom dealing products and services worldwide. This report
includes the meaning of open innovation model with theoretical summary and the story of open
innovation in P and G. Furthermore, it will include the working of open innovation model with
success factors and its impact on company’s performances. Moreover, this report will also
include the challenges faced by P&G by adopting open innovation model. Lastly, it will include
conducting case studies to exploring the challenges and P&G in integrating the open innovation
model in its innovation system and the solutions by the company and the lessons learned from
the case study.
MAIN BODY
Open innovation model
Open innovation model by the businesses is finding and researching new ideas and
solutions for finding more innovative solutions from mass market research (Silviana, 2018).
With the growing open innovations in the companies for innovative products and services to earn
more with less cost the need for the development of this model increasing some innovations are
from inside the firms and some are from outside the firms for proper conducting of research.
This model helps the company to take all the advantages prevailing in the market like all sources
of information or creative ideas in the market for better decisions. In past years this model was
not in so much of practice as compare to the present world due diversity in the products and
services and the taste or preferences of the customers.
Furthermore, all the developed markets and developing markets are using this model for
researching the market and demands. Open innovation is all about theoretical frameworks and
the existing deficit in the theoretical leads to focus on innovation of theoretical frameworks
(Roszkowska, 2018). In new theories or concept the firm can use integral and external ideas and
both the paths to the market for more technological advancement. With the help of this theory

products can be produced with least cost high efficiency. This way the firms are using various
community ideas for producing the products and creating various collaboration with public
services centre and NGO’s (Vieira, 2018). Increasing globalisation leads to emerging use of open
innovation theories for more advancement of their markets. Research on external market is
necessary due to increasing product complexity and population because even the large
companies cannot afford to everything with their existing knowledge and work. They have to go
and research outside the market for gaining the knowledge of doing the task in a appropriate way
to achieve best outcomes.
Moreover, every firm is conducting researches in the target market and collaborating with
the Research and development teams for gaining advantages for the companies due to
globalisation. It increases the efficiency of products with less cost and less risk because of
advance researches and involves more innovations in the products and services of the companies.
R and D provide various opportunities to the new market for better quality of products and
services. Open innovation model involves extensive research on each company and their internal
and external policies for developing the products and services for huge profits.
Open innovation in Procter and Gamble
P&G is the successful company in the world who is applying open innovation strategies in
the world. This company has more than 2000 successful partners around the world which for
making their products innovative and efficient worldwide (Wang, 2018). With increase
competition and Rand D cost the P&G developed its own C and D structures for finding good
ideas and thoughts worldwide and bringing them into the organisation by the researcher of P and
G. With P&G connects and develop programs new innovative technology brought by the
external partner of the company for producing the products with least cost and high profits.
Successful factors of P&G with open innovation method
 People are the centre: The main aim of P&G is providing all the needs and satisfaction
to the customers for providing more innovative products with reasonable prices globally
for gaining their faith and belief in the company’s product for more growth.
 Constructive disruption: By open innovation theory this company is conducting
research time to time for the changing market environment and changing needs of the

customers (Cooper, 2020). P&G is developing different ways for and innovative ideas to
fulfil the changing needs to be successful in the market.
 Innovation in action: The P&G is applying all type of innovation techniques in the
company to be competitive in the present world like innovative products and advanced
technology which attract the consumers for buying the products.
 P&G ventures: This Company is growing with by creating new brand and business
different then the existing once for more growth globally.
Impact of open innovation on performances of P and G
 Reduce cost: The open innovation in P&G reduced cost of products and services due to
more innovative ideas and techniques of producing the products with least cost. This
company has more advanced infrastructure for developing the products with low cost
(Shin, 2018).
 Increase competition: The P&G is most successful company worldwide with
competitive advantages all over the world. With its latest technology and infrastructure it
has huge markets with huge customers.
 Low risk: This Company has low risk as compared to others because of deep research in
the market and developed products and services according to the market needs.
 Innovation efficiency: The cost of R and D is increasing and company cannot afford this
cost so the P&G has developed its C and D for innovation efficiency for performing
better with least cost in research.
 New and creative ideas: P&G is conducting researches within and outside the company
for gaining more knowledge about the products and the services for cutting the cost and
involving in more advanced ways for earning more profits with customer satisfactions.
Challenges faced by P&Gin adopting open innovation model
P&G is facing various issues in adopting open innovation models like making others
knowing own policies and strategies of products it increases more competition. It becomes
difficult for the companies to apply one idea and method from mass methods from external
researches. Complexity increases due to various innovative styles and solutions for particular
products (Del Vecchio, 2018). This becomes difficult for the company to choose one method for
a particular product or services which leads to reduce cost and increase the productivity.
Challenges faced by P&G are:

 Strategic challenges: This Company is facing the challenges like for open innovation
strategy the company has to collaborate many external as well as internal activities with
clear goals and it becomes difficult for the company to manage all the functions solely
(Adumene, 2022).
 Wrong research: If the research is done in wrong market or with wrong customers and
techniques then the entire process will be useless (Nelen, 2020). This is a challenging
process to coordinate all the activities worldwide in same direction by P and G.
 Operational and structural challenges: The process of open innovation is a complex
field in which P&G has to build an effective team and apply various strategies to the
market etc.
 Legal challenges: The Company has to obey a lot of legal orders because of globalisation
of the market this company has to agree various terms and issues for copyrights,
trademarks, patents and it creates difficulties in smooth workflow.
 Cultural challenges: The P&G is having thousands of employee and management team
worldwide and creates difficulty for acceptance by their team and their negative attitudes
of new technology and methods doing the task.
Case study of P&Gfacing challenges in integrating the open innovation model and the
solution to meet the challenges
Step 1:P&Gfirst need to develop the clear objectives and goals for which products and services it
has to do the open innovation and making them aware to each employee and specialist in
research worldwide to make them clear about their roles.
Step-2: Then this company need to decide its target market and audience for which the research
is being done according to their needs to reduce the complexity in work (Bertello, 2022).
Step-3: Then all the research are being done deeply to know all the pros and cons of the
information to reduce any error if any (Sutopo, 2019).
Step-4: Then implementing the innovative techniques and methods for producing the products in
the target market in appropriate quantity to reduce the risk of wastages.
Step 5: Testing the markets by customer’s feedback and reviews for the innovative style applied
to know its accuracy for better results (Nakagaki, 2012).

Step-6: Removing the negative feedbacks and techniques which are not useful and increasing the
cost and developing and planning another strategy in place of other for reducing the cost for
more growth in the market.
Lessons learned from the case study
From the above case study I have learned that if the goals and the objectives of the firm is
clear the firm will not have to face any difficulty in implementing open innovation model.
Making clear all the objectives of the firm to emplyoee’s and researcher for clearing their goals. I
also learned that making clear objectives and clear market reduce the work burden and
complexity in the work because if the markets are decided already then the company only need
to apply all its strategies to the target market or audience. Less is the complexity more flexible
will be the work and more innovations can be developed with consumer satisfaction. From my
point of view research are being done deeply on the areas which has very low growth and needs
improvements so that innovative ideas and thoughts are implemented carefully.
Furthermore, I learned that feedback is very important to know the accuracy of the
techniques and method used because if the customer’s reviews and feedbacks are negative then
the open innovation is lacking their strategies and needs improvements for the further plans. I get
to know that customer satisfaction is the key role in open innovation model because if the
innovation of products and services with least cost and high productivity does not bring
consumer satisfaction then it will not at useful for the company. The company’s aim should be
provide more innovative products with advanced technology at least cost and with customer
satisfaction. I learned that before implementing any plan and actions the firm has to check all the
market things and the product related things for making its strategies successful in the present
world.
Lastly, I get to know that each strategies related to open innovation have to be done
carefully because of huge competition prevailing in the market and everyone is using different
strategies for more competition. The ideas and techniques should be applied in a way that leads
to more innovation and facing all the challenges carefully for implementing the strategies.

CONCLUSION
From the above report it has been concluded that Open innovation is important for the
developing new ideas and techniques for finding new ways and techniques for doing the work or
researching new solutions internally and externally. Open innovation model helps the firm by
researching all the internal and external sources for finding as much solution as it can and
picking the best solution that suits the company. Furthermore, it concluded success factors of
open innovations because it helps the company to reduce the cost of making the products with
least cost. Open innovation helping the firm to increase its performances with new ideas and
thoughts having low risk with increase efficiency. This report also concluded the challenges
faced by P&G in applying open innovation due to complexity and cultural or legal challenges.
Lastly, all the challenges by open innovation can be solved with proper planning and research
and careful implementation of the strategies used.

REFERENCES
Books and journals
Jugend, and et.al., 2020. Public support for innovation: A systematic review of the literature and
implications for open innovation. Technological Forecasting and Social Change, 156,
p.119985.
Silviana, B.G., 2018. Open innovation model: enabling the market uptake of
innovation. Procedia Manufacturing, 22, pp.893-899.
Roszkowska-Menkes, M.T., 2018. Integrating strategic CSR and open innovation. Towards a
conceptual framework. Social Responsibility Journal.
Vieira, and et.al., 2018. Setting an industry 4.0 research and development agenda for simulation-
a literature review.
Wang, X. and Xu, M., 2018. Examining the linkage among open innovation, customer
knowledge management and radical innovation: The multiple mediating effects of
organizational learning ability. Baltic Journal of Management.
Cooper, and et.al., 2020. Reopening schools safely: the case for collaboration, constructive
disruption of pre-coronavirus 2019 expectations, and creative solutions. The Journal of
pediatrics, 223, pp.183-185.
Shin, and et.al., 2018. Structural relationship and influence between open innovation capacities
and performances. Sustainability, 10(8), p.2787.
Del Vecchio, and et.al., 2018. Big data for open innovation in SMEs and large corporations:
Trends, opportunities, and challenges. Creativity and Innovation Management, 27(1),
pp.6-22.
Adumene, S. and Ikue-John, H., 2022. Offshore systems’ safety and operational challenges in
harsh Arctic operations. Journal of Safety Science and Resilience.
Nelen, and et.al., 2020. Cultural challenges in adapting SWPBIS to a Dutch context. Journal of
Positive Behavior Interventions, 22(2), pp.105-115.
Bertello, and et.al., 2022. Open innovation in the face of the COVID‐19 grand challenge:
insights from the Pan‐European hackathon ‘EUvsVirus’. R&D Management, 52(2),
pp.178-192.
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Sutopo, and et.al., 2019. Accelerating a technology commercialization; with a discussion on the
relation between technology transfer efficiency and open innovation. Journal of Open
Innovation: Technology, Market, and Complexity, 5(4), p.95.
Nakagaki, and et.al., 2012. The challenges in implementing open innovation in a global
innovation-driven corporation. Research-Technology Management, 55(4), pp.32-38.
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