Analyzing P&G's Business Model: Innovation & Sustainability

This essay examines Procter & Gamble's business model with a focus on innovation and sustainable development. It discusses the effectiveness of their model in delivering quality products and maintaining economic value. The essay explores the challenges P&G faces from market disruptions and the opportunities and threats presented by the Internet of Things (IoT) technology. It further analyzes P&G's business model through the lens of the Osterwalder-Pigneur framework, highlighting key activities, value propositions, client relationships, and revenue flows. The essay concludes that P&G can achieve success by leveraging a conceptual business model to understand customer needs, improve business processes, and expand its reach.

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Innovation and Sustainable Business Development
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Innovation and Sustainable Business Development
Introduction
This essay is based on the business model that is used by almost every organization to maintain
economic value. The purpose of this essay is to describe the effectiveness of a business model
for Procter and Gamble. The company wants to ensure that they deliver best quality products to
their customers (Adekunle, Lyew, Orsat & Raghavan, 2018). Therefore the company is planning
to implement a business model that could provide value to their organization.
Business model and disruption
The ‘business model’ describes the business operations that are performed in an organization.
Social, economic and other related factors are considered when implementing a business model.
It is important to know the value proposition that defines the value of the business processes,
product/services and the value architecture of an organization. Core aspects of a business can be
represented by a business model (Afuah, 2014). A business model can be designed by using any
framework like conceptual or textual depending on the requirement of an organization. The
business model supports business operations to accomplish goals and objectives. Procter and
Gamble have used this abstract representation to attain overall success in the market. The
company wants to deal with a large number of customers for which an effective business strategy
is required. Disruption occurs when there is an addition of a new market with different
innovation. The introduction of new value and infrastructure disrupts the current business
processes of an organization. It displaces the alliances and other related aspects like the value of
a product of the well-established organization. Procter and Gamble also faced disruption issues
with the entrance of the new market. It then became necessary for the company to propose the
business strategy and to escape the threats of new markets.
Opportunities and Threats
The internet of things technology has provided advanced in the business processes and has also
promoted the use of smart connected products worldwide. These products make the business
operations like managing sales easier for the organization consuming less time and cost of
maintenance. Smart connected products are broadly used by the business organization to
exchange information on a large scale. Smart connected products allow an organization to
effectively manage the information that is accessed regularly in an organization. Procter and

Innovation and Sustainable Business Development
Gamble want to manage their assets in the best way possible therefore, they have used Smart
connected products for their business (Gassmann, Frankenberger & Csik, 2014). But from such
systems come both opportunities and threats.
Opportunities
The idea of adopting this internet of things technology is to deliver the good quality products to
the customers. The customers are more specifically attracted by price and quality of the products.
Procter and Gamble require such devices to optimize the information that is exchanged daily
with their customers. The smart connected device allows companies to build the better
infrastructure that could support new and latest technologies. The users can access the
information remotely using smart connected devices. When the operations processes of a
business are organized. These also provide cloud storage, cloud services and provide control and
monitoring of organization function. It gives better connectivity to the network protocols to
transfer the information (Porter, 2015).The company P&G gains the opportunity to increase the
sales by using innovative technology in their products. They integrate technology in such a way
that the company gets to know about the demand of the products present in the environment and
serve the customers accordingly. The company with the help of these smart connected tools gets
to know about the quantity of products present at the stores, and in case the number of products
decreases then they get automatic generated message. With this information they send the
products in the stores. Thus, it increases the opportunity to the company to provide products in
the market on time.
Threats
Smart connected devices are a threat to Procter and Gamble in terms of increasing benefits from
the invested cost (Gollenia, 2016). It is because smart connected devices are prone to the
attackers for which specified software applications are required. These devices are advantageous
to the company but also are a threat when talking about organizational profits. The cybercrimes
have now increased with the advancements taking place in the technology. Procter and Gamble
access sensitive data that includes information of a customer and other business details which
needs to be protected from the attackers Siboni & Koren (2016). As P&G is one of the leading

Innovation and Sustainable Business Development
brand present in the environment so if the price sensitive information of the company is leaked in
the market then it might hamper the brand value of the company as well.
Business model by Osterwalder and Pigneur
This model can be used by the organization to improve their business process and also to have an
effective growth in their business. A new entrant in the market affects the revenue rates and other
economic factors that are the barriers to an organization's success.
The conceptual business model is followed by Procter and Gamble-
Key activities- deals in products related to bath essentials such as showering and shaving,
household products and many more (Lasc, Betancourt & Petty, 2017).
Value proposition- the Procter and Gamble uses cloud services to manage the information which
is secured and easy to access. They also provide quality products in all parts of the world. Brand
portfolio also creates value proposition for the company.
Client-relationships- Procter, and Gamble deals directly with the customers and thus performs
business to customer type of business. The customers have reviewed positively about the
products and brands associated with Procter and Gamble.
Client segments- the company provide cleaning products of house and body care according to the
quality required by the customers.
Distribution channel- the company provides online product purchasing services to its customers.
Besides that, there is an option of home delivery so that customers can receive their products on
time without traveling to their offline store (McGettigan, 2017).
Revenue flows- the company provides support to the customers 24 hours a day and has also
implemented cloud software to manage their business operations.
Cost structure- To make the profit from their business, a company has provided vouchers to the
customers, free coupons and bonuses on each purchase. This marketing strategy of Procter and
Gamble will attract number of customers to purchase their products.

Innovation and Sustainable Business Development
Key resources- resources are the baby care products, house cleaning products, and body care
products
Partner network- brands like pampers is the partner in the business network of Procter and
Gamble Osterwalder & Pigneur, (2010).
Business models as a set of capabilities and resources
Businesses that use software applications like that of Procter and Gamble has to understand the
capabilities that this software could provide to their organization. Due to globalization
(Papatheodorou & Efthymiou, 2018), Procter and Gamble also have to implement the internet of
things technology to focus on their core operations. The capabilities of a business model affect
the role software plays in the business growth of an organization. Procter and Gamble want to
make their human resources better to earn profitability in the market. The company creates
strategies to provide products to the customers in the affordable range as possible. The
conceptual business model will help the company to analyze their current position in the market
so that relevant decisions can be made to implement a business strategy Rajala & Westerlund
(2004).
Business model as the value proposition
Procter and Gamble is expertise in a particular business like selling cleansing products who need
to create and deliver the different value propositions to the customers. This assures that the
products of Procter and Gamble are meeting requirements of the customers and these products
have a sustainable value in the market. With the help of value proposition, Procter and Gamble
will be able to satisfy needs of the customer and enhancing their business operations (Sakinç,
Jacobson, Hopkins & Lazonick, 2017). Value proposition will provide better performance,
customization and create status to Procter and Gamble. The company aims to increase their
brand value with the assured quality of products they sell to their customers. Giving value to the
customers helps in receiving positive reviews and an approach to constructing more reliable
business strategy Rajala & Westerlund (2004).
Conclusion

Innovation and Sustainable Business Development
It is to conclude that this essay provides relevant information about Procter and Gamble business
operations. It has been found out from the initial findings that Procter and Gamble want to
expand their business to overseas. The company also wanted to develop a competitive strategy to
increase revenues. This was made possible by the conceptual business model which highlighted
the key points of the business. The conceptual business model has helped the organization to
know about the requirements of the customers and the opportunities that can be provided to
customers. It can be assured from this research that Procter and Gamble will attain success by
choosing the conceptual business model. This will help the company to understand the
improvement of their business processes. In future, Procter and Gamble will also reach out for
more number of customers with the effectively managed data.

Innovation and Sustainable Business Development
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