Essay on "Proctor Innovation Strategy"

Essay 10 pages (2923 words) Sources: 7

[EXCERPT] . . . .

This helps to demonstrate the balance of causes which incline specific firms such as Proctor & Gamble to take the path toward constant innovation. It is thus that we refer to some research on the basic implications of innovation from an economic and organizational perspective.

This may certainly be said of Proctor & Gamble, which has historically and explicitly declared itself as a firm with a clear orientation toward this entrepreneurial thrust. But it is interesting to note that P&G has recently taken on some internal innovation strategies in such as a way as to more ably approach such previously overlooked goals as sustainability. As noted we may identify P&G as being inherently entrepreneurial insofar as it has generally demonstrated a willingness to continue pushing the bar forward voluntarily in all product categories. And to the point, Huston & Sakkab report that the firm has historically operated one of the largest research & development departments in the corporate world, indicating that much of its innovation has come from within. But in light of the changing technology and trade schemes that are demanding for companies to open up increasingly to external partnerships, P&G has altered the course of its innovation model concordantly. According to Huston & Sakkab, who identify themselves in the article as employees of the firm in question "we knew that most of P&G's best innovations had come from connecting ideas across internal businesses. And after studying the performance of a small number of products we'd acquired beyond our own labs, we knew that external connections could produce highly profitable innovations, too. Betting that these connections were the key to future growth, Lafley made it our goal to acquire 50% of our innovations outside the company. The strategy wasn't to replace the capabilities of our 7,500 researchers and support staff, but to better leverage them." (Huston & Sakkab, 1)

Product Development Strategy:

As the discussion hereafter on its Ariel Excel Gel will demonstrate, Proctor & Gamble is dedicated to pursuing a path of innovation that is shaped by the conditions of sustainability. The Ariel Excel Gel, officially approved by the FDA for sale in 2009, is P&G's response to the need for sustainability in such key areas as in-home water-usage. According to its own informational website, the product is a concentrated, cold-water laundry detergent formula which significantly reduces the amount of water and energy which are used for each load of laundry. P&G reports of the Excel Gel that this "uses 40% less water and 30% less energy to make; and 20-50% less energy used for in-home washing." (P&G, 2) The marketing of the Ariel Excel Gel demonstrates the continued commitment of Proctor & Gamble to pushing forward the capacity of its products to improve the lives of their users. In this case, there are clear environmental and economic imperatives for end-users.

Moreover, the innovative 'cold-water' approach to formulating the detergent in question demonstrates a continuity of research & development as well. In recent years, the transition in focus toward more sustainable innovations would cause P&G to explore the implications of such products and methods as might reduce the strain placed on our energy economy by personal water-powered appliance usage. On that point, P&G would use two of its marquee brand names in order to explore the prospect in 2005. Accordingly, using by its Tide laundry detergent and Gillette shaving solution, P&G introduced the sustainability innovations which have now emerged through the Ariel Excel Gel. P&G (2009) describes this process, disclosing that "looking at the 'energy profile' of P&G's fabric care category, researchers saw that heating water to do laundry had the greatest environmental impact. If every household in just the U.S. adopted cold water washing, the total energy savings would equal 70-90 billion kilowatt hours/year." (P&G, 2) It is thus that Proctor & Gamble has worked to integrate this development into a line of products and goods that meet with the increasingly stringent environmental expectations of consumers.

Strategy to Protect Innovations:

Proctor & Gamble's strategy for protecting its innovations has largely centered on product development for long-term viability. This is to note that the company had begun a new phase in its life-cycle in which both product and process were to represent a new model driven toward innovation. That the focus of such current innovations as the Ariel Excel Gel is on improved sustainability is particularly illuminating, denoting that the priorities and processes of innovation may be imposed from outside of the organization, even as the organization remains internally and inherently driven toward innovation. In this case, we can see an intercession between a history of product innovation and a response to external patterns relating to sustainability demands. Here, the McKibben (2007) text indicates that certain changes in both lifestyle and economic orientation will be necessary if we are to achieve an ecological stasis as opposed to maintaining our current lifestyle of excess and waste. McKibben's argument in favor of sustainability is an important one in the context of this discussion because it targets the sensibilities and ambitions of business leaders, often the most egregious abusers of sustainability but simultaneously those in the position to effect the widest and most immediate change. Compellingly, McKibben makes the case that such demographics are also in a position to experience some of the greatest benefits of sustainability. The author denotes that "shifting our focus to local economies will not mean abandoning Adam Smith or doing away with markets. Markets, obviously, work. Building a local economy will mean, however, ceasing to worship markets as infallible and consciously setting limits on their scope. We will need to downplay efficiency and pay attention to other goals. We will have to make the biggest changes to our daily habits in generations." (McKibben, 2)

This is a challenge to which Proctor & Gamble is increasingly responding by way of its product orientation and the streamlining of the processes which are intended to protect the long-term viability these products. Such products as Ariel Excel Gel represents exciting new possibilities for P&G, particularly because it denotes the ability of the company to instigate widespread changes in-home efficiencies without requiring any great change in lifestyle by the end-user. To an extent, this is demonstrative of the intercession of general sustainability innovation with the distinct qualities of consumer convenience that have helped to make Proctor & Gamble so successful across a history that stretches over a century and a half. With respect to its future prospects, one may presume that the sustainability avenue will yield yet greater accomplishments just as this path of innovation promises to yield yet greater demands upon such innovators as Proctor & Gamble.

Conclusion:

Proctor & Gamble is a firm historically driven by the desire to continually innovate from within. The current plan imposes a new set of parameters around this orientation. With the increasing importance of sustainability not just as a goal but as the very context from which innovations are derived, Proctor & Gamble is working today not just to continually innovate but to achieve innovation from within in terms of its own priorities and procedures.

Simultaneously though, P&G remains a leading marketing and consumer goods firm because it is intuitive to the needs and wants of its customer base. Its marketing dexterity and its wealth of tremendous resources also make P&G a viable contender to stand as a leader in the push toward greater industry-wide sustainability. In this regard, it has the opportunity today to seize the long-term prospects of a recasting of its priorities such that in the future, the firm will be regarded as a pacesetter in the area of sustainability innovations.

Works Cited:

Huston, L. & Sakkab, N. (2006). P&G's New Innovation Model. Harvard Business School: Working Knowledge.

Leipnik, D. (2008). Energy Efficient Companies To Be Rewarded With New 'Green Leader' Environmental Labeling Program. Green Leader. Online at http://www.greenleader.ca/press.htm

McKibben, B. (2007). Deep Economy: The Wealth of Communities and the Durable Future. MacMillan Press.

Proctor & Gamble (P&G). (2009). Innovation is P&G's Life Blood. PG.com.

Proctor & Gamble (P&G1). (2010). Strategy, Goals & Progress. PG.com.

Wikipedia. (2010). Proctor & Gamble (2010). Wikimedia, Ltd. Inc.

Woods, P. (2003). Consultancy and Innovation: The Business Service Revolution in Europe. Routledge. READ MORE

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