Procter and Gamble

Topics: Innovation, Procter & Gamble, New product development Pages: 3 (687 words) Published: October 6, 2014
Background
Procter and Gamble was formed by James Gamble & William Procter in 1837 by a candle manufacturer Procter and a soap manufacturer Gamble. This consumer product company started with a vision to grow to a $33 billion company and by 1879 it started selling its products directly to the consumers, by 1890 it has gained its legal corporation and ever since it has doubled it sales every ten years. P&G growth was driven by innovation not optimization. Radical innovation served as their backbone to success with other factors such as geographic expansion, product line extensions and acquisitions contributing to its growth. Some of its famous and successful acquisitions were, Duncan Hines, Clorox, charmin Paper mills, Folgers Coffee, NorwichEaton,

Vicks (NyQuil), Noxell and Max Factor. It also recieves
the credit for developing innovative and advanced technology based products during 1940’s such as Tide, Crest,Pampers, Bounce etc.By the end of 1980’s P&G had its operations in 58 countries,its reputation was built with its new product development strategies; they produced varied range of consumer products such that these products should meet “basic consumer needs” and create “superior total value” creating a brand image for the company. As noted in Kevin Kelly’s quote “Wealth in new regime flows directly from innovation and not optimization”, i.e. wealth is not gained by perfecting the known, but imperfecting the unknown. P&G successfully used this strategy to earn its reputation as one of the largest company in Cincinnati in 1895 and in 1995 earned the National Medal of technology, the highest given award in United states. P&G was also known for its strong ethics, values and recruiting the best and brightest. R&D was a major focus of P&G. In 1995 P&G spent 1.3billion on R&D,and emphasis was laid on combination of multiple R&D competencies and there were a lot of cross fertilization of technology. They also had an attractive work culture, employee compensation...
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