A. G. Lafley: Innovating P&G’s Innovations

Topics: Innovation, Brand management, Strategic management Pages: 13 (3258 words) Published: March 23, 2009
A. G. Lafley: Innovating P&G’s Innovations

Table of Contents


Which Industry does P&G compete?4

What are the Tangible and Intangible Resources?4

Tangible Resources4

Intangible Resources4

Major Issues5

P&G’s Strategic Health in 20055


External Environment Analysis5

Porter’s Five Forces5

Internal Characteristics6

SWOT Analysis8

Key Success Factors9

Critical Development Factors10

What factors are critical for success?10

Strategic Objectives11

Corporate Level Strategy12

Business Level Strategy12

Function Level Strategy12

General Difference in Strategic Direction13



P&G, one of the world’s largest consumer products companies came from a humble beginning when William Procter and James Gamble settled in Cincinnati as a candle maker and a soap maker respectively. Their father ' in ' law encouraged them to become business partners and P&G was founded in 1837.

Which Industry does P&G compete?

P&G is one of the world’s largest consumer products companies. P&G competes in the consumer products industry and primarily focuses on five categories, these are: fabric and home care, beauty care, baby and family care, health care, and snacks and beverages.

What are the Tangible and Intangible Resources?

Tangible Resources

The tangible resources of P&G are,

• The human resource - the vast quantity of employees that P&G has which amounts to over 100,000 personnel, each charged with the task of contributing to product innovation.

• The capital that is at P&G’s disposal.

Intangible Resources

The intangible resources of P&G are,

• Extensive Research and Development program.

• Knowledge/Experience ' gained from the close partnership and collaboration with entrepreneurs and even rival companies.

• Customer feedback ' P&G was one of the first companies that invested in customer feedback in order to better tailor their products to meet the needs of the customer.

• Reputation ' earned from P&G’s interaction with its customers and suppliers.

Major Issues

P&G’s Strategic Health in 2005

The major issues that affect P&G’s continued growth are as follows: • Competitors that were losing their market share were now stepping up their efforts to regain their market share. • Mr. A.G. Lafley was only focusing on upgrading the existing brands rather than introducing new brands ' Analyst warned that without innovative new products to match competitors’ products, the company might face trouble in the long run.


To become the world’s largest consumer products company in the categories of fabric and home care, beauty care, baby and family care, health care, and snacks and beverages.

External Environment Analysis

Porter’s Five Forces

Potential New Entrants

The threat of potential entrants in the market is small since P&G and its competitors have created products with a name that assures quality and has the loyalty of the consumers for decades. Small companies that are hoping to enter the market are integrated by the larger companies via open innovation.

Bargaining Power of Buyers

Due to the nature of the products being provided, there is competition from other companies on the international market. Competitors offer products to potential consumers which include new features to cater to the changing needs of consumers and also advertise aggressively to demonstrate the superiority of its products. Thus, the bargaining power remains with the buyers as companies like P&G has to become more and more innovative.

Bargaining Power of Suppliers

The bargaining power of suppliers is small since competitors are always introducing new and/or improved products to increase their consumer base and to eliminate competition from existing competition and potential new entrants.

Threat of substitute products...

References: Mohanty, Dakshi, A. G. Lafley: Innovating P&G’s Innovations, ICFAI University Press & ICFAI Business School Case Development Center, 2004.
Sustainability Leader, Procter & Gamble Co. 3/3/2009
Procter & Gamble ' From Conventional Media to “Targeted Scale” 3/3/2009
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