Innovation is truly at the heart of Proctor and Gamble and has allowed them to achieve tremendous year on year growth. However in the early 2000s only a very small percentage of its new products were meeting their revenue and profit targets.
Fast forward to today and P&G has tripled its innovation success rate, the result of a strategic effort by P&G over the past decade to systematize innovation and growth. P&G has no misconceptions of their history and completely understands how innovation is an incremental part of the company’s success story.
P&G recognized growth "couldn’t come from simply doing more of the same thing” CEO Bob McDonald notes “We know from our history that while promotions may win quarters, innovation wins decades.”
A key example of this strategic effort is that of “Tide,” A laundry detergent and the company’s biggest brand. The well established “Tide” brand performed consistenly for P&G. Early 2000s however, it was no longer growing fast enough to support P&G’s needs.
A decade later and Tide’s revenues have almost doubled. How you ask? Well previosuly the tide brand consisted of only one product; laundry detergent. Today however, the tide name has an extensive product mix (Tide Stain Release, Swash Odour Spray to name a few).
P&G has also taken the brand to emerging markets. With research showing that 80% of consumers in India wash their clothes by hand, P&G saw an opportunity. The team came up with “Tide Naturals” which cleaned clothes well without causing irritation to the consumer’s skin. Perfecting this innovative surge was P&G’s pricing of TideNaturals, 30% lower to comparable cleaners.
Tide is a shining example of taking product and adding the innovative prowess of P&G and their vision to create new product lines.
But what about an entirely new business Model? Can P&Gs innovation stretch that far?
It seems so. Tide Dry Cleaners was setup when a team began exploring ways to disrupt the dry cleaning market and arose from the general conception of traditional dry cleaners being, “unfriendly, dingy” places with inconvenient hours. It's appears that P&G's innovation is as sustainable as it is brilliant.
Author: Declan Egan
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