In the scope of this report, the assessment of the innovational strategy of P&G is conducted from the set of various perspectives: culture and style of innovation; effectiveness of technology: recently-issued patents of Procter & Gamble; innovative approach towards application of the Procter & Gamble’s patents and unique strengths of P&G, contributing to its innovational development.
Before succeeding with innovation, the P&G has preferred the working prototype of the factory, afterwards the proliferation of small projects has weighed down the innovation portfolio of this business entity. After conducting an assessment, it was revealed that the integrative approach towards innovation, coupled with the new approach towards assessment of the set of the issues (competitive factors in particular), has created the set off the additional opportunities of innovational development of the P&G.
Key words: innovation, development, product line, competitive advantage, Patents of Procter & Gamble, new initiative of growth, mix of innovational types.
First of all, it is essential, to refer to the fact that the major emphasis of the innovation management of P&G is put on the personal care and home products. Initial focus of the Procter & Gamble Company (multinational company) was put on the development of the set of the consumer goods – such as cleaning agents, personal care products and foods for pets.
Recently, the top management of this organization has announced that more than 80%of its core brands would be sold for its activities’ streamlining and focusing on the most profitable brands. For instance, in the end of 2014, it was announced that such soap brands as Camay and Zest would be sold to multinational Unilever (Anglo-Dutch Company) for an undisclosed price.
Culture and style of innovation
One of the major strong points of the patent portfolio of Procter & Gamble is that this business entity has increased the scales of its activities in the set of the significant ways. For instance, the patents, which have been recently issued by Patent and Trademark Office of U.S. involve the set of the protecting perfumed goods, such as skin perfuming qualities enacted with the composition for body wash. Additional aspect of the innovational development of the Procter & Gamble Company is exploration of the patent for the handheld hair dryer, which may be characterized as the one with the multiple grips, developed for more ergonomic design (O’Connell, 2012).
The most recent R&D activity, into which this company is engaged, is the patent applications, which are filed by P&G. One of the most outstanding developments of this business entity is the innovation for superimposing hairstyles, which are mainly grounded on the person’s head captured image - as a tool for the hairstyle consultation. One more patent application implies the method, developed for conducting an analysis of the behavioral data (regarding itching) – for the individual’s scalp healthiness determination. Finally, one more current R&D area of P&D activity is the patent application for the portable device for air filtration, which is mainly developed for airborne contaminants’ removing from a space.
Effectiveness of technology: Recently-issued Patents of Procter & Gamble
In this section it is essential to refer to the fact that the most essential patents which have been recently issued by the company refer to the consumer products. For instance, the U.S. Patent No. 8895041 refers to the fragrance to body wash compositions (also referred as “the Compositions for Delivering Perfume to the Skin”). The second recently-issued patent is No. 8912350. It refers to the Perfume Systems. Also, Procter & Gamble has issued the Laundry care compositions: Patent No. 8906842 (refers to the Spray-Dried Detergent Powder) (Brachmann, 2015)
Innovative approach towards application of the Procter & Gamble’s Patents
The innovation within this business entity is represented in the set of various forms. For instance, the newly-developed product lines of this company are touted on the official web site of the company. In the time frame of last 7-8 months, such products as Pampers Premium Care Pants, Braun Series 9 razors and Factor Masterpiece Transform Mascara have been developed and released (P& G official web site, 2014).
The long focus of the P&G has been put on the corporate sustainability and in the scope of the16th annual report, which has been released in the middle of December 2014, it was announced by the top management that its carbon emissions were cut by 14 percent. More than that, the 2020 waste reduction goal was set. In addition, this innovation is supported from the start-ups around the globe, through an active participation in such programs as regional Innovation Xchange, which has been conducted in collaboration with neighboring business entities – such as Kroger and Western & Southern Financial Group.
Additional emphasis should be put on development of the novel technologies of hair care, which have been developed by the experts from the Procter & Gamble and afterwards, reflected in the set of the patent applications, which are currently catching the attention of eth consumers all over the world. The patent application, which has been developed by the team, working in Singapore, refers to the method of effectiveness of use of the particular quantity of the hair care composition to the scalp and/or hair after shampooing. Almost 10% of the cationic surfactant system; more than 20% of fatty compound with high melting point; up to 10 percent of metal and almost 5% of the metal pyrithione are included into the care composition. Such composition is capable in terms of utilizing the zinc pyrithione for further provision of the conditioning benefits to the scalp and hair as well as decreeing the rate of the oiliness (Culpan, 2014).
One more area of P&G innovative activity is protection of the rights in terms of its novel system for consultations on hairstyles provision, this innovation is reflected within the U.S. Patent Application No. 20140313302 (referred as Hair Consultation Tool Method and Arrangement). The arrangement tool involves the digital video camera, which takes the continuous video of a model’s hair and head and afterwards processes the software tool, which uses the display and video device for representation of the processed pictures. In addition, the configured illumination device is used by this system for production of the multiple modules for lighting. The major purse of designing such innovative technological tool is providing its users with an option of seeing the real-time and dynamic of themselves: this video shows the potential new hairstyle, which is superimposed on them in such manner as if they actually see their new hairstyle in the mirror (Pfeffermann et al, 2014).
One more innovation of the P&G may be traced from the Patent Application No. 20140357962 (referred as the “Objective Non-Invasive Method for Quantifying Degree of Itch Using Psychophysiological Measures”). This method mainly refers to the evaluation of the core indicators of potentially unhealthy scalp. It is claimed within this patent application that this method is non-invasive and it quantifies itch though the following procedure: provision of the visual stimulus to an individual who is subjected on itch. The tools, used in the scope of this method, collect the psychophysiological data from the subject through displaying of the stimulus and applying into the practice the information, which is critical for assessment of the product’s or treatment’ therapeutic value. The major purpose of such system is represented in assessment of anti-dandruff and related compositions’ efficacy through measuring response of the subject - for instance, reduction of the heart rate, increase in electro-dermal activity or decrease in respiration.
The recent activities of the P&G in the area of research and development (R&D) involve the wide set of the products, developed for the personal care. This trend may be traced from the applications of other patents. For instance, the patent for the Collapsible Air Filtering Device (No. 20140331623) refers to the device, which is developed for removing the air pollutants from the interior spaces. It is claimed that the practical application of the patent refers to the device for air filtering; this device is equipped with the base, which has both the air’ inlet and outlet; the fan, which is functionally attached to the base and air filter (Favaro, 2013).
The last innovation of P&G to be discussed in the scope of this paper is the system, used for identification of the Pelvic Floor Muscles’ Condition (patent No. 20140323912). Application of this patent implies detection of the wetness though the use of specially-developed device. The end purpose is the identification of the pelvic floor muscles’ condition (Del Giudice et al, 2013). The major purpose of this innovation implies the provision g the test procedure for the self-diagnostic, which is aimed to assess the value of exercises for pelvic training in terms of the urinary incontinence’ prevention (Brachmann, 2015).
Unique strengths of P&G, contributing to its innovational development
Formation of the a group of new-growth-business guides
This step was issued by the HR management of this business entity for assisting the team in terms of managing the disruptive projects or situations. The major role of the experts implied advising the teams to remain small, until the answers for the key commercial questions of the projects were found. The ‘guide’ involves several skillful entrepreneurs who have previously succeeded or even more, failed in the process of starting businesses (Koulopoulos, 2011).
Development of the organizational structures
The major purpose of such approach implied development of the new growth and expansion. As an evident example, it is possible to refer to the case when small groups within P&G were formed for focusing on the new initiative of growth. The major area of responsibility of the dedicated teams within the groups implied conduction of the market research, creation of the business plans, development innovative technologies as well as testing the assumptions for the specific innovative projects (Lafley, 2013).
Development and issuing the process manual
The major purpose of this approach implied provision of the step-by-step guide for development of the new-growth direction within the business of P&G. This manual involved the detailed templates and procedures as well as the overarching principles, which are essential for identification of the requirements for progress and success monitoring as well as for making the go/no-go decisions (Addison, 2013).
Running the demonstration projects
This step was undertaken by the top management of the P&G for showcasing the emerging factory’s work, as an evident example it is possible to refer to the line of the pocket-size products, which are also referred as Swash – the remedies for prompt and effective refreshing of the clothes – these products have worked in the following manner: in the case if an individual is in a hurry, one has an option of getting the not-quite-clean shirt with the spray instead of washing it with water and cleaning powder (Brown and Anthony, 2011).
Three essential improvements were caused by the innovative approach towards running business, launched by the top management of P&G. First of all, the emphasis of the P&G was shifted to intermediate category, which was represented by the sustaining and transformational innovations, directed on delivering the new benefits in existing categories of the product.
The second improvement was represented in the form of the strengthening the organizational supports for the transformational disruptive and sustaining businesses’ formation. In other words, the set of the new-business-creation groups has been established. These groups have been larger in scope and size in comparison to the previous team, oriented on the growth within the factory, whose management and available resources were kept carefully separated from the major directions of the business development.
The third improvement has implied that the strategy development was revamped by the P&G alongside with the process of reviewing. From the historical perspective, the handling of the strategic and innovation assessments has been conducted in a separate manner. The latest approach of the top management of the P&G implies that the business, company, and innovation strategies are explicitly linked together by CTO, CEO, and CFO. Such form of integration, coupled with the new approach towards assessment of the set of the issues (competitive factors in particular), has created additional opportunities of innovational development of the P&G. Such revised approach calls for each unit of the lager P&G business for determining the mix of innovational types, which are critical for the achievement of the required growth.
Addison, M. (2013) P&G Connect and Develop – an innovation strategy that is here to stay. Retrieved from: https://www.pg.com/en_UK/news-views/Inside_PG-Quarterly_Newsletter/issue2/innovation3.html
Brachmann, S. (2015) P&G innovation focusing on personal care and home products. Retrieved from: http://www.ipwatchdog.com/2015/01/09/pg-innovation-focusing-on-personal-care-and-home-products/id=53437/
Brown, B., Anthony, S. (2011) How P&G Tripled Its Innovation Success Rate. Retrieved from: https://hbr.org/2011/06/how-pg-tripled-its-innovation-success-rate
Culpan, R. (2014) Open Innovation Through Strategic Alliances: Approaches for Product, Technology, and Business Model Creation. Palgrave Macmillan
Del Giudice, M., Carayannis, E.G., Della Peruta, M. R. (2013) Unpacking Open Innovation: Highlights from a Co-Evolutionary Inquiry. Palgrave Macmillan
Favaro, K. (2013) Does P&G Need Product Innovation or Strategic Innovation? Retrieved from: http://www.forbes.com/sites/boozandcompany/2013/07/12/does-pg-need-product-innovation-or-strategic-innovation/
Koulopoulos, T. (2011) The Innovation Zone: How Great Companies Re-Innovate for Amazing Success. Nicholas Brealey Publishing
Lafley, A.G. (2013) P&G’s Innovation Culture. Retrieved from: http://www.realignforresults.com/Websites/realignforresults/images/PGInnovationCulture.pdf
O’Connell, M. D. (2012) Harvesting External Innovation: Managing External Relationships and Intellectual Property. Gower Publishing, Ltd.
P& G official web site (2014) P&G Innovations. Retrieved from: http://www.pg.com/en_US/innovation/
Pfeffermann, N., Minshall, T., Mortara, L. (2014) Strategy and Communication for Innovation. Springer Science & Business Media
Appendix A Innovation Climate Index for P&G