Procter and Gamble Company Essay

BackgroundProcter and Gamble was create by James Gamble & William Procter in 1837 by a see manufacturer Procter and a soap manufacturer Gamble. This consumer merchandise connection 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 three-f darkened it sales every ten years. P&G growth was set by innovation not optimization. Radical innovation served as their headstone to success with other factors such as geographic expansion, product suck up 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 overly recievesthe credit for developing innovative and advanced technology based products during 1940s such as Tide, Crest,Pampers, Bounce etc.By the end of 1980s P&G had its o perations in 58 countries,its reputation was built with its refreshed 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 pictorial matter for the company. As noted in Kevin Kellys quote Wealth in novel regime flows directly from innovation and not optimization, i.e. wealthiness is not gained by perfecting the known, but imperfecting the unknown.P&G successfully utilize 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 set a get going in United states. P&G was also known for its hefty ethics, values and recruiting the best and brightest. R&D was a major boil down 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 piquant work culture, employee compensation and had a structure in place which informed employees of growing within the organization with its up through the rank hail which fostered innovation.In the process of growing, P&G moved out of their old tradition of new product development and concentrated completely on the global expansion and development of existing products. With structured productsectors in place, P&G had some difficulty fitting some new product idea into any of the available category which led to the rejection on various novel ideas. In 1993, the company started the Strengthening Global military strength (SGE) with the goal of increasing profits through cost reduction which was achieved by reengineeringand reformation of distribution and manufacturing. This led to a successful increase in profits from 10% to 17% in a year. In the same year, CEO tush Pepper said that their was an urge for developments of new brands in order to fulfill the companies lo ngtime goals of increasing their sales.Mark Collar, Vice chairperson and General Manager of New Business Development and a part of SGE said that a breakthrough is required to manage and accelerate the companys innovation process. In addition, the concept of cross fertilization was fading out gradually so their was a requirement of a new innovation team that can incorporate the old traditions followed by the company during the 1960s. Therefore this lead to the formation of Innovation Leadership Team (ILT) in 1993. The top seven officers of the company were a part of this team John Pepper(Chairman and CEO) Durk Jager(President and COO) Wolfgang Berndt(Executive VP North America) Gordon Brunner(Senior VP Research and Development) Gary Martin(Senior VP Information Services and Product Supply) and Eric Nelson(Senior VP and CFO) Robert Wehling (Senior VP Advertising and marketplace Research).The ILTs responsibility is to investigate the portfolio of the projects under development and p rojects on shelf, conduct valuable projects that add value to the firm. Soon Corporate Innovation Fund(CIF) was open up for the funding the research on new products developments. The employees can report projects no matter of their sector and obtain approval at very fast railyard on appropriate projects.