P&g Industry Brief

Procter and Gamble (P&G) is the world's largest manufacturer of consumer goods. Their primary focus is in beauty and grooming and household care. Major competitors are L'Oreal, Unilever and Colgate-Palmolive Company. P&G and their competitors are large multinational organizations whom operate worldwide. Their products are primarily sold in grocery stores, specialty retail stores and mass merchandisers. Major brands of P&G include (all are expected to bring in over $1 billion), but are not limited to, Tide, Pringles, Charmin, Febreze, Duracel, Swifer, Bounty, NyQuil, Cascade, Braun, Gillette and Head & Shoulders. Former CEO, A.G. Lafley, was able to substantially improve the company. He honed in on superior chain management techniques and product and brand management. Furthermore, he acquired Gillette, which has increased revenues by 27% (1). P&G's success depends on its customers, people and innovation. Understanding customer needs and building lasting relationships demonstrates P&Gs need to innovate.

P&G is facing a major problem in the fact that they do not innovate new products often enough. Although they do come out with products that are innovative and often mimicked, such as Pampers and the Swiffer, they lack the ability to maintain innovation throughout their various departments. The company must create a path of successful innovations, time after time. The innovation issue from P&G is a direct result of the company's enormous size. P&G has six consumer categories; five of them have annual revenues between $12 and $27 billion, indicating the company's massive market power.

In order for P&G to successfully capitalize on more market share they must create and maintain innovative products. P&G is simply becoming too large to manage. If they spun off their 6 different sectors, beauty, grooming, health, home care, baby care, and snacks, into separate businesses, they would be able to successfully create innovative products. P&G needs to have multiple innovative top selling products in each of their main categories rather than just one product. If each department is created into their own business, they will be able to focus on individual niches. Colgate-Palmolive does a successful job innovating and maintaining growth because they are able to focus primarily on oral care and soap. If each sector of P&G becomes its own business, they will have the time, resources and proper management in place to create innovative products, thus reinforcing their overall brand (2.)