Innovation Management of P&G

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Innovation Management of P&G


1.1 The introduction of P&G1
1.2 The development of P&G1
1.3 What the report is about2
2. Evaluation of its innovation management3
2.1 P&G’s way to search for ideas3
2.2 Organic Structure of P&G4
2.3 P&G’s way to manage human resource5
2.4 P&G’s creative strategies7
3. Recommendation to its innovation management8


1.1 The introduction of P&G

P&G is short for Procter & Gamble, it is a multinational company that founded in 1837 in Cincinnati, Ohio, and now manufactures a wide range of consumer goods. Its products cover every aspect of consumers’ life and the brands that created by P&G include Crest, Gain, Luvs, Olay, Pampers, SK-II, Tide, Venus and so on. 23 of P&G’s brands have a billion dollar in net annual sales and another 18 have sales between $500 million and $1 billion.

P&G is making sustainable progress since it is founded. It is listed at the tenth place of the “world‘s most admired company” by the Fortune magazine in 2008 and jumped to the fifth place last year. The developing speed is quite rapid. The core strengths, that stimulate P&G to develop quickly, are consumer understanding, scale production, going to market capability, innovation and brand-building. The CEO of P&G thinks a good CEO must firstly be a CIO (short for Chief innovation Officer) and he regard “consumer understanding” as the main factor in sustainable development. The leaders’ farseeing ability also contributes a lot to the company’s rapid growth.

In a word, the multinational company is creative and manages its available resources well. It have the ability to make a large quantity of profit every year and been admired by the society. P&G’s successful experience is wonderful.

1.2 The development of P&G

In the year 1837, P&G was born as a company to make soap and candle. In the year 1880, the grandson of the founder created a new kind of soap, called soap ivory, which is with higher quality but lower price. The soap ivory is the first progress for P&G.

Then it tried to make greater and greater progress: Firstly, it publicized itself on radio. Such as making a lot of radio programs for its brand Crisco, and making the brand going popular soon. What’s more, it branched out into new areas. For example, P&G branched out into shampoo in 1947 with the creation of the brand Prell, and branched out into toothpaste in 1955 with the creation of the brand Crest. Moreover, it tried to move to other countries and then spread all over the world. Its first trial to move into other countries is in 1930. P&G moved into England in that year and then maintained a strong link to the north east of England. At last, it become a international well-known company.

With the flourish of the company, P&G begin to acquire a number of other companies that diversified its product line and significantly increased profits. Then managers of P&G turned to brand management strategies and focused on consumers instead of products. Because of the suitable management strategies adopted by the company, it dramatically expanded throughout its history and recorded $82.6 billion dollars in sales last year. What’s more, it wins a tier one sponsor of the London's Olympic Games 2012 and sponsors 150 Athletes.

1.3 What the report is about

This report is about the innovation management of P&G. The report is divided into four parts. The first part is the introduction. The second is the presentation and evaluation of P&G’s innovation management. The third part gives recommendation to its innovation management, and at the end of the report is the summary of the report. The main parts of the report are part 2 and part 3.

Part 1 presents the background of P&G, and introduces the development process of the company. This part provides readers with the basic knowledge....
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