Open Innovation

5947 words 24 pages
UNIVERSITY OF BATH, MSC IN INNOVATION AND TECHNOLOGY MANAGEMENT

Connect and Develop
P&G's big stake in open innovation

Limali Panduwawala Suvidha Venkatesh Pedro Parraguez Xiajing Zhang

27/11/2009

Abstract: This report explores P&G's "Connect and Develop" open innovation initiative. Its focus is to analyse this innovation strategy in the context of the formal academic theory, other P&G's programmes and the company situation. Its objective is to understand the impacts, challenges and problems of implementing a large open innovation initiative inside a corporate giant such as P&G. Keywords: Procter & Gamble, P&G, Open Innovation, Connect and Develop, Innovation Networks

Connect and Develop, P&G's big stake in open innovation

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In the process, they should let others use their unused ideas which in turn can become a profitable venture by itself. This process would require an open business model to be in place.

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Innovation Strategy at P&G

One of the core strengths of the company is its Innovation strategy. Its CEO A.G Lafley believes that innovation is at the heart of P&Gs business model. The company uses innovation to create value with retail partners, satisfy customers and to create new business models to maintain sustainable growth (Datamonitor, 2009). The company boasts of a range of industry firsts (Appendixes 7.1 and 7.2). P&G uses a unique design for innovation comprising of five major categories (Datamonitor, 2009):      Defining innovation broadly Investing in innovation at industry levels Managing innovation with discipline Delivering innovation that builds consumer trust and loyalty over time Using global brands and an outstanding team of innovation leaders to lead innovation

One unique feature in P&Gs strategy is that innovation is involved in every area of the product which makes contact with the customer, such as the packaging, the shopping experience, the in-home product usage experience as well as the product itself (Datamonitor, 2009). A good example is the company’s family care business where the innovations are customer focused rather than technology focused. This means that each product offers customized benefits to meet different

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