WRITTEN ANALYSIS OF CASE (WAC)

Connect and Develop: Inside

Procter & Gamble’s New Model
For Innovation

Submitted by: IBAD IMRAN (25467)

Procter & Gamble is one of the largest consumer goods companies in the world, with a portfolio of
over 65 brands and a presence in more than 180 countries. Innovation has been at the heart of
P&G's success since its inception, with the company investing heavily in research and development
to create new products and technologies that meet the changing needs of consumers.

However, P&G recognizes that it cannot rely solely on its internal innovation efforts to drive growth
and stay ahead of its competitors. To remain competitive, the company must also tap into external
sources of innovation, including collaborations with individuals, companies, and organizations from
around the world.

To this end, P&G has developed its Connect and Develop strategy, which aims to enhance the
company's internal innovation efforts by collaborating with external partners. The strategy involves
the use of proprietary networks, supplier networks, and open networks to identify potential sources
of innovation and to develop new products and technologies.

Proprietary networks are networks of external partners that P&G has established for the purpose of
innovation collaboration. These networks are designed to help P&G identify potential sources of
innovation and to develop new products and technologies that meet the changing needs of
consumers.

Supplier networks are networks of P&G's suppliers that the company uses to share technology briefs
and to collaborate on innovation projects. P&G has established a secure IT platform that allows it to
share technology briefs with its suppliers, and this has seen a 30% increase in innovation projects as
a result of these efforts.

Open networks, on the other hand, are networks that connect companies with solution providers,
contract scientists, and retired scientists and engineers. P&G uses open networks such as NineSigma,
InnoCentive, YourEncore, and Yet2.com to identify potential sources of innovation and to
collaborate with external partners on innovation projects.

P&G has also established six connect-and-develop hubs in different regions around the world, each
focusing on finding products and technologies that are specialties of the region. These hubs are
staffed by P&G employees who work with external partners to identify potential sources of
innovation and to develop new products and technologies.

Once potential sources of innovation have been identified, P&G screens them internally to
determine which ones are worth pursuing. The company uses a variety of screening methods to
assess the potential of each idea and to determine whether it aligns with its innovation goals.
For example, P&G's screening process includes an assessment of the potential market size for the
new product or technology, an analysis of the competitive landscape, and an evaluation of the
potential risks and rewards associated with the project.

P&G also makes use of a range of innovation metrics to track the progress of its innovation efforts.
These metrics include the number of new products and technologies developed each year, the
percentage of sales derived from new products and technologies, and the return on investment for
each innovation project.

Overall, Procter & Gamble's Connect and Develop strategy is a key driver of the company's
innovation efforts. By collaborating with external partners from around the world, P&G is able to tap
into a broad range of expertise and experience, allowing it to develop new products and
technologies that meet the changing needs of consumers.

The Connect and Develop strategy has helped P&G to achieve significant success in the consumer
goods market. For example, the company's collaboration with a small UK-based company called First
Water led to the development of a new technology for removing stains from clothing. This
technology was incorporated into P&G's Ariel laundry detergent and has since become one of the
company's most successful products.

In conclusion, Procter & Gamble's Connect and Develop strategy is a powerful tool for driving
innovation and staying ahead of the competition in the fast-paced consumer goods market. By
collaborating with external partners from around the world, it has once taken its mantle as a market
leader and left the competition behind.