OPEN INNOVATION: THE CASE OF P&G

Chawla, T

ECCH 306-423-1

Description: By 2000, in the wake of rapidly increasing research and development (R&D) expenditure, lackluster new product launches and nearly flat sales, Procter & Gamble (P&G), one of the largest global consumer products companies, decided to revamp its innovation model. The company's existing innovation model was heavily dependent on its internal R&D department. This model worked well for the company over the decades. However, the above setbacks urged the Chief Executive Officer, AG Lafley, to reinvent the innovation model to ensure consistent growth. Thus, the company initiated an open innovation model, 'connect and develop' (C&D). The new model encouraged the company to collaborate with external organisations for innovation ideas. Connect and develop turned out to be a successful innovation model and helped P&G launch new innovative products. The case starts with a short introduction to the problems that P&G were facing in 2000. The next section gives a brief history of the company underlining its innovative products over this period. The case then attempts to highlight the company's new approach to innovation - shifting from R&D to C&D - and elaborates how it adopted and applied the new model. The subsequent sections present details of what is open innovation and how P&G benefited from it.

More information: http://www.ecch.com/casesearch/product_details.cfm?id=69353&rc=27&pg=3&tc=31&adv_search=1

Keywords: Procter & Gamble (P&G); Open innovation; Nine Sigma; Innocentive; YourEncore; Yet2.com; AG Lafley; Closed innovation; Pringles; Connect and develop (C&D); Mr Clean Magic Eraser; Crest; Pampers; Tide

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