Digital Strategy of Procter & Gamble: Becoming More Agile and Efficient

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P&G had its origins in 1837, when two brothers-in-law, William Procter and James Gamble, decided to combine their existing businesses of making candles and soaps, respectively, as the raw materials they used were the same. The firm was set up in Cincinnati, Ohio, USA. In 1905, P&G was incorporated as a company. In 1915, its first manufacturing plant outside the US was set up in Canada. As of December 2011, P&G was the largest consumer packaged goods company globally. Its products, numbering over 300, were being sold in over 180 countries. , Of P&G's brands globally, 24 had individual sales exceeding US$1 billion. Its entire operations were classified into six categories - beauty, grooming, health care, snacks & pet care, fabric care & home care, and baby care & family care.

For the year ended June 30, 2011, P&G had generated net sales of US$82.56 billion and net profit of US$11.79 billion.

P&G was considered one of the most innovative companies globally, in terms of applying technology to developing products. The company's innovative culture had been attributed to its Connect+Develop initiative. In the late 1990s, P&G had been facing tumultuous times. Its sales growth was petering out, financial expectations had not been met for two straight quarters in 1999-2000, and, its market capitalization had shrunk by US$85 billion. In 2000, when AG Lafley (Lafley³ ) took over as CEO, he launched the C+D program. The aim was to grow the company by tapping innovation from outside, and, using them to introduce new products. The goal was that 50% of new innovations should be sourced externally. P&G deployed information technology to partner with companies, entrepreneurs, and, research institutions. It spotted brilliant concepts globally and used its in-house capabilities to make tangible products. IT operations were outsourced. By 2004, P&G's sales and net profit had risen 19% and 25%, respectively over 2003. In 2004 and 2005, P&G introduced 100 new products with external assistance. And, by March 2006, its share price had doubled from its 2000 level. However, according to experts, the biggest and the most enduring benefit that accrued to the company from the C+D initiative was the change in the thought processes of its employees. P&G's employees became open to experimenting with new ideas and did not shy away from collaborating with external partners to enhance the company's business.

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3] Lafley remained the CEO of P&G till the end of June 2009. On July 1 of the same year, he handed over the CEO's mantle to McDonald.

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