Procter & Gamble's Powder Laundry Detergent Compaction | Free Essay Example

Procter & Gamble’s Powder Laundry Detergent Compaction

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Topic: Business & Economics
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P&G CASE

This recommends the implementation of the North America Compaction Roll Out. In this framework, Powder Laundry Detergent Compaction will be undertaken as well. Mainly, this initiative will lead to substantial market growth and enhanced customer loyalty, which is likely to enhanced profitability over time. It is also targeted at the improvement of business sufficiency.

Background

The sphere of laundry develops with time due to the continuous innovations maintained in various industries. To be distinguished among other businesses, companies, including P&G, need to point out their uniqueness. Thus, the company decided to emphasize compaction. Following global tendencies, P&G started to focus on positive contributions to environmental quality and society. It believes that with the implementation of new compaction, those people will resort to a larger amount of green services and operations. The cleaning product industry is not tightly connected with environmentally friendly changes because it is mainly associated with some chemicals. Thus, with the emphasis on environmental benefits, the company is likely to reach unexpected excellence. What is more, the implementation of detergent compaction is currently seen as a highly valuable offering to clients and positive intervention to professionals because it allows to reduce product price to some degree and to provide more convenient products. Such alteration is required now because the company has existed for almost 20 years already and it has reached the global market, the representatives of which appreciated it so that further improvement can be reached only when resorting to some unusual interventions. In addition to that, P&G has enough experienced employees who can accept a change with a limited course of time and continue to gather different important information. The organization has effective technologies that allow managers to utilize them to provide clients with better services.

Recommendation

As soon as P&G decided to introduce a compacted power laundry, it stopped the provision of products that were manufactured based on the standard formulation. Professionals believed that in this way it would be much easier for them to monitor alterations in human behavior. Still, the price for the product did not change significantly so that everyone had an opportunity to use the laundry. The research study showed that even though P&G provided smaller compaction currently, its advanced qualities allow the representatives of the general public to use for 40 loads just as other standard products of this type. From the very beginning, the company expected a decrease in sales and was getting ready for it. However, it was revealed that people and to give preference to the second option because they emphasize the convenience of the product and its influence on the environment. Thus, at least a 3% increased intake of a new product was offered. Other organizations that operate in the same sphere may try to spend their time to implement this change successfully.

Basis for Recommendation

  • The implementation of new cultural approaches that deal with environmentally-friendly transformations allows P&G to attract client’s attention
  • Competitive advantage can be obtained with the development of detergents, and P&G is likely to pay back its initiative.
  • More powder laundry detergent in smaller and lighter forms expenditures can be reduced, especially operational costs.
  • P&G’s products have a stable position in the market regardless of competitors (see Exhibit 1).

Discussion

P&G is likely to obtain the most benefit from the implementation of laundry detergent compaction because it provides a range of benefits for the company and society (see Exhibit 2). For example, it allows the reduction of expenditures but still provides a product that has the same qualities and allows the representatives of the general public to fulfill their needs. As the assessment of P&G’s performance showed, such an approach provides it with the opportunity to increase income and attract clients. It is also environmentally friendly, which allows gathering new customers for whom such characteristic is critical. The increase in income with such an option is not extreme, but even in this way, it provides an opportunity to earn more. Still, it is not clear what should be done if competitors resort to similar alterations.

Another option that can be offered is the opportunity to stick to commonly accepted practices. It means that P&G should not emphasize innovations and should focus on the improvement of existing offerings in a less invasive way. However, many organizations that operate in this market tend to follow such a path, which means that P&G will not be able to differentiate itself from its competitors. The company is not likely to obtain additional income because the resources of the revenue remained the same. All in all, P&G may lose its image and uniqueness if it decides to follow this way.

Finally, it is also possible for P&G to focus on the innovations but not to try to enhance something that has already been created. For instance, it can offer some unique cleaner for carpets. It is expected that the focus on such an innovative idea and provision of a good offering is likely to appeal to the representatives of the general public so that they start buying it. However, the company already has numerous products and can just improve their quality, which will also be less expensive. Otherwise, the development of additional products will increase expenses.

Thus, focusing on three possible options, it can be stated that the most advantageous initiative for the company’s cusses seems to be the first one. It provides a lot of different benefits that are not considered to be vital enough.

Next Steps

P&G has already implemented enormous alterations in the way this business is developed with time. Still, the company believes that it will not only compact powder laundry but also reformulate cleaning compounds completely. It believes that it is possible to use less detergent in comparison to other cleaning powers. P&G also thinks that it may be advantageous to develop products that are targeted at washing machines, etc. However, even though the representatives of the general think about this book and even do not eat in the elevator.

Exhibits

Exhibit 1

Rationale for Recommendation

  • The implementation of new cultural approaches that deal with environmentally-friendly transformations is the right thing to do in the current situation. The representatives of the general public tend to pay more attention to those products that are somehow concerned with the issues that are critical for today’s world. In this way, P&G attracted the client’s attention because it revealed its transparency and stated that its clients were free to find out how the company operates.
  • Analytics considered the way, in which competitive advantage can be obtained as soon as possible. While standard soaps have been used for numerous years already, nothing unusual could have happened to them. They have already be used from different sides so that it was possible to cope with bathing and soap with time. Still, the first detergent was developed in the 20th century already and the representatives of the general public tend not to worry about them. A detergent sector revealed data that showed that American families have about 600 laundries per year. With the development of the detergent market, penetration increased as well as the amount of the targeted market. As a result, P&G obtained an opportunity to turn into a leading company, with almost a 60% value share of the North American market. In this way, P&G is likely to pay back its initiative.
  • Under the influence of retailers and due to the increased customer demand, the company had to consider the opportunity to provide more powder laundry detergent. Trying to enhance product delivery and make it less costly but more streamlined, P&G started to offer the same product in smaller and lighter forms. Soon, the additional alteration was made to appeal to both producers and clients and to reduce transportation costs. With the creation of compacting powder, professionals provided an opportunity to reduce expenditures needed for packing materials and warehousing. The water usage would also improve. All in all, these changes ensure that P&G reduces the number of negative influences made on the environment due to the company’s operations.
  • Those products that are provided by P&G turned out to be rather difficult to reach. They are widely used by the individual representatives of the general public and organizations that offer cleaning. The company needs to deal with lots of competitors because they all operate in the same market and have extremely similar components. Still, P&G itself gathers enough revenue so that it is not that vital to have everything ordered.

Exhibit 2

Options Grid

Option 1 Option 2 Option 3
Description of Option Implement laundry detergent compaction Stick to the commonly accepted practices Add additional product
Overall Assessment Recommend because of increased income, improved image, and high possibility to attract more clients Do not recommend because of competition created by the existence of numerous similar offerings Do not recommend it because of existing offerings. The company already has got a lot of products so that new ones will not attract much attention
Strategic Fit
(Core Competencies)
Focus on innovative offerings and superior benefits. This approach allows capitalizing on the company’s strengths, making its weaknesses less critical Lack of company’s identity. The majority of companies follow the same best practices, which affects differentiation negatively. It will be more difficult for clients to make up their minds and stick to the products of one company Focus on innovative products. Clients tend to be attracted by innovative items because they associate them with improvement and increased overall benefit
Financial Attractiveness $65million per 10% increase (1-2% per year). First improvements can be observed within the first year of launching this option No additional income. The company already utilizes this approach, so no significant changes will be observed Additional expenses for the design and manufacturing of a new product will be needed. Additional assistance can be required
Noteworthy Risks No discussion of competitor’s reaction Move away from differentiation No competitive reaction