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1. What are the two innovations at P&G?

What
problems were solved by the two innovations?
2 innovations were plastic food wrap that created a
perfect seal against itself, with just the press of a finger
and a garbage bag which defies puncture
Food wrap is inexpensive and easy to use. It protected
food from freezer burn at low cost and high reliability
Garbage bag is extremely resistant to punctures,
solving the problem of leaks and the inconvenience of
double bagging. It also used less material than
traditional bags, saving resources

2. Why P&G hesitated to launch the two products?


Past experience showed that test-market response is
not reliable
Faced with dominant competitors
launching Press'n Seal and Force Flex would require
huge capital investments in manufacturing
infrastructure - industry-specific technology with which
P&G had little experience.
Could result in huge losses

3. What was P&Gs experience with Citrus Hill in the


1980s?
Developed in the 1980s, Citrus Hill was an innovative brand of
orange juice which featured high calcium content.
Very well received in the test-market, P&G was confident of its
success and tried to force its way into the market dominated by
Minute Maid and Tropicana
The 2 market leaders feared that P&G would gain a major
foothold and threaten their core businesses, used their mass
and finances to fend off P&G vigorously, resulting in P&Gs
failure.
P&G was able to withdraw from this unsuccessful venture and
moved on to collaborate with these two rivals, earning profit
from these competitors usage of its technology, thus illustrating
the importance of strategic collaboration with stakeholders in
the process of constructing a successful business.

4. What are the two options faced by P&G?


Why P&G is not happy with either options?
2 options were launching the product into a market with a
few dominant firms, and licensing out its technology
Huge capital investments in manufacturing infrastructure
which P&G had little experience in meant taking a huge risk
and failing would mean significant financial losses. Past
experience had shown that the threat was very real.
By licensing, P&G would lose company awareness as its
competitors will just incorporate its technology into its
existing products. There is a risk that competitors may decide
not to pay licensing fees and develop a similar technology by
reverse engineering, resulting in losses for P&G.

5. What was the solution that P&G came up with?


Entered in a joint venture with staunch competitor Clorox
Contrary to traditional ventures, Clorox was given control of this one
In exchange for the technologies and the assignment of R&D
personnel, P&G received 10 per cent of the overall Glad business,
with the option to acquire another 10 per cent on prearranged terms
It exercised its option to purchase a further 10 per cent which netted
them huge capital gains arising from the strength of the new
products which was developed by Glad
Thus, it benefitted from the collaboration with its competitor. It
obtained some of its competitors stake and reaped the rewards of
its innovation.

6. What steps from integrative thinking are used to create


the solution?
Faced with 2 seemingly opposing models: launching and licensing,
P&G chose an in-between solution by disengaging the opposable
mind and looking at the trade-offs. P&G did not settle for an either-or
choice.
Determining salience: response of customers to new product
favourable, but based on previous experience with Citrus Hill aware
that foray into new markets will face very fierce competition that
would not be ideal. Competitors desire for market dominance very
important.
Envisioning the decision architecture: made the deal a win-win for
both parties involved. Eventual new business model based on belief
that P&G should not be overly-ambitious in trying to dominate market
it has no prior experience in, collaboration is key
Achieved resolution by creating a non-competitive space & successful
leading brand business even though joint venture was uncertain

7. Implications?
Strategy is changing-firms should now look to include
external parties and stakeholders in its strategy
Results in far more complicated relationships
Rather than throwing away all strategy in this VUCA
world and winging it, should rely on strategy
However, should look to integrative and creative use.

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