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Procter & Gamble and No-frills are two firms competing on the same marketplace, through Innovation and Price respectively. The purpose of the assignment is to compare and contrast the two strategies used by the firms and to critically examine that one strategy is better than the other. The first part of assignment will brief about P&G’s Innovation strategy. It will be explained through Framework of Organisational Innovation; and the three Types of Innovation will be discussed. In which QFD is constructed as an example for P&G’s Process Innovation and discuss impact to organisation. Second part will present No-frills as a firm competing through price. It looks at organizational impact as well as considering how Internal and External factors influencing Price decision. Third part will introduce Porter’s Competitors Five Forces to demonstrate how these forces threaten firms using the two strategies. Forth part looks at how the market demand will respond to Price elasticity therefore benefit or impact to Innovative or Price focused firms. In the fifth and sixth parts, risks for using both strategies are revealed. Finally, summary and conclusion will summarize and debate on that Innovation strategy is a better strategy compare to Price strategy.
Innovation Strategies by Procter & Gamble
Procter & Gamble, is one of the largest packaged consumer goods company in the world, based in Cincinnati, USA. This is a manufacturer of fast moving consumer goods (FMCG) with revenue of US$68 billion a year, P&G ranked 81st among the FORTUNE Global 500 companies in 2006. (CNNMoney.com 2007) P&G is responding creatively and competitively with branded products and services which enhance firm’s performance and their consumer’s satisfaction. P&G is regarded as competing through Innovation. The company markets products in nearly 50 categories. The magnitude of businesses allows Innovation by connecting technology across categories. As a result, P&G has innovation in an...