Innovation in designing products Essay Example

other regions. The company took advantage of government tax incentives by manufacturing the product in Puerco Rice.

In 1981, Richardson-Merrill divested its prescription pharmaceuticals business and rebranded as Richardson-Vicki. Shortly after, Milliner, an Anglo-Dutch conglomerate, launched a hostile takeover bid on Richardson-Vicki. In response, Richardson-Vicki sought assistance from Procter & Gamble, a soap company acting as a white knight. Eventually, in 1985 they merged with Procter & Gamble. The main attraction for Procter & Gamble was the Vicki ETC line. However, it took them several years to determine how to manage less popular brands like Lola.

Nonetheless, in 1987 beauty cream and lotion for sensitive skin were introduced under the Lola brand name. This was followed by the launch of a cleansing lotion in 1990. When Dove's patents expired, Procter & Gamble introduced the Lola beauty bar in 1993 which directly competed with Milliner's brand.

Additionally, Procter & Gamble introduced body wash and shower gel products in 1994 which quickly gained a substantial market share of 27% and generated sales of around $mm.

Then in 1996,the group unveiled the Oil of Lola Age Defying Series which utilized alpha-hydroxyl-based skincare technologyBy the late asses, Oil of Lola had expanded its product line to include over 30 separate items under the shared umbrella brand. Procter & Gamble responded to customer demands in Asia by introducing a range of skin whitening beauty products called Lola Fairness. However, not all of Lay's brand expansions were successful. In the mid-asses, Procter & Gamble announced their plans to enter the color cosmetics segment. Lola, which held nearly 27% market share for facial moisturizers in the US, offered a wide range of products including aging creams

and shower gels. Combining skincare and color cosmetics into one product made sense during the health-conscious era of the 1990s.

Procter & Gamble's hold on the cosmetics market was declining as they fell to third place behind faster-growing rivals Revolve and L'Oreal. After successfully testing a range of cosmetics in Germany in 1994 and conducting a small-scale test in the US that gained attention from competitors, further tests were carried out in the UK in 1996 before formally launching the brand again in Germany in 1999. P reported success from these European roll-outs, noting "double-digit market share" for their lipsticks, foundations, and eye-shadows.

Industry estimates indicated that P aimed to achieve around $1 million in sales from this new brand extension in the US, which would give them two of the top five cosmetics lines nationwide.In 1999, Revolve and Cover Girl were the top-selling brands with sales of approximately $1 million each. If Lola achieved sales of $1 million, it would rank fifth behind Amiability and L'Oreal. P allocated a significant amount of money, ranging from $mm to $mm, specifically for their cosmetics line. This was the largest marketing expenditure at the time for a single product, excluding Toilette's Mach Ill razor.

However, P faced unexpected difficulties in the market due to competition from Neutron cosmetics by Johnson & Johnson and new launches from Revolve's Alma brand. While Lola foundation reportedly sold well, other products like eye-shadow underperformed. With only around a 3% market share in the US mass cosmetics market and sales estimated at about $mm (less than one-third of their target), P decided to cut costs and discontinue the range in summer 2001.

Critics often highlighted that

P's failure to embrace the promised fast-turnaround product cycle was evident in the prolonged seven-year development of Lola Cosmetics. This gave competitors ample time—five years—to develop similar products. In contrast, Lola Facial Wipes were conceived in 1999 but launched quickly and achieved relatively more success. These disposable face wipes infused with moisturizer generated over $mm in sales within their first year.During this period, the brand also launched its initial line of "Age-Defying" products, which proved to be more successful than regular color cosmetics. P standardized the Lola/Lay/LULAS name as Oil of Lola internationally in most markets once copyrights began to expire in 1999. However, they removed the "Oil of" label in 2000 after research indicated that younger women disliked the implication that the product was "oily". Despite this change, Lola sales in the US surpassed those of the Dove range. In 2000, P entered the premium-priced "mastitis" market with Lola Total Effects and later introduced Lola Registering in 2003.

P has a clear strategy for future growth, focusing on increasing concentration on their core attractive businesses and expanding their customer base. They have particular interest in fast-growing segments like beauty and health, as well as various household care categories. The global personal care products market has annual sales exceeding $39.5 billion and experiences an approximate annual growth rate of 5%. P plans to acquire underserved and untapped consumers to expand their customer base by targeting developing markets and enhancing their distribution systems, brand presence, and product portfolio.

By 2010, it is projected that developing and emerging economies will account for 90% of the world's population, resulting in increased demand for fast-moving consumer goods.P&G is investing in expanding

its manufacturing capacity to enter new categories and countries where it currently lacks brand presence. They will allocate 4% of sales towards capital spending, including funding for new manufacturing facilities. Over the next five years, P&G aims to establish 20 new manufacturing facilities, mainly in developing markets and covering various product categories. This focus on developing markets will reduce serving costs and allow for closer proximity to high-growth regions.

In addition to these plans, P&G has made significant acquisitions such as the Girth skincare brand in June 2009, Natural Pet Products in May 2010, and the Iambi Purr Brand from Sara Lee Corporation in July 2010. The Iambi Purr brand is a global air care brand present in 80 countries that also offers toilet care products. It has a strong presence in Western Europe and Asia. These acquisitions will strengthen P&G's position across different categories, boosting both its top line and bottom-line performance.

P's main competitors include Dove, Naive, Neutron, along with their related products. Furthermore, the company is expanding into the premium sector where it competes with L'Oreal and Esteem Ladder's Clique brand. For more information about other companies and brands within the Personal Care Sector index, please refer to it.

Procter & Gamble (P&G) has plans to launch its Lola skin care brand into fifteen new markets worldwide this year.According to De Shirley, the vice chairman of global beauty and grooming brands at P&G, this strategy is in line with P&G's global growth plans. The brand's focus for this year is on entering new markets, particularly Brazil due to its fast-growing retail market. The goal is to expand Lola's presence from 69 to 100 markets within

the next two years. Shirley acknowledged during the presentation that they have been slow in bringing innovation to the market for Lola brand development but expressed the desire to have a comprehensive Lola portfolio globally.

The acquisition of Gillette business has shifted P's focus towards male personal care and grooming products, leading to future growth opportunities from the Lola brand. With its evolution from a moisturizing product to a leader in anti-aging segment, Lola has capitalized on increased demand for moisturizing and anti-aging products driven by the growth of men's grooming market. P estimates that in fiscal 2009, approximately $2.Bin of their total $bin revenues came from the Lola brand. Currently dominating major global markets like China, UK, and US, Lola has experienced rapid growth in its beauty and grooming operations.The text examines the four generic strategies outlined by Herbert and Dresser: develop, stabilize, turnaround, and harvest. These strategies are derived from similar factors and qualities seen in other models. They are not reliant on other strategies, environmental circumstances, or the organizational or product development stages. The develop strategy is employed by newer enterprises, companies with rapidly evolving technology and product ranges, or organizations venturing into new product-markets as a result of unfavorable conditions in their current business domain.This text discusses different business strategies and provides examples of companies that have implemented them. Intuit's innovative approach in the personal finance computer software market is an example of a develop strategy, which aims for long-term growth through new product or market development. This strategy is commonly used in mature industries like textiles and chemicals.

When the market consists of buyers with similar needs, cost leadership becomes important. In

these cases, management focuses on providing products at a low cost. Goodyear in the tire industry follows this type of strategy by offering high-quality products at competitive prices.

In markets with differentiation, companies use market segmentation or product specialization to focus their strategies. They provide high-quality products, excellent service, and maintain close relationships with customers. Laura Ashley's turnaround strategy serves as an example of this approach.

The turnaround strategy is implemented when survival and rebuilding are necessary. This involves improving cash flow, reducing costs, or refocusing the organization through downsizing or other forms of restructuring.

The cost strategy aims to increase efficiency by focusing on cost reduction measures while refocusing may include reorganizing, diversifying, or acquiring other companies through mergers.

Lastly, the harvest strategy involves removing a business from the corporate portfolio altogether.The decision to sell General Electric's small appliance business to Black & Decker is driven by factors such as poor financial performance, lack of compatibility with the core business, absence of competitive advantage, and misalignment with the future direction of the corporation. This sale exemplifies a harvest strategy in which specific actions are not provided but a general direction or end goal is indicated. Generic strategies offer broad guidance for action, requiring management to develop specific plans. Organizational renewal has resulted in significant changes to the size and structure of many business firms in recent years. Activities like rightsizing, reengineering, and reinventing the organization are involved in this process. The traditional organization undergoes three phases during renewal: vertical disaggregating, internal redesign, and network formation. The first phase aims to reduce the organization's size by eliminating jobs and middle managers while flattening the hierarchy. According to the conference

board, 90 percent of its members have downsized in the past five years, and about two-thirds of executives across various businesses anticipate continued downsizing.
The text discusses the concept of a horizontal corporation and its key processes such as new product planning, sales generation, and customer service. Multifunctional teams are emphasized as the main units of the organization, aiming to provide superior customer value and measure performance. Regular contact with suppliers and customers is encouraged for employees. Organizational renewal goes beyond staff reduction and worker empowerment, involving the redesign of internal structure to be lean, flexible, adaptive, and customer-responsive. Technology plays a crucial role in innovation, product design, supply and distribution management, and market adaptation. Priorities include understanding customer needs, offering value, and retaining customers. The third phase involves forming relationships with other organizations through collaborative arrangements called networks. Benton's example showcases characteristics of a network organization. Entrepreneurs are more likely to launch networks due to challenges faced by traditional vertically integrated companies in transitioning to the network paradigm.

The transformation process includes downsizing the workforce, encountering management challenges, undergoing cultural changes, and forming intricate collaborations with other organizations. Nevertheless, there are instances where traditional companies like General Electric have effectively transitioned into more flexible and adaptable network structures.