Procter & Gamble: Connecting and Developing for Top-Line Growth

Procter & Gamble (P&G), the world's largest consumer goods company, has been driving top-line growth through a strategic shift in its innovation approach. The company, which initially relied solely on internal R&D, has embraced the "connect and develop" method to tap into external sources of new ideas and develop them into profitable products swiftly and cheaply. This approach has allowed P&G to maintain its competitive edge in the consumer goods market.

P&G's shift in strategy is evident in its successful launch of Pringles Prints, a line of potato crisps printed with entertaining pictures and words. Instead of looking internally for solutions to the problem of printing images on crisps, P&G searched its global networks of individuals and institutions and discovered a small bakery in Italy run by a university professor who had invented an ink-jet method for printing edible images on cakes and cookies. P&G adapted the method and its North American Pringles business scored double-digit growth.

This change in strategy has allowed P&G to innovate more quickly and cheaply than relying solely on internal R&D. By leveraging its global networks of individuals and institutions, P&G has been able to adapt and innovate more efficiently. This approach has helped P&G maintain its market leadership in the consumer goods industry.

P&G's revenue growth has been driven by this strategic shift, with the company's global revenue amounting to approximately $84 billion in 2024. The company's market capitalization has also evolved over the past decade, with fluctuations driven by various factors such as economic conditions, market trends, mergers and acquisitions, operational efficiency, and geopolitical risks.

In conclusion, P&G's shift to the connect and develop method has been a key driver of the company's revenue growth and market leadership in the consumer goods industry. By embracing external sources of innovation and adapting them swiftly and cheaply, P&G has been able to maintain its competitive edge in a rapidly evolving market. As the company continues to evolve its product portfolio and brand strategy, investors can expect P&G to remain a strong performer in the consumer goods market.