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to the local environment. Factors such as infrastructure, supplier
base, differing regulatory regimes, and, most important, varied
consumer preferences often require new business design and
creation capabilities. Companies that master local specialization
while retaining the benefits of global breadth will prosper.
Selling shampoo in New Delhi that was developed for con-
sumers in Cincinnati is no longer good enough. One of the
highest-margin products in P&G’s portfolio is a small sachet
of shampoo sold in India. Many lower-income consumers in
India, typically women, consider shampooing a luxury, some-
thing that they would do more often were it not for the cost.
The large bottles sold in developed countries not only are too
expensive but are difficult to distribute across India’s compli-
cated infrastructure and to manage within the channel of the
small retail kiosks that are common throughout the country.
Large bottles take up too much space and are too expensive for
most consumers. Thus, P&G created small packets of shampoo,
known as sachets, which provide consumers with an occa-
sional luxury. Though they sell at a much lower price, the mar-
gin per ounce turns out to be much higher than that of similar
shampoo sold in developed countries.
But achieving growth in diverse markets means much more
than simply redesigning products. It requires new approaches
to the business design. P&G’s sachet solution helped manage
the supply chain and retail channel issues, enhanced the cus-
tomer experience (i.e., prior to this, many consumers had not
had access to high-quality shampoo), and changed the way
P&G captured value. Think about this in terms of the Innova-
tion Radar described in Chapter 2. It illustrates how any com-
pany can approach the entry into a new market in terms of
holistic new business design.
In some cases, the demands of launching new businesses in
emerging markets generate new business models that would