A.G. Lafley the P&G Company's Term Paper

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This, as mentioned above, provides job satisfaction, tenacity, and excellence in performance. In this way the human resource is not ignored but used to integrate with product development.

Furthermore, Lafley recognizes the power of customer trust, whereas this is another element that Jager ignored in favor of his pure focus on tangible resources. Previously successful products are tried and trusted by customers; enhancing the marketing strategy for these utilizes this trust in order to build a strong product basis from which to innovate.

8. In general, Lafley's direction of focus was inward rather than outward. Jager for example focused only on tangible resource renewal. For him, innovation was the most important focus of improvement. As such, he invested a large amount of monetary resources into this focus, ignoring existing resources. Existing resources are the basis from which to build new products and resources. If the health of this basis is not ensured, innovation will most likely not be successful, as indeed proved to be the case with Jager's strategy.

Lafley, in contrast, focuses inward in terms of both tangible and intangible resources. Instead of frantically creating new products, he investigated the merits of the existing ones. In addition, he also recognized the vast, largely untapped human potential within the company. In terms of organization, he involved the creative power of a large collective base rather than just the fraction represented by the company's researchers and scientists. The effect of this is many-fold in terms of both human and product resources. Personnel operate from a basis of higher satisfaction, hence relieving the pressure upon the scientific research department, and also freeing creative power to ultimately both enhance existing products and create higher quality new ones.

9. The main concern with P&G's strategic health for 2005 relates to opportunity recognition. Doubtlessly, Lafley's inward focus was more successful than Jager's purely outward focus.

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Nevertheless, the inherent danger is that Lafley's approach could also result in an imbalance in terms of strategy. It has been mentioned above that there needs to be a balance between innovation and existing product promotion. The problem in Lafley's case is that excessive inward focus results in a lack of opportunity recognition.

Strategically, it may be a good idea to use the very strong resource base he built to create a team focused purely on the necessary aspect of focusing outwards in terms of new products and opportunities. This team can then focus on market research, new product creation and acquisition. In this way, the existing resource base maintains its current health, while this is balanced with the necessary element of innovation in order to maintain a competitive edge.

10. Currently, the competitive situation for P&G is much better than was the case under Jager's management. The company now has a strong existing basis from which to work on innovative products. This is however precisely an area of potential weakness. With the return of P&G, it should be kept in mind that competition is now stronger than ever, as competitors are fighting to regain their position in the marketplace. It is therefore not adequate to merely maintain the existing resource base. It is also necessary to use this in its capacity as a strong basis rather than the entire focus of the company's competitive edge.

As such, innovation is extremely important. P&G now has the necessary strength from which to gain competitive favor in the marketplace. Strong innovation policies should therefore be put into place in order to remain competitive. Maintenance should therefore be supplemented with innovative strategy. Customers who trust the company can then be presented with new products that will also inspire trust and future patronage......

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