Overview Of Business Model And Its Connection With Disruption: A Case Study Of P&G Company

Business Model and its Components

Question:

Discuss about the Innovation and Sustainable Business for P & G Company.

A business model refers to a plan that explains the fundamentals of the development in an organization. This model provides and captures the value of environment and induces them in the activities of the organization so as to attain competitive advantage in the target market. This model explains all the major aspects that are connected with the activities like objectives, process, organizational structure, target market, operational activities, infrastructure etc. Every organization uses business model to initiate their activities in the environment as this model helps an organization in successfully implementing their goals in the environment. Further, the purpose of this essay is to provide a brief overview about the literature business model and disruption. It also includes opportunities and threats connected with the use of smart connected products in the activities of P & G Company. The latter part of the paper includes business model canvas and interpretation two of the aspects of this model. Resource and capabilities and value proposition are the two aspects which are discussed in this paper. More details about the paper are discussed below:

According to (de Jong, & van Dijk, 2015) business model is a framework that includes different aspects and their relationship with activities of the organization. This model helps the organization to inculcate the business idea in the organizational process. This model includes the information about the values involved in the organization that they offer in the environment to initiate success in the target market. This model is basically is set tools that are modified with the help of innovation and induced in the organization so as to bring an efficient output in the external environment (Osterwalder, & Pigneur, 2010). This aspect talks about the infrastructure of the firm along with their partnership with organization for the supply and development of their goods and services. This model assists an organization in generation of optimum profits and increases the revenue through their business activities. To elaborate the business model, an approach of business model canvas was formulated that includes nine building blocks related to the activities of the organization (Zott, Amit, & Massa, 2011). Further, it should be noted that this model provide basically provides three values to the organization that are, value delivery, value creation and value capture. Value delivery helps the organization in providing the value to the customers with the help of ways defined by the system. The value creation and an organization to provide better experience to the customers by adding value in their products. Lastly, value capture helps of organization in capturing value from its business operations (França, Broman, Robèrt, Basile, & Trygg, 2017).

Relating the business model with the disruption, it should be noted that use of disruption increases the efficiency of the business model canvas to perform effectively in the changing environment (Foss, and Saebi 2017). Disruption in technology helps an organization to innovatively use their business model increase the satisfaction level of customers present in the market. It refers to the use of innovative technologies in the business so as to attain competitive edge in the market (Dijkman, Sprenkels, Peeters, & Janssen, 2015). Use of disruptive technology and innovation in the company provides a new face that changes its position in the external market. Also, disruption in technology and innovation molds complex and expensive products into things that are simple and affordable to people (Gobble, 2014).

Business Model Canvas

Disruptive technology is now days used by organizations to initiate advancements in the business using smart connected products. These products refer to the products that are technological advancements that are implied in the business to expand the opportunities and gain competitive advantage. The smart connected products are developed with the software, processors, sensors that allow the organization to effectively share data between the business environment and producers, products and other systems. (DaSilva, and Trkman 2014). P & G is one of the largest organization that produces and serves consumer goods in the environment. The organization effectively uses the smart connected products to manage their activities in the internal process of the organization. The organization comes under the major organizations present in the market that uses these tools to integrate their system and bring output for the organization. P & G adopted knowledge capture software internally in almost 60 nations and other P&G brands (P & G, 2018). Talking about the use of this tool in the products of the company, it should be noted that P&G created Oral-B toothbrush with position detection sensor that helps the customers to identify the places where they are missing hygiene. This process was initiated in such a way that the sensor of the brush was connected with the app that helped the user to analyze the defected areas by the user. Further, this feature helped the company to retain the customer to the maximum level because all customers likes innovation in their daily usage products as its increases the efficiency of their routine work (Chakrabarti, & Chaudhuri, 2017). This aspect brings more opportunities for the company. The company uses the smart connected tools in many other products of the company and increased its value. Just like the company involved with the Amazon Dash devices helped the customers to get paper towels and facial cleansers on just one click. With this one click the customer can easily get these products. Also, with the help of these products the company gained the ability to easily transfer the information to its different departments. The inventory control and monitors system of the company became efficient as this product helped the management to effectively record the inventory and supply it to respective departments as well. Waste management activities were effectively managed as information was easily circulated in all parts of the company that reduced the waste production activities (Christensen, Raynor, & McDonald, 2015).

Further, the biggest threat which the company gained with the use of this tool is that the employees of the company were not much aware about the pros and cons of these tools. This created various negative implications in the activities of the organization. The company faced the threat of privacy as by hacking this tool the competitors can easily gain information of the company (Guttentag 2015).

Further the business model canvas of P&G Company is created below:

The two selected aspects which are to be discussed from the business model canvas are value proposition and resource and capabilities. Value proposition of an organization includes the competencies attained with them to handle the risks and mitigate them in such a way that opportunities are attained to the company. The value proposition of the company P&G company includes it manufacturing and distribution process of goods and services according to the requirements of their target customers (Flaherty, & Rappaport, 2015) . The organization aims to deliver high quality products and cheap and affordable prices. As the organization provides consumer goods so that aim to introduce qualitative efficiency in them so as to increase its sales. The company offers a diversified range of personal, healthcare and child care products. Also, they offer house hold products in the market as well. Thus, it should be noted that the value proposition of the company P&G includes their aim to improve their products in such a way that the needs of the customers are appropriately fulfilled (Covin, Garrett, Kuratko, & Shepherd, 2015).

The resource and capabilities block of the business model talks about the assets attained with the company which they use to grab the opportunities present in the market. The major resource of the company is its human resource which helps them in attain value proposition as well. The company owns 20 manufacturing units in 20 regions of United states that iitiates the production process. The company has initiated an extensive distribution channel that aligns all the stores effectively and supply products to the end customers in the market. The company adequately uses its resources and capabilities in tempting the customers towards their products and services in the market that helps them in sustaining their competitive advantage (P&G, 2018).

Thus, in the limelight of above mentioned events, it should be noted that the business model is a significant tool that helps organization in analyzing their resources and capabilities and inducing them in the business to gain success. P & G adequately target the audience and satisfy their requirements accordingly. With the use of this business model the company innovate their products and services to enhance their skills. The paper adequately supports the requirements of the task.

References

Chakrabarti, A., & Chaudhuri, A. K. (2017). Blockchain and its Scope in Retail. International Research Journal of Engineering and Technology4, (7).

Christensen, C. M., Raynor, M. E., & McDonald, R. (2015). What is disruptive innovation. Harvard Business Review, 93(12), 44-53.

Covin, J. G., Garrett, R. P., Kuratko, D. F., & Shepherd, D. A. (2015). Value proposition evolution and the performance of internal corporate ventures. Journal of Business Venturing, 30(5), 749-774.

DaSilva, C.M. and Trkman, P., 2014. Business model: What it is and what it is not. Long range planning, 47(6), pp.379-389.

de Jong, M., & van Dijk, M. (2015). Disrupting beliefs: A new approach to business-model innovation. McKinsey Quarterly.

Dijkman, R. M., Sprenkels, B., Peeters, T., & Janssen, A. (2015). Business models for the Internet of Things. International Journal of Information Management, 35(6), 672-678.

Flaherty, M., & Rappaport, A. (2015). Agents of Change: Sustainability and Industry Trade Associations–An Evolving Value Proposition.

Foss, N.J. and Saebi, T., 2017. Fifteen years of research on business model innovation: how far have we come, and where should we go?. Journal of Management, 43(1), pp.200-227.

França, C. L., Broman, G., Robèrt, K. H., Basile, G., & Trygg, L. (2017). An approach to business model innovation and design for strategic sustainable development. Journal of Cleaner Production, 140, 155-166.

Gobble, M. M. (2014). Business model innovation. Research-Technology Management, 57(6), 58-61.

Guttentag, D., 2015. Airbnb: disruptive innovation and the rise of an informal tourism accommodation sector. Current issues in Tourism, 18(12), pp.1192-1217.

Osterwalder, A., & Pigneur, Y. (2010). Business Model Generation. New Jersey: Wiley (the unit textbook). The textbook is available from the CQUniversity library for free.

P & G. (2018). Our brands. Retrieved from https://www.pg.co.uk/our_brands

P&G. (2018), Caring About Your Look & Beauty. Retrieved from https://www.pg.com/en_EG/products/look.shtml.

Zott, C., Amit, R., & Massa, L. (2011). The business model: Recent developments and future research. Journal of Management : JOM, 37(4), 1019-1042.

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