Procter & Gamble
A consumer goods maker whose Ivory soap became one of the first national brands.
P&G turned an $11,000 ad campaign for Ivory (1879) into a national brand, then sold 30+ soaps within a decade as sales quadrupled. Later wins came from pushing strategy to brand managers: Tide has led detergent for 77 years, and Olay passed Clinique with premium lines in mass channels. Lesson: attack a rival's fault line, and watch customers for pains they no longer notice, as with Swiffer.
What was said about Procter & Gamble
1How Ivory became a national brand
An $11,000 ad campaign made accidental floating Ivory soap a national brand. Ivory's floating soap came from an accident in 1879. After an $11,000 advertising campaign it became one of the first national consumer brands. Within a decade P&G sold more than 30 soap brands and its sales had quadrupled.
The scale rested on infrastructure built by Morgan and other tycoons: railroads, steel machinery, coal-fed steam and shipping. P&G also needed department stores to sell the goods. The source frames it this way: "They enabled mass consumption, which in turn created even more businesses."
2Olay and the positions P&G can defend
P&G moved Olay into mass channels where Estee Lauder could not follow. Olay's premium products, such as Regenerist, were sold in mass channels, and Olay grew into the biggest skincare brand, overtaking Clinique. Estee Lauder could have countered by moving Clinique into mass channels, but that would have hurt its prestige brands and their channel.
Roger Martin calls this attacking a fault line: a position where the rival's existing business makes copying you painful. Estee Lauder stayed put and Olay won.
Be clearly differentiated or lowest cost, or leave the field. Martin says P&G is one of the companies that competitors cannot bully, along with Southwest, Vanguard and Lego. The test is whether customers choose you over rivals, or whether a rival can cut price and you cannot follow.
If a buyer would flip a coin between your product and a rival's, you are playing to play. Martin's evidence includes Southwest, the only US airline to earn its cost of capital over 50 years. Tide has also led detergent for 77 years. Quote: "There's no way to protect yourself if you're not one of those two."
3Strategy as a skill owned by brand managers
P&G treats brand managers, far below the CEO, as makers of strategy. The Head and Shoulders brand leader sits four levels below the CEO yet decides whether the brand does well. Martin says people down the organization must be trained to make important strategic choices, and their work should not be dismissed as mere 'execution'.
About 10% of S&P 500 CEOs are ex-P&G people. Quote: "People down organization have to make really important strategic choices or bad things are going to happen."
A.G. Lafley became a great strategist through decades of practice. Lafley practiced strategy for decades, starting in the Navy around age 25, before becoming P&G CEO. Martin's point is that strategists are made by reps, so strategy should not wait until operational concerns ease.
Martin says he has never met a great natural strategist, and that anyone who says they will get to strategy later never amounts to anything. Quote: "Great strategists that I have met have all one thing in common. They just practice."
4How Swiffer came from watching people mop
Swiffer came from observing how painful mopping was, not from asking. P&G's Swiffer came from watching people mop. They had developed workarounds and no longer noticed how painful it was.
Jag Duggal's lesson for builders is to observe more than ask, and to ask indirect questions from several directions instead of asking whether people would love your product.
The Tycoons: Carnegie, Rockefeller, Gould & Morgan
Ivory soap (1879) became a national brand after an $11,000 ad campaign, resting on logging, steel machinery, coal-fired steam and rail shipping. Within a decade P&G sold more than 30 soap brands and sales had quadrupled.
An $11,000 ad campaign made accidental floating Ivory soap a national brand. Ivory's floating soap came from an accident in 1879. After an $11,000 advertising campaign it became one of the first national consumer brands. Within a decade P&G sold more than 30 soap brands and its sales had quadrupled.
The scale rested on infrastructure built by Morgan and other tycoons: railroads, steel machinery, coal-fed steam and shipping. P&G also needed department stores to sell the goods. The source frames it this way: "They enabled mass consumption, which in turn created even more businesses."
5 essential questions to craft a winning strategy | Roger Martin (author, advisor, speaker)
Brand managers four levels below the CEO make strategic choices that decide a brand's fate, and about 10% of S&P 500 CEOs are ex-P&G. Tide has led detergent for 77 years, and Olay overtook Clinique as the biggest skincare brand with premium lines in mass channels.
P&G moved Olay into mass channels where Estee Lauder could not follow. Olay's premium products, such as Regenerist, were sold in mass channels, and Olay grew into the biggest skincare brand, overtaking Clinique. Estee Lauder could have countered by moving Clinique into mass channels, but that would have hurt its prestige brands and their channel.
Roger Martin calls this attacking a fault line: a position where the rival's existing business makes copying you painful. Estee Lauder stayed put and Olay won.
Be clearly differentiated or lowest cost, or leave the field. Martin says P&G is one of the companies that competitors cannot bully, along with Southwest, Vanguard and Lego. The test is whether customers choose you over rivals, or whether a rival can cut price and you cannot follow.
If a buyer would flip a coin between your product and a rival's, you are playing to play. Martin's evidence includes Southwest, the only US airline to earn its cost of capital over 50 years. Tide has also led detergent for 77 years. Quote: "There's no way to protect yourself if you're not one of those two."
P&G treats brand managers, far below the CEO, as makers of strategy. The Head and Shoulders brand leader sits four levels below the CEO yet decides whether the brand does well. Martin says people down the organization must be trained to make important strategic choices, and their work should not be dismissed as mere 'execution'.
About 10% of S&P 500 CEOs are ex-P&G people. Quote: "People down organization have to make really important strategic choices or bad things are going to happen."
A.G. Lafley became a great strategist through decades of practice. Lafley practiced strategy for decades, starting in the Navy around age 25, before becoming P&G CEO. Martin's point is that strategists are made by reps, so strategy should not wait until operational concerns ease.
Martin says he has never met a great natural strategist, and that anyone who says they will get to strategy later never amounts to anything. Quote: "Great strategists that I have met have all one thing in common. They just practice."
Be fundamentally different, not incrementally better | Jag Duggal (Nubank, Facebook, Google)
Its Swiffer came from observing how painful mopping is, a pain people had stopped noticing because of workarounds.
Swiffer came from observing how painful mopping was, not from asking. P&G's Swiffer came from watching people mop. They had developed workarounds and no longer noticed how painful it was.
Jag Duggal's lesson for builders is to observe more than ask, and to ask indirect questions from several directions instead of asking whether people would love your product.
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