Published on January 15, 2008
Jeff D. Davis: Jeff D. Davis Global New Business Development P&G Pharmaceuticals Mason, Ohio “Inside P&G’s Innovation Machine” Slide2: P&G…the world’s largest consumer packaged goods company Inside P&G’s innovation journey Inside P&G Pharmaceuticals’ new innovation strategy Agenda Who are we?: Who are we? Over $68 billion in global sales 300 brands in over 160 countries #1 or #2 in 80% of our categories 140,000 employees Slide4: billion P&G’s 22 Billion-Dollar Brands Slide5: 99% of US households purchased a P&G product in 2005. Slide6: Three Global Business Units Household & Family Care $33.5 Billion Baby Care Family Care Fabric Care Home Care Pet Health & Nutrition Snacks & Coffee Beauty & Health Care $29 Billion Cosmetics Deodorants Feminine Care Hair Care Personal Cleansing Skin Care Oral Care Personal Health Care Pharmaceuticals Gillette $6.4 Billion Razors & Blades Duracell Braun P&G Growth Strategies: P&G Growth Strategies 1 2 3 Core business: leading brands, biggest countries, winning customers Portfolio shift toward faster growing, higher margin, asset efficient categories Developing markets and lower income consumers Leveraging P&G’s Core Strengths: Innovation Go-to- Market Scale Consumer Understanding Branding 8 Leveraging P&G’s Core Strengths Slide10: 10,000 market research studies each year Slide11: Understanding Consumers Slide12: P&G…the world’s largest consumer packaged goods company Inside P&G’s innovation journey Inside P&G Pharmaceuticals’ new innovation strategy Agenda Slide13: Historically P&G has Grown Through Internal Innovation What Happens if You Don’t Grow?: What Happens if You Don’t Grow? Year 2000 wake up call >50% drop in stock price Sustainable Sales Growth: Organic Target thru FY 2010 +4% to +6% Organic (excludes foreign exchange, acquisition & divestiture impacts) Acquisitions & Divestitures Sustainable Sales Growth Slide16: innovate how we innovate Slide17: A Call to Action . . . “We will acquire 50% of our innovations from outside P&G” President and Chief Executive The Procter & Gamble Company A.G.Lafley Slide18: & develop research connect C&D vs R&D… Slide19: 50% our labs from Slide20: 50% our labs through US Industrial R&D by Size of Enterprise: US Industrial R&D by Size of Enterprise Company Size <1000 employees 1,000 – 4,999 5,000 – 9,999 10,000 – 24,999 25,000+ Source: Open Business Models: How to Thrive in the New Innovation Landscape by Henry Chesbrough (Harvard Business School Press, 2006), page 22. Just a few examples of C&D . . . : Just a few examples of C&D . . . Pantene Hair Styling Products Slide24: “Connect & Develop” Inside P&G’s Innovation Model +35% of new products have elements that originated from outside P&G Up from 15% in 2000 R&D productivity has increased by nearly 60% Since 2000 stock collapse Share price has doubled Our portfolio has grown to 22 billion-dollar brands Slide25: P&G…the world’s largest consumer packaged goods company Inside P&G’s innovation journey Inside P&G Pharmaceuticals’ new innovation strategy Agenda Slide29: 1887 Vicks VapoRub launched by Richardson-Vicks 1901 Pepto-Bismol launched by Norwich Over 100 years old . . . Slide30: P&G Pharma’s Strategic Model Acquire, Develop & Market…(Connect & Develop) Strategic choice to exclusively partner, license or acquire all of our new drug candidates How? Our new drugs will come from a network of academia, biotech and pharmaceutical industry relationships Restructured our R&D and commercial organizations to excel at identifying, evaluating, negotiating and managing long-term, mutually beneficial partnerships. P&G Pharma’s Strategic ModelThe Best of Both Worlds…: P&G Pharma’s Strategic Model The Best of Both Worlds… You & P&G…Think of the possibilities Marketing Expertise and Unique Insights of the world’s largest consumer company Personal Touch of a small pharmaceutical company with deep experience and proven capabilities in our focus areas Slide32: P&G Pharma’s Strategic Model Acquire, Develop & Market We eliminated our Discovery organization (300 people) and most of their laboratories We retained our complete Development organization (650 people). We established a Search & Evaluate organization (35 scientists) who have responsibility for helping find and screen licensing opportunities Our New R&D Structure (July 2006) Slide33: musculoskeletal gastrointestinal women’s health focus areas P&G Pharma’s Strategic Model Why will it work?: Strategically focused on 3 therapeutic areas where the patient plays an active role in managing their health Musculoskeletal Osteoporosis, Rheumatoid Arthritis and Osteoarthritis Gastrointestinal Ulcerative Colitis, Crohn’s disease, IBS and GERD Women’s Health Overactive Bladder, Incontinence, Menopausal symptoms P&G Pharma’s Strategic Model Why will it work? * Corporate interest: hair growth and skin aging Slide35: Our Pharma Partnering Experience Recent deals…P&G and NastechFeb 2006: Recent deals…P&G and Nastech Feb 2006 Recent deals…P&G and AblynxApril 2006: Recent deals…P&G and Ablynx April 2006 Recent deals…P&G & ARYxJuly 2006: Recent deals…P&G & ARYx July 2006 P&G Pharma Partnering Philosophy: P&G Pharma Partnering Philosophy The real test of a successful alliance negotiation is not a signed contract with all desired terms agreed in full… …it is whether the companies share a common vision, feel like the deal is fair, are contractually motivated to do what’s right, and can work together over the long term! “Negotiate for Implementation” Slide40: the of both worlds best
Jeff Davis, Director of New Business Development at Proctor & Gamble, discusses P& G's new innovation strategy and their "connect and develop" model. When ...
By Jeff D. Davis; Abstract: Jeff Davis, Director of New Business Development at Proctor & Gamble, discusses P& G's new innovation strategy and
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