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The Economy IS Down, P&G IS Up. It's Innovation.

Posted by: Bruce Nussbaum on April 30, 2008

News this morning is of a weakening economy in the first quarter of 08, with final sales off 0.2%, the first drop since the first quarter of 02. Business investment is down 4.7% and housing investment is off 26.7%

But the other news is P&G’s great earnings, with its quarterly net up 8% from a year ago. A.G. Lafley, the CEO, says that innovation allows the company to maintain margins and boost retail prices in the face of rising commodity prices. Innovation can cut costs as well as offer something new and different to consumers who may be willing to pay a bit for products, even in tough times.

Reader Comments


April 30, 2008 9:09 PM

Innovation how specifically?


May 8, 2008 5:17 PM

One example I can think of is "HE" laundry detergents -- presumably "high efficiency". They concentrate the product (or don't dilute it in the first place), you use half as much but pay a lot more per ounce, they save big bucks (and help the environment) by cutting down on packaging and shipping, and they increase their margin.

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Want to stop talking about innovation and learn how to make it work for you? Bruce Nussbaum takes you deep into the latest thinking about innovation and design with daily scoops, provocative perspectives and case studies. Nussbaum is at the center of a global conversation on the growing discipline of innovation and the deepening field of design thinking. Read him to discover what social networking works—and what doesn’t. Discover where service innovation is going and how experience design is shaping up. Learn which schools are graduating the most creative talent and which consulting firms are the hottest. And get his take on what the smartest companies are doing in the U.S., Asia and Europe, far ahead of the pack.

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