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Disposable Diaper and Pampers :Role of Innovation Strategy and Ecosystem Management in making these two items synonymous

Disposable Diapers and Pampers2011

No one likes change except babies in diapers. - Barbara JohnsonA human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. But definitely be able to change a diaper. Robert Heinlein, Science fiction writer Diaper backward spells repaid. Think about it.- Marshall McMuhan, Canadian communications theorist Educator, Writer and Social ReformerYou have to change those diapers every day, I mean literally. When those directions on the side of the Pampers box say, 'holds 6-12 pounds' they're not kidding!- Comedian Jeff Foxworthy commenting on the absorption capabilities of todays diapers

IntroductionThe use of some form of diaper to wrap children is as old as human history. Other than food, water and clothing, it fulfills a fundamental need of human beings that is surpassed by few other products. Does a need so universal mean that all you need to do is develop the product and it will be an instant success? It would appear so but it is certainly not the case. The disposable diaper a quintessential innovation that is the solution to an age-old problem has had a tremendous ride along the innovation ecosystem over its evolution in over 80 years. Many players have tried to put the pieces together in this ecosystem and capture the enormous market potential but only a couple of frontrunners have emerged and one has come out as the winner Procter & Gamble with its Pampers line of diapers. How did Procter & Gamble achieve this competitive edge to become the dominant player, especially with a consumer/commodity level product such as a diaper? The answer is hidden in how P&G managed the ecosystem better than anyone else and how it has done so in a sustainable fashion that will perpetuate into the future. These secrets behind P&Gs success are exposed through this analysis of the evolution of the disposable diaper and Pampers ecosystem below.HistoryAs early as 1887, mothers began experimenting with different materials to create diapers that are comfortable for their babies and prevent untimely leaks. Cotton was the material of choice as it was readily available and was known to absorb better than other fabrics. It was also the material of choice because it was easy to wash and durable. Soon mothers and doctors began using Turkish toweling with an inner soft muslin layer. Also, the wide spread commercialization of the safety pin that had been invented in 1849 lent ease of use for the cloth diaper and added to its viability. However, cloth diapers meant lack of air circulation, roughness when wet, transfer of bleach from laundry to babys skin etc. that led to diaper rash and other infections. These problems were hard to mitigate and hence difficult to commercialize with no added value when compared to diapers that mothers could make on their own at home. Throughout the early 1900s, various inventions led to continued improvements. The idea of using paper was first suggested in the 1940s when Hugo Drangel of a Swedish paper company suggested the idea of placing sheets of paper tissue inside the cloth diaper. This led Valerie Hunter Gordon in the UK to develop the first 2-part system diaper cellulose wadding covered with cotton wool and outer plastic. This diaper called the Paddi had an adjustable garment with press-stubs/snaps. However, Valerie Hunter with her Paddi and similar efforts by other inventors including Marion Donovan in the US and Hugo Drangels daughter in Sweden faced resistance from big manufacturers as purchasing managers were mostly male. Many of them declared they would never allow their wives to put paper on their children. Although the Paddi went on to be a successful product for retailer, Robinsons of Chesterfield, for many years, its use did not spread widely.Only due to changes in socio economic structure of the 1950s with more mothers entering the work force as a result of the Second World War did the demand for disposable diapers rise. This fundamental change in mothers wanting more freedom to enter the workforce and travel caused the advent of big players such as Johnson and Johnson, Playtex, and Parke Davis into the disposable diaper market. Not until 1956 did P&G make its arrival.

The disposable diaper ecosystem evolution and P&Gs dominanceThe story once P&G began researching the disposable diaper and how this company developed its stronghold can be examined by dividing up the analysis into three distinct eras on the time chart Inception, Growth and Competition, and Future Development. In each of the eras or stages, P&G faced challenging and transforming execution and adoption risks that needed to be addressed. Below, these risks are elucidated and P&Gs efforts in mitigating these risks by carefully leveraging co-innovations and developing an innovation strategy governed by informed expectations are presented. Inception (1960 to 1980)"This one will fly. - Victor Mills on P-57, precursor diaper to Pampers brand

After three years of research, Victor Mills, a chemical engineer at P & G and his team conceptualized the disposable diaper in 1959, which went on to become Pampers at launch in 1961. Although similar product research was occurring at Playtex, Johnson and Johnson and other companies, P&G and Pampers came out as the winner with over 80% market share within a decade of launch. Below is the analysis of how P&G achieved this incredibly successful launch. Execution Risk In the early days of research and development of the disposable diaper and the launch of Pampers, P&G faced challenging execution risks. But throughout this process the innovation strategy was not driven by the need to enter the market first but by the goal to bring a product that will enjoy widespread popularity and adoption. These execution risks can be grouped into product risks and manufacturing risks.Product risks:The development of the disposable diaper was not without risks for P&G. On one hand it had considerable R&D budget and talented individuals to drive the innovation efforts. But on the other hand, the end customers were highly demanding mothers who can be unyielding in comfort and safety expectations for their children. Plus, all this had to be achieved while keeping the price low for this consumer product to allow widespread adoption.Faced by all these challenges, P&G managed this risk in two ways. First and foremost, it listened to its end customers relentlessly. After experimenting and developing the product in-house for five years, it finally presented its 3-layer (Exhibit 1) diaper to mothers in Peoria, Illinois. But, mothers did not like the price tag of 10 cents apiece, when diaper services prices ranged from 2 to 5 cents per unit, and laundering cloth diapers had a cost of 1-2 cents. Also, offering the diapers at 10 cents per unit would only reinforce the idea that disposable diapers were specialty items for high income customers, which was prevalent at the time. This was against the goals set by P&G to make the disposable diaper a true consumer product. P&G had to develop a product of high quality at a much lower cost and they went back to the drawing board.After 5 more years of diligence, P&Gs engineers developed a sophisticated machine that took rayon, wadding, polyethylene and other materials to cut, shred and fold the materials into finished Pampers at incredible rate of productivity 400 diapers per minute! At that production rate, P&G was able to offer the disposable diaper at a much lower price of 5.5 cents per unit. Customer testing after 10 years of development was done in California to very positive reviews. By the end of 1969, the product was available throughout the United States of America. Instead of being holed up in R&D centers in Cincinnati and wasting effort in making a product that would not meet customer demands in the end, P&G engineers worked closely with the end customer throughout the development process to ensure customer demands drove the direction of the product. This helped mitigate information gaps that can be critical to successful execution of any innovation effort.

Manufacturing Risks:With a goal to sell the Pampers product nationwide and establish it as the leader in the market place, P&G had to ensure that it maintained its cost advantages while manufacturing the product in large volumes. Also, these economies of scale had to be attained immediately, not over time as is generally the case. The strategic acquisition of Charmin Paper Company in 1957 set up P&G with incredible advantages on this front. By utilizing existing Charmin factories and a workforce already skilled in handling similar materials to make Pampers in large volumes alongside tissue paper at the Charmin mill in Mehoopany, PA, P&G was able to put in place a manufacturing process that would lend economies of scale that this product launch demanded.Hence, they were able to offer a superior product at an affordable price for its customers. Co-innovation in parallel with other industriesThroughout the research and development that went into designing the diaper, P&G engineers worked closely with mothers to ensure satisfaction. When a test group in Dallas complained that the babies were uncomfortable in 90 degree weather, the engineers went back to design a diaper with better features such as zee pleats, superior containment, hydrophobic top sheet and a plastic back sheet. At the time of launch, the Pam

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