P&G has announced the launch of new Tide laundry detergent pods - single-dose, dissolvable packets of detergent, stain fighters and brighteners. The launch comes after a significant delay, as well as some uncertainty regarding the extent to which US consumers will embrace this premium-priced product.
We don't know if P&G will succeed with this particular innovation, but it illustrates the right kind of approach to competitive strategy. As many firms face slowing growth in a mature category, they diversify and turn their attention to new areas. However, that often accelerates the decline of their core business because they stop innovating with the seemingly mature product. Then someone does innovate and hurts the company badly. P&G is choosing to try to deepen their competitive position in household products rather than simply diversifying to new areas in search of growth. They have identified two possible consumer needs that pods may fulfill: convenience and better cleaning. Why better cleaning? Many consumers do not use the right amount of detergent - they just pour some liquid in the machine. These pods will provide just the right amount for a load. Naturally, the pods also provide convenience and less mess. Will consumers pay a premium? That's the key question. Still, the attempt to innovate and deepen the firm's competitive position in a mature market should be lauded.