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Kraft Open Innovation Case Studies by w6WLescw

VIEWS: 80 PAGES: 26

									    OPEN INNOVATION
     CASE STUDIES
Miles Eddowes
Open Innovation Champion
Kraft Foods
October 22, 2010
Impressive global reach


    World’s second-largest food company

    Approximately $48 billion in revenues

    Sales in approximately 170 countries

    25%+ of revenue from emerging markets

    50%+ of revenue from biscuits & confectionery,




2
Portfolio of Iconic Brands



 • Eleven $1 billion+
   brands

 • 70+ $100 million+
   brands

 • 80% revenue from #1
   share positions
More than half of our business is now outside
North America*




*2009 Pro Forma net revenues $48billion are based on the acquisition of Cadbury plc and the divestiture of the Pizza business
Building a Global Powerhouse…
in Snacks and Quick Meals




5
#1 in Global Confectionery
Confectionery and Snacks now make up the
majority of the portfolio*




*2009 Pro Forma net revenues $48billion are based on the acquisition of Cadbury plc and the divestiture of the Pizza business
Inventing Delicious Framework



                      Strengthens How we
                      innovate by integrating
                      the competencies and
                      best practices of
                      Knowledge Management,
                      Open Innovation and
                      Intellectual Property into
                      the technology
                      development process
                   The Inventing Delicious Framework
                     Helping you deliver better … faster.

                     The “What”                                  The “How”

           Corporate/
          Business Unit
                                          Technical       Intelligence        IP & Technology    Development &
                                      Challenges/Needs     Gathering         Sourcing Strategy   Commercialization
            Strategy


                                                         Ask three high-level
                                                              questions:
                                       1                                 2                           3
                          What do we                       What do others                   What is our IP
                            know?                             know?                          strategy?




FDIN Eddowes Kraft 22_10_10 (Rev 17/09/10)                                                                           PAGE 9
Hub & Spoke Organization:

►HUB
  Tools, Process, Culture
                                                            Candy &
  –   Build organizational capabilities
                                                             Gum
      and networks                                                      Research
  –   Scouts for game changers and             Chocolate                 Centers
      new business partnerships                                         (US & UK)

  –   Governance and metrics
  –   Lead OI Community of Practice
                                                            Kraft OI
                                                                               Regional
                                          Biscuits         Corporate           Centers
►SPOKE
  Scout, Content, Collaborate                                 Hub
  –   Identifies key business unit
                                                                       Refreshment
      priorities                                 Coffee                Beverages
  –   Scouts for opportunities                              Cheese &
      (suppliers, innovation brokers,                         Dairy
      licensing, game-changers)
  –   OI champion/change agent
                                             Joint Research
                                                 Venture


                                    What neither              New products for
                                   could do alone             new consumers




FDIN Eddowes Kraft 22_10_10 (Rev 17/09/10)                                       PAGE 11
Game Changers


                Challenge: Identify Breakthrough
                 Innovation to drive growth
                Lessons Learned
                • Serendipity in open innovation
                • Scouting non-food/beverage
                  networks to identify breakthrough
                  innovation
                • Co-development agreement ensures
                  success will be based on levering
                  strengths of both partners
                                             Joint Research
                                                 Venture                           Problem
                                                                                   solving

                                    What neither
                                   could do alone
                                                              New products for
                                                              new consumers         X          Improved
                                                                                               execution




                                                                                 Fresh Ideas




FDIN Eddowes Kraft 22_10_10 (Rev 17/09/10)                                                         PAGE 13
Supplier Challenge


                     NPD Challenge: Identify Breakthrough
                      Ideas to leapfrog the competition
                     Lessons Learned:
                     • By leveraging the supplier challenge
                       process, new products & packaging
                       can be developed quickly while
                       taking advantage of “end-to-end”
                       thinking
                     • The business can access supplier
                       creativity and optimize the design
                       and commercialization efforts
                                             Joint Research
                                                 Venture                           Problem
                                                                                   solving

                                    What neither
                                   could do alone
                                                              New products for
                                                              new consumers         X          Improved
                                                                                               execution




                                                                                 Fresh Ideas




FDIN Eddowes Kraft 22_10_10 (Rev 17/09/10)                                                         PAGE 15
                                                Joint
                                             Development

                                              Accelerated   New products for
                                              Innovation    existing consumers




                       An answer today




FDIN Eddowes Kraft 22_10_10 (Rev 17/09/10)                                       PAGE 16
Joint Development


                    Challenge: Create a platform technology
                    Lessons Learned:
                    • Getting the right partner gets us to
                      market first
                    • The right relationship and contract allows
                      relationship to mature and diversify into
                      other value creating opportunities
                                                                                 Near-Market
                                                Joint
                                                                                  Licensing
                                             Development
                                                                                                     Product
                                              Accelerated   New products for
                                                                                                     variants
                                              Innovation    existing consumers



                                                                                   Bolt-on benefit
                       An answer today




FDIN Eddowes Kraft 22_10_10 (Rev 17/09/10)                                                              PAGE 18
Near Market Licensing

               Challenge: respond to competitive threat &
                key consumer dissatisfier
               Lessons Learned:
               • Can turn a consumer dissatisfier into a
                 growth enabler
               • Proactive scouting for external
                 technology enabled a get-to-market
                 faster solution
               • Can build off the licensed patent to
                 deliver additional IP & value for Kraft
                                                                                 Near-Market
                                                Joint
                                                                                  Licensing
                                             Development
                                                                                                     Product
                                              Accelerated   New products for
                                                                                                     variants
                                              Innovation    existing consumers



                                                                                   Bolt-on benefit
                       An answer today




FDIN Eddowes Kraft 22_10_10 (Rev 17/09/10)                                                              PAGE 20
FDIN Eddowes Kraft 22_10_10 (Rev 17/09/10)   PAGE 21
FDIN Eddowes Kraft 22_10_10 (Rev 17/09/10)   PAGE 22
Open Innovation Driving Value Creation


                                                               Scouting for New Solutions



                  Searching
                                                                                              Alliances /
                  inside your                                                                Partnerships
 VALUE CREATION




                  network
                                                                              Licensing In
                                                                              - Technology
                                                                  Product
                                                                In-bounding
                                                Licensing In
                                               - Trademark
                                  Supplier &
                                   Coman
                                  Challenges
                  Supplier Co -
                  development


                                               DIFFICULTY & TIME
FDIN Eddowes Kraft 22_10_10 (Rev 17/09/10)   PAGE 24
Business Process – Embed open
innovation into strategy

         Consumer
           Needs
                    OI Lead    Cross-Functional
        1. ~~~~~
        2. ~~~~~
                                  BU Team
        3. ~~~~~
        R&D
                                Marketing NPD
                                                         Possible
Sales
                                     Operations
                                      (Internal & Ext)   Solutions

         Legal                Procurement


► Open innovation considered at onset of project
► Shared ownership & alignment
► One set of goals: BU owned; OI enables
► Created an Innovation Framework incorporating OI
FDIN Eddowes Kraft 22_10_10 (Rev 17/09/10)   PAGE 26

								
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