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Miles Eddowes Open Innovation Champion Kraft Foods October 22, 2010

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

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Miles Eddowes Open Innovation Champion Kraft Foods October 22, 2010

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  1. OPEN INNOVATION CASE STUDIES Miles Eddowes Open Innovation Champion Kraft Foods October 22, 2010

  2. 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

  3. Portfolio of Iconic Brands • Eleven $1 billion+ brands • 70+ $100 million+ brands • 80% revenue from #1 share positions

  4. More than half of our business is now outsideNorth America* *2009 Pro Forma net revenues $48billion are based on the acquisition of Cadbury plc and the divestiture of the Pizza business

  5. Building a Global Powerhouse… in Snacks and Quick Meals 5

  6. #1 in Global Confectionery

  7. 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

  8. Inventing Delicious Framework StrengthensHowwe innovate by integrating the competencies and best practices of Knowledge Management, Open Innovation and Intellectual Property into the technology development process

  9. The Inventing Delicious Framework Helping you deliver better … faster. The “What” The “How” Corporate/Business UnitStrategy IntelligenceGathering IP & TechnologySourcing Strategy TechnicalChallenges/Needs Development & Commercialization Ask three high-level questions: 3 1 2 What is our IP strategy? What do we know? What do others know?

  10. Hub & Spoke Organization: • HUB Tools, Process, Culture • Build organizational capabilities and networks • Scouts for game changers and new business partnerships • Governance and metrics • Lead OI Community of Practice • SPOKE Scout, Content, Collaborate • Identifies key business unit priorities • Scouts for opportunities (suppliers, innovation brokers, licensing, game-changers) • OI champion/change agent Candy & Gum Chocolate Research Centers (US & UK) Kraft OI Corporate Hub Biscuits Regional Centers Coffee Refreshment Beverages Cheese & Dairy

  11. Joint Research Venture What neither could do alone New products for new consumers

  12. 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

  13. Joint Research Venture What neither could do alone New products for new consumers Problem solving X Improved execution Fresh Ideas

  14. 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

  15. Joint Research Venture What neither could do alone New products for new consumers Problem solving X Improved execution Fresh Ideas

  16. Joint Development New products for existing consumers Accelerated Innovation An answer today

  17. 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

  18. Near-Market Licensing Product variants Bolt-on benefit Joint Development New products for existing consumers Accelerated Innovation An answer today

  19. 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

  20. Near-Market Licensing Product variants Bolt-on benefit Joint Development New products for existing consumers Accelerated Innovation An answer today

  21. Open Innovation Driving Value Creation Scouting for New Solutions Searching inside your network Alliances / Partnerships Licensing In - Technology ProductIn-bounding VALUE CREATION Licensing In - Trademark Supplier & Coman Challenges Supplier Co -development DIFFICULTY & TIME

  22. Cross-Functional BU Team OI Lead Consumer Needs 1. ~~~~~ 2. ~~~~~ 3. ~~~~~ Marketing NPD R&D Possible Solutions Operations(Internal & Ext) Sales Legal Procurement Business Process – Embed open innovation into strategy • Open innovation considered at onset of project • Shared ownership & alignment • One set of goals: BU owned; OI enables • Created an Innovation Framework incorporating OI

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