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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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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
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
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


Building a Global Powerhouse…

in Snacks and Quick Meals

5



Confectionery and snacks now make up the majority of the portfolio
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
Inventing Delicious Framework portfolio*

StrengthensHowwe 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 portfolio*

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?


Hub spoke organization
Hub & Spoke Organization: portfolio*

  • 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


Joint Research portfolio*

Venture

What neither could do alone

New products for

new consumers


Game changers
Game Changers portfolio*

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 portfolio*

Venture

What neither could do alone

New products for

new consumers

Problem

solving

X

Improved

execution

Fresh Ideas


Supplier challenge
Supplier Challenge portfolio*

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 portfolio*

Venture

What neither could do alone

New products for

new consumers

Problem

solving

X

Improved

execution

Fresh Ideas


Joint portfolio*

Development

New products for

existing consumers

Accelerated

Innovation

An answer today


Joint Development portfolio*

  • 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 portfolio*

Licensing

Product

variants

Bolt-on benefit

Joint

Development

New products for

existing consumers

Accelerated

Innovation

An answer today


Near Market Licensing portfolio*

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 portfolio*

Licensing

Product

variants

Bolt-on benefit

Joint

Development

New products for

existing consumers

Accelerated

Innovation

An answer today


Open innovation driving value creation
Open Innovation Driving Value Creation portfolio*

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


Cross-Functional portfolio*

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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