2. • Competitiveness -of, involving, or determined by competition
• Competition – the act or process of competing
• Compete - to strive consciously or unconsciously for an
objective (as position, profit, or a prize) : be in a state of rivalry
Ability and performance
Ability and performance
of a firm, sub-sector or
of other firms, sub-sectors
country to sell and supply in relation to or countries in the same
goods and services in a
market.
given market
3. • Oscar Mayer – The company
• Oscar Mayer Finding a Better Way Vision
• Open Innovation Introduction
• Examples of How Oscar Mayer uses Open
Innovation as a Tool for Competitiveness
4.
5. • American meat company owned by Kraft
Foods known for its cold cuts, hot dogs,
bologna, bacon, and Lunchables products
• The company was founded in 1883 by Oscar F. Mayer in Chicago,
Illinois
• 1919 – Headquarters move from Chicago to Madison WI
• 1981 - General Foods acquires Oscar Mayer
• 1985 - Altria, which Kraft is a part of, acquires General Foods
• 2007 - Kraft splits from Altria
• 2012- Kraft splits into Kraft Foods Group and Mondelēz
International
6. • 12 brands with more than $1 billion in revenue
• 70+ brands with more than $100 million in revenue
• 40 brands over 100 years old
• 80% revenue from #1 share positions
7. Major North American grocery company
• Approximately 80% of its revenues from categories in which it has #1
market position
• Highly-competitive retail presence
• Strong innovation pipeline
• Significant scale across categories
8. Worldwide leader in global snacks
• #1 Biscuits, #1 Chocolate, #1 Candy, #2 Gum
• Leading market shares in each major region of the world
• Strong presence in fast-growing developing markets and instant
consumption channels
• Strong stable of global and local brands
9.
10. 1. Columbia, MO – hot dogs
2. Coshocton, OH - bacon
3. Fullerton, CA - Lunchables
4. Newberry, SC – sliced deli meats
5. Kirksville, MO – bacon, sliced deli meat
6. Davenport, IA – sliced deli meat, Lunchables
7. Madison, WI – hot dogs, sliced deli meat
8. Woodstock, IL - pickles
11.
12.
13. • We found a better way to use simple ingredients to improve our
food and became the first brand to offer a complete line of meats
that have:
• No artificial preservatives
• No artificial flavors
• No artificial color
• By using simple ingredients such as celery juice, half of our new
products will have no artificial preservatives in 2012
• Sodium reduced by 20% across our portfolio, by end of 2012
• Our goal is to have 20% of our portfolio made with no artificial
preservatives by 2015
14. Oscar Mayer Selects =
Competitiveness
Competitiveness requires
Technology
Technology requires Open
Innovation
15.
16. • Leveraging the capabilities and expertise of others
to deliver noteworthy and distinctive innovation
• Model that assumes for businesses to advance their
technology they can and should use
• External ideas as well as internal ideas
• Internal and external paths to market
17. Competition is fierce in today’s
world - requires companies to
develop innovative products with
short development times
Goals unattainable by single
companies are attainable when
companies join forces
The world is a vast pool of
resources.
Easy access with internet
18. • Define strategy and priorities
• Decide which projects
or parts of projects to
execute outside
• Decide how and where
to execute outside
19. • What external skills, technologies, or resources
Want
• How will these critical external resources be found
Find
• How will the resources be accessed
Get
• How will the new partnership be managed
Manage
*Source-Reinventing Corporate Growth (Gene Slowinski, 2005)
20. • The skill, technology, resource required for innovation that will
result in competitiveness
• Make-Develop a technology internally with internal resources (Closed)
• Buy-Purchasing or in-licensing a technology that already exists in the
market (Open)
• Partner-Create a technology by joining forces with external resources
through a strategic alliance (Open)
• A Want needs to be
Clearly defined
and understood
Prioritized
Communicated
21. Want Brief
• Many different forms exist
• Should contain at least:
• Business opportunity
• Technical needs
• What is already known
• What is in scope
When done well it is the essential
• Ideal solution element of problem solving
• Solution must have
• Budget and timeline
22. • Going about finding a solution
Internet
• Great ideas are Search
Small everywhere and can be
hidden in other Firms industries and countries
Engines
Universities
Start-ups
• The challenge is Large
Government
uncovering the ideas
Firms
Customers Vendors
23. Strategic Resource
Fit Fit
Shared Value
Creation
• Partners of choice
• Have internal structure that allows for creating and maintaining high quality
relationships
• Can make decisions fast and efficiently
• Supports team members and provides them with the tools they need to
perform well within the framework of the partnership
• Can identify disputes early and handle in an effective manner to resolve
quickly
• Have a history and reputation as an excellent partner to work with
24. • Employee Networks
• Internal and external to the company in Industry, Academia, and
Government
• Beyond area of expertise
• The Internet
• Wealth of information and leads for investigation
• Current Suppliers
• Supplier challenges
• Open Innovation Partners
• Your Encore
• NineSigma
• Innovia Technology
• And many more
25.
26. • Process for negotiating a mutually
acceptable agreement
• Involves cross-functional teams
• R&D, marketing, procurement, legal,
What not to do
manufacturing
• Requires planning and collaboration
• Must identify and share value between
partners
27. • Negotiation guide
• Project description with deliverables
• Roles and responsibilities of each team
• Length of partnership and termination guidelines
• Confidentiality
• Intellectual property and right to use
• Field of use and exclusivity
• Often most challenging part of Open Innovation Framework for
researchers
• Training and practice essential
• Discussions and negotiations should occur before legal
documents are drafted
28. Intellectual Property
• IP can be used in multiple ways to create value for all
• It is not necessary to own IP for competitive advantage
• Rights to IP patents can be licensed and defined by:
• Field of use
• Time
• Territory
• Royalty or royalty free
29. • Establishing and maintaining working principle so both parties
work and act as one team
• Managements’ roles
• Researchers’ roles
• Sharing of information formally and informally
• Problem resolution
30. • Defining and managing technical needs and challenges
• Monitoring and evaluating external activity
• Negotiation of agreements
• Leading and managing projects or portions of projects
with external development
31.
32. • Inventing Delicious Framework
• We innovate by integrating the competencies and best
practices of Knowledge Management, Open Innovation
and Intellectual Property into the technology
development process
33. • Derived from the business strategy
• Review make, buy, ally and differentiate needs
• Develop Open Innovation Needs list
• To do well must have
• Devoted resources
• Cross functional buy in
• Continuous process
37. • Expanding our Supplier network
to drive innovation and
competitiveness
• Supplier Innovation Summit 2011
• Identified new partnerships to drive
growth
• 45 participating companies
• 110 Kraft participants
• 35 Open Innovation needs
38. • Defining the Problem
• Identification of the aims and goals of the QuickScan
• Key Findings and Trends
• Highlights important findings and current picture of the developing landscape
• NineSigma Mind Map
• High level view of the search areas and technology groups
• Identify trends
• Highlight specific capabilities
• Find commonality/areas of overlap
• Specific Technology Examples
• Options for pursuit and further consideration
39. • Long term food safety partner
• Partner of choice
• Strategic Fit
• Resource Fit
• Create shared value
40. Oscar Mayer’s Strengths:
• Consumer based insights
• Experts in the chemistry of our food systems
• Applications of ingredients in our food
systems
• High standards for product quality and food
safety
• Leadership and scale – lead the way in
implementing new ingredients like Lactate in
the 1990’s Purac’s Strengths:
• Regulatory insight on final products • Fermentation
especially USDA expertise • Downstream processing
• High volume/long term customer • Food safety modeling
• Ingredient solubility modeling
• GRAS and USDA approval of ingredients
• Specification development and scale up
of ingredients
• Scientific/research depth
• Proven long term partner
41. • University of Wisconsin-Madison
• Close proximity
• Strategically aligned
• Meat Color
• Food Safety
• Lipid Oxidation
• Bi-Annual research reviews and information sharing
• Member of the Food Research Institute
42. • First brand to offer a complete line of meats that have:
• No artificial preservatives
• No artificial flavors
• No artificial color
• Half of new products in 2012 will have no artificial preservatives
• 20% sodium reduction across our portfolio by end of 2012
• 20% of portfolio made with no artificial preservatives by 2015
• Continued evolution using simple everyday ingredients people
trust
43.
44. Step into your consumer’s worlds,
listen and observe with open minds
• You will find competitive insight
Inspire those that you work with to dream
• Allow for thinking and playing outside the normal
workplace constraints
• Rules and attitudes of organization can inhibit innovation
Create an innovation strategy
• Have a vision to work for and people
will surprise you
45. Embrace the global research
community
Encourage and incent employees to build both
their internal and external networks within and
outside our industry
Build skills in:
• Program management
• Partner orchestration
• Problem definition
• Relationship management
46. Optimize internal and external resources to
• Have the right talent at the right time
• Develop technical strategies to deliver strategic plans
• Share risk outside your organization
• Accelerate innovation
View and treat external companies/universities as
partners not adversaries
Think about your profit assets differently
• Manage IP portfolios to create numerous streams of value
47. • “Many corporations are modern dinosaurs. They
can choose to adapt to new challenges in front
of them” –The Open Innovation Marketplace
*Source-The Open Innovation Marketplace
(Alpheus Bingham and Dwayne Spradlin, 2011)
