EBf
EUROPEAN BUSINESS FORUM
Observations
The European perspective on management www.ebfonline.com
Building an
innovation
platform
C
Consumer goods companies
day – offered a platform to
entrepreneur used the insight as typically look to innovation to open
reposition its yogurt and biscuit
a platform to launch OverTime, new streams of revenue, stay
products for innovation and growth.
a business that makes a line of
ahead of competitors and justify
Danone identified a new occasion
grooming products branded OT,
price increases. But nine out of ten
for health-based innovation:
just for boys ages 9 to 16. The
innovations die in the pipeline, and
breakfast. Traditionally, the firm’s
platform led to a range of products
about three-quarters fail after
yogurts and biscuits competed that iterate on boy-friendly
launch. Searching for growth, the
in both the snack and dessert
packaging (Pit Defense deodorant,
temptation is to pump out more
categories for the whimsies of Lid Lock hair gel, and so on).
and more in hopes of finding a few
mid-day munchers. But breakfast,
big winners – often an expensive
Danone noted, was an occasion
rigorous as they can in assessing
and ineffective approach.
where consumers not only wanted
the potential of their new product
healthy choices, but also exhibited
portfolios. Many organisations
way. It involves screening what
high product loyalty, eating the
simply add up the revenue potential goes into the pipeline far more
same thing day after day. Danone
of the products in their pipeline carefully by using innovation
innovated its formulas, creating
and assume they have enough
“platforms” to generate ideas with
yogurts and yogurt drinks that
innovation to meet their growth
higher potential and lower risks contained special enzymes to aid
goals. When pushed to quantify the
of failure. That approach provides
digestion (Activia and Actimel). And
net-expected value of the pipeline parameters for innovation and gives
it developed convenience
– after product failure, cannibalisation
lift – you don’t have to start from
packaging that combined yogurts
and competition – the shortfall
scratch each time, but can tee up
with cereals (Light & Fit Crave
often comes as a shock.
big-hit innovation that offers
Control). It repeated the approach
“repeatability” across product lines.
with its biscuits line, developing
allows companies to select
There is a better and less costly
Companies need to be as
Developing innovation platforms
nutritious breakfast biscuits.
products from their portfolios that
makers and technology firms have
Growth followed. Launched in
have the best chance of success.
used to build multiple models from
1997, by 2004, Actimel yogurt
To succeed, consumer product
the same core parts, but that
drinks accounted for 16 per cent companies need to understand consumer goods makers have only
of Danone’s yogurt sales in France.
the true size of their “innovation
It is an approach that car
begun to exploit and adapt broadly.
In car manufacturing, a platform
The right innovation platform
gap”, investing in consumer
can lead to a new business. One
insights to develop platforms, and
may be a new technology – say, a
entrepreneur, who came up
then making sure those platforms
new engine. In consumer products,
through the school of market
have the right resources to thrive.
it is more likely to be a consumer
research at Procter & Gamble, insight that fosters new product
saw huge potential for innovation
innovation including “occasions”,
around the interest teenage boys
Nicolas Bloch is managing partner
channels and packaging.
began to take in personal
for Bain & Company Belgium and leader
Take Danone. In the 1990s, grooming. The US market included
in the firm’s European Consumer Products
it saw that consumers’ increasing
22 million pre-teens and young
Practice. Kara Gruver is a partner in
concern for healthy eating – in
teens who had no personal care
Boston and leader in the firm’s Consumer
particular a healthy start to their
products made just for them. The
Products Practice.
republished from EBF Issue 28, Spring 2007