Personal case study
Linnar Pärn, MSc
EurEco Grupp OÜ
Institute of Forestry and Rural Engineering
September 2007
Tartu, Estonia
Introduction
Innovation is the process of making improvements by introducing something new.
The term innovation may refer to both radical and incremental changes to products,
processes or services and also innovation is an important topic in the study of
economics, business, technology, sociology, and engineering.
Classification of innovation types (OECD):
Innovation
Product
Process
Marketing
Organisation
Good
Production Method
Design/ Packaging
Business practices
Service
Delivery Method
Product Placement
Workplace
organisation
Product promotion
External relations
Pricing
Figure 1. Types of innovation (OECD).
Innovation are engines for:
*economic growth;
*competitiveness;
*income creation and firm profit;
*employment creation, especially in rural areas;
*changes towards environmental improvement and sustainable development;
*meeting changing consumer needs and demographics
Case Enterprise
Name of the enterprise: EurEco Grupp OÜ
Picture 1. Logo of EurEco Grupp OÜ.
Business address: Küünissaare 3, Paide, Estonia (Town middle of Estonia)
Contact information: www.eureco.ee
Information in homepage is in Estonian, English and Finnish.
Year established: March 2007
Legal form of enterprise: 100 per cent private unlimited enterprise
Persons engaged in managing the enterprise:
Managing Director –
Development Manager –
Specialist-
Mr. Valdu Vahemets
Mr. Hektor Uustalo
Mr. Jaak Viitmann
Number of employees: 3
Annual turnover: It is very difficult to speculate about annual turnover, because first
financial year has started six months ago.
Short history: Valdu Vahemets (chief executive) and two friends of his had an idea to
establish business firm in end of year 2006, which deal with selling of great emotion –
EurEco Grupp plant Oyster mushroom (Pleurotus Ostreatus) logs to their customers
garden. Then customers get splendid emotion of cutting the mushroom off the logs
and then cooking a tasty and easy meal out of it. EurEco Grupp was juridically
formed in March 2007.
The idea of found that kind of enterprise came from studies in Estonian University of
Life Sciences when Valdu and Hektor had lectures in mycology.
Products or product groups: Planting Oyster mushrooms (Pleurotus Ostreatus) logs to
customers garden.
Geographic market area: Estonian market. Main activity in Estonia three largest towns
– capital Tallinn (population 400000), Tartu (100000) and Pärnu (50000) and nearby
of these towns. Market area shown in picture 2.
Innovation case: Service innovation: EurEco plant the oyster mushroom logs to
customer’s garden. Unique service in Estonian market.
Picture 2. EurEco Grupp market area in Estonia. Marked with circles.
Oyster mushrooms (Pleurotus Ostreatus)
The Oyster mushroom is a valuable edible mushroom that is denoted in cookbooks
and mushroom-encyclopedias as the best edible mushroom – carriyng three stars. The
Chanterelles and Ceps and Saffron milk caps (Robellons) bear the same mark.
It does not need blanching – it tastes well if fryed, steamed, pickled or if even salted.
It also preserves well if dryed. Among hundreds of mushroom-recepies there are
several where Oyster mushrooms are irreplaceable.
Picture 3. Oyster mushrooms
It is a big fleshy mushroom, variyng from light-grey to brown in cap color. It can
grow as high as several decimeters. The tastiest are the ones that have the cap between
10 to 12 cm. The stipe is not the best part of it to eat, so it is reccomended that you
remove it before cooking. You can also eat it without cooking, but still it tastes much
better when cooked. The balmy and tasty mushroom fits quite well into different
recepies – from omlet to a pie.
Mushrooms does not contain cholestorole and the unsaturated fats that they contain
lessen the risk of heart-diseases. The mushroom contains several irreplaceable
minerals, vitamins, aminoacids and microelements. Scientists have foud that the
polysaccharides have the effect of lessening the risk of cancer. Aditionally the Oyster
mushroom has the effect of lowering the blood-cholestorole. Hudred grams of Oyster
mushrooms contains: calories 34.5 g, proteine 3 g, fat 0.2 g, iron 1.5 mg and several
other nutrients. It it a good nutriment for diets.
The technology of planting
The cultivating of Oyster mushrooms is based on an extensive method.
The aspen timber that we use must be cut down at least a week before the planting of
the mushrooms. The logs that we use are about 50 cm long.
Picture 4. Planting Oyster mushrooms log.
Nessecary holes are drilled into the logs before it is infected with the Oyster
mushrooms mycelium. The mycelium is prepared in sterile lab-conditions. After the
mycelium is added, the drilled holes are closed with wooden cones (without using any
nails!).
Picture 5. Oyster mushrooms on log
After that it is nessecary to find a good spot in the garden to dig holes for planting the
logs – the light conditions must be just right. One third of the log remains bove the
ground, the rest is in the soil. Surrounding area is flattend.
It is easy to mow the lawn surrounding the logs and so they make a good decoration
for a home garden. On the first year they start to come to fruition in August.
On hot summers, when it is not raining enough, it is reccomended to water the logs
once in a week.
Logs sold by EurEco are always pre-planted, so they come to fruition earlier.
Innovation case
Chronology and subject of the innovation
There wasn’t enterprise before three young man founded EurEco Grupp OÜ to put
into practice their innovative idea.
Development and implementation of the innovation process (milestones):
 making the conception
 sharing responsibilities between owners
 founding an enterprise named EurEco Grupp OÜ
 supplying enterprise of raw materials (aspen logs, mycelium)
 setting up storages in all main towns
 acquire equipment which were needed
 setting up an homepage (www.eureco.ee)
 starting advertise the service and product
 receiving orders
 realize orders as soon as possible
Description of the innovation
EurEco Grupp will plant the oyster mushroom logs to customers garden. Customers
get splendid emotion of cutting the mushroom off the logs and then cooking a tasty
and easy meal out of it. It is unique service in Estonia.
Actors network analysis
Actors who were connected with innovation process and founding the enterprise:
 owners of the enterprise
 education and research institution (Estonian University of Life Sciences)
 owners individual networks
Innovation type
This kind of innovation is process innovation and the subunit is delivery method. Also
in that firm is also product innovation – they have another way how to produce their
Oyster mushroom logs.
Conclusions of AWOT
SWOT factors with weights
Strengths
Weight
* short time of delivery……………………………………… 100
EurEco Grupp usually delivers products in Estonia major cities (Tallinn, Tartu, Pärnu)
in day or two after the order.
* low production costs………………………………………… 90
The firm has opportunity to buy aspen from many different sources. For example:
from relatives; from Estonia State Forest Management Center etc. The felling is made
by owners.
* quality of products…………………………………………... 80
The quality of products is excellent. All of Oyster mushroom logs that EurEco Grupp
has planted so far are fruitful. There are special scheme how they infect logs with
mycelium.
* good employees……………………………………………... 70
There are only three workers – all are owners of the enterprise. It is a good motivation
trigger to all of them.
* product development………………………………………... 70
Enterprise examines different mushrooms and different technologies to provide new
products in future. Also, they are real-interested in new direction – produce heat-andpower energy from biomass.
Weaknesses
Weight
* seasonal product…………………………………………….. 100
At the moment, they only can plant Oyster mushroom logs from April to September.
Rest of the year, this process is impossible because of climate.
* unsystematic marketing plan……………………………….. 90
It seems, that EurEco Grupp doesn’t have direct marketing plan and thereby sale
numbers aren’t in this level where they could be.
* size of the company – small………………………………… 90
Size of the company is relatively important – if they want to make large-scale
investment, then they could face the big problem – how to finance it.
* limited stuff………………………………………………… 60
There are only three workers in that enterprise – all of them are owners and all of
them have full-time job in other places. At the moment, the enterprise is managed out
of real working time.
* local market………………………………………………… 50
EurEco Grupp is selling products only in Estonian market at the moment. Estonia is
little country with population nearly of 1,400,000. At least half of the population is
living in flats; therefore they can’t buy products now.
* short history…………………………………………………. 30
EurEco Grupp is a very young enterprise. It was juridically founded in end of March,
2007. The name of firm isn’t well-known to public at this is has important role of
selling products.
Opportunities
Weight
* product development………………………………………... 100
EurEco Grupp has a possibility to introduce new products to the market and improve
existing products.
* new concept in product family……………………………… 90
The enterprise has a possibility to introduce new products and services.
* new marketing areas (Latvia, Finland)……………………… 80
Around and near of Estonia are Latvia, Finland, Russia, Sweden and Lithuania, which
are also potential future market areas for EurEco Grupp.
* revenue can rise two-fold in two years……………………... 70
The turnover and profit can double or triple next year if effective marketing plan is
taken in use.
Threats
Weight
* increase of competition……………………………………… 100
There is threat that new competitors will come on the market and provide same
products and services.
* the products and services are easy to copy………………….. 90
There is threat that new competitors will come on the market and provide same
products and services.
* availability of skilful labour………………………………… 50
It is well-known, that in Estonia is lack of qualified labour. If EurEco Grupp wants to
employ new workers, it could be complicated.
Results of AWOT are shown on figure 2.
AWOT
strenght
0.300
0.200
0.100
threat
0.000
weakness
Figure 2. Results of AWOT.
opportunity