Le Petit Chef

One Minute Brief, May 12, 2008: Le Petit Chef by Charmaine Catania

Between 1996 and 2000, Le Petit Chef’s poor performance could be mainly attributed to an increase in competition, which had a direct effect on the 10% price decline in microwave ovens. Because of the shrinking profit margins, allocating R&D recourses became one of the company’s more difficult tasks. Bigger players entered the market, including Asian consumer electronics manufacturers who were able to use their global distribution networks to ship low-end microwave ovens to Europe, while larger European players like Electrolux and Bosch-Siemens came into the market with higher end product competition. In an attempt to compete with these low and high end products, Le Petit Chef maintained an extensive, ongoing product pipeline. This pipeline did not take into consideration the possibility of developing multiple products from a single platform, and the practice of allocating resources to so many different projects hindered the company’s ability to invest in the right projects that would be essential for competing with these new entrants and maximize future returns on new products. In order to satisfy the needs of the four main areas of competition, which included: a product to compete with “fuzzy logic’ intelligence microwaves, a low-end Fraternite line, a faster version of their top of the line Liberte, and a larger version of the Liberte, the company needed to define the types of innovation needed to compete effectively and identify investment categories that could be assigned to each of its business segments, like Clorox had in the “Slimming Innovation Pipelines” reading. Similar types of innovation strategies that Clorox used could be applied to Le Petit’s strategy, such as “Rapid Response” (low-cost ovens), “Core growth” (Liberte express), and “Game Changing” (fuzzy logic technology) and an investment category, such as “Optimize”, “Sustain” and “Invest” could be assigned to each of the...