Butter Beater Overview

Unilever’s Butter-Beater

Managing Innovation

Business processes

How new products are conceived and developed.

How strategy is formulated.

How annual budgets and managerial incentives are determined.

How career paths are defined for successful managers.

Unilever

World’s largest food manufacturer and marketer, with over $50 billion in revenue; Market share of over 70% in most of the world’s markets.

Food products

Must cater to unique tastes and preferences of each country’s culture.

Unilever is essentially a holding company comprised of many autonomous regional and local food companies.

Margarine consumption in Europe was declining.

Consolidation of Manufacturing

To reduce cost.

Consolidation presented a dilemma because of the unique preferences of each country’s consumers.

Logistical complexity.

Coordinative Units

The EBG (European business group), comprising of the country manager from each of Europe’s operating companies;

The category boards, comprising marketing executives who were responsible for major categories of products sold by the companies.

The Yellow Fats Category Board

For the margarine business.

Development groups in Hamburg (Germany), Rotterdam (the Netherlands), and Crawley (England) are also responsible for developing pan-European products.

The Hamburg center – innovation alone the taste dimension,

The Rotterdam center – innovation on using spreads used in cooking,

The Crawley center – innovation on spreads targeted at health-conscious consumers.

Krona

Consulting with the margarine product managers in each major European country, the Hamburg innovation center defined a product concept for a new spread that consumers would not perceived as a butter product or a margarine product.

The Hamburg innovation center executed the development project without much interaction with their counterparts in other countries.

Discussion Questions

What is your explanation for the data presented in Exhibits 4, 5, and 6?

Do these...