Keeping It Fresh in Packaged Food: An Examination of Open Innovation at Mondelez International

Student comments on Keeping It Fresh in Packaged Food: An Examination of Open Innovation at Mondelez International

1. November 13, 2018 Dwayne Johnson says:

   Im a huge fan of OI in the food space. I think this is the wave of the future with changing demographics, and quite frankly I think OI is the only way to innovate to changing tastes in society quickly. I fully agree that Mondolez should spread awareness as this will only help push its branding and OI forward.
2. November 13, 2018 Charlotte Chang says:

   Thanks for a thought-provoking and interesting pieces. A few thoughts on the questions you raised –
   On when is OI most impactful, I think the condition for success is two-fold: 1) the company needs to have an internal blind spot, and 2) the audience it opens up the question to needs to have unique insights into said blind spot. So for instance, crowdsourcing ideas for snack flavors from end consumers make a lot of sense, but you would not get valuable insights on inventory management from the same crowd. For the latter, all the information you need to make good judgments reside in-house, and opening the forum up to too many opinions will only prove counterproductive.
   On how to measure the success of OI programs, I think back to the A/B testing methods we discussed in the Uber case. For a multinational like Mondelez, it would not be difficult to choose two similar markets (e.g., France and Germany) and run a controlled experiment to see how OI affects performance in a particular area. The challenge here is that, given the nature of the OI process, ideation to implementation will probably take considerable time, so running the test on a topic with limited scope would be beneficial.
   1. November 13, 2018 Howard Hughes says:

      I feel like using OI to get customer preferences might actually have some negative impact in preventing the company from thinking differently and independently. Instead of coming up with new, healthier foods with improved tastes and brand images, Mondelez might instead rely too much on customer response to existing products and become complacent in its own development. I like the fact that the company is encouraging people to contribute to their decisions and product choices, but don’t want this to replace their own industry leadership and innovation. Often consumers unfortunately don’t know best and the company should feel ownership over providing better foods and choices to those consumers.
3. November 14, 2018 Buzz Lightyear says:

   This is a great piece. I would be interested to dig deeper how companies validate what feedback they are getting on these platforms – are consumers saying they like A, but they might not actually like A? What would incentivize them to do this? Can competitors sabotage the process? This may however be a very useful tool when entering new markets, where nuances in consumer taste are difficult to capture on a large scale without trial and error.
4. November 14, 2018 nicivey says:

   Thank you for this thought-provoking piece. There are two things I’d like to add to the discussion on what makes OI successful.

   As @Charlotte Chang noted, one condition to make OI successful is that the company should likely have a legitimate blind spot where consumers can help. I agree and think that OI can help companies rethink strategies, but I also think a successful condition for OI is that companies be able to discern which suggestions have mass appeal. I fear that sometimes OI solicits recommendations from a niche of power users or people who may have their own blindspots when making recommendations. You cite an example of OI as Modelez’s Cherry Cola Oreo, but Amazon and Target reviews suggest that the product was neither like nor broadly bought (https://www.amazon.com/Oreo-Cherry-Chocolate-Sandwich-Cookies/dp/B07BMJVPFT#customerReviews).

   The other idea I’d like to posit is that company could likely do more to foster relationships within it’s OI community. We know from cases like IDEO and IBM Watson, that work culture and being able to brainstorm and bounce ideas off other people can lead to better innovations. This is also a central thesis of a recent HBR article title Open Innovations Next Challenge:Itself (https://www.amazon.com/Oreo-Cherry-Chocolate-Sandwich-Cookies/dp/B07BMJVPFT#customerReviews).
5. November 15, 2018 Anonymous says:

   In this article, I would like to challenge quote from internal R&D innovation that “before open innovation, the lab was our world. Now with open innovation, the world has now become our lab”[34]. I don’t believe that this statement accurately reflects Mondelez innovation process. I would argue as someone who has worked on the launch of more than 20 skus at the company, many of the most innovative ideas and successful product launches at Mondelez have come from the creativity of the employees who have been able to pair the internal capabilities with external consumer preferences. There are many logistical complexity that comes with innovation most specifically in the key categories where the company competes. Examples of this include the launch of OREO as a chocolate brand with the OREO CREME EGG in Canada and the launch of OREO MILK chocolate bars in the US in Europe. Also when addressing innovation in OREO, the Fourth of July OREO used previous similar process to its CADBURY MINI EGGS portfolio while the STRIDE GUM launch of SOUR PATCH KIDS GUM comes from the flavor technology of its SOUR PATCH candy portfolio and ownership of trademarks.
6. November 15, 2018 User deleted this comment on November 15, 2018
7. November 15, 2018 Pocahontas says:

   Great effort on putting 800+ words in 799 with abbrevitions and eliminating spaces! 😉
   For the content: I think open innovation can be successful with scale, when you have a large enough dataset to filter out outlier ideas. If you do not have enough data, you are running the risk of implementing something marginal on a high cost. For this, customer engagement will be key and I think the interesting question is how to engage them without compromising any major pieces of the strategy (e.g. pricing, place, etc.)
8. November 15, 2018 Clark Kent says:

   Awesome article – thanks for sharing! To answer one of your questions above, I think proper metrics and a robust feedback loop are key in successful OI programs. These ensure that the ‘right products’ make it through the product development cycle and eventually to market. These also avoid the scenario that @BuzzLightyear describes above, noise in consumer data and sabotaging competitors. I’d love to know more about how these work at Mondelez and competitors in the space.
9. November 15, 2018 Nancy Dong says:

   Thanks for sharing this super cool lens on open innovation in supply chain. Typically, we think of crowdsourcing only in the “ideation” phase of new product development, rather than other parts of the development process in reducing costs, iterating on consumer needs, and incorporating production innovations (e.g., reduced sugar content ingredients). I believe the biggest challenge here is not simply integration of ideas, but the **validity** of these crowdsourced ideas as applied to the business strategy. When we think about the distribution curve of who may contribute to Modelez’s OI ecosystem at this time, the ideas likely appeal more toward the tail-ends of the distribution — rather than what may “stick” with their target mainstream consumer. Without ensuring that the source of OI is applicable to key target market, the OI products may be more “interesting” than value-add to the business. For example, what @nicivey alluded to in the performance of Cherry Cola Oreo’s above.
10. November 15, 2018 trishim11 says:

    This article raises a very important question on how far do you let crowdsourcing dictate your products. OI is useful to get ideas at the beginning of the funnel, but the filtering has to be done by the brand in accordance to what their product vision and positioning stands. Getting customer input is a great step to really build the right product, and these channels could be enhanced further. Announcing challenges for graduate students to create marketing and product development plans provide great platforms to get more data points on the roadmap and identify the right crowd to recruit innovating thinkers as well.
11. November 15, 2018 Legal ML says:

    This is a fun example of one industry (perhaps unintentionally) borrowing the model of another. We often think of big pharma when we think of companies that outsource their R&D (big names buying the patents of little biotech startups), but it seems strange to see it in an industry we don’t associate much with product innovation (how much can potato chips, for example, innovate?) But as consumers demand more, this seems like one possible avenue to keep up. That said, I wonder long-term how this will play out. There’s certainly a cost to sacrificing control over your own creative process, or not investing as much in your own internal R&D, especially if in the medium-term you abandon this idea and find yourself with an R&D team depleted and atrophied. I also think — much like we saw with the marketing case about whether or not to have a creative director (top down product changes) — sometimes the customer does not even know well what he/she wants. That’s another risk of overindexing on external customer recommendations (as Ford famously said, his customer would’ve said he wanted more horses on the buggy!).
12. November 15, 2018 MZ says:

    Open Innovation is a disruptive trend that is having huge impacts on many organizations – in this case, the point on “what can make OI successful” is very interesting. Especially from an organizational standpoint, it is important to define the right tools, capabilities and frameworks which can enable OI. As an example, based on my own experience, while I know that OI can be support many different functions and processes in a company, in different companies and industries, I learnt it is important to define well the OI process itself, making sure that two things happen:
    1) that people contributing to OI have the right incentives (as with multiple entities in the value chain, with misaligned incentives the final result of the system would be sub-optimal or anyway worse than what it could have been had all entities be part of the same organization)
    2) that OI happens very upstream in the design phase (to make sure there is the right amount of time and resources to diverge first and converge just at the end, where more disruptive ideas actually have the time to be generated).
13. November 15, 2018 Natasha Romanoff says:

    Great article! I loved reading about how OI is changing the future of the food/bev industry. Your suggestions on how Mondelez should leverage OI moving forward were very insightful and creative. I would be curious to see if open innovation could actually stifle innovation of new snacks and flavors. For example, Trader Joe’s has a number of odd and quirky flavor combinations that have become a cult favorite but were developed by food scientists. If companies rely more on OI and less on experts, is there a risk that there will be *less* innovation in flavor?
14. November 15, 2018 Eve says:

    I find that your question regarding the long-term consequences of growing adoption of OI across industries and what impact this will have on brand differentiation in the future is very relevant. You also ask what the right equilibrium between internal vs. external innovation efforts is. I think that as more brands adopt OI, it is true that the majority will have “the world as its lab” – however, the beauty is that the world is incredibly large and diverse and it will likely always be possible for a company to capture innovation and ideas from different populations or in different manners than their competitors do. Thus if done more effectively than others, gaining a competitive advantage in theory is possible. External efforts might determine the product outcomes, but internal efforts will still be crucial as these are the ones that innovate in regards to how to most effectively apply OI to reach a diverse set of differentiated product outcomes.