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Lise Berg Kildemark Open Innovation, Suppliers Arla Strategic Innovation Centre Open Innovation in the Food Industry, Copenhagen, 28 May 2014 Confidential. Only to be distributed to participants at the event
MILK INTAKE 12.5+ BILLION KG
TURNOVER 10 BILLION EURO
LOCATIONS IN THE WORLD
PEOPLE 19,000+ EMPLOYEES 12,500+ OWNERS
COOPERATIVE SINCE 1880
BRANDS MAIN GLOBAL
02 June 2014 3
Creating the future of dairy to bring health and inspiration to the world, naturally
Vision
To secure the highest value for our farmers' milk while creating opportunities for their growth
Mission
Our vision, mission & strategy 2017 The foundation for everything we do
Deliver the growth
Develop the core
Do it faster, simpler and leaner
3 strategic axes
Cooperative mindset At the heart of Arla’s identity
02 June 2014 4
GOOD GROWTH is our identity
We want to grow and we care about how we do it
Cooperative growth at Arla
5
Executed in multiple ways
STA
RT-
UP
S
COOPERATIVE GROWTH SOLUTIONERS
SCOUTING
CR
OW
D S
OU
RC
ING
COOPERATIVE MERGERS UNIVERSITIES
STRATEGIC COOPERATION
CO
NT
RA
CT
RE
SE
AR
CH
EN
TR
EP
RE
NE
UR
S
CONSORTIA
CATEGORY MANAGEMENT
OPEN INNOVATION
JOINT VENTURES
VOLUME SUPPLIERS ARLA FOODS EXECUTIVE ADVISORY BOARD
INDUSTRIAL ASSOCIATIONS
OUT SOURCING
CUSTOMER GRREEN HOUSE
SMEs
LARGE ENTERPRISES
CO-DEVELOPMENT
A structured approach to external cooperation We call it…
02 June 2014 6
OI AMBITION
1. Scale up external cooperation as a key lever to the growth of Arla
2. Work with best-in-class external partners
Innovation & Open Innovation is EVERYWHERE
7
…along the entire value chain
…and everyone plays a role
Farms Dairies Consumers
It is not new
02 June 2014 8
…..but now a strategic priority
…..and with structure, alignment & governance
Innovation at Arla
02 June 2014 9
Profitable SELL implementation DO of en idea THINK
Speed Cost
How we define it
Differentiation
INCREMENTAL RADICAL
A paradigm shift and a game changer
02 June 2014 10
The lab is my world The world is my lab
Inside Outside
Driven by change, technology and opportunity
02 June 2014 11
A change of mindset
How can we create and deliver
maximum value most effectively,
regardsless of corporate boundries
We must own everything, invent
everything, gain everything
Inside Outside
A structured but simple approach
13
The Arla Open Innovation steps
WANT FIND
GET
MANAGE
Inside Outside
Adapted from The ”Want, Find, Get, Manage” Model of PhD Gene Slowinski, an expert on alliances and co-author of the book The Strongest Link
Who are the external players?
14
Development stage Early Mature
Mid
Business needs
Benefit areas
Focu
s
PRODUCTS & SOLUTIONS
Consumers
Consumers
Consumers
Consumers
Consumers
Consumers Suppliers
Start-ups & entrepreneurs
Universities & consortia
Supplier segmentation Work with the right partners - Work with the partners right
We use a segmentation model to help us identify the best-fit relationship with our suppliers
15
Commercial fit and innovation fit goes hand in hand …for successful and sustainable supplier relations
CO
MM
ER
CIA
L F
IT
Fit
bas
ed
on
co
mm
erc
ial o
bje
ctiv
es
INNOVATION FIT Fit based on value contribution & culture
Low High
VOLUME SUPPLIER Interdependent relationship
STRATEGIC PARTNER
Collaborative relationship
STANDARD SUPPLIER Standard relationship
SOLUTIONER
Targeted relationship
High
Medium
Medium
’LIMBO’ Relationship to be clarified
START-UPS
16
Think different
17
Find new ways of innovating and cooperating
Opening our doors – Arla Foods Global Innovation Centre An enabler for excellence in cooperative innovation and knowledge sharing
1. Using the Danish Food Cluster as a stepping stone
2. Designed for seamless collaboration with external parties – open space and project rooms
3. Access to and testing of 3rd party technologies / equipment
4. World class innovation environment – attractive to talents
19
The additional outcome of Open Innovation Fostering cooperation internally
Source: Forrester report commissioned by InnoCentive, Feb. 2012. Survery on open innovation with decision makers from large companies in US, Germany and the UK 20
Does it work? According to our suppliers…
Source of quotes: Master thesis on Arla and colloborative innovations. Students from Aarhus School of Business and Social Science, 2013 21
Our best results are created in cooperation with others….
THANK YOU [email protected] +45 22 72 85 94