Last Wednesday, I presented about “Innovation through Collaboration” to a group of entrepreneurs from the glasshouse horticulture industry.
To shake things up, I started my presentation with an “old” example of underestimated competition: Amazon not being perceived as a serious competitor by booksellers internationally about 18 years ago and now potentially on one side being a competitor to any business and on the other also being a partner to every business.
Then, I used the example of the coffee industry to show how innovation through collaboration can change an industry and help protect against mass competition. The coffee industry was, like horticulture, for a long time a very traditional industry.
From a consumer’s perspective, coffee hasn’t changed much over the centuries. The first innovation was perhaps the invention of the electric coffee maker that added convenience to making a pot of coffee. It was only in the late nineties of the last century and early 2000 that the coffee industry started to show real innovation.
Nestlé and Philips began to develop new coffee solutions with the aim to offer the consumer the convenience of single coffee servings with a guaranteed taste level per serving. Both companies made this innovative approach through collaboration with other companies, albeit each in a different fashion.
Nestlé already started in the late 80’s with developing the Nespresso system and teamed up with several independent coffee machine makers. The ownership of the design of the machine retains by Nespresso and thus they kept very tight control over the partnership.
Philips teamed up exclusively with Douwe Egberts to bring the Senseo coffee maker to the market. Unlike the Nespresso system this was – and still is – a true strategic alliance with a unique business model and brand.
Both Senseo and Nespresso have been able to collect their fair share of the market and a fan base that is loyal to their products like machines and their coffee. Through collaboration, while focusing on their own core capabilities, Nestlé and Philips independently knew the importance of innovation in the coffee market and turn the tide of diminishing margins while increasing convenience and experience for the consumers.
I concluded my presentation with a challenging question to the attendees and I’d like to share that question with you as well. To inspire you, perhaps even ignite you, to think about new ways of doing business, to innovate through collaboration:
Suppose that with all the knowledge you have now, you will be in a completely new market Tomorrow. A market where everything is possible, without constraints:
- What would you do?
- What experience would you like to give your customers?
- On what core capabilities would you focus yourself and for what potentials would you establish partnerships?
- What would be the most ideal way for you to bring your products or services to the market?
We had an inspiring group conversation about these questions which at some point ignited new thoughts among the participants. Yet to be continued in the coming weeks, I’m quite curious to hear how you are dealing with these questions and how it inspires you to innovate: share your thoughts in the comments below.