3) Which model of the innovation process did Marks & Spencer in order to bring about the innovation of chilled ready-mesls?

Spencer: the advantage of using several small manufacturers was the flexibility offered small suppliers (Cox et al.,1999). These small firms manufacture in small batches, which highly desirable given the relatively short shelf-life of the product. Being small, these firms are also highly specialised. Many specialise in particular product bases (e-g. poultry, fish etc.) and. "ethnic" recipes (e.g. Indian, Thai, Italian, etc.). Specialisation provides scope for retailers offering a very broad product range and also facilitates the rapid development of new products. Given the access to customer behaviour provided by customer loyalty schemes (like Tesco's club card), retailers were anxious to be able to identify new market niches and fill them with new products as quickly as possible. Of the small specialist food manufacturers used by the major retailers, S & A Foods of Derby is typical. The company was started in 1986 by Perween Warsi after she despaired of ever finding a decent samosa in her local supermarket in Derby. S & A Foods began as a micro-kitchen supplying a range of chilled Indian ready-meals sold as own label products for retailers like Marks & Spencer and has grown to the point where it has two factories manufacturing Indian meals. As a specialist food manufacturer S & A Foods does not engage in marketing, branding or distribution, focusing its efforts instead on developing new products. Log SICS technical! ecurement: " Packaging Marketing chilled ready meal Development of processes and identifying (26 staff) new products esaging design as a Restaurant/catering trends part ofretailers generic town brand marketing Rival's products Innovation network Original ideas (Members meetin allocations and communicate frequently) Food is manufacturers Packaging companies range from companies Large to micro-kitchens) Develop technology for active packaging! Development of packaging technology graphics The innovation network for chilled ready-mealsThe IT developments centred on electronic point of sale (EPOS) systems based on otic laser-scanning technology introduced in the 1980s. These helped to transform retailers' ability nes to exercise detailed operational control over the goods going through their stores. EPOS ow systems, which scanned all the goods going through the check-cuts, enabled retailers to link ller their inventory replenishment to consumer requirements. No longer did they have to estimate at demand, since EPGS systems enabled them to link their purchases of replacement inventory ca directly to consumer purchases: A key feature of this was the use of electronic data ly interchange (EDI) systems. EDI in particular enabled retailers to manage inter-firm co-ordination, between themselves, manufacturers and distributors, in real time. Working in ur real time brought an unprecedented degree of precision, both to inventory management and ve purchasing. No longer was it necessary to estimate demand by laboriously checking the stock on the shelves to see which were empty or at least needed re-stocking. EPGS systems using bar codes on all items of stock did this automatically. The systems were also highly efficient as EDI replaced paper-based administrative systems with computer links. Effective inter-firm co-ordination required a high degree of systems compatibility in order to provide links that would facilitate data transfer between retailers, manufacturers and logistics/distribution companies. The achievement of the necessary compatibility can be directly attributed to the work of a trade association (Bamfield, 1994), the Institute of Grocery Distributors (IGD). The IGD brought together retailers, manufacturers and distributors to establish a set of common standards for bar-coding. Bar-coding was an essentially element in ensuring rapid and easy data transfer.. . To add to the wealth of data that retailers now possessed in relation to the goods going through their stores came developments in data warehousing and data mining. Retailers introduced store loyalty cards in the 1990s so that they could link the data coming from their EPGS/BDI systems .to individual consumers. This in turn permitted retailers to record the activities of consumers on a regular basis. Then, using data mining they could establish consumer buying patterns and trends. Armed with this sort of data, retailers were in a position to exercise a high level of co-ordination between all the parties involved in producing and selling goods to consumers. This was particularly significant for food items where the perishable nature of the goods was an important issue. The introduction of these various technologies created an infrastructure that provided scope for innovation in ready-meals, driven not by manufacturers but by retailers. Marks & Spencer began with a range of meat pies and quiches marketed under its St Michael brand name. Their strategy for chilled ready-meals was that they should be promoted as a substitute for takeaway meals or even restaurant meals, which had been increasing both in popularity and the range of dishes available. The key elements in promoting these products were variety, novelty and quality (Cox et al., 2003). As such chilled ready-meals were marketed as high- quality, premium-priced products. Marks & Spencer's strategy was that as quality substitutes for restaurant meals, their range of chilled ready-meals should offer an extensive and constantly changing array of new products that mirrored customer eating trends. To provide them with the necessary variety and choice, as well as new offerings, they turned to small specialist food manufacturers. These ranged from micro-kitchens employing less than five people to larger concerns such as Hazlewood Foods, though most were relatively small concerns. For retailers like Marks & 18 | INNOVATION MANAGEMENT CASE STUDIESIn developing chilled ready-meals, firms like Marks & Spencer assembled new product-development teams that brought together employees from the specialist food manufacturers with employees from the packaging companies and their own staff drawn from their food technology and hygiene departments. The new product teams formed a network for pooling knowledge and drawing on data from a variety of sources in order to facilitate innovation. From the retailer came data on purchasing patterns and trends derived from its IT system. From the specialist food manufacturers came ideas for new dishes and guidance on which dishes would be more suitable for chilling and re-heating. From the packaging companies came guidance on packaging materials suitable for use in microwave ovens. This was particularly important as microwavable meals necessitated the development of "active" forms of packaging designed specially for use in microwave ovens. Working on a collaborative basis the new product development teams devised a range of ready-meals suitable for chilling.. . While the innovation network based on new product development teams generated new products, retailers like Marks & Spencer were able to use their IT systems to co-ordinate product and distribution to ensure that the right amount of stock got to the right store at the right time at the right temperature so that it was available when consumers wanted it. To gauge the success of chilled ready-meals as an innovation one has only to travel a few miles on a motorway and count the number of large trucks with the words,"Chilled ""Distribution" painted on the side. Similarly, a visit to any supermarket will reveal rows of chiller cabinets offering a wide range of Indian, Chinese, Thai, Italian and traditional British ready-meals. A more conventional evaluation reveals that sales of chilled ready-meals almost doubled between 1993 and 1999. 112 130 140 1997 146 1998. 162 175 UK retail sales of chilled ready-meals 1993-1999 20 | INNOVATION MANAGEMENT CASE STUDIESCASE STUDY SIX What did you have for dinner last night? We are increasingly eating a range of exotic meals eaten not in restaurants or collected from the takeaway but prepared in our own homes in a matter of minutes. Chicken tikka, chicken Madras, mango chicken curry, chicken chow mein, these are just a few from the wide range of ready-meals that are available in the chiller cabinets of our supermarkets these days. They offer high-quality, ready-prepared meals at reasonable prices. But it was not always so. Chilled ready-meals such as chicken tikka are a relatively recent innovation that only began to appear on our supermarket shelves in the early 1990s, pioneered initially by multiple retailer Marks & Spencer. Prior to the introduction of chilled food, ready-made meals were available in our supermarkets, but they came as frozen foods. Unilever's frozen food subsidiary Birds Eye introduced the first "TV dinners" as they were known in 1969. Over the years, the freezer cabinets of Britain's supermarkets became home to a range of ready-meals. Social changes in the 1970s and 1980s, such as the increasing number of women working full-time and the increasing number of single-person households meant a steady increase in the popularity of these kinds of products. Though the range of meals became steadily more sophisticated, the products themselves did not. They might look attractive, but when it came to eating them, most were nothing like the ready-meals we have today. As frozen foods, they were hampered by the fact that freezing food and then thawing it to reconstitute it had an adverse effect on both the texture and the flavour of the food that inevitably made the meals less palatable. This was a major drawback that constrained the growth of the market for ready-prepared meals sold in supermarkets. The solution was not to freeze the food but simply to chill it. Chilling involves lowering the temperature of the food to about 5 degrees centigrade but not actually freezing it. Keeping food at a low temperature helps to preserve it (for a time at least), while not actually freezing it avoids the problem of damaging the texture and flavour of the food. However, as Cox et al. (1999) point out, chilling presents formidable logistical difficulties, since the meals are highly perishable and have a very limited shelf-life with the result that the maximum period of time that can elapse between production and final consumption of such products is a few days rather than weeks or months in the case of frozen foods. Without very careful and precise co-ordination of supply and demand, the premium price associated with delivering to the consumer a superior product would be more than absorbed by high wastage rates. By the late 1 980s Marks & Spencer felt recent developments in technology, combined with their proven and long-standing skills in relational contracting in the textile and clothing sector, offered scope for offering a range of chilled products in the form of ready-meals. The technological developments that formed part of this innovation covered both consumption and production. On the consumption side, the introduction of microwave ovens in the early 1970s and their widespread use in domestic households meant that a means of quickly and easily preparing and heating chilled ready-meals was readily available. On the production side, developments in IT systems, especially in the field of communications technology and data management, helped to provide retailers with an unprecedented degree of control over their operations. 17 | INNOVATION MANAGEMENCASE STUDY 6 GROUP: F QUESTIONS: 1. Why did retailers like Marks & Spencer choose to use small firms as their suppliers? 2. What aspect of Marks & Spencer's prior knowledge , and experience proved particularly useful in terms of the innovation process used to develop chilled ready- meals? 3. Which model of the innovation process did Marks & Spencer adopt in order to bring about the innovation of chilled ready-meals?' 4. What benefits did Marks & Spencer (and the other retailers) obtain from the particular lovell innovation process they used? 5. What alternative models of the innovation process might Marks & Spencer have used? 6. What enabling factors permitted firms like Marks & Spencer to use their chosen model of the innovation process? 7. What do you think were the critical factors in achieving successful innovation in this case? 8. Why was co-ordination vitally important and how was it achieved