1.1 Objective target
1.2 About the company and its founder
2.1 Basic terminologies
2.2 Innovation process model.
3.2.1 Idea generation
3.2.2 Idea acceptation
4.2.1 Idea realization
188.8.131.52 Innovation classification
184.108.40.206 Product realization planning
220.127.116.11 Pollout strategy
18.104.22.168 International activities
List o1 Figures
Figure 1: Creative process of problem solving (cp. Zmija, 2001)
Figure 3: Novelty - frame of reference
Figure 4: Novelty - classification of Booz-Allen & Hamilton (cp. Perl 2003, p. 30)
Figure 5: Triggers of innovation (cp. Perl 2003, p. 39)
List o1 Tables
Table 1: Stages of innovation processes (cp. Wolfrum 1994, p. 13)
Table 2: Strategic program priorities based on Ansoff matrix (cp. Brockhoff 1999, p. 207)
Table 3: Porter's 'Generic Strategies' (cp. Mintzberg et al 2007, p. 125)
1.1 Objective target
When I was thinking about, which company I want to contact for this term paper, I not only had the idea of choosing a company which is capable of generating innovative products or services – I also tried to find a candidate who really is something special itself and not an “everyday firm“. In my opinion the “Zotter Schokoladen-Manufaktur GmbH” located in the eastern part of Styria is such a company, because it qualifies a lot which is written in state-of-the art business literature as well as in established sources on innovation and technology management. The method I used to acquire information was a primary analysis, realized as an interview with the business owner and entrepreneur, Josef Zotter. Given information about the Zotter GmbH not cited in this paper is obtained out of that interview. He gave me a chance to get very feasible answers for the 20 questions I prepared in advance (see the appendix for the German questions). As secondary literature I used his book “Schokolade – Die Süßen Seiten des Lebens” in addition.
Despite to the fact that it is difficult to match real-life to theory, I want to describe the real facts by using the processes of innovation. It starts with the idea of the Zotter-Schokolade in the invention stage and leads to current questions like, how knowledge is secured in the company. I hope that I can give a good insight to these unconventional approaches in the context of innovation management, which gives the reader a chance to see theory in a more touchable and realistic way.
1.2 About the company and its 1ounder
Josef Zotter, the founder of “Zotter-Schokoladen-Manufaktur GmbH” was born in a village called Bergl, in eastern Styria. As the son of a local farmer, he did not receive much attention from his parents because they worked hard every day. The older sister was the person he looked up to and she helped him whenever it was possible. His parents possessed a local tavern too, where he should help his family – they told him to go to vocational school (“Berufsschule”) so that he can once take over the parental business.
As young, as he had been he did not want to take this predetermined way of his parents. He finished his vocational training, went to Tyrol, and started working in the kitchen of a restaurant. Although he had no good, cooking experience the people always supported him so that he was able to learn fast. Due to coincidence, they even offered him the possibility to work as chef. In the next few years, he worked in restaurants in Vienna, like Hilton or Imperial, and even in New York. There he also developed his desire to launch his own business. He started some pastry shops in Graz and Bruck – but this attempt had not been successful and he even had to declare bankruptcy.
After some time of idea generation and reevaluation, he was obsessed by the idea of creating chocolate. He started with his hand made chocolate, first in his old pastry shop in Graz where demand for it was extraordinary high. However, this place was too small to fulfill all wishes of the customers so he moved back to his roots – to Bergl in eastern Styria. In a former barn of his parents, he and seven employees started to manufacture chocolate on 160m². Then in 1999, they decided to launch the “Zotter- Schokoladenmanufaktur”.
He risked a lot and built the factory at the same place in Bergl – but it was worth the risk and today about 80 employees process up to 400 tons of cacao per year (about 8 million chocolate bars). The “Zotter-Schokoladen-Manufaktur GmbH” grew to an international player in this niche of chocolate manufacturing and in 2006 they still had about 20% increases in turnover. (Zotter 2006)
2.1 Basic terminologies
To take a closer look at the company’s core innovation it is necessary to differentiate among multiple terms. The word “innovation” itself is used every day in multiple contexts – but is really everything that is a so-called “innovation” also coherent with given definitions?
The term itself derives from the latin word “novus” which is equivalent to “introduction”, “renewal” or “novelty” (Wolfrum 1994, p. 7). Furthermore, the meaning of the word itself is differently used in several economic definitions. For example Thommen and Achleitner perceive innovation as “new products or operational workflows” (2003, p. 954) contrary to Schumpeter, who originally defined innovation as “creative destruction” and the new combination of input factors (Perl 2003, p. 19). Most of those definitions emphasize that innovation must be something new, but do not state to whom it has to be new. Is it for the customer, the company or even for society? In academic literature, there have been many discussions about this topic and a result was that innovation should embrace “all processes, which a company implements the first time, as well as the results of these processes – this shouldn’t be influenced by a similar realization of other individuals or organizations” (Wolfrum 1994, p. 8).
To achieve something new most of the time you also have to develop it in a preliminary stage. This pre-stage to an innovation is called invention, which is the first-time technical realization of a new problem solving (Perl 2003, p. 19). Innovation does not necessarily need an invention before, but this is often the case. It could be a result of target-oriented research as well as a creative process, but the output is not anything you are able to sell on market. Wolfrum picks up the following statement of Martin that gets to the point: “A scientific invention may be viewed as a new idea or concept generated by P&D, but this invention only becomes an innovation when it is transformed into a socially useable product” (Wolfrum 1994, p. 8).
Beside these two concepts, it is also useful to explain the term imitation in a broader understanding of innovation. An imitation is a reapplication of a problem solving, which was already introduced in one or more different companies. Therefore, it has applications similar to a comparable innovation, operates in the same market and overall uses the same technology. There can be creative imitations as well as the very takeover of ideas. (Perl 2003, p. 19)
2.2 Innovation process model
After shortly discussing the fundamental terms, I want to introduce the process-oriented view of innovation, which will be further used to examine Zotter in a structured way. Though there is no consistent definition of an innovation-process, because observed sequences are very complex and each stage strongly overlaps with the others. Often companies are not able to recognize a stage-oriented innovation process inside the organization - this is also one reason for the development of multiple models that fit best for different types of organizations (Perl 2003, p. 49). In the following table, you get an overview about some process-oriented views, where the increasing level of detail is getting visible:
illustration not visible in this excerpt
Table 1: Stages of innovation processes (cp. Nolfrum 1994, p. 13)
Each level of detail makes the innovation process more precise, but it reduces flexibility for the model because you cannot map it on every organization’s processes. For the example of Zotter the most perfectly fitting process-view would start with the invention stage, which is characterized as “process of bringing technology into being” followed by an innovation stage which contains all economic activities to exploit an invention. All processes in context of market-entry are related to the diffusion stage. (Wolfrum 1994, p. 12)
Seeing that innovation and diffusion stage are strongly intersecting each other, rollout stage will be mentioned in the context of innovation as well. Especially the following questions will be addressed in this term paper to give detailed insights into the innovation-process and the company itself:
- How was the idea of Zotter-Chocolate generated and how does this process work concerning upcoming innovations?
- How was the idea “accepted”, so how did it come from the idea to this unique invention? How are ideas in the company evaluated today?
- Are the characteristics of an innovation, in terms of novelty, risk, complexity and concentration of conflicts, fulfilled?
- How could the resulting product be classified? Is it revolutionary? Was it a push or pull innovation?
- How was the invention realized and brought to the stage of a product innovation?
- What kind of (international) strategy is the company pursuing with its innovations?
- How does the company react on imitations of its products? Are there any activities to secure knowledge?
Even the most brilliant ideas have always been inspired by something that someone else has done, thought, or dreamed - [...] birds inspired planes, the powerful sound of gospel music in the streets of Memphis and other cities inspired rock and roll […]. (Gregerman 2007, p. 11)
Most of the literature explicitly states that it is always possible to create innovation without invention. When talking about the creation of new styles of chocolate with some extraordinary ingredients, you cannot precisely say whether this is an invention or not. From an innovation management perspective invention is often seen from a technological point of view, where something very new is constructed using given technologies. Combining these definitions with the common meaning of an invention where something new is created by inspiration of an inventor it is also possible to perceive the invention in this very special case:
Before it came to the idea of the chocolate itself, Mr. Zotter had to suffer a real setback: he had to declare bankruptcy with his pastry shops in Styria. After that, he was making up his mind about a new idea to come out of this misery. First, he simply tried creating some candies in his first place of business in Graz. The first ones contained fruits like currant, pineapple or peach. Soon people got interested and advertising executives came because these candies were interesting for various events. However, this was not the product, which satisfied Josef Zotter: all customers had only been interested in the wrapping but not in the content neither the taste.
One day a woman wanted to buy a “gag with company logo” and Mr. Zotter suggested a chocolate bar with pumpkinseed on it whereas the logo is located on the package. She was convinced and therefore an ancestor of the “Zotter-Schokolade” was born. Because of time pressure, he had to improvise and so he shortly developed a new process for forming the chocolate bars. Beside, he and his wife also tried a new type of wrapping: instead of using a cellophane foil, they tried a paper based package band. They did not know how the customer would react on this approach but the next day she called Mr. Zotter and was very enthusiastic about it. (Zotter 2006)
From an ex-post point of view several factors can be identified which supported this development to the invention of Zotter’s chocolate. The famous Austrian researcher Schumpeter was one of the first who identified attributes necessary for entrepreneurship. In his opinion, the creative entrepreneur reforms or revolutionizes production structures, encounters resistance that he has to overcome and furthermore always deals with the environment (Bierfelder 1989, p. 9). That is further derived from his idea of “creative destruction” in the context of invention and innovation, where a new combination of input factors like products, processes or markets areas occurs (Perl 2003, p. 19).
In a more pessimistic view, Knight was mentioned, who described entrepreneurship as taking up high risks and dealing with uncertainty. Other entrepreneurial attributes described by Mintzberg are the distinctive need for control, independence and performance as well as averseness of authority. (Mintzberg/Ahlstrand/Lampel 2007, p. 148ff)
All these attributes mentioned above can also be mapped to the Josef Zotter: He was that kind of person who didn’t cope with authority but liked to create his own hierarchies. Declaring bankruptcy was of course a huge resistance he encountered what led him to taking new risks by manufacturing his chocolate. Therefore he quickly revolutionized production structures developing a new process for forming chocolate bars. He also always told that “he wants to be independent” so that he is able to realize his own ideas which embody “his identity”. Hence Mr. Zotter can be defined as an entrepreneur, which is often a good basis for invention and furthermore supports the transition from invention to innovation stage. Bierfelder also therefore cited Schumpeter, who described the entrepreneur as the engine for technical, economic, organizational and social change (Bierfelder 1989, p. 9).
- Quote paper
- Bakk. Michael Glitzner (Author), 2007, Innovation in the context of "Zotter Schokoladen-Manufaktur GmbH", Munich, GRIN Verlag, https://www.grin.com/document/121502