{"id":29675,"date":"2018-11-12T21:25:45","date_gmt":"2018-11-13T02:25:45","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/nivea-leveraging-open-innovation-to-drive-product-development-in-a-race-to-be-the-worlds-leading-skincare-company\/"},"modified":"2018-11-13T12:38:01","modified_gmt":"2018-11-13T17:38:01","slug":"nivea-leveraging-open-innovation-to-drive-product-development-in-a-race-to-be-the-worlds-leading-skincare-company","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/nivea-leveraging-open-innovation-to-drive-product-development-in-a-race-to-be-the-worlds-leading-skincare-company\/","title":{"rendered":"NIVEA: Leveraging Open Innovation to Drive Product Development in a Race to be the World\u2019s Leading Skincare Company"},"content":{"rendered":"

\"\"<\/a><\/p>\n

\u201cWhen it comes to creativity, we recognize that good ideas can come from anywhere. So we\u2019re reaching outside of our normal approach to creative development and are involving the very communities who use our products to tell us what we should do\u201d \u2013<\/em> Matt Marlow (Head of Global Digital Activation at Beiersdorf for NIVEA).[1]<\/p>\n

The personal care industry is highly competitive and rapidly evolving, with a typical product life cycle lasting four years.[2] With shorter product market cycles, companies can no longer afford to rely on superior internal R&D to drive innovation. \u201cExpenditure on R&D has had to double every 13 years just to maintain the same level of growth in the economy as a whole, with no industry managing to innovate in a cost-effective manner,\u201d argued Adi Gaskell, writing for InnoCentive.[3] In order to increase speed to market while keeping costs at a reasonable level, NIVEA has turned to open innovation in order to foster idea generation and product development.<\/p>\n

In the short term, NIVEA has focused on co-creation with the consumer to create new and improved products. One example is the launch of the Company\u2019s Black & White Deodorant. NIVEA looked externally for idea generation, and conducted netnography research to determine consumer pain points regarding deodorant. After reviewing hundreds of consumer conversations, NIVEA concluded that customers were concerned with antiperspirant stains on their clothing. The Company responded by creating initial product designs, and invited consumers to evaluate and modify its products.[4] NIVEA then partnered with Evonik, a specialty chemicals company, to jointly develop the anti-stain technology.[5] The result was the best-selling deodorant in the Company\u2019s history.[6] By working closely with the end consumer, NIVEA was able to create a disruptive product, increase its speed to market, and reduce internal R&D spend. Engaging the consumer also created buy-in and increased word of mouth, which doubled as marketing for the product.[7]<\/p>\n

Figure 1: Consumer Insight – “Stain Manual”\u00a0<\/em>[8]
\n\"\"<\/a>Longer term, NIVEA is working to expand its approach to open innovation, in an effort to spur new product creation while strengthening customer relationships. This has been demonstrated most recently with the launch of NIVEA\u2019s Co-Lab, a crowdsourcing initiative that invited individuals from the UK, Korea, and Brazil to take part in an ideas pitch. The Company challenged people to submit technology-based products that aimed to bring the NIVEA community together in a meaningful way. Finalists were financially compensated and given the opportunity to work with NIVEA strategists to execute on their ideas globally.[9] This creative approach to crowdsourcing led to new product ideas while reinforcing the perception that NIVEA cares about forming close connections with its customers.<\/p>\n

As a result of these efforts, NIVEA has made tremendous strides towards incorporating open innovation in its product development process. According to the former VP of R&D, Dr. Martin Rudolph, \u201cIt is more important to find the right ideas and take them to market quickly. This implies that especially the front end of the innovation funnel is nowadays a more \u2018porous system\u2019 than a streamlined process.\u201d[10] Consequently, in the short term I would encourage NIVEA to drive innovation from scratch by taking a broad approach, employing both crowdsourcing and netnography tactics. Simultaneously, I would suggest that the Company focus on specific customer pain points, rather than asking more general questions of its consumers. This strategic combination will allow NIVEA to increase its speed to market and respond more effectively to market needs.<\/p>\n

Taking a longer-term approach, I would recommend that NIVEA extend collaboration beyond the consumer. One suggestion is for NIVEA to seek contributions from suppliers and independent specialists. Beiersdorf, NIVEA\u2019s parent company, has taken initial steps towards this goal by hosting a supplier fair in order to share ideas with raw material, active ingredient, and packaging partners.[11] The Senior VP of R&D at Beiersdorf commented, \u201cCross functional discussions on inspiring new technologies and concepts pave the way to future innovation.\u201d[12] This level of partnership would lead to the enrichment of ideas and product generation beyond what the consumer is able to contribute.<\/p>\n

While open innovation has allowed NIVEA to create new products in a faster and cheaper manner, the key to this model hinges on the Company\u2019s ability to keep consumers engaged. In situations where the Company will ultimately own the IP, how will NIVEA continue to attract motivated external individuals and companies that are willing to participate in co-creation? How will the Company maintain a cohesive vision so that external partners do not develop their own products that compete with NIVEA?<\/p>\n

(Word count 748)<\/p>\n

Sources:<\/strong><\/p>\n

1 Beiersdorf. \u201cLet\u2019s Create Together.\u201d August 22, 2018. https:\/\/www.beiersdorf.com\/newsroom\/press-news\/local\/en\/all-news\/2018\/08\/22-lets-create-together, accessed November 2018.<\/p>\n

2 Regan, Charlie. \u201cNivea\u2019s Invisible Black and White \u2013 Social Media Synergy.\u201d Social Media for Business Performance, February 16, 2015. https:\/\/smbp.uwaterloo.ca\/2015\/02\/niveas-invisible-black-white-social-media-synergy\/, accessed November 2018.<\/p>\n

3 Gaskell, Adi. \u201cWhy Open Innovation Makes Sense.\u201d InnoCentive Innovation Blog, November 14, 2017. https:\/\/blog.innocentive.com\/why-open-innovation-makes-sense, accessed November 2018.<\/p>\n

4 Bartl, Michael. \u201cGetting Closer to the Consumer: How Nivea Co-Creates New Products.\u201d The Making-of Innovation, February 18, 2011. http:\/\/www.michaelbartl.com\/article\/getting-closer-to-the-consumer-how-nivea-co-creates-new-products\/, accessed November 2018.<\/p>\n

5 Evonik. “Black & White Protects Against Staining.”\u00a0https:\/\/corporate.evonik.com\/en\/products\/product-stories\/pages\/black-and-white-protects-against-staining.aspx, accessed November 2018.<\/p>\n

6 Regan, Charlie. \u201cNivea\u2019s Invisible Black and White \u2013 Social Media Synergy.\u201d Social Media for Business Performance, February 16, 2015. https:\/\/smbp.uwaterloo.ca\/2015\/02\/niveas-invisible-black-white-social-media-synergy\/, accessed November 2018.<\/p>\n

7 Regan, Charlie. \u201cNivea\u2019s Invisible Black and White \u2013 Social Media Synergy.\u201d Social Media for Business Performance, February 16, 2015. https:\/\/smbp.uwaterloo.ca\/2015\/02\/niveas-invisible-black-white-social-media-synergy\/, accessed November 2018.<\/p>\n

8 Bartl, Michael. \u201cGetting Closer to the Consumer: How Nivea Co-Creates New Products.\u201d The Making-of Innovation, February 18, 2011. http:\/\/www.michaelbartl.com\/article\/getting-closer-to-the-consumer-how-nivea-co-creates-new-products\/, accessed November 2018.<\/p>\n

9 Beiersdorf. \u201cLet\u2019s Create Together.\u201d August 22, 2018. https:\/\/www.beiersdorf.com\/newsroom\/press-news\/local\/en\/all-news\/2018\/08\/22-lets-create-together, accessed November 2018.<\/p>\n

10 Mattes, Frank. \u201cSkin Care Giant Launches New Open Innovation Approach.\u201d InnovationManagement, July 4, 2011. http:\/\/www.innovationmanagement.se\/2011\/07\/04\/skin-care-giant-launches-new-open-innovation-approach\/, accessed November 2018.<\/p>\n

11 Beiersdorf. \u201cBeiersdorf Raised Open Innovation to a New Level.\u201d December 22, 2016. https:\/\/www.beiersdorf.com\/newsroom\/press-news\/all-news\/2017\/01\/09-beiersdorf-raised-open-innovation-to-a-new-level, accessed November 2018.<\/p>\n

12 Beiersdorf. \u201cBeiersdorf Raised Open Innovation to a New Level.\u201d December 22, 2016. https:\/\/www.beiersdorf.com\/newsroom\/press-news\/all-news\/2017\/01\/09-beiersdorf-raised-open-innovation-to-a-new-level, accessed November 2018.<\/p>\n","protected":false},"excerpt":{"rendered":"

Utilizing open innovation to drive product development at NIVEA<\/p>\n","protected":false},"author":11895,"featured_media":29869,"comment_status":"open","ping_status":"closed","template":"","categories":[4466,4239,678,344],"class_list":["post-29675","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-nivea","category-open-innovation","category-personal-care","category-product-development","hck-taxonomy-organization-nivea","hck-taxonomy-industry-beauty-and-cosmetics","hck-taxonomy-country-germany"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2018\/","yoast_head":"\nNIVEA: Leveraging Open Innovation to Drive Product Development in a Race to be the World\u2019s Leading Skincare Company - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/nivea-leveraging-open-innovation-to-drive-product-development-in-a-race-to-be-the-worlds-leading-skincare-company\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"NIVEA: Leveraging Open Innovation to Drive Product Development in a Race to be the World\u2019s Leading Skincare Company - 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