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Schwan Food Company
Schwan Food Company
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Values:
GROWTH Relentlessly and urgently pursue value-added company and individual growth. HARD WORK Intelligent, extraordinary effort to deliver superior customer and consumer value. HELPING ONE ANOTHER Teamwork and open, constructive dialogue to achieve greater success. ENTHUSIASM Visibly engaged, passionate and determined to win regardless of circumstances. INTEGRITY Do what is right regardless of cost .
Case Facts..
Schwan was started as Schwans Home Service(SHS), an ice-cream home delivery business in March 1952 by the Marvin Schwan. The SHS label marketed frozen pizzas under three brand names: Tonys, Freschetta and Red Baron.
Schwan operated three primary business units: SHS, Schwans Global Consumer Brands(SGCB), Schwans Food Service Group(SFSG).
SHS was the countrys largest direct-to-home food delivery service. SGCB operated two divisions: Schwans Consumer Brands North America(SBNA) and Schwans Europe.
Cont...
SBNA served the North American market with products under five brands: tonys, red baron, freschetta, pagoda and larrys. SFSG had two units: a. Schwans food service
b. Schwans bakery
Schwan had three core business divisions: a. Explore Information Service b. Bi-Phase Technology
Question-01
What were the factors that made Schwan food extensively focus on innovative product development?
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Strength
SWOT Analysis
Innovative and skilled team Good R&D Facility Good understanding of market Brand name
Industry growth
At the rate of 8% Frozen food sales were one-third of total food service sales Over 96% restaurants plan to use frozen foods Increased food technology
Question 2
How Schwan organized the new product development exercises for Red Baron Stuffed Pizza Slices? What hurdles were encountered while moving from idea development stage to the concept formation stage? How are these challenges encountered?
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Concept generation
Idea concept Need of product that provide value proposition Product that could be easy to cook
Baking took 11 to 17 minutes for cooking
Need to provide in appropriate quantity (small pieces) for the individual need Stated concept Product frozen Pizza slices
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Concept evaluation
Tools used
Focus group
Concept testing
Creating what if scenarios Consumer testing ( market survey) Product protocol
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Product development
Prototype concept: prototypes were translated into manufactured products Challenges faced:
Dough Placement of bottom part of dough Dispensing right amount of filling Covering of filling with upper layer of dough Giving desired shape Adding topping
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Launch Stage
Red baron slices variants:
Pepperoni Five cheese and tomato Italian sausage & Pepperoni Supreme Italian Sausage pizza with roasted onion and garlic chicken
Pricing -$2.99 for 2 slices (Triangular shape) Launching retail and food service distribution channel
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Positioning of Red Baron Stuffed Pizza Slices Unique, convenient way for family to enjoy Pizzas at any time- even when they are on the run
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Expansion strategies:
Globalization through acquisition and francizing routes
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Question-03
Critically analyse the role played by Schwans cross functional team in developing Red Baron Stuffed Pizza Slices. In what way various team contributed in project ?
Internal teams
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Proces s engg.
Produ ct develo pment
Applied Researc h& culinary
Regulato ry affairs
Sensory group
Manufa cturing
Marketin g
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From the beginning they want entire company as well as external entities to involve Each milestone of the project evaluated against the expectation of target market
Schwan always offers great opportunities and a place where people like to work Schwan is known for hybrid organisation Ownershi All the team know their jobs p External team can helps Schwan to get output from the market and what consumer wants internal team can build product like that
They have done all the upstream activities for the new product like Marshal based R & D centre(research kitchen, lecture kitchen, five product development laboratory, focus group Integration laboratory, evaluation and testing room) Entire cross functional team sit together and they have clearly earmarked responsibilities vis--vis their deliverables to the project Installation of high tech production line
flexibility
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Regulatory affairs group : examine the entire exercise whether all necessary regularity guidelines had been compiled with.
Sales and consumer research: regularly taken feedback from market Marketing team: A successful launch of the product
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Bringing people in early in the process Building team support, momentum, excitement, enthusiasm Building effective communication with cross functional team
2003 spirit of innovatio n Award for red Baron Stuffed Pizza slices
Question-04
In light of fact that majority of new product fail in market, how do you think Schwans effort would fare? What issues do company need to keep in mind while developing new product in order to minimise the risk of failure ?
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Yes it is true that more than 75-80 % new launches failed to attract the market and Schwan's were quite successful in new launch but some of points which companies should keep in mind to minimise risks are-
Proper PIC generation in start of project Idea screening seems to be improper Involving external parties can be harmful in some cases
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Customer centric approach. Yet product is success in market, some prior financial analysis is required. Dont get too much attached to product otherwise company can fall in pitfall.
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Thank you
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Questioning