ENGINEERING IN THE FOOD INDUSTRY Quality is everything 16 March 2016 “In terms of technical or industrial knowledge and experience my PhD professors in Chemical Engineering were excellent” Irina works on research focused on predicting the quality of milk powder through modelling, experimentation and data analysis. Her work bridges academia and industry applying research to the real world. Start building your future with a Postgraduate qualifi cation from New Zealand’s leading Visit us at EMEX May – June Booth ET faculty of Engineering*. Or download our Prospectus at www.engineering.auckland.ac.nz *QS World University Rankings by Faculty / EN011 Successful firms are re-focusing their innovation efforts from product and business model innovation towards market innovation. Our understanding of what markets are and how they operate has increased dramatically during the recent years. This deeper understanding means that firms now can choose whether they accept to be market-driven or whether they develop market-driving strategies. At the heart of market-driving strategies lies a simple realisation. Markets are not a synonym for a geographical area (‘the Chinese market’), a consumer group (‘the youth market’), a product category (‘the wine market’) or any other single factor that enables you to calculate the demand for your product. Instead, market-driving strategies view markets as systems, consisting of various interlinked elements such as diverse actors, norms and regulations, material infrastructure and language. This systemic view to markets brings forth two important managerial implications. First, the value that any customer can extract from your products and services is determined by the market system. Take the car, a magnificent invention with huge use value. Yet, no value accrues unless the customer knows how to drive, and there are roads, petrol stations, mechanics, maps – even used car salesmen – plus agreed traffic rules and institutions enforcing them. Second, unlike abstract demand – the typical way of looking at markets – market systems can be influenced so that they work in your favour. It is true that market systems are typically too large and complex for any one company to fully control their development. But anyone, with the right story or value proposition to sell to the right players, can influence markets. Look beyond the product – and see what it makes possible If you are interested in exploring market-driving strategies, we first urge you to review your market definition. Do you define your market based on the product or service you sell? If your answer is yes, you belong to the majority. Managers and entrepreneurs typically self-identify with descriptions like “we operate in the whiteware market” or “we work in the telecommunications market”. There is nothing inherently wrong in using the product to frame one’s thinking. Excellent products and services are of course central to all businesses. However, viewing your market through the product lens tends to create a managerial equivalent of a tunnel vision. For example, you might not pay enough attention to Are you market-driven or MARKET-DRIVING? By Associate Professor Suvi Nenonen and Professor Kaj Storbacka Professor Suvi Nenonen
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