311-063-8 INNOVATION AT PLAY: THE CASE OF HIGH- END CUISINE Teaching Notes Giada Di Stefano, Andrew A. King, Gianmario Verona (Case n° 2010_10) Copyright © 2010 SDA Bocconi, Milan, Italy No part of this publication may be copied, stored, transmitted, reproduced or distributed in any form or medium whatsoever without the permission of the copyright owner. Distributed by ecch, UK and USA North America Rest of the world www.ecch.com t +1 781 239 5884 t +44 (0)1234 750903 ecch the case for learning All rights reserved f +1 781 239 5885 f +44 (0)1234 751125 Printed in UK and USA e [email protected] e [email protected] 311-063-8 SDA Bocconi School of Management Innovation at Play: The case of High-End Cuisine 2010_10 Giada Di Stefano, Andrew A. King, Gianmario Verona Innovation at Play: The case of High-End Cuisine Teaching Notes Abstract This case deals with the idea of an experienced young chef, named Linguini, to create a new venture, namely a restaurant in the Milan area. In order to support Linguini’s choice, the case describes both the general context of Italian gourmand cuisine and the specific, geographical context around Milan. The stu- dents are asked to analyze specific issues and define the characteristics and positioning of Linguini’s new venture. Substantive issues The decision maker, chef Linguini, is described as a young chef, who, after receiving his degree in gastro- nomic sciences, has worked as an apprentice in many famous kitchens around Europe. During these years, not only has he learned to master the technicalities and the art of cooking, but was also given the chance to understand the complexity of the industry and the subtle challenges that running a restaurant entails. He is described as a very analytical person, able to identify four phenomena characterizing the general context and four phenomena characterizing the geographical context of reference. With respect to the general context, four phenomena are described in the case, i.e. : (1) the increase in competitive pressure, due to the growth in the number of high-end restaurants, as well as to the mushroom- ing of restaurant guides and industry experts; (2) the intensification of issues related to the protection of intellectual property and hence sustainability of competitive advantage, in a context in which innovation is not protected by traditional legal mechanisms; (3) the introduction of technological innovation in the kitchen; and (4) the changing demand landscape that is discovering value for money as well as alternative food and way of enjoying it. With respect to the Milanese context, he is able to position restaurants on a continuum ranging from those whose innovation is more “cautious” and targeted at exalting existing products in the simplest way, to the avant-garde cooks who focus on technology and techniques and are going beyond the traditional bounda- ries of cuisine. Pedagogical objective The case allows the reader to get a first, rough idea of the main features of the fine dining industry. It also gives instructors the chance to teach a variety of topics related to innovation and entrepreneurship. Mainly, it aims to discuss different types of innovation. In particular, it makes it possible to deal with con- cepts like product and process innovation1, incremental and radical innovation2, niche/market creation3 and 1 Tushman ML, Anderson P. 1986. Technological discontinuties and organizational environments. Administrative Science Quarterly, 31: 439-465. 2 Henderson RM, Clark KB. 1990. Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of Established Firms. Administrative Science Quarterly, 35 (1): 9-30. 3 Abernathy WJ, Clark KB. 1985. Innovation: Mapping the winds of creative destruction. Research Policy, 14: 3-22. Copyright © 2010 SDA Bocconi, Milan, Italy 2 311-063-8 SDA Bocconi School of Management Innovation at Play: The case of High-End Cuisine 2010_10 disruptive innovations.4 The case study attempts to derive the definitions directly from empirical observa- tion, thus letting students understand them better. In this respect, while the case in more focused on tech- nology sources of innovation, the debate should allow students to let demand sources of innovation emerge. The case can also be used to discuss the practice of market and competitor analysis, providing an example of the type of analyses that an entrepreneur should carry out before starting up his new venture. In either case, the instructor will help the students create a map of competition in the context of creative industries, with specific reference to gourmand cuisine, also thanks to the descriptions of real restaurants provided in the case. Positioning and use The case is targeted at courses that deal with innovation management and technology strategy. It can be used to discuss the broad topic of managing innovation-based competitive advantage, with particular refer- ence to the peculiarities of innovation and related business models in creative contexts. More specifically, it allows the instructor to deal with a variety of innovation types and also introduce the topic of entrepre- neurship and the notion of intellectual property rights. For this last issue, see also: Di Stefano G, Verona G. 2009. Protecting Innovation in Low-IPR Regimes: The Fine Fashion Industry. ECCH Case Collection, ref. 310-120-1. Suggested questions 1) What are the main features of the industry of gourmand cuisine in Italy? 2) How can we describe the innovation strategies of the main players in the Milan area? 3) How do the different players maintain their competitive advantage? 4) Are there threats in the environment that could hamper the survival of classic business models? 5) What strategy should Linguini ultimately implement? Hypothetical teaching plan The time devoted to discussing the case should be 90 minutes, divided into 60 minutes devoted to recon- structing the characteristics of the industry and of the strategies of its players, and 30 minutes to laying out the possible strategies that Linguini could adopt in order to enter the business. In this second, the instruc- tor should encourage the students to discuss the pros and cons of the various solutions arising from the class discussion, including the most fundamental question, i.e. should Linguini enter the business? The teaching plan should be as follows: 1) Broadly describe the industry of gourmand cuisine: history, facts, main characteristics (10 minutes); 2) Describe the main changes that the industry has undergone in recent years (10 minutes); 3) Describe the main types of innovation strategies that one encounters when analyzing, for instance, the cluster of restaurants in Milan (30 minutes); 4) Explain how the changes in the competitive landscape may hamper or sustain the different innovation strategies (10 minutes); 5) Critically discuss the alternative strategies that Linguini could adopt to open his new restaurant (20 minutes); 6) Takeouts (10 minutes). 4 Christensen CM, Bower JL. 1996. Customer power, strategic investment, and the failure of leading firms. Strategic Management Journal, 17 (3): 197-218. Copyright © 2010 SDA Bocconi, Milan, Italy 3 311-063-8 SDA Bocconi School of Management Innovation at Play: The case of High-End Cuisine 2010_10 Case overview Broadly describe the industry of gourmand cuisine: history, facts, main characteristics (10 minutes) As a first step in approaching the study of this case, the teacher should give a brief overview of gourmand cuisine. As one of our informants told us during one of the interviews that we conducted in writing this case, “the first essay on cooking dates back 3,317 years from now, the second 2,000 years, the treaty by Bartolomeo Scappi from the Middle Ages …the “Last Supper” from Leonardo…you find the history of a country on the table, the history of the whole society. Hippocrates wrote that food is medicine, he was a doctor and, as you can see, it was already clear 3,000 years ago that if you eat well you will live better and longer.” Although food has always been a fundamental component of human life, the first attempt to study food from a scientific standpoint dates back to the beginning of the nineteenth century, in 1825, when Jean Anthelme Brillat-Savarin published his “The Physiology of Taste” (originally titled: “Physiologie du goût, ou Méditations de gastronomie transcendante”), the first formal study of gastronomy. Gastronomy (from the Greek γαστήρ, stomach, and νόμος, knowledge), indicates the study of food in a scientific manner, i.e. looking at production, distribution, promotion, and communication of high-quality foods.5 Thanks to their scientific approach, the French have profoundly influenced the codification (and creation) of the rules of cuisine. It should therefore be no surprise if most of the words used in this domain are French. Gourmand cuisine refers to the high-end of the restaurant industry. It is usually divided in cuisine clas- sique (classic cuisine) and nouvelle cuisine. The principles of cuisine classique were formalized by An- tonin Carème’s Philosophical History of Cuisine (1833) and Auguste Escoffier’s Culinary Guide (1903). The main characteristics of this cuisine type, as described in Table 1 include the use of ingredients like high game, shellfish, cream, poultry, river fish; a service organized through the saucepan, with the waiters cutting and serving the dishes; very long menus containing all the classic dishes.6 Nouvelle cuisine emerged in the late '60s as an alternative approach to food. “The modern usage can be attributed to authors André Gayot, Henri Gault and Christian Millau, who used nouvelle cuisine to describe the cooking of Paul Bocuse, Alain Chapel, Jean and Pierre Troisgros, Michel Guérard, Roger Vergé and Raymond Oliver, many of whom were once students of Fernand Point”.7 Its main characteristics, described in Table 1 in- clude: the mix of old legitimate ingredients/techniques with new techniques/ingredients; service through the plate and under a “cloche”; very narrow menus in which the menu of the day is offered.