What can business teach potato chips?
America and the developed world with cheap snacks, comfortable, saturated packaged. These functions are delicious, sweet, salty chilled, heated, or styles and presentations. None is as popular and ubiquitous is that the potato chips.
The potato chips in America was in the past, a mother and very local pop-ups until 1930. The final product, the potato chips that are very difficult to process it, ship and store, without advanced packaging techniques.Before the invention of the coated components in bags, the chips were manufactured and sold in the local cuisine in some local stores, usually barrel. Once the barrels were opened, and the shop owner took the goods sold to the consumer becomes obsolete in the air, the barrels and chips. Consumers of these chips was taught at home to soften the chips before serving out the lack of freshness heat.
This type of trade is sufficient for a model of local business serviceBut do not allow for economies of scale or national distribution. In addition, each city and region has a favorite kind of chip that enjoys developing local popularity. The occasion was ripe for an entrepreneur to consolidate the market and the snack business significantly and to revolutionize the category.
Entrepreneur, was Herman Lay. Mr. Lay was a route for the seller Barrett Food Company in Atlanta. Barrett sold the brand of chips in aassigned area, in Nashville, TN in 1930. Was a natural talent for sales, developed and grew quickly and soon took over its territory provides transformational work for him. The owner of Barrett noted his success and has offered to sell Herman Lay the whole thing. Fought together provide the financing. This was at the height of the Depression. Somehow, a combination of loans, savings and preferred shares mounted and the price of $ 600,000 on the sale was guaranteed.
NewCompany immediately changed the name to the H. W. Lay, Company. Mr. Lay recognized that mechanization was necessary to expand his distribution and lower costs. He invested every dollar of profit in self-contained potato processing machinery that took a whole potato and produced a finished chip. The crisps were then packaged in the new non-permeable bags that insured freshness for the product as they were shipped and sat on store shelves until purchased and consumed.
The onset of World War II proved to be profitable for the savory snacks industry. Chocolate and sugar are strongly during the war and is rationed products with these ingredients become scarce and expensive until the war was complete. Salt, but it has never been rationed and the availability of savory snacks made them the preferred choice of consumers for a quick treatment during the war. Moreover, these savory snacks in large quantities were consumed by the troops.
Where chips and snacks, has become ubiquitouson the shelves in the southern United States during and after the war. The company has bought small, under capitalized competitors and expanded aggressively. At the end of the HW Frito Lay Company, the company bought in San Antonio, Texas. Frito had perfected the production of a chip of grain that is eaten in large quantities on that day. The combination of Frito-Lay company has the largest national producer of salty snacks.
Frito Lay and a number of regional brands dominated the salty snack categorythrough the postwar period. The simple potato chips was essentially unchanged in appearance, taste and texture, with the exception of the addition of new flavors such as garlic, spring onions and bar-b-cue. The industry seems to be located in a mature, slow-growing category have, with limited opportunities for new offerings. But the company more entrepreneurial consumer goods in the world, Cincinnati, Procter & Gamble (P & G) is always looking to cultivate and grow new niche product. Theyhad their eyes on corporate and snack industry, in particular, P & G's management felt that they had detected a crack in the armor of the manufacturer of potato chips.
That crack in the package. Potato chips were sold from 1930 until the end of the flexible, elastic bag. While this freshness insured has a broken question. Consumers who participate in discussion groups, "said P & G does not like the small, cracked, fragments of chips, which settled in the bottom of the bags. Research andDevelopment at P & G has begun working on a response to the problem.
P & G is famous for his creation of brand management. Brand management allows the team manager to assign each product to treat your brand as a stand-alone business and profit center for the company. The success of this management style is legendary and has been studied in business schools and adopted by many other companies. The system of brand management encourages each team aggressively pursueAdaptation of new products and inventive.
P & G's research and development for the group of food companies have been working on the project of the chips for the entire 1960th Your answer to the problem created a wonderful example of how an entrepreneurial society, or individual, can benefit enormously from a product innovation convergence. The innovation, a billion-dollar mark has, and revolutionized the snack marketing, was the introduction of Pringles.
P & G, of course, not invented chipsor sweet snacks. However, the adaptation of the classic potato chip into shape, taste and presentation creates a new, blockbuster brand that is sold for millions of consumers around the world every day.
Pringles, 42% of the potatoes. They are formed by mixing potato flakes with liquid mud and then dried to each chip in an oval shape nearly identical curves perfectly crispy. Pringle's genius lies in the cylindrical tube made of cardboard for P & G invented by Fredric Baur. The Pringle Chipsare stacked in the tube, so there is virtually no breakdown of the individual chips. Tube closure is a breeze, the plastic cover. Pringles test was launched in 1968, the market has been and inspire consumers. The product has been continuously improved and more than 40 variants have been included in the original style. Many of these flavors are sold in certain countries or regions to taste to the preferences of the dominant jalapeno in Mexico and Louisiana Cajun.
Entrepreneurs are driven to seek andcreate "different products. The invention of the disturbing" different ", as the lamp, the cotton gin or the combustion engine the" Holy Grail "who are trying to perfect these visionaries and a springboard for fame and fortune. However, most cases of and create realistic path to success for an improved product niche. Discover identify existing products and technologies, and needs that are not covered by these products. The creation of a new "convergedProducts ", add only the additional benefits and improvements in the implementation of the small size can cause huge profits.
Procter & Gamble has built the largest consumer goods companies in the world and one of the most admired buildings innovation, the search for employment opportunities is the "divergent" and "convergence". Pringles is a great example of a "unanimous" successful innovation. The story of P & G is the examples of new convergence product full of "success. The "new product" Innovationshave become less and harder to discern and bring to market. This is a great company, the opportunities, wherever they should find.
Farmers should take note of this process. Frito Lay is now owned by PepsiCo. The evolution of this great brand thanks to the hard and simple vision of HW Lay. He took a simple product that has undergone a pattern of poor distribution, and turned the opportunity to reach into the country. P & G has the problem that breaking chips into bags and taken byInnovation in formulation and packaging creates a huge success around the world with the introduction of Pringles. P & G and HW Lay are examples of the elegance of simple ideas. Remember the old axiom: KISS = Keep It Simple Stupid! The best ideas are often the source.