Case study notes

Case study questions

To a large extent it is guilty. This is because of the following reasons: First, it did little to consider potential threats from replacement products. Second, it did little, if any, R&D. Third, it also allowed its quality of production to deteriorate and this helped to contribute to the call for a better product.

This is a key question and should make students realise that sometimes the consumers do not get what they want and sometimes the industry decides what it wants. In this case, the big buyers – supermarkets – have influenced the decision as they demand a better-quality closure. In addition, the new worldwide wine brands are also demanding a better-quality product and these two factors have changed the industry.

Initially, synthetic was more expensive but economies of scale have brought the cost down. But the initial driver was quality and an inferior product from the cork industry.

Technology forecasting is undertaken in industries that operate at the forefront of technology. However, the cork industry should have been able to recognise that a potential threat might be forthcoming from the synthetic cork producers. Also, competitor analysis might have been able to provide an early warning signal of a competitor threat.

This is a very difficult question to answer, but students should start considering what other similar industries spend. This may provide an indication on level of expenditure. Clearly, at present, very little investment is made in R&D, but that is part of the problem. A starting point would generally be agriculture industries. Also, the trade bodies of these industries often invest on behalf of the industry. For example, the UK cereal and grain industry spends money on R&D on behalf of its members who are grain and cereal farmers.

Here, students need to think about how R&D can help a business (see Chapter 8). R&D should help the existing businesses compete, develop new businesses and finally provide access to new technologies of the future. Diversification would be one possibility. The questions that arise are: Where else could cork be applied? What are the properties of cork that could be exploited by other products/markets? Another area could be improving the quality of the existing products. Finally, the analysis includes what opportunities exist for the product within other products and what strategic alliances can be developed.

Some lobby groups have been arguing that the synthetics have been causing the destruction of the cork forests. But the issue is slightly more complicated as the forests that were planted for harvest were not natural in the first place. Secondly, one may argue that the forests could remain – it does not necessarily mean that they will disappear. Also, cork could be used for other applications.

7. What role have the wine buyers (end-users and others in the supply chain) played in contributing to the fall in demand for cork as a closure?

It is the wine buyers – supermarkets – that have played a crucial role in the demise of corks. Supermarkets did not want customers bringing back faulty bottles of wine. Their margins were so small that they could not profit from large numbers of returns. Professional buyers/tasters also preferred screw caps because if you are opening a large number of bottles a day it is simply easier to open a screw cap.

Many innovations are applications of existing technology, in such cases this part of the framework may not be used. In the Gore-Tex case, the new science is the creation of PTFE but this was back in the 1960s.

As with so many innovations this is where most of the technical effort takes place. Gore has spent the past 50 years applying PTFE to many different applications and they keep finding new uses for the technology. The stretching of PTFE to create lots of tiny holes in it led to the breathable membrane- maybe other firms would have seen this as a fault and thrown the technology away. It is the curiosity in the R&D scientists which often leads to new product ideas.

During this phase, the technology is adapted to meet specific needs of customers. In this case Gore simply provides the fabric in square meters to different manufacturers to incorporate into their products. There is little adaptation of the technology. What is important are the negotiations on licencing and using the Gore-Tex brand. Clearly, Nike, Berghaus and the others would want to use the patented membrane, but once the twenty years of the patent expires they no longer have to buy from Gore and indeed some firms do not. It is interesting that some big brands like Berghaus have their own breathable membrane which they use in some of their products and they also continue to use Gore-Tex in other products. Clearly, buying the licence is a crucial part of the business model for all concerned.

As Gore is selling business to business this part of the innovation cycle is limited for Gore but there would have to be educational effort to explain the product to the end customer. Gore would probably work with its partners, Nike, Berghaus, etc., to develop such literature and merchandise.

Sometimes this can be a single individual; in this case it was the firm W L Gore. There may have been a project team involved and there may have been an individual project champion.

This is the challenge for the industry. Consumers clearly still enjoy cork and the theatre of using the corkscrew, the pop, etc. However, the synthetic still provides this. Some wines seem to survive longer with cork as a closure, so this is something that the industry can develop. It also needs to improve the production quality. This is largely a marketing challenge, but it is one that calls for creativity and innovation.

At first glimpse, it would seem the Zork offers all the benefits of the cork and the screw cap. It provides the theatre and can be resealed. This would seem to be a major challenge, but it is expensive.