Bush Boake Allen

Bush Boake Allen

Brief about the company:

Bush Boake Allen Inc. manufactures flavor and fragrance chemicals and aroma chemicals for the food, beverage, pharmaceutical, and household products industries. The flavorings, including essential oils, seasonings, and spice extracts, impart a desired taste and smell to a broad range of consumer products, such as snack foods, confections, soft drinks, and alcoholic beverages. The fragrance products appear in soaps, detergents, air fresheners, cleaners, cosmetics, toiletries, and related products. BBA's aroma chemicals are primarily used as raw materials in fragrance compounds. The company had operations in 38 countries.

About the Industry:

In an $11 billion industry dominated by trade secrets and not patents, flavors and fragrances accounted for about 80% of its half-billion dollar annual revenues, and aroma chemicals for the remainder. The Americas accounted for 35% of sales, Europe for 33%, and Pacific Asia for 16%

BBA operated in a field of over 300 competitors worldwide. Only a tenth of these, however, had significant multinational operations. Leading the industry was the US firm International Flavors and Fragrances (IFF), at three times the size of BBA, followed by the Swiss firm Givaudan Roure. The top nine global companies accounted for over three-fourths of this $11 billion world market. Although BBA enjoyed membership in this elite club, it held only about 4.7% world market share in 1999.

[pic 1]

Please sketch BBA's traditional flavor development process.  What are the roles of R&D, marketing and manufacturing? What is the role of customers and consumers?

1. A customer would request a flavor for a product it was developing, with the sample flavor to be delivered in seven days.
2. Marketing, management and flavorists would then decide about the customer’s needs
3. The flavorists would then work hard to ship out a sample in six days.
4. It might take three weeks for the salespeople to get the following feedback from the customer
5. This might lead to another couple of days of adjusting the flavor
6. Another few weeks might pass before the salespeople brought back further word from the customer
7. Final answer can be a “YES” or a “NO” as even if the customer liked the flavor, the final decision to source the flavor was based upon taste tests with end consumers.

Now characterize the proposed development process using Project Mercury technology.  How will more customer participation change the roles of R&D, marketing, and manufacturing? How could the new technology disrupt BBA's business model?

Project Mercury is that customers may develop flavors via the Internet. This would be facilitated through new flavor production technology and on-line ‘‘spidergram’’ software, spiderweb-like diagrams that flavorists used to graphically illustrate the varying quantities of different ingredients involved in a flavor.