Management of Corporate Innovation at Fonterra Co-Operative Group Limited

Running head: CORPORATE INNOVATION
Corporate innovation
Name of student
Name of University
Author note

1CORPORATE INNOVATION
The essay demonstrates the management of corporate innovation considering the
business organisation named Fonterra, which has managed to follow the seven rules of
innovation for determining the competitive profile and ensure application of open vs. closed
innovation to improve business functioning. The assignment will also include the various
concepts and innovation theory that can facilitate the organisational practices and methods,
furthermore ensure management of good decision making skills (Amore, Schneider &
Žaldokas, 2013). A Blue Ocean strategy for the organisation will also be implemented with
proper consideration of the corporate environment, furthermore to ensure improvement of
business performance and achievement of positive business outcomes with ease and
efficiency too.
Fonterra Co-Operative Group Limited is a multinational dairy corporation owned by
more than 10,500 farmers in New Zealand and has been responsible for the management of
dairy exports long with the higher generation of revenue that accounts for more than NZ$17.2
billion. It is one of the largest dairy co-operative in New Zealand that has manage to deliver
fresh quality dairy products to cater the needs and preferences of the clients with ease and
efficiency (Fonterra.com ̧2019).
The innovation aspect of business is critical to the success of the organisation in terms
of growth, revenue generation and for attaining competitive advantage in business. According
to Weiblen & Chesbrough (2015), to facilitate innovation, various components are considered
including the leadership, implementation of strategies, processes, resources, performance
metrics, and measurement of performance and incentive rewards. The seven rules of
innovation are to exert strong leadership on the innovation concepts to facilitate moving
in the right direction along with making effective decisions too, integration of
innovation aspects into the business ideas, matching the innovation with the business

2CORPORATE INNOVATION
strategies, managing the natural tension between creativity and value creation and
preventing the organisation’s antibodies to affect the business functioning (Weiblen &
Chesbrough, 2015). The other rules of innovation include formation of an innovation
network and developing the right metrics along with providing rewards for keeping
them motivated and encouraged largely.
The need for management of changes has changed largely at present, which has
created scopes for and opportunities to improve the research and development activities that
can facilitate innovation and at the same time, meet the changing demands and expectations
of clients. As stated by Chang et al. (2015), the open innovation management has focused on
the incorporating of knowledge and skills into the knowledge management system whereas
the closed innovation is enabled within the self-contained business environment with the
management of human resources and financial resources for responding to the changes
effectively within the marketplace (Chang et al., 2015).
The closed innovation is applied at Fonterra Co-Operative Group Limited by enabling
innovation within the company itself through the generation of ideas and concepts related to
the marketing activities. It has not only been done through the management of marketing
activities but also by committing to the high standards of sustainability to become more
transparent and proactive in terms of monitoring the products that were sourced both locally
and globally. The closed innovation is facilitated by committing to the delivery of high
quality daily nutrition through the assessment of nutrition problems and maintaining good
production to ensure that the nutritional deficiencies and obesity problems experienced by
people are overcome (Chemmanur, Loutskina & Tian, 2014). The company has followed the
voluntary codes for fulfilling the social responsibilities and by integrating those in the
advertising and marketing of food and beverage products in Australia and New Zealand. The