BUS4001: Managing Innovation - Hello Fresh Case Study and Analysis

This report examines the innovation strategies of Hello Fresh, a meal kit company. It begins by describing the Diffusion of Innovation and Schumpeter's Theory of Innovation, and how Hello Fresh applies these theories to its business model. The report then explores the historical development of Hello Fresh, from its founding in 2011 to its expansion and market position. The analysis covers the company's products, including meal kits and wine subscriptions, and its efforts to reduce food waste. Finally, the report recommends possible future development pathways for Hello Fresh, considering consumer trends and sustainable practices. The report concludes with an overview of the company's innovation journey and future prospects.

Managing innovation

Table of Contents
INTRODUCTION...........................................................................................................................1
1) Describe the innovation theories which is suitable for selected company..............................1
2) Explain the historical development of products or services of organisation...........................3
3) Recommend possible future development pathways of products or services of the
enterprise. ....................................................................................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The term innovation is defined as the formation, growth and changes of a new goods or
services and process with the purpose of enhancing effectiveness and efficiency in order to gain
competitive advantages (Bahl, Lahiri and Mukherjee, 2021). This is to introduce and invent
products which create value which end users will pay of their purchasing items. Managing
innovation leads to develop clear direction for the development of performance and bring new
products in market place in order to achieve organisational goals and objectives. Hello Fresh is
considered in this report. This organisation is a type of public traded company in a meal kit and
headquarters is in Berlin, Germany. However, the founder of Hello Fresh are Dominik Richter,
Thomas Griesel and Jessica Nilsson as these people are CEO and COO of enterprise. In 2011,
they launch their entity for the launching of their business. They manage and operate their
business in United Kingdom, Belgium, France as well as Australia. The revenue of this
enterprise is 2.01 billion. However, the number of employees work in their entity are approx
5000 which helps them to perform their work effective and efficiently. This company offer
products such as meal kit and deliver their services to each and every final users to their front
door. This report includes innovation theories, historical development and future development
pathways of products or services in selected entity.
1) Describe the innovation theories which is suitable for selected company.
Innovation signifies to build new opportunities in market to increase the profitability and
productivity in order to remain competitive in market. It allow them to develop better quality of
products in market to meet satisfaction of customers which helps them to fulfil needs and
demand of them. However, this helps them to improve productivity, decline costs, develop the
strong relationship with ultimate users in order to attract them to buy the goods from them. When
company is using innovation and invention in their business activities and process which helps
management to plan the strategy as it saves time and efforts as well as the resources (Biemans,
2018). Administration of Hello Fresh is in better position enhance their supply chain which allow
company to improve as well as develop audience experience which helps them to know about the
taste and preferences so that they can develop next recipes based on their wants. There are
different theories of innovation such as radical sustaining, radical disruptive, incrementally
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sustaining as well as disruptive, diffusion and Schumpeter's theories. However, the best
innovation theories which is adapted by Hello Fresh which are mentioned below:
Diffusion of Innovation theory: This theory is developed by E.M. Rogers and is
launched in year 1962. This theory explains about the new ideas and technology which helps
them to spread the knowledge of their innovation to their new as well as existing users. The
theory signifies to identify and understand the marketers to introduce new products or services in
market place. Thus, this helps them to know which type of items they want to satisfy their desire
and needs (Brem, Tidd and Daim, 2019). There are five categories of diffusion of innovation
theory such as innovators, early adopters along with majority, late majority and laggards.
Innovator is the one who first acquire products and services in market. Early adapter is the one
who want to observe the review of goods. Early majority teat the things before purchasing. On
the other hand, laggards are last to adapt the new goods in market. Hello Fresh can adapts this
theory as this helps them to identify and understand the upcoming trends and know the taste so
that they can make recipes which is distinct from their competitors in order to develop
performance and profitability in their business. This is the method by which manager of Hello
Fresh focus on acceptance of consumers towards their organisation.
Schumpeter's Theory of Innovation: This is the theory is proposed by Joseph A.
Schumpeter which signifies that they work by success and growth in order to gain more profit by
successfully introducing new products or services. It states that it introduce new ideas to develop
the performance of business. This is the theory which states to minimize costs of production and
maximize the demand of their goods which build interest of end users to buy products from their
brands. This innovation has two categories in Schumpeter innovation theories in which first
category involves that process which decline the production costs such as launch of new
technique of presentation, introducing new automation machines and equipments as well as
adapting new processes in their business activities and operations (Bucic and Singh, 2018). On
the other side, second category signifies that organisation launch different types of activities
which increase the demand of goods. For example, of this category are development and
implementation of better quality services and products which helps them to allow making
different design of goods to remain in competitive position. In context to Hello Fresh, supervisor
can launch their distinct meals to serve their consumers either by reducing cost of production and
maximize the demand of items in order to gain more profits from their rivals.
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From the above discussion, it is evaluated that manager of Hello Fresh has followed
Schumpeter's Theory of Innovation as this helps them to introduce and update new products by
launching various veggies, meat and low calories foods. In COVID pandemic they sell hygiene
meal to their customers which helps them to protect their health which lead to increase in sales
and revenue in business (Choo and et.al., 2021). As well as they can open new market for their
food with the latest raw materials and goods. The innovation of Hello Fresh is that it raise the
demand in the pandemic as they are restrictions for people to go out from their home so this is
the industry which sell their products to them at the door. They produce and manufacture their
products as the prepared and ready products to serve their customers best quality services.
2) Explain the historical development of products or services of organisation.
The historical development of Hello Fresh is that it is established in year 2011 by
Dominik Richter, Thomas Griesel and Jessica Nilsson in Germany. While starting their business
they deliver their products to ten users as this enterprise is the one who sell their meal kit in
sector. The investors of this organisation is Rocket Internet which provide funds and resources to
the brand. Afterwards, they expand their business activities and operations in the other countries
and nations such as Australia, United Kingdom, United States as well as Netherlands in order to
develop their process in industry and increase profitability and productivity. They deliver one
million meals in a month as with these they raise huge capital and funding in their business in
year 2014.
In 2015, they eliminate all the Initial Public Offer because for the brand image and value
of their business. In the month of September, they make funds of 75 million and make their
company as unicorn which means the privately owned start-up by enterprise. Thus, this helps
them to grow their performance and build success in order to gain higher profit and attract large
number of consumers towards Hello Fresh brand. In year 2017, they announced Initial Public
Offer to collect $300 million on Frankfurt Stock Exchange. Hello Fresh has many competitors in
United Kingdom such as Blue Apron as this enterprise has huge market structure along with
capitalization in industry (Gasparin and 2021). However, Hello Fresh has obtained Green Chef
as an organic food which provide meal kit products in the different industry sectors. They also
acquired Chefs Plate in Canada in order to increase profitability and productivity which helps
them to expand business process and activities.
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The business model of Hello Fresh is to develop different types of ingredients for the
meal and they provide their ultimate users to take that meal and cook the meal based on the cards
which is given to users with their meal. This cooking process take half an hour to cook. They
introduce new service which service better quality products to its customers in United Kingdom
which provide them a wine subscription services that is different from their competitors. They
launches new products such as the consumer can make there food in 20 minutes which is called
as “Rapid Box”. There are various issues such as certified organic meal which includes vegan
and Gluentenfree menus with the Keto diets (Harmsen, Haan and Swinkels, 2018).
With the help of the innovation theories they develop high quality products or services
which assist them to produce and manufacture new recipes and make instant food to cook and
eat. Recently, they introduce a solution which affect the economy as well as global problems.
However, the minimization and elimination of food waste as this process is the main focus of
business model which is improving and building business performance. Hello Fresh reduce their
food waste by purchasing based on real demand as they apply the right quantities of ingredients
in accordance with the users needs and wants which they have ordered . In year 2020, they have
reduce the food wastage approx 65% in their process. Therefore, they provide them knowledge
about not wasting food in their homes as well as in restaurants. They follow best principle which
is to share food such as when the food are not serving to their final consumer in United
Kingdom. Management of Hello Fresh conduct research project and apply theory to introduce
new instant food items to attract and retain new as well as existing products. Hello Fresh main
objective is to give each and everyone healthy food along with the quality ingredients to enhance
the chief to make special type of food.
The model signifies that they allow them to make that much of food is going to take
place. However, they created many recipes to make their business success and growth and utilize
the skills as well as knowledge of their professional chefs to make their food popular in all over
the world in which manage and operate their business. In this food, they only make those food
packages which the consumers has to make with the instructions which is given in their packets
or recipe cards (Huang and et.al., 2020). The main thing of these recipe is that they create recipes
with the special ingredients in a week approx they make 19 new recipes. Ultimate users want to
improve customer experiences which help them to improve brand value and image. The recipes
all However, the Hello Fresh provide directly to its consumers as they do not add the prices of
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the ingredients in their packages. They uses various sources to remove the negative impact on
environment. Hello Fresh makes their money by imposing a weekly fee which is being
subscribed and serve as well as deliver their food to its end users. The prices of goods along with
their kit of meals based on their ordering level of consumers in their selections of products.
3) Recommend possible future development pathways of products or services of the enterprise.
The future trends such as consumer attitude, techniques of delivery methods used to
attract customer in order to meet their requirement to fulfil their demands and wants. However,
the development in future as they have reduce carbon emission from 9.3 to 4.1 grams per euro
revenue and the other emission which is remained are offset effectively and efficiently. They
also planning the strategy for the reduction of food waste in their process. They also expand
their plans of sustainability from year 2020 in order to accomplish the future trends and helps
them to achieve the goals of sustainability development. After COVID pandemic they provide
safe and healthy to fresh ingredients to their clients so that they can make more purchasing
decisions towards their brand. The main purpose of Hello Fresh is carbon reduction which is the
strategy which helps them to improve the performance of their business. Thus, Hello Fresh is the
first global carbon neutral meal kit organisation and allow them to reduce the emission in year
2021. Thus, it improves the efficiency in operations and decline the carbon emissions as well as
implement the various energy sources such as renewable and conventional energy. Management
of Hello Fresh has taken some initiatives as they will continue there process of reduction of food
waste and and emissions in the process and procedure activities and make 60% per euro revenue
by year 2022 (Kerzner, 2019).
They have adapted business model in which they have to decline their wastage of food in
which all it improves the operational efficiency of their business. From the year 2019 they are
successfully implementing and updating their strategy to reduce the large amount of wastage as
per the euro revenue. In their food processing they are taking as well as making their production
in order to gain competitive advantage. There are different tools and techniques which manager
of Hello Fresh are reducing such as that they have improved efficiency by managing and
handling supply chain management, improves and give solutions for the improvement of
packaging their products with the recipe cards which give instructions to make recipes in 20 – 30
minutes (Tan, 2020). In addition to this, they continue cooperate with their supervisors and
research partners. Hello Fresh provides flex subscription service which defines about the
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products which receive a packet box each and every week but there is another policy that is to
eliminate that week and continue to their orders. They offer various services such as when Hello
Fresh ship their boxes they install their cooler box in it so that they can freeze products over a
long period of time.
In addition to this, they keep an ice pack with them to refrigerate their products to keep
them safe and secure in order to gain overall performance and profitability (Mousavi, Bossink
and van Vliet, 2018). Meal as well as fish are packed with the safety which are not waste and
kept the fish and meat in a vacuum sealed bags. However, Hello Fresh packed in a colourful bags
in that they pack the all the ingredients in their packages. The future development of Hello Fresh
is to double their producing and manufacturing of their goods in the upcoming year and the main
objectives of them is to maintain the sustainability in their products as well as in their business.
They have to increase their revenue and growth for the development of their business to
accomplish the objectives and goals and increase the revenue from 20% to 25% in year 2021. In
COVID pandemic, they are increasing their sales and developing their performance as they are
one who work in meal kit sector as they are increasing profitability as well as productivity in
their business organisation. They are targeting many ultimate users to the large number of people
in the brand in order to increase their brand image and reputation of Hello Fresh (Ombrosi,
Casprini and Piccaluga, 2019). This allow them to improve customer the customer experience
which help them to make more recipes and innovate many products as well as ingredients to
make customize menu, deliver their foods in an appropriate and defined manner which s guided
by their authorities and they have one option to skip or cancel their orders in a week. In the
future, management of Hello Fresh are making their ingredients which are affordable to each and
every person as it helps them to develop more sales in order to enhance their meal kit
subscription.
Hello Fresh is innovating new and best quality services which they have to make the
strategy and planning based on their customer needs and wants. Due to COVID crisis, they are
producing healthy cooking as well as fresh meals with the different types of meals and serve
their clients in order to gain their interest in their brands. Hello Fresh has contracted and
partnered with the Yumble to introduce to provide packed meals for the young people (Pandit
and et.al., 2018). In upcoming years top management are introducing the prepared meal which is
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suitable for the kids and children to eat food as this is best service which is innovated in their
business activities.
CONCLUSION
From the above discussion, it is concluded that the innovation is the important method of
effectively accomplishing goals and objectives of business by proper planning and making
strategy. With the help of managing and controlling the innovation in day to day process which
lead to maximize in productivity and profitability. This helps them to increase there market share
in order to attract investors to invest in their organisation for the success of their business. But
there are many issues which arise in innovation such as consumer behaviour as well as their
changing trends in their business process. There are various theory of innovation such as
disruptive, diffusion and incrementally sustaining as well as and Schumpeter's theories. Thus,
Hello Fresh has followed Schumpeter's theories which helps them to operate their business in
which they are situated. The historical development of Hello Fresh is that they make meal kit
subscription which is the one who sell in the industry as they are prepared and packed. The
future development pathways of the Health Fresh is that it reduce the carbon emission and
remove the food waste which boost the sales and revenue as well as gain the competitive
advantage to survive for long term.
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REFERENCES
Books and Journal
Bahl, M., Lahiri, S. and Mukherjee, D., 2021. Managing internationalization and innovation
tradeoffs in entrepreneurial firms: Evidence from transition economies. Journal of
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Biemans, W., 2018. Managing innovation within networks (Vol. 7). Routledge.
Brem, A., Tidd, J. and Daim, T. U. eds., 2019. Managing Innovation: Internationalization of
Innovation (Vol. 34). World Scientific.
Brem, A., Tidd, J. and Daim, T. U. eds., 2019. Managing Innovation: Understanding and
Motivating Crowds (Vol. 32). World Scientific.
Bucic, T. and Singh, G., 2018. Apple watch: managing innovation resistance.
Choo, A. and et.al., 2021. Introducing goods innovation, service innovation, or both?
Investigating the tension in managing innovation revenue streams for manufacturing
and service firms. Journal of Operations Management.
Gasparin, M. and et.al., 2021. Business as unusual: A business model for social innovation.
Journal of Business Research. 125. pp.698-709.
Harmsen, J., Haan, A. B. and Swinkels, P. L., 2018. 3. Managing innovation. In Product and
Process Design (pp. 17-74). De Gruyter.
Huang, H. and et.al., 2020. Managing intellectual capital in healthcare organizations. A
conceptual proposal to promote innovation. Journal of Intellectual Capital.
Kerzner, H., 2019. Innovation Project Management: Methods, Case Studies, and Tools for
Managing Innovation Projects. John Wiley & Sons.
Mousavi, S., Bossink, B. and van Vliet, M., 2018. Dynamic capabilities and organizational
routines for managing innovation towards sustainability. Journal of cleaner production.
203. pp.224-239.
Ombrosi, N., Casprini, E. and Piccaluga, A., 2019. Designing and managing co-innovation: the
case of Loccioni and Pfizer. European Journal of Innovation Management.
Pandit, D. and et.al., 2018. Disruptive innovation and dynamic capabilities in emerging
economies: Evidence from the Indian automotive sector. Technological Forecasting
and Social Change. 129. pp.323-329.
Tan, S. F., 2020. Managing Innovation: Technology, Consumer and Sustainability Perspective,
and the Challenges. In Leveraging Consumer Behavior and Psychology in the Digital
Economy (pp. 205-216). IGI Global.
Zhang, S. K., Tang, T. Y. and Wu, F., 2021. The ambidextrous patterns for managing
technological and marketing innovation. Industrial Marketing Management. 92. pp.34-
44.
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Online:
Introduction to Hello Fresh. 2021. [Online]. Available through:
<https://wiki2.org/en/HelloFresh>
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