Fostering Student Innovation

Posted on Thursday, June 2, 2011
Categories: 2011 Summer Speakers, strategy, summer fellowship

By Avery Faller

Who: Ashok Vasudevan
Company: Preferred Brands International

“Every business should be global,” Ashok Vasudevan, CEO of Preferred Brands International boldly stated at the start of his talk to the summer fellows yesterday.  Throughout, he spoke to both the practical and abstract sides of running a business using Preferred Brands International and its child company Tasty Bites as examples.  Ashok emphasized the importance of a strategy that identifies a megatrend and drives the need in building a business that will be relevant both today and 15 years down the line.

Strategy

Ashok broke down the process of building a business into three parts: Strategy, Process and Execution.  “Strategy,” he said, “is an integrated set of choices about what an organization wants to accomplish, where an organization will play, and how it will play.”  Strategy does not necessarily depend on certain people, but rather can be built into the DNA of a company from day one.  That being said, everyone in a company should understand a company’s strategy.  Ashok has implemented a practice at Tasty Bites where department heads carry around a “Tasty Bite Spice Card” at all times.  Much like a Balanced Score Card, managers write down their branches’ annual and quarterly goals in one sentence or less in addition to their branches’ goals for three years out.  Ashok believes that this helps his employees stay focused on the companies’ strategy both in the short and long terms.  

A good strategy can take advantage of valuable resources which are created by the convergence of three trends in a market: a scarcity, a demand, and an appropriability, which intersect to form the “Value Creation Zone.”  In Tasty Bite’s case, there was a scarcity of products in the markets of natural foods and special dietary needs.  Most vegetables came frozen, diminishing their taste, so Tasty Bite worked to develop a series of pouches which enabled vegetables to have an 18-month unrefrigerated shelf life.  At the same time, the demand for specialty foods has risen dramatically in America in the past 10 years.  This is due to two trends: more and more teenage girls are becoming vegetarian and at the same time Americans are eating more cuisines per week than any other nationality.  The appropriability of these fast cooking meals is also on the rise.  As more women in America joined the workforce the average time spent cooking a meal dropped from 48 minutes in 1995 to 12 minutes in 2011.

By recognizing this series of converging megatrends Ashok was able to develop a product that would be successful its first year and whose need would continue to make it successful over the coming decades. 

The Takeaway

Building off of the practical examples and abstract theories that he discussed throughout the morning, Ashok stressed that the best businesses are based in the real world.  “Concentrate on building the business and not the business plan,” Ashok said, pointing out that although a business will flow into a business plan, a business plan will not flow into a business as the real world can strongly influence a product.  So while it is key to have a vision and a strategy while building your business, make sure that you build a business that is based in reality and not just on paper.