Page 120 - MYM 2015

Case: Nestlé
Business Model Innovation:
the NESCAFÉ AMBASSADOR Program
Innovation does not occur only in the eld of technology. The creation of new business systems, changes to society and the way people work,
and the opening up of new markets can also be considered forms of innovation.
NESCAFÉ AMBASSADOR is a program in which NESCAFÉ GOLDBLEND BARISTA soluble coffee machines (hereinafter referred to as Barista coffee machines) are sent free of charge to people who apply to become NESCAFÉ Ambassadors. The Ambassadors then set up the Barista coffee machines at their workplace, collect payments from colleagues, and place orders with Nestlé.
The program was rolled out across Japan in November2012, and by the end of February 2015, just over two years later, the number of applicants
had already exceeded 170,000.That number is still increasing day-by-day. It is not simply a scheme to sell coffee; it is a business model innovation that also helps to invigorate communication and create a sense of community at the workplace as our customers enjoy cups of coffee.
When examining how to expand the NESCAFÉ AMBASSADOR program, the rst aspect we considered was the fact that in order to turn the program into a sustainable business, we would need to make it a business model with a high pro t margin. To do this
we needed new and innovative ideas about how to redesign our business.
The NESCAFÉ AMBASSADOR concept was created roughly two years before the program’s nationwide deployment. Although NESCAFÉ was the leading
instant coffee brand at the time, NESCAFÉ still wasn’t considered a synonym for coffee because NESCAFÉ
was mainly consumed at home. With the aim of making NESCAFÉ synonymous with coffee, we made the decision to open up a café, NESCAFÉ Harajuku, in 2010. The café serves NESCAFÉ Regular Soluble Coffee, and quite a few customers are astonished when they try it and learn that it is NESCAFÉ. Even NESTLÉ employees, who supposedly know NESCAFÉs’ attractiveness best, are again reminded of the high quality of Regular Soluble Coffee and the strength of the NESCAFÉ brand, when seeing the success of NESCAFÉ Harajuku.
Then, in order to develop NESCAFÉ into Japan’s top coffee brand, the rst thing we turned our attention to was of ces. There are approximately six million of ces in Japan, most of those are small ones with less than 20 workers. Although there is a rmly established market for targeting of ce workers who regularly go out to buy coffee during their breaks, there were hardly any companies selling coffee directly inside the of ces themselves. If we were to set up our Barista coffee machines in such workplaces, NESCAFÉ Ambassadors there could tell their colleagues about the machine and how good the coffee tastes. Even though this
is an attractive market, it is relatively unlikely that price competition will occur there, and that is why we decided to focus our attention on of ces.
120 I October 2015