Eureka Case 30 min Undergrad

Open Formula

You are Beatriz Macedo-Linhares, 48, Chief Innovation Officer at Raízes Cosméticos, a Brazilian botanical personal-care company. For twenty years every product was invented in your own lab. The lab is still excellent. It is also two product cycles behind the market.

The situation

Raízes Cosméticos — R$ 600M in revenue — built its name on proprietary formulations from Amazonian and Cerrado botanicals. Its 40-chemist lab does everything: it discovers the ingredients, develops the extraction science, formulates every product, designs the packaging, runs the claims testing. Nothing leaves the building until Raízes invents it. That closed model is the brand's story.

It is also why the pipeline has slowed. Global majors run open-innovation networks — contract labs, ingredient-supplier R&D, university partnerships, crowdsourced problem-solving — and launch two or three products for every one of yours. Nimble indie brands buy formulations off the shelf from contract labs and move even faster. Your CEO has asked one question: should Raízes open up its innovation — and if so, how far? The leadership offsite is in three weeks.

Your job in this case: map where Raízes' innovation work actually sits, model what opening up does to the pipeline and to the moat, and commit to the innovation model. The choice sounds like a question of identity. It is really a question of sorting.

The decision

Which innovation model does Raízes adopt?

  • A · Stay closed, invest in the lab
  • B · Go open across the board
  • C · Open selectively, by problem

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