Corporate

Strategy November 9

El Bulli: The Taste 2010

of Innovation
This case study examines the Business Level strategy
and of El Bulli – Worlds’ Finest Restaurant – and it’s
owner Ferran Adria and examines the how innovation
and focused differentiation can help achieve success,
excellence by adopting an Open Business Model fueled
by ongoing Business Model Innovation –by innovating
value proposition through reconfiguration and
collaboration

Project Team:
Ajay Rana (2218854)
Arihant Jain (2218547)
Gita Babaria (2219230)
Saurabh Seth
Mithun Kannan (2218930)
 El Bulli: Taste of Innovation -A Case Study

Background:
“elBulli, the best restaurant in the world”. -- Restaurant Magazine, 2002, 2006, 2007,
2008 and 2009, and #2 in 2010

“While there are many exciting chefs throughout Spain, … the man who is redefining
haute cuisine into alta cocina is a prodigiously talented, self-taught Catalan Ferran
Adrià”. --- The New York Times Magazine, August 10th 2003

Chef Ferran Adrià’s - El Bulli, a Michelin 3-star restaurant located near the town of
Roses, Catalonia, Spain about 2 hours drive from Barcelona, is an outcome of exuberant,
unfettered imagination, hard work, persistence, and new, scientific ways of interpreting
age old traditions and recipes. It is pure creativity at work with the single minded aim of
taking food and eating experience beyond mere eating – it is about indulging not just six
senses but also tantalizing the sixth and creating strong emotions in the diner.

El bulli is unconventional in it’s thinking and breaks all rules –it is hardly accessible:
from the reservation to the car ride, It is limited in time space and guests capacity, open
for a very short time in a year. It does not seek customer feedback - - is also the opposite
of the new “design thinking mantra” of observing customers and then designing services
according to the gained insights.

Yet El Bulli has a long list of hopeful diners (about 2 million) who vie to be one of the
8000 customers that get served for the six months (50 each evening for six months). The
restaurant serves avant grade cuisine that is exclusive and authentic spirit contrasted with
“hi-tech” recipes, the goal is to create once in a life time experience – arouse the six sense
– by introducing the emotions.

During the time when El bulli is open to customers – it s manned a by an operational staff
of 60 people out of 30 are chefs in training who work in a 50,000 sq. feet kitchen
preparing a meal for 50 people each evening, at 250 Euro per person (a total of 2 million
Euro per season), despite being the best restaurant in the world it is loosing money.

Innovation process at El Bulli:

“Creativity Comes, first then comes customer… If you know nothing about what to
expect, it’s like magic” “Turn eating into an experience that supersedes eating”---
Ferran Adria

Elbulli does not repeat a menu as a result it has a new menu very year and to ensure that
there is constant innovation, they have adopted a creative process during the six months
that the restaurant s closed the Core creative team undertakes creative brainstorming,
traveling researching around the world. Divided in three groups, each presenting to the
others generating feedback and ensuring leading position in the molecular gastronomy
field and undertakes constant research for the new emotion through tastes and textures.
The goal is to achieve the unthinkable, the unseen and unspoken of!

Challenge: Does Innovation Work?

EL bulli has deployed a strategy of business Model innovation through a combination of
approaches. On one hand it has elements of Revenue Model Innovation and on the other
employs various approaches for Enterprise Model innovation:

Integration / specialization continuum

Integration requires execution of all business components across the enterprise while
specialization requires collaboration and partnering on selected non-differentiating
business components. Enterprise integration.

Collaboration and partnering

Organizations are redefining the extended enterprise as they seek collaboration in a
selected number of business areas/components and partnerships ranging from supplier
relationships to legal joint ventures – leading in some cases to value networks

From a Revenue Model Innovation perspective Ell Bulli is

Innovating value proposition through reconfiguration
“The opening of new, uncontested spaces generates a leap in customer value through
reconfiguration of competitive factors, creation of unprecedented value propositions and
completely new markets.” -- (Zaheer Travadi)

El bulli has created a complete new value proposition for the diners who visit el Bulli for
the chefs who work at El bulli. And resulted in creation of a new offering – Molecular
gastronomy and avant garde cuisine. It combines open innovation - where outside
organizations – other cultured countries techniques become the source of new ideas with
single minded focus on creating something new – in terms of technique and experience.

El bulli has redefined the extended enterprise as Ferran and El bulli seek collaboration
in a selected number of business areas/components and partnerships ranging from
supplier relationships to legal joint ventures – leading in some cases to value networks :

El Bulli has established following partnerships and collaborations:

A) Wth Suppliers:
a. from specialized foods –
b. and chemicals and equipments –
c. custom design china and silver ware and Glass ware
B) With other chefs and restaurants around the world
a.
C) Hotels – Creating and extended experience –
a. Hotel Elbulli – charges up 1400 Euros per night for an elbulli experience -
b. Co-branding agreements with other companies such as NH Hotels and
Nestlé
D) Consulting – to Enterprises and Food manufacturers
 a. Chips
b. Olive oil
Shares knowledge about creating oils, sauces and aperitifs with Borges, the
food manufacturer. Borges launched products that were co-branded by both
companies. Other companies can have access to these profitable resources,
principally its brand and its knowledge. – El Bulli has a long list of clients and
tie ups in this segment

E) Training Chefs and collaborating on new techniques - While this is not as

revenue earning Model as of now El Bulli gets to work with 30 Talented chefs
every year – who work for free and contribute greatly to the innovative process.

In addition El Bulli has following source of revenue:

F) Book Publishing and Catalog sales: It was a good source of publicity and sales
varied from 10000 units to 25000 units being sold at Euro 100 to 150 Euro.
G) Speaking arrangements and Public Appearances by Ferran Adria

Conclusion: / Response:
So even if El bulli - the restaurant looses money – it is not a problem as El bulli serves as
the R&D laboratory and like most R&D units of an organization are not expected be
profitable by itself but are suppose to generate the much needed knowledge for sustaining
other profitable areas. And indeed El bulli has achieved sustainable growth through
innovation and adopting an open business model. Constant innovation will also help to
create the differentiation with the customers for the El Bulli brand as such.

To quote Sandulli and Chesbrough: who in an article in the Universia-Business Review

titled, “Open Business Models: The Two Faces of Open Business Models,” said:

“..the company actively looks for new external sources of innovation in the world of
gastronomy. It closes for long periods of time with the goal of finding and absorbing new
ideas. That enables the restaurant to stay one step ahead of other restaurants that try to
copy its formula for success.”

And on the other hand:

“El Bulli markets its brand and its knowledge through a variety of tightly managed
relationships that have enabled its brand to penetrate business sectors far beyond the
typical business activities of a restaurant. So while the restaurant is not profitable, its
overall group of businesses does make money.”