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Ne w Business Design 75

ponents was not entirely synchronized. For instance, T-DISCS
that were supposed to be available in Best Buy and Whole
Foods locations at launch didn’t reach the shelves until well
after Tassimo units had been delivered to early customers.
While Kraft eventually ameliorated these issues, recognizing
after the launch the additional complexity of supporting the
product in the market, it ended up reporting a $245 million
noncash pretax impairment charge to recognize lower utiliza-
tion of manufacturing capacity.
To the company’s credit, Kraft is standing by Tassimo and
in 2008 launched a next-generation high-end unit with its Ger-
man partner Bosch. One wonders, though, whether paying
more attention to the components of the business system
beyond the product would have enhanced both financial per-
formance and customer satisfaction.
Tassimo illustrates the notion of business design. More than
just a new product, Tassimo required new business thinking at
Kraft. The company recognized this in its planning and launch,
but it learned later how different a truly new concept can be,
even if it seems quite compatible with a company’s core busi-
ness. It is often difficult for companies to look at how they typ-
ically operate, as this is in some ways what has made them
successful. Whether it involves going to new buyers, as in the
Tellabs case, or managing the supply chain differently, as we
saw from Kraft’s experience, business design means keeping
all aspects of the business system in view as we bring new
opportunities to life.

New Business Design in Action

We propose that new business design be approached as a
rational process. We aren’t advocating overbearing structure,