Portland International Conference on Management of Engineering and Technology - PICMET 2006

Development of new competencies and practices the innovation management to

sustainable development: The study of Natura
Anapatrcia Morales Vilha, Ruy Quadros
Campinas University, Science & Technology Policy Dept., Campinas, So Paulo, Brazil
Abstract
Environment issues have induced firms to search and develop cleaner technologies and
production practices. This process has created new business opportunities, which are
related to sustainable production and to the conservation of the environment. This paper
aims at understanding the implications of innovation trajectories based on the
development of sustainable products and technologies for innovation management
practices and the related managerial competencies. The study explores the case of a
brazilian leading cosmetics manufacturer - Natura, through the search of secondary data
on the company and its industry; as well as the search of primary data by means of
interviews accomplished with professionals of the research and development, strategy
and marketing areas of Natura. The results show that the company presents a capability
of perception of the technological and market opportunities when developing products
for market niches not explored in Brazil, besides the effort for implementation of
routines entirely new in the company and the mobilization of resources and
competencies in its technological innovation management, such as strategic and
structural arrangements; relationship with the suppliers and the training of these;
technological competencies and knowledge sources; development of products and
research and development projects; and marketing strategy.
I) Introduction
The relationship between firms and environment was always complex and objective of
controversies, as well as being object of discussions in global levels; as we should call
"multi-interested" (society, government, articulations of international entity and the
competition) that direct and indirectly act in this kind of debate [27]. The environmental
subject turning the productive sector more susceptible for the ecological problems
made possible opportunities of businesses based in innovations for the sustainable
production [8].
Although it is recent and not consistent trend in Brazil, industrial companies are
beginning to change their view about environmental questions, changing from a reactive
approach into a more strategic and proactive one. That is an international tendency that
has been researched in the literature about the relationships between companies and
environment, in their economical, environmental and managerial aspects [20] and [29].
In that strategy type, the companies put the environmental question as a goal of
legitimate actions in their business. In addition, the environmental investments are seen
as a differentiation source of obtaining competitive advantages, such as improvement of
the corporative image, products differentiation, cost reduction, productivity and
innovation improvement through the re-engineering of several operational and
management practices.
In Brazil, one of the sectors that carries this kind of experiences is the personal care,
perfumery and cosmetics. An emerging tendency in this industry is that it constitutes

Portland International Conference on Management of Engineering and Technology - PICMET 2006

object of investigation of this paper. In Brazil some companies are incorporating

ingredients of the Amazonia biodiversity in their products. That more and more occur as
answer to the hard competition in the sector with the multinational companies, aims the
need to investigate how to obtain competitive advantages based on the innovation.
However, the companies that look for those ingredients in a sustainable way in their
innovation strategies are induce to diversify and to implement functions in the
management of that process.
Thereby, the objective of this paper is exploring the case of a brazilian cosmetics
manufacturer - Natura. The company adopts a strategy that we call proactive
sustainability", since it conceived a line of products and brands of cosmetics based in
the discovery, development and use of plants` extracts from the Amazonia, whose
extraction is made by local communities, contributing to the sustainable development of
the area.
The structure of this paper results from the doctorate research developed by Anapatrcia
Morales Vilha, through the secondary data searching based in the company and its
industry. Equally there was the search of primary data, obtained during interviews
accomplished in August and September of 2004, with professionals of the research and
development, strategy and marketing areas of Natura. Starting from a semi-structured
guide, those interviews treated of the innovation management of the company based on
technologies and sustainable products.
II) Sustainable development and innovation management
This section approaches the concepts of the sustainable development and the importance
of its assimilation for the companies, be through the interference on the product, by its
marketing meaning or still through the relationship between companies image in the
market. Its also discusses that knowing how to manage the capability of innovation
makes it possible in the market. Therefore, it refers of analyzing the importance of the
innovation management process, of an integrated and dynamic perspective for its
implantation.
A) Sustainable development: concepts and its adherence by the companies
There is no conclusive definition for sustainable development. Some people confuse its
concepts with the one of ecological sustainability. The well known concept was the
established in 1983 for the World Commission on Environment and Development
(WCED), also called Commission of Brundtland. Established to perform audiences all
over the world and to produce a formal report - published three years later, with the title
of Our Common Future - that defined sustainable development as "the development that
attend to the needs of the present without committing the possibility of the future
generations to attend its own needs" [6].
Thereby, to reach the sustainability implicates in break the historical connection
between economical growth and proportional increase of the consumption of natural
resources and the pollution. The sustainable development search the economical growth,
with the diffusion of the benefits of that growth among the population, and the
preservation of the environment, and that it doesn't need to be purely restricted to a
concern with the environmental sustainability [16]. For the reference [16], the Report

Portland International Conference on Management of Engineering and Technology - PICMET 2006

of Brundtland presents some utopian premises; above all, when it establishes the idea of
attend the human needs, with increase of the production potential and certainly giving
the same opportunities for all. Evidently, discourse and practice can be, and they are
different, which doesn't eliminate the importance of the concept and the need of
pursuing its application, come what may be the range of the model. Besides, it is
necessary to recognize that the sustainable development doesn't have an only absolute
pattern, and that can change with the society or the industrial sector in which the
concept is being applied [2].
The range of the sustainability values, demonstrated by larger investments of the firms,
is resulted from the process of understanding society regarding the environmental
questions [14]. The societal marketing1, expressed for media tools, is very important
in the consolidation of a new group of values, demands and consumption patterns
associated to the correct environmentally products [8].
Beyond create new opportunities of businesses, the environmental question offer the
appearance of important technological innovations, also called of environmental
innovations or "eco-innovations" [9]. The production of eco-innovations requires an
accumulation of knowledge on the market and scientific researches that allow the
development of environmental solutions. They can appear from small improvements in
the routine activities to great modifications of products and processes to reach the goals
of the organization.
Recent researches on strategic management2 observed that the environmental themes
influences the definition of trade and marketing strategies, as a result of a larger
costumers understanding and expectation for the correct environmentally products.
That reveals the importance of the linked questions to the reputation and image of the
company associated to the ethics and the social responsibility [34]. The corporate
reputation characterized by its values as for the sustainable development in the market
can be understood as a valuable strategic asset in the search for competitive advantage if
articulated and presented in a differentiated way or complex.
These resources, transformed by innovative capabilities, should offer value and being
rare, inimitable, non-substitutable and non-transferable to sustain competitive
advantages [17] and [10]. Therefore, the politics of sustainable development can induce
differentiated results for being associated to endogenous factors to the company (as the
possibility to transform those values in innovation capabilities) and exogenous (related
to the intensity of market acceptance). As those resources and the innovation
capabilities are not available as a "product" to be acquired, they should be created by the
company. It is from this point o view of creation the company can differ, creating
heterogeneity among their players [34].

Societal marketing can be understood as " the task of determine the needs, the desires and the interests
of the market and to supply the satisfactions wanted more efficiently than the players, in a way that
preserves or improve the consumer's well-being and the society " [19].
2
A research entitled Meeting Changing Expectations, accomplished in 1998 [36].

Portland International Conference on Management of Engineering and Technology - PICMET 2006

B) Concepts about competencies in innovation management

The effort to establish and to implement innovation strategies occur from the search for
differentiations that bring competitive advantages. As larger the differentiation in
relation to their players, larger the advantage to be explored [5].
To analyze the use of the technology under a competitive perspective (therefore in the
external context to the company), studious of competitive strategy like Michael Porter
investigate the use of the technology associated to the five forces that conduct to the
industrial competition3 [30]. For the reference [30], the goal of this approach is in the
understanding the competitive atmosphere in which the company operates. However,
this approach doesn't treat the technological and organizational aspects inside the
company; then doesnt matter the relationship between resources/capabilities of the
company and the strategic choice. Besides, that focus doesn't consider the implications
of the companys size in the technological strategies, the influence of products nature,
their consumers in the choice among cost/differentiation of the products/services and
the possible benefits of the "adverse" relationships between buyers and suppliers.
However, those two approaches are not excluding but complementary because reflect
different factors that influence the innovation strategy. Therefore, it is necessary not
only to analyze the competitive environment that surrounds the company, but also
questing for knowledge about how to manage resources and the companys capability
for innovation in the context of strategies with this objective. References [18] and [25]
also characterize this reality identifying that the innovation is resulted of the interaction
between the market opportunities and the base of knowledge and core competencies of
the company.
The priority attributed to the resources and capabilities of the company in the
formulation of innovation strategies is not a new fact. In 1959, economist Edith Penrose
already advocated one of the most important studies about the theme (The Theory of the
Growth of the Firm). Nevertheless, more recent studies signal the importance of the
resources and capabilities in the driving of good performances of the companies [23]
and [13]. In all of the mentioned studies, the resources and the internal capabilities of
the company are the element-key to generate technological competencies and to
innovate successfully.
For the reference [12], resources are all the assets and available functions for a
company, understanding: research and development (R&D), plants and installations,
financial assets, human resources, networks to which the companies belong and
following routines for these through its performance and organizational practices.
However, they are considered static concepts, being attributed to the "innovation
capabilities" of the company the task to manage those resources that include a series of
activities to generate changes in the technologies and in the markets.
Those assets add value, because enable the company to explore opportunities and/or
neutralize environmental threats, such as: i) rare: because a very small number of
companies has that assets type to occur an effective competition in the industry; ii)
3

For the reference [24], the intense competitiveness make the companies of a certain industrial sector to
stay attentive to an atmosphere characterized by the rivalry, for the appearance of new players, for the
substitute products launched and for the crescent power of bargain from the buyers and suppliers.

Portland International Conference on Management of Engineering and Technology - PICMET 2006

inimitable: because of the singularity of the conditions in which are acquired; and iii)
non-substitutable and non-transferable: because there are no alternative forms of
reaching the same results.
The management of the resources and of the capabilities for the innovation that it
induces to competitive competencies is difficult to imitate and transferred for being
established in the arrangements and complementarities of the organizational processes
and routines of the companies, with strong tacit nature and intricate reproduction. The
activities that characterize the innovation capabilities are [12]:
Forecasting and evaluation: Identify the future of technological development is a
speculative exercise that generates sceneries in the areas of science and technology,
signaling paths to be probably following for the companies. The evaluation of the
context in that the company operates includes the national innovation system and the
relationships and impacts on the other companies.
Search and selection: The innovation capability involves the search and the selection of
technologies that can guarantee the base for the competitiveness. That task is influenced
by the volume of accumulated knowledge by the companies.
Acquisition and protection: Activity related to the sources of acquisition of new
technological resources for the companies through research and development, licenses,
alliances and direct acquisition.
Implementation: The innovation is conditioned to its implementation capability.
Thereby, the development of a technological plan helps to visualize priorities of
businesses, when it evaluates the research and development capability of the
organization, the immediate and strategic needs of the company that the research
activity and development can or not serve, beyond the future of technical potential and
business of several technologies. Reference [23] shows that this activity as also
accompanied of a number of "complementary assets" required for the
commercialization, such as manufacture, competitive capacity, sales, marketing,
distribution and services.
Coordination and integration: The ability to coordinate and integrate all of the
companys functions around their activities and technological priorities is the tonic of
this activity, could be organized for the strategic management of the technological
companys portfolio. For the reference [28], it means that the company should also
develop ability to lead to a better integration and flexibility of the organizational
structure.
Alignment: The last activity that characterizes the innovation capability of a company is
its ability to align technology with businesses strategy. Some tools have been aiding in
the orientation of the research and development activities as source of businesses
opportunities.
Although the innovation is seen more and more as a powerful way of build and sustain
competitive advantages - besides a form of strengthening the companies in the defense
of their strategic positions - in an isolated way it is not a guarantee of success [31].
Thereby, the innovation also depends on the way as this process is conducted; in other

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words, its performance depends on a strategic management [30]. The innovation

management looks for promote the capability to define innovation strategies, through
including a embracing process decision of selection in bets in new technologies,
products and processes, appropriate to the resources of the organization [26].
Reference [30] suggest, in quite convergent way with the approach of Dodgsons
capabilities [12] that the organization must manage the innovation as a process (through
phases and routines), up against to the most limited vision of technology management
as a restricted activity to the department of R&D or engineering areas of the company.
Besides, that process presupposes an active involvement of the operational and technical
managers and the companys cupule as well. The process of innovation management
has the following phases:
Phase 1: Forecasting - involves the opportunities' mapping including the tools of market
opportunities identification, risks and strategic opportunities and monitoring of the
competitive, technological and regulatory atmospheres, with the intention of creating an
intelligence to guide the generation of new innovation projects.
Phase 2: Strategic selection - try to choose among the potential options introduced by
the best technological and market signs in consonance with the resources and
capabilities of the company. This is the phase in that the great lines or programs of the
projects' portfolio are defined in according with strategic priorities of the company [7].
Phase 3: The knowledge mobilization - implicates in evaluating the resources and
capabilities that the company already disposes and the ones it needs to captivate,
making use of tools to support decisions regarding R&D's outsourcing or in home
activities, mapping external and internal competencies and the evaluation of the R&D's
location [22] and [4].
Phase 4: Implementation it means put in practice the innovation projects, through the
several stages of ideas development, until the final launch of the product or service. In
this phase, execution of projects is made using strategic alignment tools, such as
approach of the stage-gate [7] or innovation funnel.
III) New competencies and practices of the innovation management required by a
sustainable development strategy: the case of Natura
A) Brief characterization of the personal care, perfumery and cosmetics sector in
Brazil
In Brazil, the personal care, perfumery and cosmetics sector is evaluated in US$ 6.339
billions. It answers for 4% of the global consumption of those products and 7th larger
world market [32]. The sector own 1.123 companies (15 of great size - that presents a
liquid revenue above US$ 41.6 millions and it represents 73.4% of the total revenue of
the sector [1]. We can find a great heterogeneity of companies in this sector. In this
market we can find international companies of large size and many resources. Most of
national companies are small and medium size [32]. Many of those national companies
just make the mixture of the final products components, not acting in all production
levels.

Portland International Conference on Management of Engineering and Technology - PICMET 2006

The multinationals are the majority among the companies of large size, and many are
originally from the pharmaceutical and food sectors. Those companies acquire
advantage of the economy scale for the fact of it develops correlate activities and act in
diversified segments. It is the case of the Americans Johnson & Johnson, ColgatePalmolive, Procter & Gamble and of the Anglo-Dutch Unilever. There are also
multinational companies with concentrated performance in the perfumery and cosmetics
segments, such as L'Oreal, Shiseido, Estee Lauder, Revlon, Coty, Avon, Mary Kay and
Nude Skin. Most of the multinationals has interest in Brazil for being a large consuming
market (with mass market segments) and because of the possibility to serve other
markets from a brazilian base, what assure a relevant strategic position [33].
Besides those companies dont expend significant amounts to develop new products,
neither local innovative productive capability, making adaptation of imported
technology. Brazilian characteristics and preferences of consumption could be factors of
motivation; at least, adaptation of global products to the local market, what doesn't
occurs. For the great possibility of it accomplish technological transfer, those companies
doesnt collaborate too much with the promotion of the technological capability of the
country [33].
The presence of large diversified and specialized companies in the sector contrasts with
several small and medium national companies, focused in the production of perfumes
and cosmetics. From those national companies, Natura and Boticrio are relevant
examples of large organizations along with a considerable number of small and medium
companies, such as Ox Marrow, Valmari, Vita Derm, Juru, Payot, Pharmaervas,
Chamma da Amazonia, Niasi and others. Those companies not only acts in cosmetic
sector but usually it also produces perfumes, personal care products and even soap.
An emerging tendency in this industry - object of the investigation of this paper - is the
fact that some brazilian companies are incorporating Amazonia biodiversity ingredients
extracted of peels, leafs, roots, seeds or fruits as raw materials of their products, in
response to strong competition with the multinationals. However, those national
companies present quite different approaches about the use of biodiversity ingredients,
with implications equally different in relation to the sustainable development.
The most important difference is the existence of companies that incorporate in their
products the use of natural raw materials (here identified as "natural companies) - not
being necessarily based in organized activities according with sustainability principles4
- and others that are responsible for environmental and socially proactive products
(called sustainable companies). Thereby, sustainable companies not only appropriate
of such natural ingredients for the formulation of their products, but they also mobilize a
series of instruments that guarantee the environmental preservation and the
sustainability in the extraction of raw materials. Besides the internalization process in a
sustainable way of those assets in the innovation strategies tends to lead those
companies to rethink their resources and innovation capabilities, as well as the process
of innovation management, under perspective of the sustainable development. In the
group of companies understood here as "sustainable" we emphasize Natura, a case that
will be examined ahead, in agreement with principles of the resources and "innovation
4

Many of those companies are making use of the "Amazonia" brand, or the Brazilian biodiversity
principles, simply as a marketing tool or a way of attracting consumers.

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capabilities" management in the process of innovation of Dodgson [12] and of Tidd,

Bessant & Pavitt [30].
B) The mapping of opportunities and risks of Natura
Natura is a brazilian company founded in 1969 producing and selling cosmetics for
direct sale. With a business volume around US$1,1 billions/year, the company has
subsidiaries in Chile, Peru, Argentina and Bolivia and has 2.700 employees. In Brazil,
their main players are the multinationals Avon, L'Oreal, and Johnson & Johnson; and
the national Boticrio [21].
Since its foundation, the objective was trade products manufactured with high quality
natural formulas and competitive prices. However, in the end of the 90's, due to a hard
competition with multinational players, the company decided to promote a substantive
jump in its competitiveness, through the management of its resources and innovation
capabilities.
To do that, Natura began a qualified mapping of it opportunities and risks in the
competitive, technological and market atmospheres detecting mainly: i) with the
economics acting in a global way, there was not more borders in the consumption of
imported product, stimulating the competition; ii) a new type of local consumer was
appearing, sloping in joining beauty and health in a more balanced way; iii) in the EUA
and European markets, the consumers recognized the value of environmentally correct
products of the brazilian biodiversity and were disposed to pay more for such products;
iv) Natura's internationalization was inevitable to keep competitiveness and enlarge its
economy scale and scope inside the business; and v) there was a valorization of
products linked to the environment in the market, be through the use of raw materials or
social causes that the companies could be involved.
C) Strategic and structural arrangements for innovation in Natura: the choice of
its new technological order
The indicators of competitive, technological and market atmospheres that were mapped,
added to the vocation already existent inside the company in manufacturing products
with natural principles, fomented the development of sustainable products in its
competitive and technological strategies. Thereby, their faiths and values to for market
were emphasized by the slogan " well-being well" and supported by the objectives and
technological priorities [3]:

Preservation and conservation of the global biodiversity.

Improvement of the operational processes according to the eco-efficiency criteria.
Production of correct environmentally products.
Incentive to the use of recycled packing.

Thereby, in its platforms of technological growth, the technological differentiating base

consisted in a sustainable development of the brazilian botanical biodiversity,
establishing a portfolio of projects in phitocosmetics based on its new objectives and
technological priorities. In this way, the company's cupule sought to align the critical
functions of the company around the technological strategy, beginning for the
adaptation of its corporate mission:

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Natura will be one of the world leaders of its market, differing for the quality of the
relationships that establish, for its faiths and expressed values in a radical way, through
products, services and business behavior that it promotes the best relationship itself,
with the nature and all that surround it.
In the year 2000, Natura launched the Ekos - sustainable products line of personal care,
perfumery and cosmetics. It is biodegradable products, decomposed in the nature in up
to 28 days. The packing are recycled, the flasks are made of resin, with a percentage of
recycled material, and there is a refill option for all the product line.
To create that line of products the company didn't lean on any norm or pattern of
external quality certification (such as ISO - International Organization for
Standardization series). According with Natura, it was not followed a preset system of
management based in specific indicators of excellence and environmental practices. In
other hands, an appropriate model of management and technological processes was
adopted to the strategy of the company.
D) Mobilization of knowledge sources and technological competencies: establishing
partnerships with suppliers, no-governmental organization, centers and research
foundations
The specific model of application of the principles of the sustainable development for
Natura is revealed by the establishment of training and partnership nets with suppliers
such as the German Cognis and the British Croda that extracts the entire ingredients
from the brazilian flora without harming the environmental balance and the
biodiversity. The interviewed revealed that those companies commit to not use infantile
labor and to preserve the communitys traditions and lifestyle of the Amazonia forest
from where are coming those ingredients.
To assure that those inputs are extracted in a sustainable way, Natura developed the
Assets Certification Program with the suppliers, leaning and monitored by an NGO (nogovernmental organization) - Imaflora5 [15]. That program is a training work of the
process of custody of the assets (ingredients), and it treats the courses attendance of the
raw material from its extraction to the arrival into the company. The program
establishes environmental and social criteria and it is composed by the following stages:

Auditing of the place of origin of the assets.

Elaboration of a handling of the assets plan.
Evaluation of the environmental and social impact.
Implantation of the handling plan.
Obtaining certificate.
Periodic attendance.

Thereby, to support and to expand its investments in sustainable products, Natura also
mobilized a partnership with the Research Assistance Foundation of the So Paulos
5

To the interviewed of Natura, Imaflora is a certifier that verifies if the extraction and handling of the
assets is made in a sustainable way. With its grant, a company can request the stamp of Forest
Stewardship Council (FSC), entity globally recognized, since Imaflora is trusted by FSC.

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state, creating the Natura Campus - a program destined to researchers of universities

and research centers, whose objective is:

Make possible the practical application of academic researches in the business

environment.
Support the development of innovative researches linked to the universities and/or
research institutes.
Qualify new human resources for cosmetics and phitoterapics areas.
Apply the knowledge generated in projects of technological innovation and
development of cosmetic and phitoterapics products of the company [15].

The first announcement of the Natura Campus was thrown in March of 2003 and its
concentration area was the biodiversity works. The program search to form science and
technology competence in the brazilian biodiversity, biotechnology, cellular
biochemical, cosmetic ingredients development, environment and packing areas.
According to the interviewed of the company, in 2003/2004 it was selected 14 research
and development projects that will have to be executed in two years and will throw
new announcements in other concentration areas. Besides, Natura established a
systematic exchange with excellence centers outside Brazil, that allow its researchers
to a permanent contact with the main progresses in the pharmaceutical, chemical and
biochemical areas [21].
E) Implementation of Natura's projects innovation: making research &
development and complementary assets for the innovation in the market
To implement its projects of innovation, Natura built a center of R&D and cosmetics
innovation on its plant situated in Cajamar, state of So Paulo, which launched about
200 new products per year [11]. In agreement with the interviewed of the company, it
applies 3.5% of their liquid revenue in the R&D area, launching a product each two
days. In the line of the biodiversity, actually the company has about 43 projects - half of
the investment in R&D was leaded to this area, with expectation of increase the profile
of the sustainable products range.
Introducing Amazonia ingredients such as Priprioca, Andiroba, Cumaru, Copaba,
Preciosa, Murumuru and other in its sustainable products, the company developed a
process of technology acquisition based on ingredients of the brazilian biodiversity, that
begins with the searching of knowledge in the brazilian universities, suppliers, popular
research and company's accumulated data about medicinal flora. This knowledge is
qualified to feed a database of botanical assets.
Afterwards, a discerning analysis of the researched botanical assets was in according to
phitochemical, safety and effectiveness criterions to compose the final products of the
company. The assets that assist such criterions are approved and become disposable for
been used in the process of new products development and certification for sustainable
supply; the no approved assets continue feeding the database of the company (Fig. 1).

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Fig. 1: Technology acquisition process based on assets of the brazilian biodiversity

In the process of new products development, Natura implemented the approach of the
innovation funnel for the generation, selection and implementation of its projects
innovation, based in its competitive and technological objectives.
This approach consists in generating preliminary ideas and new concepts of products.
The sources for this approach are the consumers, suppliers, partners and employees of
the company. The selection of the ideas and concepts that will proceed for the next stage
happen according to criterions of: i) attractiveness; ii) technological and business
strategies; iii) contribution for the brand or product line; iv) players; v) suppliers; vi)
commercial viability; vii) availability of resources; and viii) company's manufacturing
potential.
In the following stage, the development of the project's business cases are elaborated
and selected, analyzing: i) the general characteristics and techniques of the products; ii)
their production processes and distribution; iii) capital investments; iv) opportunities of
generation of patents; v) issues linked to the environment regulation; and vi)
commercial viability (in terms of volume sale and markup). Finally, in the last stage is
established the path of the products that will be launched in the market (Fig. 2).

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Fig. 2: Naturas model for innovation projects management

Referring to the complementary assets of marketing, commercialization and distribution
to make possible the innovation in the market the interviewed affirmed that to reinforce
the social and environmental sustainable image of the Ekos line in the market, Natura
established a training and updating program to its sellers (the main interface with the
market and key-instrument for promotion, sales and distribution of its products).
Through workshops and lectures, themes related with social responsibility and
environmental cultures are approached, seeking to form competencies in the consumers
persuasion process in the sustainable practices. All that efforts reinforced the image and
the prestige of the company associated to the environmental and social sustainability
values. Today, Natura is recognized socially by the players, consumers and the external
public as a "brazilian responsible company [3].
In the interviews it was revealed that the Ekos line is one of the most successful of
Natura. To launch this line, US$ 2.5 millions were invested in the development of
products and marketing efforts. According to interviewees of the company last year the
sales of the line of products increased more than 20%, representing 10% of the total
revenue of the company. In a little more than two years, the Ekos line became a
business around US$ 50 millions per/year, fact that stimulated other national companies
of the sector to also develop initiatives in the Amazonia area [35].
IV) Conclusion
Based in the path of Natura's performance showed in the paper, we saw that the
company demonstrated its strategic potential when developing a business model under
the perspective of the sustainability. Besides guaranteeing the environmental
preservation in the extraction of the raw materials, Natura looked for it differentiates
when trying to guarantee the communities' economical and social maintenance where
are extracted and handled the ingredients of the Amazonia; differently of the companies
characterized in this paper as natural companies, where the technological border is

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based on the traditional formats of production through the simple insert, manipulation
and mixture of formulas with some natural principles. In the perspective of those
companies, the activities of R&D many times are not necessary, and the processes of
technological, organizational and suppliers management become substantially simpler.
However, in sustainable companies (the case of Natura), the process of interiorizing
the sustainability principle, suggested product innovations not only under the point of
view of its concept, but also under the perspective of the technological management,
also inducing the implementation - nothing trivial, of entirely new routines in the
company, in different fields, that mobilized the management of its resources and
innovative capabilities such as:
The search and selection of risks, technological and market opportunities that make
possible lead the company to generate its new innovation projects linked to the
principles of the sustainable development. Launching products with larger value added
along with premium prices, Natura explored at the internal market niches not occupied
for the multinational companies, and established values with the consumers; in the
external market, visualized a continuous growing demand for "environmentally correct"
products of the brazilian botanical biodiversity, allowing its productive and commercial
internationalization.
The alignment of its technological and competitive platforms, along with the principles
of the sustainable development, making use of the brazilian botanical biodiversity. To
make it possible, the company integrated its technological and corporate missions,
created specific managerial processes, and involved critical functions of the company
around this technological strategy.
The mobilization of knowledge sources and technological competencies, through
partnerships with: i) suppliers, for the extraction and handling of the environmental
assets with the local communities; ii) no-governmental organization, for support and
monitoring the assets certification program with its suppliers; iii) centers and research
foundations, aiming not only to apprehend the movements and the scientific and
technological tendencies in the linked areas to the sustainable development and
biodiversity, but also acquire knowledge to build its innovation strategy.
The implementation of its innovation projects evaluating its potential in R&D and
expanding this area, with the built of a wide center of R&D and cosmetics. Besides, the
company implanted management tools for acquisition of technologies based in assets of
the brazilian biodiversity. Also some tools for generation, selection and implementation
of new products in the market were used, through the approach of the innovation funnel.
Finally, Natura developed complementary assets of marketing, commercialization and
distribution to make possible its innovations in the market, leading the Natura's
consumers more and more to see the company as ethical, responsible and innovative,
that got to transform the sustainable development principles in a viable opportunity of
businesses and that assists to the consumption.

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Portland International Conference on Management of Engineering and Technology - PICMET 2006

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