Recently, Apple Inc. was required to spill some of its carefully-guarded development and operating secrets as part of its legal action against Samsung. The disclosure provided the tech world an unprecedented look into a company that was built on proprietary information and intellectual capital. Apple is not the only company that takes pride in its secrets. Here are five companies that are closemouthed about some of their business practices.
Harland Sanders started Kentucky Fried Chicken in 1939 after he developed a unique method of pressure frying chicken. KFC is now one of the largest fast food franchises in the world. The company's claim to fame is Sanders' secret 11-herbs-and-spices recipe. To this day, the recipe is locked in a vault in KFC's Louisville head office. According to the company, only a few people in the world know the entire recipe. However, many copycat versions appear all over the Internet. The spice blend is made in separate parts so that those putting it together don't know the whole recipe. Although competitors claim to know the recipe, no other fast food chicken tastes just like KFC.
The Coke recipe is one of the all-time most protected formulas in food history. The Atlanta-based company dates back to 1886, when a local pharmacist created the beverage and sold it at Atlanta soda fountains. Although there have been many competitive cola products on the market over the years, most notably Pepsi, none have been able to crack the Coke formula. In February 2011, a radio show announced that the recipe had been "hidden" publicly in an old issue of The Atlanta Journal-Constitution in the 1970s. The recipe included several types of essential oils and coca, a derivative of the coca leaf stripped of its cocaine content.
Coca-Cola tried to substantially alter its recipe in 1985 by developing a product it called New Coke. The public backlash was immediate and severe. The company eventually returned to its original formula and has not tried to make big changes to the recipe since.
Today, you can't go into any mattress store in America without seeing several "memory foam" mattresses. Tempur-Pedic was the original, and the company still retains secrecy over the manufacturing process of its products. In the 1970s, NASA developed a cushioning material to support astronauts during the severe backwards pressure when lifting off. The agency stopped working on the project when it could not overcome the offgassing problem the material had. In the 1980s, a Swedish-led team of scientists continued to develop it, and the technology was sold to a U.S. businessman who started Tempur-Pedic. The mattresses are sold throughout the world to both retail customers and hospitals. The company states that it continues to develop new versions of the material.
Research In Motion
RIM, the producer of the Blackberry, has had its confidential developmental processes analyzed more than most companies. The Blackberry is considered the grandfather of the smartphone. It was the first commercial cellular phone to provide email access, and it was quickly embraced by the military and by business users. RIM's protection of its technology may ultimately result in its downfall. Initially, it did not allow other companies to develop third-party applications on the Blackberry, and the retail market eventually lost interest in the product in favor of the flashier new products on the market.
Everyone has been exposed to Cadbury commercials that suggest that the company has a highly-secret technology to get the caramel into the center of the chocolate squares in its Caramilk bars. Far from being an actual technological advantage, the 'Caramilk secret' is a clever marketing campaign developed by the company's advertising agency over 40 years ago. The candy bar is made at only one Cadbury facility, in Toronto, and the company reports that the 'secret' is carefully guarded in a vault there. The ad campaign continues to this day, with new commercials hinting that fans can unlock the secret.
The Bottom Line
Keeping a company's formulas, methodologies and other intellectual capital close to the vest can give the business an advantage over its competitors. It also creates a mystique that can be used to help build a loyal customer base.