Case Study on Innovation and Commercialization

Innovation and Commercialization (Case Study)
Innovation and Commercialization: Amazon Go (Case Study)
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Innovation and Commercialization (Case Study)
Executive Summary
This assignment provides a complete analysis of the concept Innovation and commercialization.
The analysis of this concept is based on a case study on Amazon Go. The assignment includes
difference between invention and innovation, the importance of innovation in comparison to
invention in Amazon Go, how organizational vision, leadership, culture and teamwork can
develop innovation and commercialization, the 4ps of innovation , analysis and application of
the innovation funnel for Amazon Go, the role of frugal innovation in the development of
Amazon Go, developments in frugal innovation and its use and the role of frugal innovation.
Table of Contents
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Innovation and Commercialization (Case Study)
Introduction.................................................................................................................................................3
P1 (LO1) Explain innovation and determine its importance to organizations in comparison with invention
.................................................................................................................................................................... 4
D1 (LO1, 2 & 3) Critically analyze how innovation is developed embedded and measured in an
organizational context.................................................................................................................................6
P2 (LO1) Explain how organizational vision, leadership, culture and teamwork can shape innovation and
commercialization.......................................................................................................................................7
P3 (LO2) Explain the 4Ps of innovation and explain the use of the innovation funnel to examine and
shape innovation ideas.................................................................................................................................8
M2 (LO2) Analyze and apply the innovation funnel in an organizational context......................................9
M3 (LO2) Evaluate the role of frugal innovation in an organizational context.........................................11
P4 (LO2) Explain developments in frugal innovation and provide examples of how it is used in an
organizational context...............................................................................................................................12
M1 (LO1) Analyze different sources of innovation and how organizations can foster and develop an
environment and culture of innovation......................................................................................................13
References.................................................................................................................................................13
Introduction
The term Innovation refers to the introduction and implementation of new methods and ideas.
This can be defined as the process which includes different activities to find out new ideas to do
a particular thing. In the provide case of Amazon Go, the company came with an unique idea to
launch a store named Amazon Go, where the prices of the purchases of the customers will
automatically billed to the Amazon Prime Accounts of the customers. In this store sensors will
automatically track the details of the customers when they shop in the store and record the
purchase item accordingly for pick up. This store can also be used by the employees of Amazon
as well as general public.
Here, the launch of the Amazon Go by the company Amazon can be considered as a technical
innovation. The benefits of this innovation can be seen while analyzing the effectiveness to the
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Innovation and Commercialization (Case Study)
customers as well as company. This innovation helps to get the services in a frequent manner
with authenticity of payment made by the customers to the company. It helps cost effective and
less time consuming.
P1 (LO1) Explain innovation and determine its importance to organizations in comparison
with invention
The term innovation is not similar to creation as innovation is an art for thinking of ideas for
invention and a thought to produce certain things. However, the innovation of new things can
also be termed as creativity. In Innovation people basically have to think out of the box for
generation of certain ideas and methods. Innovations provide greater opportunities which help an
organization for economic growth, critical survival and success of an organization. Innovation of
new concepts helps the organization to develop real concepts which is considered as a driver of
optimized operations
Today, it can be said that nothing in this world is permanent whether it may be technology or
product. With each passing day there is an improvement in the technology which includes
updating or invention of new ideas. However, there is difference between innovation and
invention.
The term invention can be defined as the creation of a completely new product or service or
technology whereas the term innovation refers to the act of making certain changes in the
existing product, service or technology with the introduction of new ideas.
The following are some of the differences between innovation and invention:
Innovation Invention
The implementation of an idea or thought in a
product, service or technology for the very first
time is known as innovation.
The happening of an idea or thought for a
product, service or technology which was
never made in the past is known as invention.
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Innovation and Commercialization (Case Study)
The term innovation refers to the addition of
value by making a specific change in the
existing product, service or technology.
The term invention is related to creation of a
completely brand new product
Innovation is considered as the implementation
of new idea practically.
The invention basically related to fresh idea for
creation of a brand new product
Innovation concentrates on the multiple
combination of products, service or
technology.
In case of invention, it is emphasized on a
single product, service or technology
In case of innovation the requirements are a
complete set of technical, strategic and
marketing skills.
In terms of invention there is requirement of
scientific skills.
Innovation does not have any limitation as it is
applicable for the entire organization.
The limitations of invention is that it is limited
to the research and development department of
an organization
Amazon Go, the company implemented a unique idea to launch a store named Amazon Go,
where the prices of the purchases of the customers will automatically billed to the Amazon Prime
Accounts of the customers. In this store sensors will automatically track the details of the
customers when they shop in the store and record the purchase item accordingly for pick up. This
store can also be used by the employees of Amazon as well as general public.
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Innovation and Commercialization (Case Study)
This is an innovation as the company has developed new idea on the existing product of Amazon
Prime. The launch of the Amazon Go by the company Amazon can be considered as a technical
innovation. The benefits of this innovation can be seen while analyzing the effectiveness to the
customers as well as company. This innovation helps to get the services in a frequent manner
with authenticity of payment made by the customers to the company. It helps cost effective and
less time consuming.
D1 (LO1, 2 & 3) Critically analyze how innovation is developed embedded and measured in
an organizational context
The innovation in a business helps to implement new idea, creation of dynamic products and
adjustment of the existing products. For innovation a person has to think about something new
which is not general and has certain different from general assumptions. However, such type of
innovation may be risky in nature. When a business does not consider the concept of innovation,
it means that the business has more possibility of losing its work to its competitors. The lacking
of innovative thought may result to loss of employees as well decrease in engagement. Thus,
innovation cannot not be considered as an afterthought. It is essential element in a business
which must be included in the future strategies of a business.
Innovation will be termed a cultural outlook which directly and indirectly affects the thinking
and problem solving attitude of a person. Today, many business give credit to the innovative
practices for the success of their businesses. Most of the business houses and scholars are of the
opinion that invention and innovation is not the same thing. Invention refers to creation of new
ideas with a completely brand new product, service or technology where as innovation is
considered as new way of producing new ideas. Innovation is although is not a requirement.
However, Invention can be beneficial for a business. The importance and necessity level can
vary as per the standard and norms of the industry.
In this case, the first thing that what Amazon did was just an analysis of the for the guaranteed
and best idea for spreading FUD in the minds of the suppliers and retailers of the company.
Secondly the introduction of cashless payment facility is a logical development not only for the
company Amazon but also for other companies who are dealing in online sale and purchase of
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Innovation and Commercialization (Case Study)
goods and services. Thirdly, the cashless benefit used by Amazon is a new way for reduction of
marginal cost in the retail environment of online as well as offline business.
P2 (LO1) Explain how organizational vision, leadership, culture and teamwork can shape
innovation and commercialization
Diversity can be considered as an advantage for innovation by collecting different ideas of
different persons. However, it be concluded that diversity has a little advantage as it is based on
open culture and allows multiple opinions to be expressed. In case of innovation, there are
effective group activities which can convert ideas into reality and provides a clear vision which
can help to differentiate the useful from other factors.
On the other hand, the aforesaid things depend on the leadership quality of a person for the
creation of a vision and set an example. Similarly, an adoption of structure is important to
overcome the process and to make the same effective. For the success and growth a company
should have a clear vision of the objectives, goals, values and mission of the organization. The
main elements of the guidance to the team are the vision and mission of the company for
commercialization.
One of the key lessons can also be said that a leader can only good for his team members. On
finding the employees who lack of technical skills but have the willingness to adopt and work
according to the guidance of the team is essential for success. A leader tries to crate an
environment on the organization which influences innovation by recruiting employees from
diverse background, has a voice and has that energy and time for the experiment on employees.
This can be better understandable with the help of an example. For example, an employee who is
working on content of social media observed content and requires a experienced employee for
the same can ask for working on other ideas for innovation. This can be possible in team work.
Team work helps to create innovation and ideas which later integrated to some strategic efforts
of the company and ultimately lead to commercialization of a product, service or technology.
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Innovation and Commercialization (Case Study)
P3 (LO2) Explain the 4Ps of innovation and explain the use of the innovation funnel to
examine and shape innovation ideas
The innovation is a mixture of 4Ps. This model of 4Ps was developed by John Bessant and Joe
Tidd. This technique enables to find out how an innovation process can be improved and brought
into the business. The innovation mixture of 4Ps is Paradigm, Product, Position and Process. It is
a tool which provides a basic idea to explore the means of the improvement in each and every
department of the business. The detailed analysis of the aforesaid 4Ps has been provided below:
Paradigm:
The main question is that how can it be framed on what we want to do. The use of innovation is
for the change in business. The change can radical who change the mind as changes can be
positive always. The imagination takes all the care for the potential change that can increase the
profit. This change also includes changes in models of business.
Product:
This is based on the question what you offer. The answer of this question can be found by
analyzing the facts that how a product or service can be improved. How changes can be made to
make the product attractive and better than other products available. The suggestions of this
answer also include the ways of making a better product which also known as incremental
change. This can also be suggested that it is completely different from another product in terms
of innovation or radical change.
Process:
This is based on the question that how the offerings are being created. This not only includes the
preparation of the process of the service or products but also other aspects such as workflow,
recruitment of employees, training, supplying etc. This shows that how this will help in increase
in profit and what sort of recent trends can be carried out for such processes.
Position:
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Innovation and Commercialization (Case Study)
This is based on the question on the target of the offering. It works on the context of changing
the product or service which are already framed. How these idea can be communicated, how you
see people such as employees, customer, public etc.
M2 (LO2) Analyze and apply the innovation funnel in an organizational context
It is needless to say that innovation funnel is being used to explain the steps that help to develop
a process, product or service. The main aim of every innovation is to create product, process,
service or technology which can meet the requirements of the economic forms. In the starting
stages of development, some of the ideas are arranged through a system of refinery.
After the refining process, some of the ideas are left with the company for implementation. The
ideas which generally remain after the refining process are later combined to form a new
concept. The following are some of the steps of innovation funnel;
At this first stage, the knowledge and information base are increased by the organization. The
basic objective of this stage is to combine many ideas. Before collecting the information a prior
strategy has to be made. The information can be collected from research, university, partners,
competitors, institutes etc. If the number of ideas is more it affects the development of products
in large quantity.
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Innovation and Commercialization (Case Study)
In this stage one must have clear vision regarding the objectives, there is also a need of
reasonable understanding for the capabilities of a intention for the actualization of new ideas and
innovation.
In the second stage, the ideas and concepts of the company is generate from the first step thrugh
the screening process. The process for screening includes the combination of ideas with the goals
to look if they are perfectly matched. After that the assessment must be carried out for the returns
and risks which can be decided on which idea has to be selected. It is also considered that which
stage should be selected to test the service or product with the real customers.
After that resources can be allocated with the most attractive opportunities. There is scarcity of
resources, thus it is best to use these resources so that great return can be achieved. However, the
ideas selected must be related to the ultimate goal or objective of the company, the ideas must be
directly or indirectly collected with the objectives of the company.
In the third stage, the company ensures that the selected ideas can be used for the delivery of the
objectives of the company and these objectives are anticipated since the inception of the
business. The creation of new product or service is later introduced in the market. The concept of
funnel is adopted by many organizations that have specialization in different industries.
However, it cannot be explained for what it actually needs for the development of such idea in
creation of a product or service within a market. The creativity is also discourages as the ideas
are merely pruned before the testing of ideas.
In the case of Amazon, go the company was clear about its organizational objectives and
mission. Considering the same the company created a innovation of cashless payment which is
cost effective and less time consuming. This innovation not only helped the company to increase
its profits but also helped the company to attract more customers. The customers on the other
hand were also benefited for the easy and hassle free service of the company.
By launching Amazon Go, the company considered that the idea of cashless payment is unique
one as it can reduce the probability of fraud and will create authenticity of in terms of making
payment of a particular product or service. The concept of funnel is adopted by Amazon to
explain the actual needs for the development of such idea in creation of a product or service
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Innovation and Commercialization (Case Study)
within a market. The creativity is also discourages as the ideas are merely pruned before the
testing of ideas.
M3 (LO2) Evaluate the role of frugal innovation in an organizational context
Frugal innovation can be defined as the process of reduction in the complexity and cost while
production of goods. This is also known as Frugal Engineering. It generally refers to the removal
of needless features from a good so that it can be sold in developing countries.
In the modern business world, companies are basically looking forward for the expansion of the
business and later changed their mind to focus on the current market. If that is the case, the
companies have succeeded in this as the companies have understood that they have to affect
another which is also highly important. For this reason the companies have to change their
approach to innovation process.
Most of the companies in markets of West consider that innovation is required for development
and improvement of new products which are being sold with advanced features and with
premium prices. In this context, the products are applied to many who do not have million. The
companies needs to familiar with the concept and application of frugal innovation. However, the
term frugal innovation can be considered as the learning of how to practice that a thing can be
done easily without any hassle.
Here, the company created such as innovation for the benefit of company, its employees as well
as customers. The company created an innovation of cashless payment which is cost effective
and less time consuming. This innovation not only helped the company to increase its profits but
also helped the company to attract more customers. The customers on the other hand were also
benefited for the easy and hassle free service of the company.
The following are the six principles of frugal innovation:
Finding the opportunity in case of adverse situation
Doing more with lesser known facts
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Innovation and Commercialization (Case Study)
Act flexibly and Think Properly
Try to keep everything Simple
Inclusion of Margin
Follow the heart
P4 (LO2) Explain developments in frugal innovation and provide examples of how it is
used in an organizational context
Frugal Innovation is a concept which suggests the companies and large business house to
respond to the limited resources whether it may be related to finance, material, institution etc.
These constraints can be converted into practical solutions and innovative ideas. This can be
better understandable with the help of an example. For example, a product, service or technology
which is created as a result of frugal innovation must be priced at a rate between 50-70% lower
costs as compared to the present alternative which can have the cost of at least 70-80% of the
functionality by no compromising on the quality of the product or service.
In simple words, it can be said that Frugal Innovations can be created with the use of the
abovementioned processes such as open innovation, maker movement, inclusive business and
Circular & Sharing Economies. To get the advantage of the frugal innovations, the emphasis
must be given to quality solutions that can be accesses and afforded. However, that must be
created with the following aspects;
Product or service level in terms of design thinking
Macro level in system thinking
Thinking of new ideas for product development and design
To learn from the technologies so that low cost solutions can be delivered
To make the solutions accessible creation of innovative business models
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Innovation and Commercialization (Case Study)
M1 (LO1) Analyze different sources of innovation and how organizations can foster and
develop an environment and culture of innovation
Innovations provide greater opportunities which help an organization for the economic growth,
critical survival and success of an organization. Innovation of new concepts helps the
organization to develop real concepts which is considered as a driver of optimized operations. In
the provide case of Amazon Go, the company came with an unique idea to launch a store named
Amazon Go, where the prices of the purchases of the customers will automatically billed to the
Amazon Prime Accounts of the customers. In this store sensors will automatically track the
details of the customers when they shop in the store and record the purchase item accordingly for
pick up. This store can also be used by the employees of Amazon as well as general public.
Here, the launch of the Amazon Go by the company Amazon can be considered as a technical
innovation. The benefits of this innovation can be seen while analyzing the effectiveness to the
customers as well as company. This innovation helps to get the services in a frequent manner
with authenticity of payment made by the customers to the company. It helps cost effective and
less time consuming.
References
Bas, C. L. (2016). The importance and relevance of frugal innovation to developed markets:
milestones towards the economics of frugal innovation .
Dignan, L. (2018, January 23). Amazon Go: The impact on human jobs, retail innovation,
Amazon's bottom line .
Fund, H. I. (n.d.). TYPES OF INNOVATION .
Grasty, T. (2012, March 29). The Difference Between ‘Invention’ and ‘Innovation’ .
Grasty, T. (2016, December 6). The Difference Between “Invention” and “Innovation” .
Greenwald, M. (2014, March 12). What Exactly Is Innovation?
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Innovation and Commercialization (Case Study)
Hainey, I. (2015, November 23). Vision and leadership important in cultivating innovation .
Howlett, D. (2018, January 25). Understanding the impact of Amazon Go innovations .
Innovate, E. (2015). 4PS- EXPLORING THE INNOVATION SPACE .
Masnick, M. (2004, April 29). Innovation Is More Important Than Invention .
Mukerjee, K. (2012, August). Frugal innovation: the key to penetrating emerging markets .
S, S. (2016, July 26). Difference Between Invention and Innovation .
Skillicorn, N. (2016). What is innovation? 15 experts share their innovation definition .
Spellbound. (2016, June 21). Is Innovation More Important Than Invention?
Venuturupalli, S. (2017, December 21). Frugal Innovation for Sustainable Growth and
Development .
Walker, B. (2018). Innovation vs. Invention: Make the Leap and Reap the Rewards .
Walton, C. (2018, August 3). Amazon Go Has Been Flawed From The Get-Go .
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