Analysis of Open Innovation and Commercialisation

The provided assignment involves a comprehensive analysis of open innovation and commercialisation. It requires students to explore various research papers and case studies related to open innovation and commercialisation, highlighting key concepts, methodologies, and outcomes. The assignment aims to understand how open innovation and commercialisation contribute to technological success, innovation management, and entrepreneurship. Specific topics covered include the importance of research, innovation, and commercialisation for technological success, management of innovation in academia, technology transfer and commercialisation by universities and PRIs, organisational diversity and innovation potential of EU-funded research projects, and the applicability of ecosystems of open innovation to small countries and regions.

INNOVATION AND
COMMERCIALISATION

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Innovation and importance in comparison with invention. ..............................................3
P2 How organisational vision, leadership, culture and teamwork shape innovation and
Commercialisation..................................................................................................................5
TASK 2............................................................................................................................................6
P3 Explain 4 Ps of innovation and use of innovation funnel to examine and shape innovative
ideas. ......................................................................................................................................6
P4 Frugal innovation and examples of using in Essence Drinks............................................7
TASK 3............................................................................................................................................8
P5 Importance of the commercial funnel and the application of New Product Development
(NPD) processing for commercialisation of innovation.........................................................8
P6 An innovation business case for Essence Drinks and includes ways to access funding. 11
TASK 4..........................................................................................................................................12
P7 Different tools used by Essence Drinks to protect knowledge and intellectual property12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Innovation refers to a creative idea, new method or a new way of doing things. Innovation
refers to developing an innovative solution to meet out the demands of existing and potential
customers. Innovation occurs through development of a new product, advanced technology or
new business model etc. The innovation includes generation or renewal of product and service.
Commercialisation refers to a detail procedure of launching a new service or a new product in
the market. It includes different stages for success of the innovative product or service. It
involves extensive market research and using strong marketing tools and techniques.
The Report is based on Essence drinks company in U.K. and the strategy being adopted for the
success of the company in the future. The Report will describe importance of innovation as
compared to invention, 4 P's of innovation, process of commercialisation of a new product, the
ways of protecting a innovative product.
TASK 1
P1 Innovation and importance in comparison with invention.
Innovation-
Innovation does not only mean developing new methods or introducing new ideas. Innovation
refers to a process of generating new ways of performing things. Innovative ideas involves use of
creativity in creating a new product or to provide new service to customers. Innovation can be
use at various levels of an organization of different size(Chun, Chung, Y. and Bang, 2015).
Innovation of a new product should be on the basis of trends prevailing in the market. Innovation
provides an opportunity for development of economy and for growth and success of the
organization. It helps in finding new solutions for complex problems. There are various theories
that promote and support innovation.
Invention-
Invention refers to inventing a new process, device, or a new method of doing things. It may
involve improvement in features of a product, or creating a new process etc. The inventor can
patent the invention so that, other peoples cannot use the innovative idea. It is a process of
creating unique things that does not exist before. It is an important process of designing the
features of an innovative product (Kergroach, 2018).
Difference between invention and innovation-
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Heading Invention Innovation
Meaning Invention involves happening
of an idea for developing new
process or new product.
It refers to implementation of a
concept for developing process
or product.
Skills It requires scientific
skills(Tsai, S.2015)
It requires skills related with
marketing, strategic etc.
What it involves It involves development of a
new product.
It involves adding more value
to the existing product or
process.
When it occurs It occurs when new idea
comes.
It occurs when there is a need
of improving the features of
existing product or process.
Importance of innovation as compared with invention in “Essence Drink”-
Innovation refers to the process of practically implementing a new idea into action. Whereas, the
term invention refers to generation of new ideas. “Essence Drinks” has invented healthy mango
lassi at the time of establishing the company in U.K. During the first year of launching the
product sales was very high. Later on, in the third year of operations of Essence Drinks the sale
of mango lassi start declining. Due to the intense competition from competitors in the market,
increase in consciousness of consumers towards healthy and organic drink, company will be
launching new range of drinks like “Chocolate Lassi with Toasted Almonds ”. Innovation in the
product will help to increase the sales of Lassi. This will be beneficial for the company in
different ways such as-
The innovative product will provide competitive advantage over the competitors to the company.
It will help Essence Drinks to strengthen its market share. The company will be able to
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differentiate its product with the existing product of the competitors. More and more customers
will buy the innovative product of the company (Maritz, 2015). This will result in increase in the
sales of Chocolate Lassi with Toasted Almonds. Thus, invention of Lassi in past and innovation
of new range of drink both will help in growth and success of the company.
P2 How organisational vision, leadership, culture and teamwork shape innovation and
Commercialisation.
Invention refers to creation of a new product or a service and it promotes new thinking. Whereas,
an innovation refers to implementing the process into action. The main objective of both
invention and innovation is to bring the new product or new service in the market.
Commercialisation includes detail process of invention and innovation to sell an innovative
product to existing as well as new customers. It contains various stages of launching a new
product or service with the help of marketing tools and techniques in the market. There are
various factors that impact the procedure of innovating a new product and commercializing it in
the market. These factors affect every organization in different ways (Mohalajeng, 2016).
Organizational vision also impact the process of inventing and innovating a new product. The
vision of Essence Drinks is to improve the sales revenue through innovating a new range of
products. To achieve this vision, invention of a new product is essential. Leadership of the leader
will play an important role in influencing the workers to develop the new product for Essence
Drinks. Orgaization culture should promote good working environment because it is essential for
implementing new process of production in the company. Company has to generate new ideas
and innovative thinking to deliver the best product to existing as well as potential customers. So
there is a need of invention of a new idea and after invention company has to practically
implement it into actions so that, product can be sold in the market. So, vision of Essence Drinks
leads the whole process of innovation and invention. Another factor that directs the process of
innovation is leadership. Leader of the company can adopt different styles of leadership such as
democratic, participative, autocratic and laissez-faire to direct the efforts of employees and
influence the subordinates for developing new ideas for successful implementation of the process
of innovation in the company. Leader of the organization has the ability to scan the environment
to identify the potential opportunities in the market and helps in guiding the employees to take
the benefits of such opportunities to gain competitive advantage over the competitors.
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Culture of the organization includes norms, values and beliefs of the employees. Culture of the
company also defines the way of performing things. Due to diversity in the culture of the
countries difference in the culture of countries impacts the process of commercialisation as well
as process of innovation. The companies that co-ordinates the process of innovation with culture
of organization will gain better returns as compared to those who failed to do so. Essence Drinks
must define their cultural traits to promote the strategy of innovation. Culture of the company
helps in improving the performance of the company.
Team work plays an important role in implementation of process of innovation. Team of the
Essence Drinks company help in solving the complex problems that will occur in innovating the
new product. The company is having skilled workforce in the team to carry on the process of
innovation and finally selling it in the market. Team members help in generating new ideas for
delivering the best product to existing and new customers. This will help in achieving the goals
and objectives of Essence Drinks. Team work helps in development of innovative ideas to
support innovation in the product.
Thus, the vision of the organization, culture, leadership style and team work in the organization
impacts the process of innovation and commercialisation (Nepelski, 2018).
TASK 2
P3 Explain 4 Ps of innovation and use of innovation funnel to examine and shape innovative
ideas.
Innovation funnel refers to the composition of various steps that are required to perform for
developing a particular product or a process. Innovation is related with implementation of a new
idea and thinking(Dincer, 2017). There are 4P's of innovation which is also called innovation
mix that are used by the organization for implementing the process of innovation. The 4P's of
innovation are as follows-
 Paradigm- It is a process that describes the changes in the way of performing job roles,
changes faced by the organization due to implementation of innovative process. It
involves adopting a new business model or new tools for improving the effectiveness of
the process of innovation. Essence Drinks will develop a new business model to operate
in the changing business environment(O’Gorman, 2016).
 Product- Product is the most important part among 4P's of innovation. Essence Drinks
will launch Chocolate Lassi with Toasted Almonds that will add value to the existing
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products of the company. And also help in increasing the customer base so that, company
will gain competitive advantage over other competitors. Thus, the whole process of
innovation and commercialisation is dependent upon the type of product company will
innovate and bring in the market.
 Process- Process refers to the steps that are involved in making available the new product
to existing as well as to potential customers. The success of new product is dependent
upon the process of distributing the product to the customers. If, the process is too short
then, Essence Drinks will not be able to reach to large customers and if the delivery
process is long then the chances of success will be more.
 Position- Position refers to the image of the company in the minds of customers. The
position that, Essence Drinks wants to achieve by achieving the objectives behind
innovating a new product. The company will achieve the position by providing best
services to its customers. So that, it will help in long term growth of the company.
Innovation funnel
Innovation funnel refers to step by step process for delivering the innovative product or
service to the targeted customers. It helps to achieve the objectives behind the whole process of
innovation and commercialisation. First step of the innovation funnel in Essence Drinks will be
gathering data and information to determine the need of customers for the product. It defines up
to what extent the innovative idea will help in satisfying the needs and demands of the
customers. After collecting the information, the company will perform the screening of the ideas
that are generated in the first step of innovation funnel. After selecting the idea it will be
implemented into real action. This will result in innovation of Chocolate Lassi with Toasted
Almonds (Tsai, 2015).
P4 Frugal innovation and examples of using in Essence Drinks
Frugal innovation is the process of innovation that discovers innovative models of
business, reconfigured value chain, and redesigned products for users who faces affordable
constraints, in sustainable manner (Abdul Razak, and Murray, 2017). Some ways in which frugal
innovation can be used by the company Essence Drinks :
Company Essence Drinks can reduce their cost of production by distributing quantity of
Lassi in various category like, Lassi can, recyclable bottles of 200 ml, 500 ml, tetra pack etc.
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This distribution of Lassi will make available for all income groups and all professionals like
office going employees, sales personnel and many more.
Essence Drinks can use different pricing with their different quantities of Lassi pack,
which helps the consumers by providing them convenience that they can drink “Chocolate Lassi
along with toasted Almonds” of Essence Drinks anywhere they want. This will not only increase
profitability of Essence Drinks but also the company may able to gain loyalty of customers. As
they did not tend to shift to other brands because of the convenience they get by Essence Drinks
(Chun, Chung, and Bang, 2015).
The Essence Drinks can open their outlets in Malls, Supermarkets and office canteens of
UK, which can help them to attain profitability. By this they can increase their market share in
UK. This will lead to increase in volume of sales of their product that is Chocolate Lassi with
Toasted Almonds and attain objective of the Essence Drinks by creating frugal innovation.
Company can also use electronic and portable Lassi outlets in UK, which improves
Essence Drink's sales as these outlets make available to large number of customers. By this
company not only able to increase their sales volume but also create a good customer base which
help them to attain competitive advantage.
Essence Drinks can also use new machines for production of “Chocolate Lassi with
Toasted Almonds” that will be more efficient and time saving for the company. This will directly
impact on reduction of production cost and final product cost will also decline by using new and
efficient machines (Amponsah, and Adams, 2017).
Essential Drinks can introduce different distribution channels like direct selling and
selling through intermediaries and make the drinks available in every segment of market of UK.
So customers can gain attention from other rivalry companies of Essence Drinks towards
“Chocolate Lassi with Toasted Almonds”.
By these examples of frugal innovation company like Essence Drinks who provide
Chocolate Lassi with toasted almonds can adopt these innovations and can attain growth, success
and profitability.
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TASK 3
P5 Importance of the commercial funnel and the application of New Product Development
(NPD) processing for commercialisation of innovation
Commercial Funnel is visually representation process which make product of the company
available to the potential customers which affects their actions and buying decisions.
Commercial funnel is also known as Sales funnel (Daellenbach, Davenport, and Ruckstuhl,
2017). Commercial funnel includes following importance and impact on Essence drinks by
providing various benefits to the organisations :
Helps in selecting right marketing strategy - The Commercial funnel will help organisation
like Essence Drinks in selecting right and appropriate strategies for marketing. This will impact
the company to understands marketing tools that will help in Essence Drinks to grow and
attaining success. This way they can make action on potential targeted customers of Essence
Drinks.
Helps in generating more sales - Commercial funnel helps in generating more sales and
impacts directly on profitability of Essence Drinks. This sets sales funnel to assemble towards
long run target of the company which gets an ease by performing commercial funnel.
Helps in business growth - It helps business like Essence Drinks to grow. By undertaking
activities in Sales Funnel, Essence Drinks will able to get more strategies which help them in
increasing their sales. Potential clients purchase products which is cost efficient and by
identifying these hazards company can attain profitability and impacts directly on the growth in
their business entity.
Helps in attracting new consumer segment - Commercial funnel helps Essence Drinks to
attract new customers (Davis, Tzanidis, and Saltzman, 2018). As by following this funnel
company is getting new strategies which need to be applied properly. Then the impact on
Essence Drinks is that they may able to gain new customers.
New product development process for the company Essence Drinks
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Idea generation - The Essence Drinks Company has come with the innovative idea of flavoured
Lassi which contains taste of Chocolate Lassi along with toasted almonds in their Lassi. They
come up with new flavoured Lassi which is their idea to start the business of Essence Drinks.
Idea screening - The company launch this product as a refreshing drink and fulfil this attributes
of the drink. Also, chocolate is liked by most number of persons. So, this flavour of Lassi is most
suitable for the company Essence Drinks (Kergroach, Meissner, and Vonortas, 2018). Therefore,
the product of flavoured Lassi should be executed as it has been passed test of Feasibility.
Concept definition - On this stage, the company will do all specification and design of the
product which is launched by Essence Drinks Company as a flavoured Lassi.
Strategic Analysis - This stage is specifically for getting proper analysis of Direct cost and
indirect cost. The Essence Drinks will also set margins of profit on a single unit of Lassi shall be
identified.
Development of the product - After complete analysis of contents will be added in the
packaging of flavoured Lassi for getting attention of consumers. Also, comparison of quantity,
quality and price with other rivalry companies for dealing with prevailing competition in the
market. Any deficiency in the product has been noted and improvement will be made regarding
it. This improves the quality of product that is Lassi sold by Essence Drinks Company.
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Figure 1 : New product
development process
(Source : New product
development process, 2018)

Test marketing - The marketing test includes research of the market of Essence Drinks
Company which is in UK. Also, on this stage company identifies their customers to be target to
sell their flavoured Lassi and develop a customer base.
Commercialization - It is an important step for every organisation to be conduct. The Essence
Drinks also undertakes this step of new product development which includes pricing strategy to
be finalise for the chocolate flavoured Lassi (Dincer, 2017). For increasing the sales in market
and to generate more customers other than the targeted customers.
Introduction to the market - This is the last and final stage of new product development which
is launch of the product of the company to the market segment. The Essence Drinks launch their
“Chocolate flavoured Lassi with Toasted Almonds” as a new product in the market of UK. After
launching the Flavoured Lassi the company has applied different plans and strategies that were
planned in previous stages.
P6 An innovation business case for Essence Drinks and includes ways to access funding
Innovation business case
The Essence Drinks company is a Beverage company which is UK based and known for
their Mango flavoured Lassi. But company fails decline in their sales revenue from “ Mango
Lassi” and therefore the company Essence Drinks now comes up with the new product that is
“Chocolate Lassi with Toasted Almonds” flavours. This flavour of Lassi contains taste of milk
chocolate in their Lassi and it will give crunch of toasted almonds too. Although, the new
flavoured Lassi will come at little higher price than previous one as it contains touch of dry fruit
that is Almond in it. But it will turn up the sales and revenue of Essence Drink Company with
their innovate flavour and crunchy taste within it (Kergroach, Meissner, and Vonortas, 2018).
The company will target all class of peoples specially children and adults are their target
customers in UK. For launch of their new product Chocolate Lassi they will set a strong channel
of distribution and the product will be available to all outlets and stores of UK. The main aim
behind the launch of Chocolate Lassi is that this flavour will turn up the sales and revenue
growth of the Essence Drinks Company which has actually declined by failure of Mango Lassi.
By this flavour company will gain competitive advantage and also their market share will
increase.
Now various sources of funds will be determined that can be accessed by the Essence Drinks
Company
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Own capital - The company Essence Drinks can invests in their new product by their own funds.
Also, their access profit can be use by them to make initiate in their innovation of Chocolate
flavoured Lassi.
Borrowings from banks and financial institutions - Many business takes loans from banking
and financial industries. The Essence Drinks also can take bank loan for executing their business
activities for launch of Chocolate Lassi on behalf of their collaterals.
Borrowings from friends and family - The owner Akshay Kumar can also borrow funds from
their friends and family, that is they can ask them for financial support by taking money for
further investment (Kergroach, Meissner, and Vonortas, 2018). This is also the best followed
source of fund after borrowing from financial institutions.
Borrowings from Venture capital – Start up companies like Essence drinks who aims to grow
potentially from their investors, may access funds from venture capital for main perspective of
long term growth. Another source of funding in businesses is Venture capital. They can get help
to accomplish their financial needs from them. As these institutions invest in businesses who
believed to have long-term growth as a primary objective.
Borrowings from public - This is also a way by which companies like Essence Drinks borrows
funds. The company can borrow and fulfil their financial requirement in investment by raising
equity shares among public. Interested investors come and buy shares of the company. In
exchange they will contribute their call money.
TASK 4
P7 Different tools used by Essence Drinks to protect knowledge and intellectual property
The company Essence Drinks can use the tools that will protect their innovation. Here are the
tools which provide aid to them ate :
Patent of the product the company will produce
This is a tool which help the company Essence Drink in providing right of not getting
copying by other companies. The company Essence Drinks can patent their products so that they
can create an identical image in market of UK and other companies cannot produce same product
and sell them in market (Heinonen, 2015). It is an important tool as this will help company in
protecting their intellectual rights which includes that the product will be produce and sell by
them only.
Initiating the component of trade secret in Essence Drinks
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In this all the information which is related to functioning of the company and other
important information will be kept as confidential by employees, in order to prevent from
competitors and rivalry companies by safeguarding the information with them (Dincer, 2017).
Thus, it is important for the company Essence drinks for keep their recipe of flavoured lassi
confidential and the company can use this tool to maintain their confidentiality of important
information of “Chocolate Lassi with toasted almonds”.
CONCLUSION
The above Report has described the term innovation, invention, comparison of invention
with innovation and importance of innovation as compared to invention for Essence Drinks. The
Report has also explained the impact of various factors such as vision of the company,
leadership, culture, team work on the process of innovation. Further, the Report has explained 4
P's of innovation that are paradigm, product, process and position and the use of innovation
funnel on innovation process. Moreover, the Report has described frugal innovation in the
context of organization, the importance of commercial funnel. The Report also explained the use
of process of new product development in commercialisation of new product, the ways in which
company can raise funds. The Report has also described various tools of protecting the
innovation.
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REFERENCES
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Exploration And Exploitation For Commercialisation. International Journal of Innovation
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Chun, D., Chung, Y. and Bang, S., 2015. Impact of firm size and industry type on R&D
efficiency throughout innovation and commercialisation stages: evidence from Korean
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Daellenbach, U., Davenport, S. and Ruckstuhl, K., 2017. Developing absorptive capacity for
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Transfer and Commercialisation.15(4Dincer2017).pp.447-462.
Davis, S. J., Tzanidis, A. and Saltzman, D., 2018. Medicinal marijuana: Commercialisation and
innovation in a complex regulatory environment. Australasian Biotechnology.28(1).p.60.
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Heinonen, T., 2015. Management of innovation in academia: a case study in Tampere. Journal of
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Nepelski, D. and Piroli, G., 2018. Organizational diversity and innovation potential of EU-
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O’Gorman, B. and Donnelly, W., 2016. Ecosystems of open innovation: Their applicability to
the growth and development of economies within small countries and regions. Handbook
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Tsai, S. P., 2015. Dynamic marketing capabilities and radical innovation
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