The Importance of Innovation and New Product Development for Oven-fresh Bakery: Overcoming Market Challenges

In this declaration we will discuss about oven-fresh bakery faces challenges and below are the summaries point:- The student confirms that the submission is their own work, without external help, and has not been copied. Oven-fresh Bakery faces challenges in meeting customer preferences and needs to develop new products. The study focuses on the importance of innovation and new product development for Oven-fresh Bakery's market sustainability.

Student Declaration
This is to confirm that this submission is my own work, produced without any external help
except acceptable support from my lecturer. It has not been copied from any other person’s
work (published or unpublished), and has not previously been submitted for assessment either
at GBS or elsewhere. I confirm that I have read and understood the ‘GBS Academic Good
Practice and Academic Misconduct: Policy and Procedure’ available on Moodle.
I confirm I have read and understood the above Student Declaration.
Student Name (print) Suhel Ahmed
Signature
Date
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Introduction
The world is moving forward day by day with some necessary and unnecessary change. In the
business world, management faces several challenges for the change of customer taste and
preference. Oven-fresh Bakery, a well-known company needs to make something new for its
consumer. This study helps the company to move forward to sustain its market share by new
product development. Oven-fresh has to follow several processes. Besides the management and
the staff of the company needs to analyse the market and then according to the market response,
it should handle the challenge. This study makes the company understand the necessity of
innovation and invention and the difference between them, new product development process,
threats of the process, and the ways to recover the challenges.
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To,
Mr Wilbur
Subject: Developing Innovation Model for Oven-fresh Bakery
Dear sir,
Section 1
Background to the company and the challenges it is facing.
Oven-fresh Bakery is a renowned UK-based company in the food and beverage industry. It has
been operating its business with its goodwill for 5 years. But its operation is very narrow as it
produces only one type of food. Although its product is very quality full and popular, nowadays
Oven-fresh Bakery is facing some threats. Every day people search for something new. They
cannot be satisfied with one type whatever it is good or bad. This nature of humans badly affects
this Oven-fresh Bakery. The consumer of Oven-fresh Bakery wants something new. If the
company cannot modify its existing product or cannot launch a new product line, the consumer
will probably move to other bread and it is a tremendous challenge for Oven-fresh Bakery.
The differences between invention and innovation and their importance to
organisations such as Oven-fresh Bakery.
Differences between invention and innovation
According to Despa, (2017), invention and innovation seem to be the same but there are some
basic differences between them. The main point of difference is existence. The differences
between invention and innovation are shown below through the table:
Invention Innovation
According to Gokhberg and Meissner, (2015),
when a new idea that is not existing is
introduced, it is called an invention.
When a new thing is introduced using existing
ideas, it is called innovation.
In invention, scientific knowledge is required. In innovation, knowledge of modification is
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required.
The whole organization regulates this process. R & D department regulates this process.
A new product or service is a must here. There is no such type of requirement here.
The invention deals with only a single
product.
Innovation deals with a single product or a
combination of several products.
Producing a new butter bun is an example of
invention of Oven-fresh Bakery.
Changing colour of existing cake is an
example of innovation of Oven-fresh Bakery.
Importance of invention and innovation to Oven-fresh Bakery
Invention and innovation greatly affect any organization especially a business organization.
Oven-fresh Bakery produces only one product. Here, consumers have no choice. But it is tedious
for them to consume the same food all time. To get a new flavour the consumers have to move to
another bakery. As a result, the market share of Oven-fresh will decline day by day. According
to Gokhberg and Meissner, (2015), in this situation, to sustain the share, invention or innovation is
most important. Oven-fresh Bakery can solve this problem in two ways. They can produce a new
product or modify an existing product. The importance of invention and innovation is bellowed:
Competitive advantage: If one company invent a new product or update the existing product
regularly after a certain period, it can cover more customer than any other company. Otherwise,
it loses customers instead of getting market share. In this way, Oven-fresh Bakery can fulfil
consumer demand.
Economic growth: By using the invention and innovation process a company can enlarge its
market as well as profit. Thus Oven-fresh Bakery can make economic growth by increasing
profit.
Customer satisfaction: Consumers always want a new feature or a completely new product.
Introducing a new product line or producing another product such as sugar-free cake, Oven-fresh
can satisfy its consumer.
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Discuss how organisational vision and leadership can promote teamwork to
develop an innovative culture in the organisation for its commercial success.
Vision, leadership, and teamwork are co-related to any organization. Without any common goal,
a business cannot collaborate with its employee and other stakeholders. According to, Boyatzis
and Soler, (2016), without any leader, no organisation can move in a common row. And finally, if
any company emphasis vision and leadership, a team can be automatically made.
Vision: Vision is a common long term goal. The final destination of any organization is to reach
its vision. As it is a common goal, the employee can do their work by making a team. Oven-fresh
Bakery should have a vision and it can be customer satisfaction.
Leadership: According to, Boyatzis and Soler, (2016), leadership refers to propel the staff or
labour to have specific work done. A leader can make a weak worker confident. Oven-fresh can
also have a leader to maintain the invention and innovation process.
Teamwork: Teamwork means helping one’s colleague and getting help from a colleague to do a
specific job. A very difficult job can be finished easily by teamwork.
Culture: In any organization, there are many staff and workers from different places. They have
a different belief, different religion, norms, values, etc. These are called culture. According to
O'Cass and Ngo, 2018), this different culture helps to introduce different ideas. For example, a
vegetarian worker of Oven-fresh Bakery can provide an idea of vegetarian bread or cake.
The relationship among them to develop an innovative culture in the organisation
When the goal of all workers is the same such as all workers of Oven-fresh Bakery try to make
customer satisfaction by providing new bread, they do their work under a common command.
According to O'Cass and Ngo, (2018), that is called leadership. By leading several workers, a team
is automatically made. Thus, making a team, a different type of worker with a different culture
can be found. The more an organization gathers different cultures, the more it can get new and
different ideas.
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4Ps of innovation and how this supports the capability and management of
innovation. Advise Oven-fresh Bakery which form of innovation would be
most appropriate for the company to engage in.
4Ps of innovation: According to Akgun, et al., (2017), 4ps of innovation model indicates the
effective innovation technique that is suitable for an organization. The 4ps model is described
below:
Paradigm: Paradigm is the first stage of the 4ps model. In paradigm, Oven-fresh Bakery selects
the easiest but effective innovation technique that is suitable for its business operation. Oven-
fresh should make some effective changes in its business operation by analysing after influence
on productivity and economic stability.
Product: Oven-fresh needs to modify its product by adding some new flavour or packaging in
this stage so that the bread becomes more tasty and healthy. The bakery has to focus on customer
desire in modifying the product.
Process: According to Akgun, et al., (2017), the process stage refers to the process of production
of a new product. Besides, it requires selecting, hiring, and training the employee. Oven-fresh
Bakery should not select any processing technique that is expensive and unproductive.
Position: According to Akgun, et al., (2017), position is the last step of 4ps innovation. In this
stage, by adding some unique features, Oven-fresh can attract consumer and thus it enlarge its
market share. Through it, this bakery make a strong position in the food and beverage industry.
Advice for most appropriate innovation for Oven-fresh Bakery
Oven-fresh Bakery can engage in the second stage of the 4ps model. As it has already known
about customer demand, it can determine what to do. And by modifying existing products
according to the consumer, Oven-fresh can easily take a position in the market. If the company
would not know what the customer wants and what to do, it could have to start from the first
stage.
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Discuss approaches that Oven-fresh Bakery can take to develop innovative
ideas, including the innovation funnel and frugal innovation, and their
application by providing appropriate examples.
Innovation funnel
When an organization wants to innovate any product or service, different ideas are found from
different sources. But all the ideas cannot be made feasible. Now the question is which ideas
should be accepted and which should be not. According to Bonazzi and Zilber, (2019), innovation
funnel helps the organization to justify the feasibility of those newly proposed ideas. So, we can
say, an innovation funnel is a tool by which the research and development department can select
or eliminate the proposed ideas for innovation.
Oven-fresh Bakery can also use this tool. Based on Bonazzi and Zilber, (2019), as this company
needs to innovate products, different ideas come from different sources. In this situation, the
innovation funnel helps to test the feasibility of those ideas and finally select the idea which is
most effective and feasible.
For example, the two ideas are proposed. One is modifying an existing product and another is
producing a new product. Oven-fresh Bakery can analyse these two ideas by innovation funnel
and select the most profitable and cost-effective idea.
Frugal innovation
Sometimes in new product innovation, new ideas may not be available. In this case, the
organization has to move forward within the existing idea. The company here needs to modify
the idea by reducing cost, complexity, etc. Frugal innovation works in this situation. According
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to Weyrauch and Herstatt, (2017), frugal innovation doesn’t funnel the ideas as there is a limited
idea. It adds or declines necessary features to the specific idea.
In Oven-fresh Bakery, there is only one product. Now the company can reduce the feature which
is not preferable to the customer and add some new flavour that is desired by the consumer.
Between the two mentioned innovations, on the basis of Weyrauch and Herstatt, (2017), Oven-
fresh Bakery should follow the innovation funnel. In frugal innovation, the organization reduces
the limitation of the product. Though the existing product has no limitation but consumers want
something new. So, this bakery needs some fresh and new product idea and analyse those by
innovation funnel. Analysing those ideas, Oven-fresh finally can select an effective idea and
produce.
The process of innovation of the Oven-fresh Bakery
There are eight steps in the process of innovation. Oven-fresh Bakery has to follow these steps.
These steps are discussed below:
1. Idea proposal: Top-level managers with some specialists can propose some feasible
ideas. The idea of Oven-fresh Bakery may be a dry cake or cake with jelly. As it is a
bakery company, the proposed ideas should be bakery oriented.
2. Idea screening: According to Mulkay, (2018), the management has to funnel the ideas and
find out the most effective and feasible idea to develop. In this stage, the ideas are
analysed and evaluated according to the company's capacity. Oven-fresh Bakery can pick
the idea of dry cake because of cost-effective.
3. Idea development: In this stage, the top-level manager tries to find a way to develop the
idea. For this, management can hire a specialist. Oven-fresh Bakery has to collect the
information from a customer survey about the new product and identify the market
expectation.
4. Market strategies: Inform the consumer about the new product is very important. Only
producing a quality full product is not enough. If the customer can’t know about the
product, they won’t have any interest to purchase new. The more Oven-fresh advertises
its new product, the more sales volume is increased.
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5. Business analysis: According to Mulkay, (2018), business analysis covers all financial
requirements. To make feasible the new idea Oven-fresh Bakery needs a certain amount
of finance. In this stage, the company ensures the final support to make the innovation
successful. But the financial manager will ensure the least cost of financing. The bakery
can collect finance internally as it has no cost of finance.
6. Developing product: With financial strength, Bakery has to go into production. In this
stage, the company should follow the production process. The production manager of
Oven-fresh Bakery should ensure the quality of the new product.
7. Marketing experiment: After completing the production process, Oven-fresh Bakery
launch its new product in the market with a small number for an experiment. If the
response of the consumer is not satisfactory, the company should update the product
according to customer satisfaction.
8. Commercialization: Based on Mulkay, (2018), commercialization is the last step of the
innovation process. In the market experiment stage, if the market response is satisfactory,
the Oven-fresh Bakery will commercialize all the stock.
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Section 2
Scout new ideas for new product development. Identify ways to access
funding.
There may have several ideas for product innovation of Oven-fresh Bakery. The company can
develop a dry cake as its expiry is longer than bread and the price of the cake will be
comparatively low. Now the main task of production is managing production cost. According to
Auerbach and Hassett, (2016), every Finance has two sources. One is external and another is
internal.
The external source of finance: When an organization collects its finance from other
organizations then it is called external financing. The other organization may be a bank or
financial institution. Finance is available from an external source but the cost of financing is
high.
Internal source of finance: When an organization collects its finance from self-organization
then it is called inter financing. According to Auerbach and Hassett, (2016), retained earnings are
the best example of internal financing. In this financing, the cost is comparatively low but
finance may not be available.
From the above discussion, Oven-fresh Bakery should collect its new product development cost
from an internal source. Because no non-operating expense like interest has to be paid here. As
the bakery has been running its business with high popularity for five years, it must have made a
remarkable profit. So, generally, the financial manager expects that the company has a smart
amount of retained earnings.
Build an Innovation Business Case for the above organisation using
appropriate techniques to measure, test, and improve the performance.
Include the following in your discussion
As the customer of Oven-fresh Bakery wants something new, to sustain the market share
company management has to produce something new. But, based on Mitsuhashi and Greve, (2017),
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producing something new is not possible overnight. For that, the collaboration of all departments
is very necessary. To develop a new product, Oven-fresh Bakery should consider the followings:
Matching goals to resources and capability: Developing a new product is a common goal of
Oven-fresh. To reach the goal, management has to plan and execute several steps. According to
Mitsuhashi and Greve, (2017), one thing must be considered that the company should do the job
within the resources and capability. On the other hand, management should not let the resources
unused. For example, Oven-fresh is a bakery company. It has experience and capacity to produce
bakery products like bread, cake, etc. If it tries to develop soft drinks to change the customer
taste, it will be a great risk. Because Oven-fresh has no experience in soft drinks. Rather it can
produce a dry cake. It will be a better choice to meet customer demand.
Assessment of risks involved: There will be a risk in every innovation especially in the business
sector. Because if the customer doesn’t accept the new product, the company will face losses.
For the Oven-fresh Bakery, the situation will be the same. The new product development will be
successful or not, it depends on customer response. To reduce this risk, the market experiment is
very effective. Oven-fresh can produce a small amount of cake and commercialize. If the
customer prefers the product, the company can start its full production. But if not, it can collect
market response and then modify the product according to the response.
Value analysis applying frugal innovation: As Oven-fresh has to develop a new product within
a bakery product, it should apply frugal innovation. According to Weyrauch and Herstatt, (2017),
this innovation eliminates the production cost as well as difficulty. As consumers prefer healthy
food to junk food, Oven-fresh can add healthy ingredients rather than testing elements. Thus the
bakery can produce the cake with one kind of element, only a healthy element, and reduces
production cost. In this way, the company can reach customer demand as well as more profit.
Discuss the importance of commercial funnel in the new product development
process for its commercial success.
According to Bonazzi and Zilber, (2019), if any company wants to get a competitive advantage, a
commercial funnel can help greatly. Now how the commercial funnel promotes a business
organisation is discussed below:
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To know about market competition: With the help of a commercial funnel, company
management can get knowledge about consumer preference and other company’s services.
Getting the customer response that the company can modify or produce its new product. Oven-
fresh should analyse the market and develop the product.
Economic growth: If any company gets a competitive advantage, its economy automatically
grows. With the help of a commercial funnel, Oven-fresh can get a competitive advantage as
well as reach the expected economic margin.
Explain how Oven-fresh Bakery can protect the intellectual property rights of
a new product.
There are several ways to protect intellectual property under the intellectual property act. Based
on Kalanje, (2015), it may be a copyright, trademark, patent, registered business product. Oven-
fresh firstly should maintain the confidentiality of the development process. Besides, it can
register the new product under the intellectual property act. In a single owned company, it is very
convenient to protect these types of property.
Provide a critical evaluation of the entire process, including the nature of
innovation, context, risk, and challenges involved, and recommend ways to
overcome challenges for sustainability.
A new product development process is not very convenient. According to Howells, (2016), this
process consumes much time and the worker has to work tediously to make the process effective.
The study has already discussed the innovation process. The major point in this process is market
response and quality of the management. If the company has any weakness in these two sectors,
the entire process will fail to reach the profit margin. There are several risks in this process for
the Oven-fresh. For example, the goal of innovation may not match the resource and capacity of
the company. Skilled management can easily reduce this risk. On the other side, Oven-fresh
Bakery will produce a new cake according to consumer demand but it may not reach customer
satisfaction because of competition or other external challenges. A proper marketing plan can
eliminate these types of challenges. At last, based on Howells, (2016), the management has to
emphasize growth maximization rather than profit.
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Sincerely yours,
Mr Suhel Ahmed
Conclusion
A company lives within its customer. So, to sustain in the market, Oven-fresh Bakery needs to
bring some radical change to satisfy its customer. Here, new product development is a better way
to handle the customer pressure. As the bakery is already well-known to the community, the task
of the marketing department will be half. It is easy to reach the community with a new product in
this situation. But the company must consider the customer requirement in producing the new
product. Management may face some financial and business risks. It can be reduced if the
company follows the whole innovation process properly. Finally, the study strongly recommends
the market experiment firstly then commercialization as it is a new product for the company.
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References
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