Innovation and Commercialisation

This document provides an overview of innovation and commercialization, including the definition and value of innovation, the role of leadership, vision, teamwork, and culture in shaping innovation and commercialization. It also discusses the 4P's of innovation and the use of the innovation funnel. Additionally, it explores frugal innovation and its role in the organization. The document is based on the case of Chilly, a company that aims to provide innovative water bottles that keep water cool.

Innovation and
Commercialisation

Table of Contents
INTRODUCTION...........................................................................................................................1
LO1..................................................................................................................................................1
P1) Explain innovation and its value...........................................................................................1
P2) How leadership, vision, teamwork and culture shape innovation and commercialization.. .2
M1) Analysis of sources of innovation........................................................................................3
LO2..................................................................................................................................................4
P3) Define 4p's of innovation and use of innovation funnel to shape innovative ideas. ............4
M2) Application of funnel of innovation in the context of organization.....................................6
P4) Explain developments in frugal innovation...........................................................................6
M3) Analyse role of frugal innovation in context of organization..............................................7
D1) Analysis of how innovation is formed in organizational context.........................................8
LO3..................................................................................................................................................8
P5) Value of commercial funnel and use of new product development process.........................8
P6) Business case of innovation in the company and ways of funding. .....................................9
M4) How to measure overall effectiveness of innovation business case...................................11
LO4................................................................................................................................................11
P7) Various tools that helps to retain and protect intellectual property.....................................11
M5) Evaluation of various tools in context of business environment.......................................12
D2) Evaluate nature of innovation ............................................................................................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
The term innovation refers to the process of converting an idea into product or service
that helps to create value for the customers. It is also defined as use of better solutions to meet
out the demand of customers. Commercialization can be defined as the process of bringing new
products into the market. It involves various activities like manufacturing, marketing,
distribution, sales and other functions that helps to attain commercial success of the product or
service (Osoro, Kirama and Vermeulen, 2017). The Report is based on Chilly. It was founded in
year 2010 by Tim Bouscarle and James Butterfield. The aim of this organization is to provide
people to always have cold water on the go without the need of buying single plastic water
bottles. The Report is based on Chilly's Bottle. It is a modern product that uses high electronic
technology and provide benefits of traditional bottle. The Report will outline term innovation,
sources of innovation, how culture, teamwork, leadership etc shape innovation, 4 p's related with
innovation, procedure for commercialization of product etc.
LO1
P1) Explain innovation and its value.
Innovation:
It refers to creative, new idea, thoughts and new imaginations in form of a method or
device. It can also be defined as the use of improved solutions to meet existing market needs,
new requirements or unarticulated needs of the customers.
Invention:
The term invention can be defined as a unique method, composition, device or a process.
It can be an betterment in a product, machine or a new process for developing an object etc. To
be called as an invention, it should be replicable at cost which is economical to the business and
it should be able to satisfy the specific needs of people.
Importance of innovation as compared with invention in Chilly company-
The process of converting new ideas and concepts into products or services is known as
innovation. It plays a major role in the organization as it leads to new opportunities. There are
various reasons due to which Chilly company should remain innovative. Such as it will help to
respond to trends and competition, provides unique selling point, helps to reinforce the brand etc.
Whereas, invention means to develop a working idea (Radjou and Prabhu, 2015). Innovation will
help to improve productivity by reducing unit cost of operations. It will assist Chilly firm to offer
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better quality of cold water bottles to customer's. Further, it helps to add more value to the
products. For being an innovative company, Chilly firm have to think regarding the process it
will use to manufacture Chilly's Bottles, also it should know how to collect relevant information
related with a particular idea and how the business will derive values for various recourses.
Invention means developing something new that could be a product, service or idea.
Invention is the result of innovation. It means that for developing new Chilly's bottle that keep
water cool will require new technology, improved process of production etc. Inventing new
Chilly's Bottles will help business to satisfy demands of clients like need of cold water on the go.
This will help organization to secure competitive position in the market.
Therefore, innovation and invention are both important for developing new products or
services for the customers. In this case, it can be said that innovation is more important than
invention as for now Chilly organisation requires to bring innovation in their process by
expanding their product line of chilly bottles and there is less requirement of inventing new
products as this company is still a start-up.
P2) How leadership, vision, teamwork and culture shape innovation and commercialization.
Organization vision-
The vision of organization also shapes and influence innovation and commercialization
of new product or service of the company. The vision of Chilly company is to accelerate the
everyday use and adoption of reusable products to meet out demands of customer's through
developing innovative water bottles that keep water cool. To achieve this vision, firm have to
innovate their products that requires skilled workforce. There is a need of innovative thinking to
develop better quality Bottles to clients, by which it can be said that vision helps to shape
innovation and commercialisation of this organisation.
Leadership-
It is the act of leader through which they influence, motivate followers to make efforts for
achieving aim and objectives of the company. Leader of Chilly company have to encourage team
members by using different styles of leadership like transformational, situational etc. through
which employee’s will contribute innovative ideas for developing Cold Water Bottles (Ratcliffe,
2017). These innovative ideas are further developed by the effective leadership which assist in
commercialisation of those innovative products.
Culture-
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Culture of an organization is the system of shared beliefs, assumptions, values that
governs the behaviour of people working in the firm. According to the model of Edgar Schein
there are three levels in organization culture they are artifacts, values and assumed values.
Culture of Chilly firm should encourage everyone to take steps for innovating the products.
Innovativeness should be an important part of the culture of company. This shared culture will
maximise productivity and innovation in Chilly’s by which commercialisation of their products
will also be enhanced.
Teamwork-
It can be defined as the level of cooperation between those people who are working on a
particular task. It is an important part of business. It means, team members will make efforts to
cooperate, providing feedback despite any type of conflict between them. Employees of Chilly
firm should cooperate each other to find solution for the problems that will occur while
innovating Cool water bottles and team work is essential at every stage of process of
commercialization. Team work is important for development of new skills and knowledge of
team members that shape innovation and commercialization of new range of product of the firm.
M1) Analysis of sources of innovation
Innovation is the process which is performed because of understanding external market
and it is important to understand changes in positive and relevant manner. Managers of chilly
must implement innovation by understanding external market with the help of which they can get
success. For instance: there is some experiments in order to come with something new and then
after many failures, it come with some product, then it is considered under innovation. Other way
of innovation can be demographical basis because there this there is complete analysis of
requirement of consumers and then corrective actions are taken. In this case, if there is arrival of
new product, then it is considered under innovation.
If management of Chilly Company wants to develop innovative products and services,
then they have to motivate workers to come with new approach under which employees are
motivated and share their views. This makes it easy for provide appreciation to new thoughts and
ideas.
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LO2
P3) Define 4p's of innovation and use of innovation funnel to shape innovative ideas.
There are four different P's of innovation which is also called mix of innovation. These
are as follows:
Product-
It is one of the major element of innovation mix. Product is the item that Chilly firm will
offer to existing and potential customers. The new product that is Chilly's Bottles will be
valuable to firm if, it has ability to add value to company. Whole process of innovation and
commercialization depends upon type of product company will offer to clients.
Process-
It refers to the way through which Chilly company will offer new product to customer's.
The success of innovation and commercialization also depends upon process of delivering
products to target customer's. Process should not be too long or too short.
Paradigm-
It can be described as the planned process that explain the way in which company faces
the change in process of doing jobs by facing new threats and challenges. Chilly company have
to prepare plan regarding how to do business in changing conditions.
Position-
It refers to the goals related with innovation and commercialization of new Chilly's
Bottles through which firm will attain competitive position in the market. The aim of Chilly is to
develop products for an active urban lifestyle (Linder and Williander, 2017).
Use of innovation funnel:
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Innovation funnel is defined as the mechanism that assist a consistent stream of
innovative ideas that can be screened to evaluate their viability. It is also known as Funnel
Management Process. This process can be used by Chilly firm to develop an innovative action
plan. The funnel will help company to develop as many ideas as possible. It is an important tool
that helps to launch innovative products. A large part of innovation funnel will be refined and
converted into development plans.
By Innovation funnel, innovative ideas can be shaped and examined. By this funnel, an
idea of innovative chilly bottles of Chilly organisation can be primarily developed and then
screened on the basis of a certain criteria. In case of Chilly organisation, this screening criteria
will be whether this idea will fulfil demand of certain lifestyle people which is working
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Figure 1 : Innovation funnel, 2017
Source: (Innovation funnel, 2017)

population. After which, the idea will be tested several times in order to gain a surety about the
success of that product. At the last stage of innovation funnel, the product of Chilly’s that is their
innovative chilly bottles will be introduced in external market so that they can be sold.
M2) Application of funnel of innovation in the context of organization
There is requirement of some new and innovative products for providing satisfaction to
consumers, so in order to come with the best approach, managers of Chilly organization must use
innovation funnel. Under this method, there is analysis of ways through which consumers can be
allotted with best products. There are possibilities of different options such as getting into new
section. After analysing different options, there are some pros and cons of understanding it. This
is the way through which pros and cons of different options will be considered. At last research
and development department of Chilly company will help organization to launch Chilly's bottle
which is charged with electricity which can be used by consumers anywhere.
P4) Explain developments in frugal innovation.
Frugal innovation-
It is described as the process of designing innovative products or services. It is not only
related with exploiting cheap labour but, it is also related with redesigning the process and
products of the company to reduce unnecessary expenditure. Frugal innovation is also described
as new emerging paradigm of technology. It will provide a matrix to Chilly company from which
solutions related with technology can be developed and implemented (Liao and Huang, 2016).
Frugal innovation can also be explained as the concept requires company to respond to the
limitations in different types of resources like material, financial etc. and converting these
constraints into solutions and innovative ideas. Cutting funds and lackluster growth to minimize
debt in developed countries will tend to increase the demand of frugal products, services and
innovative processes. Constraints of resources will increase the demand of frugal innovation in
Chilly firm.
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Examples:
 Chilly firm may use frugal innovation for reducing the cost of producing new product
that is Chilly's cold water bottles. Further, it will also help to minimize the complexity of
the process of production and also the ways through which new product will reach to
target customer's.
 Further, during the period of recession and in case of low growth, frugal innovation will
help to reduce expenditure of Chilly firm on manufacturing products.
 Another example is improvement in the process of distributing new product of the firm.
Company should use improved tools and techniques for distributed wide range of bottles
to different segment of customer's.
M3) Analyse role of frugal innovation in context of organization.
Frugal innovation is important for the organization because if provides proper and better
options to consumers which assist in keeping long term relations with them. As per change in life
style of consumers, there is change in their demands as well. This is important and relevant to
understand it and take corrective actions for it. It is essential for manager of Chilly firm to
understand policies that provides complete and specific information. This is specific for
understanding changes which are happening in competitor's policy.
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Figure 2 : Frugal innovation, 2015
Source: (Frugal innovation, 2015)

D1) Analysis of how innovation is formed in organizational context.
Innovation can be developed in organisation through proper research and development
under which it is important to understand possible changes. There is complete and specific
information to managers about what is the demand of consumers and then they can make policies
to analyse it. There are many changes which are relevant through which Chilly's developemnt is
possible, so it has to be appreciated. When employee come with new idea, then it must be shared
among all individuals. With the help of innovational approach growth prospects which makes
Chilly different from others.
LO3
P5) Value of commercial funnel and use of new product development process.
Commercial funnel-
It is described as the process containing various steps that helps organization to bring
prospective buyers one step closer to the products offered by company and buying decision with
the help of various marketing actions like articles, automated e-mails etc. It is also known as
sales funnel. The importance of commercial funnel is as follows-
It helps to choose right marketing strategy.
Commercial funnel will help Chilly company to develop effective strategies for
marketing of new product that is Chilly's Bottles.
It assists firm to generate more sales.
As commercial funnel helps to develop marketing strategy, this will support Chilly
company to know customer's better.
New product development process for Chilly Company-
For effective commercialization of new product that is cold water bottles, Chilly firm will
use the following process.
Idea generation
Firstly, firm will generate large number of ideas from two type of sources that are internal
and external. Internal source can be ideas of employee’s and external source may include
customers, suppliers etc. (Jantz, 2017).
Idea screening
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The development of new product of Chilly firm will start with screening of ideas. Firm
will generate large number of innovative ideas so that, it can move on further stages to reduce the
number of ideas.
Concept development and testing
This phase involves two stages. First is development of concept. Under this, idea that has
passed through stage of idea screening will now developed into concept. Another is concept
testing. Under this, concept of Chilly firm regarding product concept will be tested within a
group of customer's.
Strategy development for marketing-
Now, Chilly company will develop strategy for developing Cold water bottles. It is
divided into three parts. It will contain description about target market for new product, planned
distribution, price, budget, planned goals for profit, sales and marketing mix etc.
Business analysis-
Now, management of Chilly firm will evaluate the attractiveness of the new product that
will be launch by company.
Product development-
Research and development department of firm will test various aspects of new water
bottles. Product will undergo different tests.
Test marketing-
Under this, management will test marketing programme, process of developing new
product etc. in real market settings.
Commercialisation-
If, new product is successful in test marketing then, company will launch product on a
large scale like country etc.
Review of performance-
It is the last stage, under this management will evaluate performance of new product.
P6) Business case of innovation in the company and ways of funding.
Innovation business case will help Chilly firm to assess opportunity, benefits, cost etc. of
innovating a new product.
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Executive summary – The business case is related with the new product that is Chilly's cold
bottles that will be launch by Chilly company. It will outline vision, mission of the company,
targeted segment of customers for new product, marketing strategy, sources of funds etc.
Aim :
The aim of firm is to develop products for people having urban lifestyle with the balance
of unrivalled performance and distinctive style. In this case, range of newly chilly bottles is
introduced which are innovative as they keep the water cold along with which these products
will be developed by reusable products. The consumers can easily use cold water while
travelling, walking etc.
Mission :
The mission of Chilly firm is to increase the adoption and use of reusable products.
Customer target group :
Firm will segment whole market on the basis of demographic factors like age, income of
people. Further, it will also segment on the basis of lifestyle of people. The target customer
segment for new Chilly's Bottles are people living in urban areas of UK with the age group of
20-45 years.
Positioning strategy:
Chilly will position new product in the market by focussing on different areas such as
material, price, benefits etc. Chilly's bottle will be available at affordable price and the bottles are
manufactured by using high quality raw material like clay etc. Main benefit of the product is that
it will keep water cool throughout the day (Dutta and Folta, 2016).
Cost
Heading Expenditure (£)
Plant and machinery 20000
Wages and Salary 10000
Administration and Sales overheads 5000
Total 35000
The innovative product will meet out the need of cold water for targeted segment of customer's.
Marketing strategy –
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The management of Chilly company will use various tools and techniques for effective
marketing of new product. It will use social media platforms like Instagram, Facebook etc.
Ways to access funds-
The firm will use different ways to access funds for developing and offering new product
top target segment of buyers. Management of Chilly company will take bank loan for £10000. It
will also access funds from friends and family. Further, firm will issue shares to shareholder's for
accessing funds (Bag, Gupta and Telukdarie, 2018). Some other sources that company will use is
from angel investors, They will firstly determine the feasibility of the project undertaken by the
company. Then decide whether or not to provide funds to Chilly company for launching a new
product. Moreover, the management of company will issue debentures to the debenture holder
that will help to raise more funds for successful implementation of the new project.
M4) How to measure overall effectiveness of innovation business case.
In order to measure effectiveness of business case, there must be complete and specific
information about changes which are taking place in market. When innovation is implemented
by Chilly firm, feedbacks have to be taken from consumers through which they get proper
understanding about negative or flaws areas which has to be covered. If there is change in any
products, then it must be communicated to consumers properly through which they are ready to
take corrective actions against it. There are proper steps in business case through which they can
understand about progress rate of new product and this makes easy change in case of any
negative outcome.
LO4
P7) Various tools that helps to retain and protect intellectual property.
It is very essential for an organization to protect new techniques and ideas. There are
various tools that can be used by Chilly firm to develop, protect and retain knowledge and
intellectual property. These are as follows -
Trademark :
It can be defined as the symbols, names, images or words that are applied to a particular
product or service or these can be used in relation with goods or services to determine their
source. This will help Chilly firm to protect its Bottles against infringement by any third party.
Benefit is that It will help the company to defend the sole right of using intellectual property in
the court to sell, import or use it. After registering the trademark with the authority like Patent
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and Trademark Office, firm will gain exclusive rights of exploitation. One of the benefit is that it
will protect intellectual rights of the owner of Chilly company. One of the limitation is that
management of Chilly firm will have to pay fees at the time of renewal and registration.
Initiating the component of trade secret in Chilly company :
Trade secret refers to the formula, practice, pattern, design or combination of information
which is not easily known to others. It can also be defined as something by which organization
will get an economic advantage over competitors and customer's. The employees of Chilly
company should keep important information related with innovation of Chilly' cold water bottle
as confidential. One of the benefit is that third party cannot access formula, design of bottles
manufactured by the company. One of the disadvantage for Chilly company for using trade
secret is that other individual or organization may be able to discover the secret and use it
thereafter. It is more complex to enforce as compared to patent (Biemans, 2018).
Patent :
It is described as the combined rights provided exclusively to the business by national
government to the inventor for a particular period. It helps to protect new process, machines etc.
of the organization. It means that other people cannot use, sell the invention without permission.
This will help to protect innovation of Chilly's Bottles of the company. Chilly company will get
the right to exclude other people for developing, selling or using its intellectual property. This
will help business to be successful by gaining competitive advantage over other firms. The use of
patent may be very time consuming for Chilly company. Marketers may overtake the invention
of new product by the time company gets patent. One of the major advantage is that it will stop
others to use the invention of Chilly company from manufacturing, copying etc.
Secure intellectual property both digitally and physically :
Digital as well as physical protection both are necessary for protecting intellectual
property of the company. Chilly firm should lock the rooms where sensitive and confidential
information is stored. Further, it should use passwords and restrict the access of employee’s to
important database.
M5) Evaluation of various tools in context of business environment
When something innovative is implemented at Chilly, then it is important that they must
use proper techniques through which they can come with new and innovative approach. There is
complete and specific way to protect new product such as Patent, copyright, trade mark, etc.
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through which unauthentic person can not use it. Hence there is proper way to take corrective
actions for understanding it and can get good image as compared to competitors. When
innovation is registered under proper law, then there are some registered and legal charges which
ahs to be deposited to authorised organisation (Berry and Berry, 2018).
D2) Evaluate nature of innovation
Nature of innovation differs from product and services which is offered by mangers when
they are performing proper actions. There are different components which has to be considered
in case innovating new products such as market, target consumers, cost, challenges, etc. There
are possibilities of different components such as frequent change in consumer demand, problem
arising in taking copy right or patent, etc. so in this case there is requirement of proper
understanding about it.
CONCLUSION
The Report has outlined that, innovation plays an important role in converting new ideas into
innovative products or services. For any business innovation is much more important than
invention. It has been concluded that, to attain the organization vision, firm have to innovate new
products that requires skilled workforce, strong leadership, culture of innovation etc. Innovation
funnel helps to develop an innovative action plan. With the help of frugal innovation, business
can easily respond to the limitations in different types of resources. Commercial funnel assist
firm to choose right marketing strategy etc.
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REFERENCES
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Liao, K.H. and Huang, I.S., 2016. Impact of vision, strategy, and human resource on nonprofit
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Linder, M. and Williander, M., 2017. Circular business model innovation: inherent uncertainties.
Business strategy and the environment. 26(2). pp.182-196.
Osoro, O., Kirama, S. and Vermeulen, P., 2017. Factors Affecting Engagement and
Commercialization Of Innovation Activities of Firms in Tanzania. Tanzania Economic
Review, 4(1-2).
Radjou, N. and Prabhu, J., 2015. Frugal Innovation: How to do more with less. The Economist.
Ratcliffe, J., 2017. Developing metrics for your sales funnel: how to implement the AARRR
acronym. Journal of Aesthetic Nursing. 6(6). pp.318-319.
Rogers, B.H., 2017. The marketing performance credibility gap: The growing importance of
developing financially credible measures of the contribution of marketing to enterprise value,
profits and growth. Applied Marketing Analytics. 3(3). pp.194-198.
Tran, V.T. and Ravaud, P., 2016. Frugal innovation in medicine for low resource settings. BMC
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Online -
Funnel of Innovation. 2017. [Online] Available Through:
<https://www.toolshero.com/innovation/innovation-funnel/>
Frugal innovation. 2015. [Online] Available Through:
<https://www.semanticscholar.org/paper/Local-frugal-innovations%3A-How-do-resource-
scarce-in-Wierenga/eaa231166e66ee37fc7d2b7170e923c9deae59b0>
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