Strategic Application of Outbound Open Innovation

This assignment focuses on the strategic application of outbound open innovation in business strategies. It involves analyzing case studies from the European Journal of Innovation Management and International Journal of Information Management to understand how information technologies drive organizational innovation. Additionally, it delves into the impact of innovation on performance in small and medium-sized enterprises (SMEs) using a meta-analysis approach. The assignment also examines the role of internal R&D alongside open innovation modes.

Innovation and
Commercialisation

Table of Contents
INTRODUCTION...........................................................................................................................2
TASK 1............................................................................................................................................3
P1 Importance of Innovation and how it is different from Invention. ..................................3
P2 Role of vision, leadership, culture and teamwork in shaping in Innovation and
Commercialization.................................................................................................................4
TASK 2............................................................................................................................................6
P3 4P's of Innovation and use of Innovation funnel in examining and shaping ideas...........6
P4 Developing Frugal innovation. ........................................................................................7
TASK3.............................................................................................................................................8
P5 Commercial funnel and New product development..........................................................8
P6 Business Case..................................................................................................................10
TASK 4..........................................................................................................................................11
P7 Different tools for developing, retaining and protecting intellectual property...............11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Innovation is defined as improving the product by providing it in a better form or creating
alternative uses of the product. Innovation and invention are keys if a business wishes to sustain
in the environment. Commercialisation is altogether is a different concept which focuses on
introducing a new product into the market on a larger scale for financial gains. Apple Inc. and
Virgin group are two perfect example of innovation and commercialisation. Apple Inc. is
innovation driven whereas Virgin group is enjoying the benefits of operation at a broader scale
Under this concept a new product is introduced to the public. This report analyses the innovation
strategies, leadership, team work in Avanti. The company carries a diversified portfolio ranging
from enterprise, broadband, carrier services to government services as well (Aarikka and
Sandberg, 2012). The company has revolutionised the cellular sector by overcoming the barriers
of cost, reach and quality all over United Kingdom.
TASK 1
P1 Importance of Innovation and how it is different from Invention.
Innovation is an necessary concept for a business enterprise. Small and medium sized
enterprises are under around-the-clock threat from incumbent in telecommunication industry.
The main rivals for Avanti are bskyb and Eutelsat. Avanti has been among the best service
provider in the telecommunication industry (Abou-Ras Kirchartz, and Rau, 2011). The company
wit the use of Ka-band has successfully able to reduce the cost of operations by whopping 70%
and this innovation by the company helped them to gain an competitive edge over its customers.
There can be no better example of Innovation than iPod by Apple Inc. which brought revolution
in the MP3 player. The compact version of MP3 not only provided more storage but was also
appealing to the customers.
Here enlisting some of the benefits of Innovation:
 Motivation: Innovation helps the employee in building morale as well as enhancing the
confidence of employee. Employee is the one who provides the roots for innovation in
the company(Gupta, 2011).
 Better Means of survival: Innovation helps the company to sustain in the market for a
long duration which further ensures job security of its employees.

 Competitive edge: Innovation helps the company in obtaining competitive edge in the
market which will help company on financial grounds. A financial stable company can
provide its employees with better perks and incentives which will result in contentment
and low employee turnover.
 Improved productivity: Innovation requires increase in the standard of performance so
that the target can be accomplished (Buenstorf and Geissler,2012). This intense
environment in the organisation motivates to perform better. The Employees in Apple
Inc. raised their standard of performance and results were unprecedented. Productivity
can result in financial as well as non financial gains.
 Experimentation: It is a process of experimentation which assist the employees into
reaching their potential and unearth skills that employee possesses.
Key differences between Innovation and Invention
Innovation Invention
Definition Improving or redefining the
existing product.
Creating a product or a new
process.
When? When is existing product is not
fulfilling the present needs and
can be utilized better.
Successful Experimentation.
Skills Research, strategy building
and technical skilfulness
Scientific Expertise
Division Every employee with idea can
contribute to Innovation.
R&D is responsible for
inventions
Examples Portable music player by
Apple Inc. is the best example
for innovation.
Invention can be justified with
Virtual reality at present times.

P2 Role of vision, leadership, culture and teamwork in shaping in Innovation
and Commercialization
Vision, leadership, culture and teamwork are essential component for a company. These
component help a company to sustain in the market for a longer duration . The competition for a
SME stands intense so they have to utilize each of the component effectively to stand tough. For
Avanti these factors are necessary as they help the company to grow with a positive environment
in the organisation (Hausman and Johnston, 2014). Vision can be referred to as company's
dream, what they want to be in the future. Avanti dreams to be the best in telecom and satellites
service provider in the nation. Vision stands important for the organisation as it gives employees
as sense of direction. Clearly defined vision gives employee the motivation and helps them to
understand the reason of existence of the company. The employees feels connected with the
organisation and can contribute to the best of their potential.
Leadership is leading a organisation to a goal or a target. Leader is a essential element to
employees as the leader helps the employees in successful achievement of business objectives as
well as personal objectives. The perfect example of Leadership can be defined by taking into
consideration the CEO of Virgin group Richard Branson. Richard is known to be very aggressive
and focuses on entering into unexplored areas of doing business. As a leader Richard always
focuses on employee development where productive employees are always motivated to make
them perform up to their potential and goal achievement. Participation of employees can be a
motivating factor for them as they get to present their business ideas in front of the leader
(Inauen and Schenker-Wicki, 2012). If satisfied wit the idea the employee is provided with
adequate resources and opportunities.
The personnel from various department coordinate with each other for the purpose of
establishing corporate priorities of the company. These goals are further communicated to the
employees in the organisation for the purpose of their establishment. Team work is the
employees coming together for the accomplishment of the common objective. Avanti being a
project oriented company believes in achieving excellence through collaborative working. The
Principle is to provides all necessary to the employees to develop a better understanding of the
project.

Culture comprises of the people's belief, attitudes and values in the organisation. The
work culture of Avanti consist of people who are culturally diverse from around the globe.
Company provides ample opportunities of growth and development (Kilelu, Klerkxand and
Leeuwis 2014). Work oriented environment in company enhances the productivity of the
employees and facilitates goal attainment. Culture in Virgin group gives special emphasis to
employee development by listening to their ideas and supporting the feasible ones which later
acts as a foundation stone for innovation.
TASK 2
P3 4P's of Innovation and use of Innovation funnel in examining and shaping ideas.
The 4P's or innovation mix is a tool which categorises innovation into four critical
components i.e. Product , Position, Process and Paradigm. Innovation mix helps by narrowing
down the process into the focused or specific areas of an organisation.
Product Innovation
Product Innovation is one of the most preferred type of innovation which focuses on
product innovation. Apple Inc. carries the perfect example of product innovation. The innovation
of iPod by the company not only surpassed in terms of size and capacity but also in the
appearance as well (Kutvonen, 2011). This product can be taken as a poster boy for product
innovation. Avanti by using their expertise in the satellite department is aiming to provide
wireless connectivity in rural areas. The company is working on 5G technology in UK and have
received various awards for research and innovation for the same.
Process Innovation
Process Innovation focuses on applying the improved process of production or delivery
of the product. The significant changes can be new techniques, software and equipment. These
changes in the process help in reducing the cost of production and achieving competitive edge.
Avanti uses the ICT for purpose of supporting collaborative work environment.
Position Innovation
Position Innovation or repositioning focuses on the perception of the product in the mind
of the consumer. It involves bringing change in the perception regarding the product in the mind
of the people. Avanti earlier was perceived as company which provides cheap
telecommunication services but now people perceive them as a company which provides

premium quality services at a cost effective manner. Positioning today at the right place is
important for a company to fulfil its objectives (Lindič and et al., 2011).
Paradigm Positioning
Paradigm Positioning is one important component of innovation. Paradigm innovation
focuses on mental models which derives the purpose of the organisation. It puts emphasis on
changing the way people look at something. Innovation is known for inviting the change in the
mental models of a person. The innovation of iPod helped the people in changing the outlook
about an MP3 player.
Innovation funnel is a process taken from an idea to it becoming reality. When the
company discovers a challenge or a query ideas are invited from the employees. The wider side
of the funnel consist of ideas from the employees and as it goes thinner Funnel impracticable
ideas will be filtered and at the last only the best one is kept and appropriate resources and
opportunities will be provided to support the idea (Mueller, Rosenbusch and Bausch, 2013). This
culture of Virgin group supports the concept of innovation funnel. Ideas are invited and filtered
on the basis of relevancy and best one is supported financially.
Source 1: Synchronization of innovation and vehicle projects, 2014

P4 Developing Frugal innovation.
The emphasis in the process of frugal innovation is to remove features which are not
essential to produce a product at a lower price so that it is approachable to the budget conscious
people. This process of inventing a product is high because of the cost involved in R&D. In order
to provide the product with the same functionality, additional features are removed to make it
available for a different segment altogether. The concentration is on producing the product with
minimal use of the resources (Qian and Haynes, 2014). The product is formed specifically for
the developing countries where the purchasing power of the people is competitively lower. The
Chinese mobile manufacturer are trying to imitate the Apple Inc. or Samsung and providing
devices with the same features at a lower process to people who couldn't afford big
manufacturers.
Avanti telecommunication has revolutionised the field of carrier services. Wit the latest
development of the Ka-band technology the company is able to reduce 70% of operational costs
and providing the services at a very cost effective prices. The company coverage now includes
remote areas which are earlier deprived of mobile connectivity. Where the leading competitors
such as Vodafone, Giffgaff and O2 are struggling to provide the services at competitive prices
with Avanti.
Apple Inc. and Virgin Group are operating at a global level having huge resources in its
pocket. The product and services produced by the company mainly targets the rich class having
big purchasing (Schroll and Mild, 2011). The products and services created by them is high in
price so there lies a need to make that innovation available for the other segment that is where
the concept of frugal innovation comes. The market approach of these companies is top to
bottom where as frugal innovators go for bottom to top approach.
Avanti has formed a partnership with EE to provide better services in the telecom sector.
Company's expertise in the satellite field have been utilised efficiently by the EE with the aim of
giving competitive choices to people and a better coverage. Resource allocation where necessary
and customer satisfaction are the two main feature of these two working together. The latest
satellite service covers remote areas at the same time focusing on the elasticity of network
(Thore, 2012). The 4G services of the company are the cheapest and the most stable.

TASK3
P5 Commercial funnel and New product development
Commercial funnel focuses on launching a new product in the market. The main focus in
this process is the buying behaviour of the prospects. A product is launched during the last step
of new product development. This process focuses on potential ideas and choose the most
feasible one for the purpose of surviving into the market for a longer period. This process studies
the deviation between prospects and the number of people who actually buy the product.
Commercial funnel is categorised into 4 parts: Awareness: the first step involves marketing which means making people aware about
the existence of the product. Awareness is of prime here. It focuses on solving the
existing problems in the market with the help of upcoming product. Social media
marketing, email, billboards are the most common ways through which a company makes
people aware about the product. Interest: this step involves the number of people who will show interest in the product
and have queries about it. Decision: At this stage a prospect carries all the necessary details about the product as
well as about the organisation. They have to make a decision to either go for the product
or not.
 Action: this step focuses on the action of prospect into buying the product.
NPD (New product development) is the process of developing a new product for the
market. The new product by the company tries to fulfil the need of the market. It is crucial for
the company to develop a new product to survive in the dynamic market for a long run
(Troshani, Rampersad and Plewa, 2011). Productivity is the key factor in the process of new
product development. This process consist of 8 steps:
Step 1: Idea generation
This step focuses on inviting ideas from the employees for the purpose of problem
solving of the consumers. Virgin Group invites ideas from all the employee of the organisation
and appreciates the efforts as well.
Step 2: Screening the ideas
This step involves the filtering out the ideas which are non relevant or not feasible. The
problem is kept in mind while screening the ideas the consumer's expectations are kept in mind.

Step 3: Concept Testing
Concept testing is a different concept which takes into account the patent, marketing
messages and legalities.
Step 4: Business Analysis
Analysis refers to the detailed examination of the idea in the fields of its feasibility and
profitability. This step also consists of marketing strategy with detailed positioning as well.
Step 5: Product development
After satisfying with the analysis of the idea a prototype of the idea will be
developed .the prototype will be given for marketing testing for the product feedback.
Step 6: Test Marketing
This step consists of developing a market plan for the product and concepts are validated
along with it.
Step 7: Commercialisation.
This step focuses on preparation for the launch of the product. The strategies to be
adopted and channels of distribution to be preferred will be finalised. Pricing of the product will
be decided keeping in mind the competitors, cost of production and the margin decided by the
product.
Step 8: Launch
this is the last step in the product development process (West and Bogers, 2014). Now
that the strategies are finalised the product will be finally launched in the market. The time and
place for the product launch will be arranged and feedback is to received.
P6 Business Case
Business Case is an analysis of the market in order to understand the opportunities that
exist. Business plan focuses on the opportunities and try to fulfil that in a profitable manner.
Various alternatives are discovered and best one is selected for the purpose of investment.
Objectives
Objectives define the purpose of the organisation. So selecting the alternatives keeping in
mind the objectives is vital. Avanti focuses on being the best telecommunication service provider
in United Kingdom. Market research helps in identifying the market requirement and company
should work to fulfil it. There is a need for a affordable handset in the market along with the best
in class features. It also identifies what people are to be included in this project.

Consumer perception is vital. The understanding of the same will help the organisation in
the process of decision making and fulfilling the needs in an effective manner.
Gathering Inputs
This stage focuses on gathering the inputs for the product to be produced. The company
is focussing on building handsets the first requirement is of funds. But before that the company
should conduct a market research to support the idea and to find out about the profitability.
Analysis
The company possess all the necessary data through the market research. The data can be
effectively utilized to produce a prototype which fulfil the requirement of the prospect. iPod by
Apple Inc. revolutionised the MP3 player segment which served the consumer in a better way.
Raising funds
The funds are the most important source for an innovation. After the company is
confident with the idea they will start procuring the funds. Banks, Venture capital, self-funding
are the most preferred means of funding an idea or a business (Wong, P.K. ed., 2011).
Results
The last step involves company proceeding with the idea and launching. The company at
this step possess all the necessary data and appropriate funds to proceed with the same. The
controlling and monitoring of the process will be done in this step.
TASK 4
P7 Different tools for developing, retaining and protecting intellectual property
Intellectual property rights can be defined as an asset which can not be copied or stolen
by anyone without getting permission from its owner. It may include various things like brand
name, invention, designs of goods or services etc. In simple terms, it can be said that intellectual
property can be stated as unique thing which is created physically because a new idea can not be
counted as an property (Rosenbusch, Brinckmann and Bausch, 2011). If owner of these assets
gets registered then no one can use it without getting permission from its owner. In United
Kingdom, there are various types of intellectual property rights like-
 Patent
 Copyrights
 Trademark etc.

Avanti plc which is a small enterprise, deals in telecommunication sector. For this, it is
necessary that it should register itself under Intellectual Property Rights act so that no one can
steal their ideas or thoughts and can take undue influence. As per given case study, it is seen that
techniques of Apple company is stolen by Samsung organisation.
With the help of this property, organisation can attain competitive advantages over its
rivals. In UK, there are various kinds of laws which have main motive to protect the rights of
owner. In order to follow all legal rules and regulations, Avanti plc should recruit highly
qualified employees so that they will help in maintaining these rights confidential.
Intellectual property rights- Whenever there is any new or innovative work, relevant
person can register it under an act. If they are registered under any legislation then it will be
known as intellectual property rights. There are various kinds of property which can be
registered under this act, some of them are given below- Copyrights- When any person or writer writes some new books or articles then he has
option to register it in order to get exclusive rights. Generally, it is made for short period
of time and after expiry of that period of time, owner has to re-registered it. And if
anyone wants to use that article or books in their products or services then he has to give
royalty to the owner for getting permission and suppose if person uses that work without
any access then he will be liable for penalty (e-Business Strategy, 2013).
 Patent- Whenever any person invents some new things for the first time then he has
option to get patent by registering it under Patent Act 1970. After that no one can use it
without getting permission from its owner and if it will be then he will be liable for
penalty.
So in order to protect their new ideas or thoughts, person should register it under any
specified laws so that no one can access it without any permission as well as can not take any
undue influence.
CONCLUSION
From the above report it can be concluded that innovation and commercialisation play a
very crucial role in development of organisation in competitive market and creating a better
image in the society. Organisation's vision, leadership style, culture contour the techniques of
marketing. Modification and invention of a product can be done with help of 4P's of innovation
and commercial funnel. To reduce the cost of production frugal innovation can be utilized that it

can assist in developing a product for the budget conscious people. Intellectual Property rights
assist in protecting the inventions that a small organisation have invented. Innovation can help
achieve the organisation efficiency and can enhance the brand image.

REFERENCES
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