Innovation and Commercialisation: A Case Study of Amazon Go

This study explores the concept of innovation and its importance to organisations like Amazon Go, contrasting it with invention. It examines how organisational vision, leadership, culture, and teamwork shape innovation and commercialisation. The 4Ps of innovation and the innovation funnel are discussed, along with developments in frugal innovation and its application in an organisational context. The importance of the commercial funnel and New Product Development (NPD) processing for commercialisation of innovation is explained, and an innovation business case is built for an organisation, including ways to access funding. Finally, the study evaluates different tools organisations can use to develop, retain, and protect knowledge and intellectual property.

Innovation and Commercialisation
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Table of Contents
Introduction......................................................................................................................................3
LO1:.................................................................................................................................................4
P1. Explain innovation and determine its importance to organisations like Amazon Go in
comparison with invention..........................................................................................................4
P2. Explain how organisational vision, leadership, culture and teamwork can shape innovation
and commercialization.................................................................................................................5
LO2:.................................................................................................................................................7
P3. Explain the 4Ps of innovation and explain the use of the innovation funnel to examine and
shape innovation ideas.................................................................................................................7
P4. Explain developments in frugal innovation and provide examples of how it is used in an
organisational context..................................................................................................................9
LO3:...............................................................................................................................................11
P5. Explain the importance of the commercial funnel and the application of New Product
Development (NPD) processing for commercialisation of innovation 500..............................11
P6. Build an Innovation Business Case for an organisation, including ways to access funding
...................................................................................................................................................12
LO4................................................................................................................................................14
P7.Evaluate the different tools that organisations can use to develop, retain and protect
knowledge and intellectual property..........................................................................................14
Conclusion.....................................................................................................................................15
Reference list.................................................................................................................................16
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Introduction
In this jeopardized business environment, organisations constantly struggle to improve their
performance standard for maintaining the competitive stability. In this case, innovation is
required for betterment of existing service as well as commodities. In this landscape, innovation
and intervention are two different aspects. Invention means introduction of new service or goods.
On the other hand, innovation can improve the existing business tactics as well as products. This
study enlightens the case scenario of Amazon Go. Recently, Amazon is preparing to open self-
checkout grocery stores in UK through registering the trademark of Amazon Go format. They
have understood that, if Grocery store has no checkouts, billing process can be handled with
more easy way. Therefore, aim of this study is to understand the importance of such innovation
in business process of Amazon. Moreover, discussion will be supportive for understand the
requirement of physical resources and funding to foster standard innovation in response to
business sustainability.
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LO1:
P1. Explain innovation and determine its importance to organisations like Amazon Go in
comparison with invention
Innovation can lead to increased productivity through the support of fundamental source of
wealth such as tactics of funding. It refers to different tactical idea for utilising different tools
that can improve the organizational performance by means of transformation. In order to create
culture of innovation, organisations have to implement various policies Belleflamme et al.
(2014) commented that often companies show little support for sharing their ideas on
management structure, compensation as well as productivity. In this case, people generally think
that innovation leads to product modification or advancement. However, this innovation is not
only related to product it also related with the production as well as supply chain perimeter.
As per the theoretical understanding, innovation on business process is related with the
procedures of performance management, employee management and other plans. Therefore, the
word ‘Innovation’ is can be supportive to increase the sales and profit rate in regards to
economic growth. Therefore, Amazon Go can get positive marketing environment through
applying their innovation plan on the business process. It can be stated that product innovation is
supportive for making transformational change within competitive market. Amazon Go is
committed to maintain a cash free shipping experience. This service innovation is also cam make
the transaction process more easily. As per the current report, refund or return system can be also
process through a disciplinary manner.
They have also implemented digitisation in the service for maintain the security level through the
support of strong surveillance system. Through this innovation on ordering and supply process,
organisation can prevent theft through verifying the purchases in a proper way. Logical service
development has been improved the time lag between ordering and purchase in Grocery stores.
Amazon’s decision on the service innovation has been taken on inventory management purpose.
As per the report, 1.44 % profit has Benn achieved through shrinking the inventory. Previously
organisations are facing issue of employee theft, unknown loss, and shoplifting and vendor fraud.
After the innovative plan on inventory tracking, such issue rates have been minimised (Spicer,
2015).
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As per the viewpoint of Butler (2016), invention can be defined as the creation of product,
whereas innovation is related with the improvement of service. In this landscape, Amazon
managers have strategic focuses on both invention and innovation objectives. As per the current
report, Amazon has introduced various electronic gadgets such as Bluetooth tire pressure
monitoring system, smart carryon luggage and other products.
However, now question is rising that why the organisations have prone to create innovation on
inventory system. As per the opinion of Cerqueiro et al. (2016), current customers prefer cheap
price range for quality products. After the Brexit, consumer consumption rate gradually
increased due to status of increased product pricing range. However, organisation cannot provide
standard product quality as per preferred price range of customers. In this landscape, Amazon
Go’s service improvement in inventory management is effective to foster such standard pricing
range as per consumer choice. Through reducing the overall spending cost, organisation can
maintain positive invention tasks, which can be acceptable between the customers. Therefore, in
comparison to invention, innovation not only deals with the invented product but also the
internal production procedures such as ordering, supply as well as deliverance (Rock, 2017).
Therefore, innovation can maintain the organisational profit as well as consumer satisfaction
from both end.
P2. Explain how organisational vision, leadership, culture and teamwork can shape
innovation and commercialization
Organisations have to understand the strategic dimension of innovation through the support of
leadership, strong organisation vision as well as team work. Innovation is a part to answer
queries of service improvement. However, leaders and CEO throughout the organisation are
responsible for changing the working style. According to Gavira et al. (2016), innovation needs
to be applied for giving a competitive edge within the field of production, marketing and other
industrial service. In E-commerce business process, Amazon is now leading player in the market
through applying positive effort on digitisation. As per the case study, Amazon Go is a part of
Amazon’s business. Therefore, the leadership culture and team collaboration have been reflected
as per theoretical approach, that Amazon do.
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After massive success on Amazon in UK market, organisation has introduced Amazon Go. Their
marketing vision has been structured as well as prioritised on customer driven services.
Invention, innovation and commercialisation are three different prospective, which cannot be
controlled without a supportive leadership vision. Amazon has introduced “Just walk out
shopping”, where more technological improvement has been applied. Therefore, workers should
have the understanding about such technological innovation to maintain the functional standard
at all level.
Amazon Go has taken support of machine learning and artificial intelligence. Leaders has taken
support of situational leadership theory and transformational understanding to accelerate
standard customer=driven standard objectives in the service process of Amazon Go. Through the
understanding the vision of service, leaders have supported the organisation to be a frontier part
of low-margin grocery industry. In the service process of Amazon Go, vision has been applied.
This vision is to be earth’s most customer centric company. Through this understanding, leaders
and workers has played major role to apply innovation on behalf of people. Situational
leadership has been applied here for creating impact on daily basis work, which is performed by
the employees. The leadership principle is applied here to invent and simplify the customer
driven attributes. According to Gibson (2016), workers are performing as per the leader’s
direction of strategic vision. In case of Amazon Go, entire inventory innovation on transaction,
billing and ordering process is maintained through the support of technology. However, this
technology cannot be applied without standard as well as knowledgeable performance of
workers. Therefore, current success of Amazon Go is the primary evidence of their positive
leadership and teamwork in regards to innovation as well as commercialisation.
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LO2:
P3. Explain the 4Ps of innovation and explain the use of the innovation funnel to examine
and shape innovation ideas
In today’s world of extreme competition and infinite substitutes, it becomes a must for the
companies and organizations to employ the process of innovation in their range of products,
services and ideas. Innovation may or may not refer to the employment of new products or
services. The companies in order to bring in innovation may resort to bringing in modifications
to the already existing products or services.
Just like the 4Ps of marketing which ensures that the products or services of the company are
promoted in the most efficient manners possible, the 4Ps of Innovation ensures that the right
process of innovation is used in their products and services (Akgun et al., 2017). The 4Ps of
Innovation comprises of 4 stages, namely:
 Product Paradigm Process Positioning
Product
This is one of the key stages of the 4Ps of innovation that comprises of the product that the
company is concerned with. Under this stage, the companies need to ensure that the right
processes of innovation has been applied to the product, in order to make it worth selling and
highlighting in front of the target consumers.
Paradigm
Paradigm refers to the perspective of viewing an already in existence component in a newer
format. Being one of the most integral of the model, it can help the companies by pointing out
the best process of innovation which can be employed in order to highlight the product or
service. For instance, for a company like Amazon Go, it shall be beneficial for the company to
portray themselves as an organization which strongly employs the process of recycling their
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products. By doing this, they can employ the scope of being innovative and hence, their
perceived value undergoes a positive modification.
Process
Under this step, various aspects of the companies, right from the manufacturing of the product to
its actual sale are analyzed. Also, the suppliers of the company are assessed. After all the
segmentation is done, the organization proceeds towards maximizing the profits with the
application of all of the latest trends in the respective domains.
Positioning
This is the step where the targeting of an already segmented customer base or a new customer
base altogether takes place. Usually, it is employed to alter and modify the perceived value of the
product. With enhanced positioning of the product, a company like Amazon can successfully
enhance the perceived value of its products.
Figure: 4Ps of Innovation
Source: (Cstmarketingmanagement.co.uk, 2018)
Innovation Funnel
Just like the 4Ps of innovation, the innovation funnel is a tool employed by companies and
organizations to make use of innovation oriented processes. This is done in order to implement
innovation in the organization. It comprises of three stages, following a certain hierarchy. Each
of the steps has been elucidated below:
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Idea generation stage: In this, various ideas and concepts are gathered by the company in order
to bring innovation and uniqueness in their products. This part represents the wide mouth of the
funnel.
Idea assessment stage: In this stage, the ideas are screened by the companies. Only the relevant
ideas and concepts are filtered based on the theoretical tests. This part comprises of the middle
portion of the funnel.
Idea testing and launch: In this, the final step, the ideas and concepts are applied to the
products. Then they are tested on a practical basis, after which they are launched for the end
consumers.
P4. Explain developments in frugal innovation and provide examples of how it is used in an
organisational context
In the current period, innovation management process in the organisation has been witnessed by
the rising interest of frugal innovation. This term primarily discussed in the landscape of
emerging market, where organisational tactics is to give non-affluent consumer opportunities for
consuming affordable services as well as products. As per the viewpoint of Gunther (2016), this
type of strategy is supportive for identifying the start-up as well as entrepreneurship requirement.
In the service improvement, technological innovation is required to eliminate the unnecessary
merits of a particular invention such as cost reduction. Frugal innovation is supportive in the
business process of Amazon Go to foster standard performance on supply chain management,
inventory tracking, manufacturing as well as deliverance.
The positive attitude of their business has been maintained by the strategic components of frugal
innovation. As per the case study, the organisation has incorporated self-checkout process.
Various reports have been indicated that ordering, selling and purchase can be accelerated in a
easy way through adoption of such Self-checkout process. In innovation, start up organisation
takes support of experienced workers, if they can understand the organisational objectives.
Therefore, frugal innovation is the basic platform of the success of Amazon Go. As per the
report, 45% customers have given positive reply in regards to delivery service of Amazon Go
(Butler, 2016). In this landscape, marketing concept has been aligned with the tactical way of
frugal innovation for achieving long-term success. Through adoption of such process,
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organisation can get positive support to reduce internal cost. Therefore, frugal innovation has
supported the Amazon Go to keep focus on both external and internal matters of business
operation. Amazon Go has applied the free shopping concept in the business process through the
support of technologies. Through rolling out cloud clients and application of sensor technology
consumers have ample scope to grab desired items from the store easily. After selection, they can
easily walk out without paying hard cash. It has been identified that previously Amazon’s e-
commerce strategy was outdated but after introducing Amazon Go they become successful to
retain more customers. Amazon is concerned about the consumer satisfaction level. Through
implicating various technologies they have also, crated value to purchasing time of customers.
The organisation has rolled out the innovation, which is supportive to reduce the friction that
existing in the shopping procedures. Over the last years, Amazon has enhanced their capability
on machine learning through understanding the cloud services. It can be said that the frugal
innovation has created greater impact on consumer centric approaches. The checkout-free
grocery is the primary example of their attributes in regards to consumer satisfaction. Through
this standard strategic performance, they can retain an excellent customer base for long-term
period. Therefore, such condition is effective for the Amazon Go to maintain competitive
stability within market.
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LO3:
P5. Explain the importance of the commercial funnel and the application of New Product
Development (NPD) processing for commercialisation of innovation 500
Commercial funnel is required to recognise the various steps that involved in the product
developmental process. The primitive purpose of a commercial funnel is to developing a product
through disciplinary procedures as per the different trend of marketing as well as business
essentials. According to Lerner and Tirole (2015), commercial funnel includes number of steps.
The first step is to understand the as well as acquire different scale of data. These are available in
the broader spectrum or sources. In the landscape of business process, this data can be gathered
through understanding different need of consumers, stakeholders and shareholders. Therefore,
Amazon Go has to analysis that idea appropriately for taking further step on new product
development. The organisation has to maintain clear stratified goal as well as objectives to
driving both innovation as well as intervention towards positive strategic direction.
Figure: Commercial funnel
(Source: Zandoval et al., 2014)
As per the presented figure, the larger mouth has indicated the first-step of the commercial
funnel. This step is related with acquisition of data for understanding the relevance of any idea
on product development. Through investigating the current market, organisation can understand
that how the planned product will be acceptable in the market. It has been understood that
consumer has a prone to get fast delivery within proper timing. In this scale, organisation has
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planned to introduce the service of “Prime air”. Through this service, organisation can design a
safer process to deliver the package within 30 minutes.
In this case, unmanned aerial vehicle such as drone need to be developed. As per the feedback of
customers, this drone delivery service can poses great potential for enhancing the overall
services. Through Drone vehicles, organisation can maintain rapid parcel delivery with overall
efficiency and safety in transportation system. It has been understood from the market research
that safety is always a concern in the eye of consumers. Both managers and customers think that
in regular hand-to-hand delivery process there is a possible risk of product damage. Therefore,
drone is required for prioritising the safety. Based on this understanding, the drones will be
developed as per the second layer of presented commercial funnel.
The vehicle will be built with multiple redundancies and sophisticated technology. Through
previous trial, organisation has understood the scale of improvement, where safety and reliability
is the major parameter. In systematic operation, this innovation will be supportive to maintain
standard home delivery services.
In this scale, organisation has to undertake some trial of this drone during delivery. Through this
trial, they can understand the consumer’s perception in regards to this new innovated delivery
system. Narrowest end of the funnel is related with the shipping of products or ultimate state of
innovation as well as invention plan. In this state, organisation has to introduce the new service
in the market through improving the identified gap during trial session.
P6. Build an Innovation Business Case for an organisation, including ways to access
funding
Innovative business is referred to various tactical plans, which is not only prioritised on
consumer satisfaction but also related with the organisational profit. Resource allocation is the
main perspective, where organisation has to understand the funding scope. They have to take
essential steps on the purpose of investment, which is required to foster execution plan. There are
various source of funding is available, which are described as follows.
Bank Loan: It is the more preferred and easiest traditional method for securing the funds. In this
case, organisation is trying to modify their existing delivery service. In previous period, the
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delivery process was entirely relied upon worker’s activity. In addition, transportation timing
also extended due to gathering product from various suppliers. For controlling the drone
organisation has to maintain more warehouse space. Therefore, loan is required to create balance
on internal as well; as external resource parameter in regards to innovation in delivery process
(Zandoval Bonazzi and Ari Zilber, 2014). Through positive performance in the E-commerce
business, organisation has maintained their profit still now. Therefore, bank can provide loan to
modify the existing service delivery process by means of technological innovation. Therefore,
bank will provide loan based on the long-term endeavoured success of the company. In this
context, loan can be provided if the organisation has entire capability to repay it within proper
time. Therefore, current organisation has positive image to get such loan amount. However, issue
can be occurred here due to lack of surety on loan amount.
Crowd funding: crowd funding is required is providing significant scale on business process. As
per the opinion of Rock (2017), bank loan is primarily tradition concept, where crowd funding is
appropriate on innovation project as well as business venture. It is effective for raising small
amount of money from the large number of people. For creating further entrepreneurial venture
such as innovation of delivery process, crowd funding can be a ideal attribute. It can b processed
through donation based, software based and reward based. Therefore, for developing the drones
as an objective of standard product supply, crowd funding will be effective.
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LO4
P7.Evaluate the different tools that organisations can use to develop, retain and protect
knowledge and intellectual property
Developing a product in internal business process is integral outline to foster standard business
objectives. In this landscape, development is referring to the production process through
retaining the idea as well as concepts, which are existing in the competitive market. As per the
opinion of Spoo (2016), every business should have their own success formula as well as
philosophy to fight against market competitors. Therefore, organisations have to take essential
steps on protection of those idea as well as intellectual properties. In addition, organisation has to
incorporate standard tool for maintaining business ethics.
Copyrights: Copyrights is referred to the legal rights to any idea, documents, assets and other
physical evidences. It is required to protect the idea of current business innovation from the third
parties and other competitors. Therefore, Copyright needs to be established for both current and
future purpose.
Trademarks: It is a recognisable design for identifying the products and services from a
particular source (Stim, 2017). In order to develop drone, organisation has to use label as well as
copyright logo. Therefore, trade marking is required to display an ethical image, where people
can understand the idea was not taken from the other sources.
Patents: Patent is required to prevent other parties from utilising and selling other’s inventions.
In this case, protection of inventions is pertained to method, product, apparatus as well as other
things. Patenting of idea is required to resolve the risk information-leak.
Therefore, proper security of such intellectual property is required to maintain ethical business.
Organisation should consult with the legal representatives for clearing any confusion on such
property protection. Such things will support the organisation to keep and deliver the idea in an
effective way.
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Conclusion
It can be deduced that, innovation is referred to different tactical idea for utilising different tools
that can improve the organizational performance by means of transformation. Theoretical
understanding justifies that innovation on business process is related with the procedures of
performance management, employee management and other plans. In the case scenario, it has
been visualised that the Amazon Go has followed standard objectives to foster their innovation
plan within inventory purpose. In order to shape the innovation idea Amazon Go has taken
support of machine learning and artificial intelligence. Leaders have taken support of situational
leadership theory and transformational understanding to accelerate standard customer-driven
standard objectives in the service process of Amazon Go. Based on the conception of frugal
innovation objectives, organisation has gained positive consumer support at all level. Based on
these factors, new product idea has been structured through the support of commercialisation
funnel. Organisation has planned to develop drone for delivery purpose through understanding
the consumer’s perception in regards to safety in delivery process. In this scale, they have to
understand the concept of funding for developing the product with all possible improvement. In
this context, organisation also has to protect their intellectual property for securing the idea of
current business innovation.
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