Innovation and Commercialisation in Small Business Context

This assignment brief focuses on the role of organisational vision, leadership, culture, and teamwork in shaping innovation and commercialisation in a small business context. It discusses the 4Ps of innovation and the concept of frugal innovation. The document also provides insights into the innovation process and tools used to protect intellectual property. The subject is Business and the course code is BTEC (RQF) Higher National Diploma in Business.

Assignment Brief – BTEC (RQF)
Higher National Diploma in Business
Student Name ID
Unit Number and
Title
08:Innovation and Commercialisation
Academic Year 2019-20 Cohort Sept 18 Block 2
Unit Leader AssessoAssignment Title Innovation in a small business context
Issue Date 25.03.2019
Submission Date
(Formative)
29.04.2019
IV Name
Deadline for
assignment
13.05.2019 (Summative Feedback)
Learners Declaration:
I certify that the work submitted for this unit is my own and the research
sources are fully acknowledged.
Date: 20-05-19
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Table of Contents
Assignment Brief – BTEC (RQF).......................................................................................................1
INTRODUCTION...............................................................................................................................3
LO1.......................................................................................................................................................3
Organisational vision, leadership, culture and teamwork can shape innovation
and commercialisation.........................................................................................................4
Types of teams are essence drinks?..............................................................................................5
LO 2.....................................................................................................................................................6
4Ps of innovation:..................................................................................................................6
The 4Ps of Innovation are used by the Organizations in order to begin the innovation
process, generally they are termed as innovation mix for the process...........................6
The 4Ps of innovation are-......................................................................................................6
Frugal Innovation :.................................................................................................................8
LO 3.....................................................................................................................................................9
Commercial funnel:...............................................................................................................9
Consumer Funnel is the process of visual representation of company's activities to
make the product available to the consumers to the extent of consumers buying
decisions and actions(Shiu, 2017).........................................................................................9
It is also known as sales funnel and is very important to the business in following ways-
.....................................................................................................................................................9
Innovation business case for Essence Drinks Company along sources to access
of funds...................................................................................................................................12
LO 4...................................................................................................................................................13
Tools used by the organisation in order to protect its intellectual property and
Knowledge:............................................................................................................................13
Trade mark:.......................................................................................................................................14
CONCLUSION.................................................................................................................................15
REFERENCES.................................................................................................................................15
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INTRODUCTION
The process of discovering new ideas and strategies in order to make a
new product available in market by the company is called Innovation.
Innovation of a product leads to growth and success of the organization.
Invention is the process of generating the new ideas as well as executing
those ideas and forming different activities to implement the ideas for
inventing a new product and completing the innovation process for the
product. The report will highlight on the difference between innovation and
invention process. Further it will focus on types of innovation and process of
commercialising innovation. The report will also mention the different ideas
and techniques used to protect the rights of innovating a new product.
LO1
Innovation can be defined by the process or activities consists of new ideas,
thoughts, methods, imaginations in order to discover new ways to do the
things.
Innovation plays an important role in the development and coordination of the
organisation, it is the way of adopting useful thoughts and converts them into
useful outcomes, products or method of operation. Innovation is crucial for
both new and existing organisations in this dynamic environment (Donate and
de Pablo, 2015.).
In this dynamic world where nothing is constant, new updations and
improvements are taking place on a day to day basis which leads to new
innovations and inventions in every one's life.
Invention refers to the process of creating or constructing something that has
never been created or made and it has come into existence for the first time
whereas Innovation is the process or activity done on the existing technology,
process or product by introducing new ideas or ways.
Invention is the creation of a new product or services, innovation refers to
addition of values to something that is already in existence.
Difference between innovation and invention:
1. The skills required in invention are scientific skills whereas in innovation
marketing, strategic and technical skills are required.
2. Generally inventions is concerned with a single product or process and
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in innovation, it is concerned with combination of products and
processes. Invention activity is limited to only R & D department and
innovation can be done by any individual in the organisation.
3. Invention can take place when the new idea strikes a scientist and
innovation takes place when a product or existing product needs an
improvement. Innovation requires knowledge, competences and
financial support whereas innovation requires technical knowledge,
competency, market knowledge and financial aid.
Innovation and Essence Drinks:
Innovation plays an indispensable role in an organisation. In this dynamic
environment, where nothing is constant technologies and changes in
products are taking place day by day according to the trend of today's
scenario and the organisation who is not taking part in this innovative world is
lagging behind (Fraj, Matute and Melero, 2015).
Essence drinks found a significant decrease in the sales of their product as
no innovation had taken place from the past two years because the company
introduced only one drink (a healthy mango Lassi) and the competitors
arrived with new ideas in the market. Essence drinks should introduce a new
flavoured Lassi to the UK market, named as Blueberry Lassi, can be a great
steps towards the innovation as its flavour is mostly liked by the people plus it
has great health benefits. It can lead the company to regain its position in the
market and can increase the sales of the product.
Organisational vision, leadership, culture and teamwork can
shape innovation and commercialisation
Commercialisation:
It is the process of introducing a new product in market for commercial benefit. It
can also be defined as process of selling a product or service into market for making
money.
Vision and innovation:
For being successful, an organisation should have a clear vision or far
sightedness to see the future goals more clearly. A goal cannot be achieved
when the vision is blurred, Essence drinks should have clear vision which can
help the innovation and commercialisation to implement much easier and
faster as all the goals are specified clearly to the employees. Essence drink
should state its vision clearly to its employees in order to innovate a new
drink.
Leadership helps shape innovation and commercialisation:
Leadership can influence gaol achievement and team performance by
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inspiring and motivating the team members. A successful leader should have
ability to enhance the skills of its team members, to create better vision
toward the goal, understand the organisational culture, develop the
performance and encourage innovation among the team members. A
successful leader can also influence its team members how they can
introduce a new flavoured drink to bring about innovation and
commercialisation.
Culture:
Organisation culture refers to the behaviour, assumption and values
that contributes to a unique psychological and social environment, a healthy
organisation culture can helps in shaping the business towards innovation
and commercialisation, if an organisation culture is positive, the employees
gets motivated and focused towards their work and can contribute to the
organisation. A healthy organisational culture can help in bringing the
essence drinks to the new heights and can lead to the success path and
employees can share their views and creative ideas to the leader.
Teamwork:
Organisations are more likely to perform well when they work collectively,
teamwork can help essence drinks to bring about innovation and
commercialisation as working in a team creates synergy, encourages team
members, create a sense of responsibility, foster flexibility, promotes a sense
of equity. Essence drinks can bring more innovation and commercialisation
when works in a team, teamwork can help to improve productivity and
efficiency (Naranjo-Valencia, Jiménez-Jiménez and Sanz-Valle,, 2016).
Types of teams are essence drinks?
There are various teams in Essence drink:
 Project team: this is the type of team in which all team members collectively work to
complete specific project.
 Functional team: Such type of team works on permanent bases; all people or team
members are allotted different responsibilities. Managers or leaders look upon the
progress of entire work so that transferring the work can be done effectively.
 Cross functional team: Managers pick the employees from different departments in
order to perform particular task, they have expertise and are able to perform their
job significantly.
 Virtual team: Team members work in different locations and communicate with each
other with various communication tools. Managers of leaders ensure all employees
make balance between their personal and professional life.
 Problem solving team Such kind of team is formed on temporary bases and team
members have knowledge about specific issues and they solve such issues so that
project can get completed on time.
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LO 2
4Ps of innovation:
The 4Ps of Innovation are used by the Organizations in order to begin the
innovation process, generally they are termed as innovation mix for the
process.
The 4Ps of innovation are-
Product- The product is the important element in the innovation process as it
is the only thing that is modified and innovated in order to offer the customer.
The Essence Drinks must be aware of what product it is innovating and
launching in the market so that it could add up the value to the organization
as well as lead the success of innovation process. Hence, it can be justified
that the innovation process is mainly dependent on the type of product the
company invents.
Process- It consists of production as well as distribution process being
undertaken by the company in its innovation of a product. Production process
involves use of the technology in producing "Blueberry Lassi" and how the
production process takes will take place. Distribution process involves how
the product will be available in market such as in retail stores, departmental
stores etc.
People- People are the ones to whom the product will be sold and is
considered another important component of the innovation process. Essence
Drinks must have the target group of people to whom the new product
(Blueberry Lassi) will be sold based on their preference and requirements
regarding the drink.
Press- Press refers to a relationship between the human beings and their
environment. The process involves providing a product which is unique and
will benefit more to the customers on its utilisation. “Blueberry Lassi”
establishes its uniqueness as it is health oriented drink along with the unique
flavour in its type of products (Mahmoud and et.al., 2016) .
Innovation Funnel- Innovation funnel refers to the implementation of
the innovative ideas through a systematic process. The completion and
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success of the innovation and commercialisation process depends on these
steps of innovation funnel.
 The initial step for Essence Drinks is to conduct a market research in
order to know the demand and needs of the customer and then decide
about whether the prescribed idea will able to fulfil these needs and
requirements or not.
 Second is the screening and evaluation of one idea with different ideas
and accordingly select the best for the business.
 Last step involves implementation and execution of the selected idea
and finally inventing a new product and launching it in the market.
Application of innovation funnels at Essence Drinks:
Essence Drinks has utilized this innovation funnel which involves identifying
the customer needs and requirements, as well as discovering the best idea
regarding the invention of a new product in the market or to modify its existing
product which can meet these demands and needs of the customers. Lastly
the company invented “Blueberry Lassi” as a step towards the completion of
the innovation process(Ortiz-Villajos,and Sotoca, 2018).
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Frugal Innovation :
The process that reduces the complexity in producing and reduces the
cost of production through innovative ideas is termed as Frugal innovation.
Frugal innovation is used to meet out the success of the innovation
process(Herrera,2016).
Following are the Principles of Frugal Innovation- Find opportunity in adversity- It involves modification of the problem
that means converting the threats into opportunities through dealing
with the effective measures and ideas. Do more with less- This principle states that the companies instead of
expecting more requirements must concentrate on the existing
resources and think of improving it through the use of various new
ideas. Think and act flexibly- This principle states that the companies must
behave more flexibly and improvisational rather than being rigid. Keep it simple- Complex tasks can cause different problems and
complications in performing them hence the company must keep its
tasks more simple. Include the margin- This principle refers to identification of customer's
problem by considering yourself at their position in order to understand
their actual needs.
 Follow your heart- This principle states that the companies must be
passionate towards discovering and implementing the innovative ideas
in their business(Prajogo, 2016).
Examples-
Coca-Cola used the concept of frugal innovation of using the solar powered
coolers which included a two valve fountains and ice boxes that remained
chilled for the hours even after power cut. This concept was used in India by
Coca-cola Plc and contributed its role towards energy saving process.
Tata motors have invented the low cost car which costed only $2000 USD
and has set a big symbol for the frugal innovation. These examples turn out
to be a mode of motivation to Essence Drinks company in adopting this frugal
innovation concept and claiming its different benefits to their business.
Essence Drinks can initiate Frugal innovation in various ways-
 The company can use the advance technology in production of
“Blueberry Lassi” so that it can reduce the labour costs and save time in
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the production process. This aspect will reduce the complexity in the
production process and also the products will be readily available on
time than the previous old techniques.
 As due to low cost of production for “Blueberry Lassi”, the company can
adopt competitive pricing strategy by setting low prices for its product so
that the product will be sold more in the market due to its low prices and
the company will be able to face its competitors by establishing strong
customer base from by increasing its sales volume.
 The company can also establish its strong distribution channel so the
product will be available in all forms of market. This will turn the eyes of
customers on “Blueberry Lassi” as the product will be displayed in every
retail stores and accordingly make them buy it. This in turn will boost
the sales volume of “Blueberry Lassi' and ensure profitability to the
company as well as lead to the success of innovation and
commercialisation process.

Thus, the above ways shows the adoption of frugal innovation by the
Essence Drinks and its benefits to the company in fulfilling its objectives.
LO 3
Commercial funnel:
Consumer Funnel is the process of visual representation of company's
activities to make the product available to the consumers to the extent of
consumers buying decisions and actions(Shiu, 2017).
It is also known as sales funnel and is very important to the business in
following ways-
 Sort and Rank sales leads- Commercial funnel may enable Essence
Drinks company in creating a consistent and organized process for
evaluating, sorting and prioritizing the sales leads and the activities of
the company.
 Focus on right sales leads- Initiating sales funnel will help the
Essence Drinks company to focus on the sales targets and correct
components related to sales as well as allocate the dedicated time for
the right consumers. This includes activities such as communication
and interaction with the customers to follow up their commitments for
the purchase of the new product, their required needs for modifications
and also their response towards the product.
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 Helps to project reasonable goals and obtain them from internal
and external sales team- As the primary function of the sales funnel is
to conduct the systematic process of sales activities it can help the
Essence Drinks company to set up various short term sales objectives
so that the company can focus and implement the strategies to achieve
them, which will increase the sales of the company.
 Systematic monitoring and accountability- The only purpose of the
commercial funnel is to carry out systematic sales activities and
maintain the uniformity in them. This will in turn provide Essence Drink
a complete record of its sales data of their newly launched product and
accordingly help them to analyse and monitor the changes of facts and
figures of the data( Gassmann and et.al., 2016).
Application of commercial funnel at Essence Drinks:
It s process through which sales and production funnel in industry helps
in improving the business operations at the right state. However, it comprises
with the stages which would attract buyers for purchasing the products of
company.
New product development process for Essence Drinks company-
New Product development is the process of taking product from
conception to the market. NPD process involves various steps in its process,
this are the steps that Essence Drinks need to follow for NPD-
1. Idea generation- The company has turned up with the new flavoured
Lassi containing one unique flavour in its Lassi product.
2. Idea Evaluation- The idea to invent the flavoured Lassi which will be
further evaluated by inventing a product named “Blueberry Lassi” which
will consist blue berry flavour in it.
3. Concept Definition- This stage will contain all the specifications and
product design which will be used for the “Blueberry Lassi” in its launch
in the market.
4. Strategic Analysis- At this stage the total cost of the new product
(Blueberry Lassi) will be determined according to the cost of
production, setting of profit margin as well as considering all the indirect
costs for the product.
5. Product Development- This stage will include the contents to be
placed at the packaging of the product to grab the attention of
consumers and also it will include the comparison of price and quality
with the different substitutes in market for facing the competition. This
stage also notes down various changes and modifications required in
the taste of “Blueberry Lassi”
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6. Market Testing- This stage will include the research of the market and
identification of target groups of customers to whom the product will be
sold.
7. Commercialisation- This is the most important stage which will involve
fixing the final price of the product so it could cover up more amount of
customers in market.
8. Product Launch- It is the final stage where the product will be
launched in the market through the application of strategies mentioned
in above steps(Clauss, 2017).
New product range of Essence Drinks:
Image
Flavour
Ingredients
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Innovation business case for Essence Drinks Company along
sources to access of funds
Innovation business case for Essence Drinks-
Executive summary- Essence Drinks is a UK based food and beverages
company popularly known for its “Mango Lassi” product. Currently the
company has declined its sales revenue of “Mango Lassi” and so it comes up
with innovative product launch of its another Lassi product.
Requirement- The main requirements for the company will be automated
machines and advance technology to increase the Lassi production in order
to produce more of its new product availability in market.
Solution- “Blueberry Lassi” is the new product being launched by the
Essence Drinks company as an outcome for its innovation process for the
product.
Need of Innovation- Primary need behind this product launch is to increase
the sales volume of the company and accordingly create more customers in
the market for the survival of business.
Market Research- Essence Drinks will target all the demographics of
population and especially the youth as they are turning up more health
conscious.
Investment Required-
Particulars Amount (£)
Machinery and Direct Cost 10000
Market Research Expenses 2000
Indirect expenses 8000
Total 20000
Benefits expected-
1. To increase the overall sales growth of the Essence Drinks up to 30%
till 2nd quarter of 2020.
2. To achieve about 50% sales growth of “Blueberry Lassi” at the end of
2020.
Sources of funds which Essential Drinks can access
 Own Capital- In order to innovate a product the company must pay first
priority in investing its own funds out of the savings as well as profits.
Essence Drinks can utilize its bank balance and liquid assets for the
innovation process.
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 Family and Friends- The owners of the company can obtain financial
help from their families and friends in exchange of paying them interest
or the equity of the company.
 Banks- Essence Drinks can avail finance from banks and other
financial bodies in the form of short term loans and finances in order to
initiate the budgeting of the innovation process.
 Others- Other sources include different sources of finance such as
venture capital, issue of shares and debentures etc(Saebi and
Foss,2015).
LO 4
Tools used by the organisation in order to protect its intellectual
property and Knowledge:
Essence Drinks can use the following tools to protect their innovation
and intellectual rights-
 Patent the product making- Patent gives the right to the company to
prevent others from making the same product and selling in the market
and thus, protect the company's intellectual right in inventing the
product. Essence Drinks shall use this tool as it has developed a new
idea for the innovation process and hence protect this concept.
 Initiate the Trade Secret component in the organization- Trade
secret is a tool where the information regarding the company's
functioning and other critical information is kept confidential by all the
employees for preventing the competitors to access the information of
the company. Essence Drink must use this tool in order to maintain the
confidentiality of information regarding “Blueberry” production
process(Donate and de Pablo,2015).
Trade mark:
Define
It is a protection provided against products and services in the organisation which
would be secured and manufactured by the policies and procedures which has been used
by the organisation in manufacturing procedure.
Advantage It created identity to the product and brand
of organisation.
Disadvantage It is complex process on which the owner
has to show proof of the differences in the
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product as well as brand from others.
Strength It secures all the rights of organisation
Weakness It costs more to organisation.
Patent:
define
patent has been approached by the person which have invented something in
environment. It protects intellectual property to keep the competitors for effective
inventions.
Advantage It presents the right to stop copying,
manufacturing and selling or importing the
invention ion a specified permission
Disadvantage It is time consuming and complex as well
as a lengthy process.
Strength One cannot copy the same product which
was patent by another person. Secures
rights of people or organisation.
Weakness It is very hard for one to make innovative
products, designs and process of activities.
Design protection:
Define
Creating differences in design of every product and service would be adequate and
effective in creating a unique identity in the market. Along with this, there can be use of
differences in design in the logo or brand symbol.
Advantage Bring uniqueness in the product design
would be effective in developing identity.
Disadvantage Charges higher costs, efforts, and time to
determine the unique design which is not
being existed in world.
Strength No fees will be charged and associated
with competitive edge.
Weakness Changes of having substitutes of pirates
regarding the designs.
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CONCLUSION
From the above study it can be summarized that innovation plays an
indispensable role in the success of the company. In order to sustain in the
market, the company should keep introducing new ideas and methods to
attract its customers and make them loyal to the brand. The important of
innovation cannot be compromised.
Also, many factors such as organisational culture, teamwork, vision and
teamwork plays a crucial role in innovation and commercialisation.
Recommendations:
There must be use of effective intellectual property which in turn would be
adequate in making innovative development in the products and growth of
entity in market.
REFERENCES
Books and Journals
Clauss, T., 2017. Measuring business model innovation: conceptualization,
scale development, and proof of performance. R&D
Management.47(3). pp.385-403.
Donate, M.J. and de Pablo, J.D.S., 2015. The role of knowledge-oriented
leadership in knowledge management practices and innovation.
Journal of Business Research. 68(2). pp.360-370.
Fraj, E., Matute, J. and Melero, I., 2015. Environmental strategies and
organizational competitiveness in the hotel industry: The role of learning
and innovation as determinants of environmental success. Tourism
Management. 46. pp.30-42.
Gassmann, O and et.al., 2016. Innovation Strategy: From new Products to
Business Model Innovation. In Business Innovation: Das St. Galler
Modell (pp. 81-104). Springer Gabler, Wiesbaden.
Herrera, M.E.B., 2016. Innovation for impact: Business innovation for
inclusive growth. Journal of Business Research.69(5). pp.1725-1730.
Mahmoud, M.A and et.al., 2016. Market orientation, learning orientation and
business performance: The mediating role of innovation. International
Journal of Bank Marketing.34(5). pp.623-648.
Naranjo-Valencia, J.C., Jiménez-Jiménez, D. and Sanz-Valle, R., 2016.
Studying the links between organizational culture, innovation, and
performance in Spanish companies. Revista Latinoamericana de
Psicología. 48(1). pp.30-41.
Ortiz-Villajos, J.M. and Sotoca, S., 2018. Innovation and business survival: A
long-term approach. Research Policy.47(8). pp.1418-1436.
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Prajogo, D.I., 2016. The strategic fit between innovation strategies and
business environment in delivering business performance.
International Journal of Production Economics. 171. pp.241-249.
Saebi, T. and Foss, N.J., 2015. Business models for open innovation:
Matching heterogeneous open innovation strategies with business
model dimensions. European Management Journal. 33(3). pp.201-
213.
Shiu, E., 2017. Good Practice of Creativity and Innovation Management in
Business. In Handbook Of The Management Of Creativity And
Innovation: Theory And Practice (pp. 175-189).
Visnjic, I and et.al., 2016. Only the brave: Product innovation, service
business model innovation, and their impact on performance. Journal
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Zhou, J., 2015. The Oxford handbook of creativity, innovation, and
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Online-
The Closed Innovation Funnel Model. [ONLINE] Available through:
<https://www.researchgate.net/figure/The-Closed-Innovation-Funnel-
Model-Source-https-learnopen2studycom_fig2_316917224>
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