Innovation and Commercialisation

This report discusses the importance of innovation and commercialisation in organizations. It explores the 4Ps of innovation and the use of innovation funnel. It also discusses the concept of frugal innovation with examples. The case study focuses on a restaurant called Pidgin and how it has implemented innovation and commercialisation strategies to become successful.

INNOVATION
AND
COMMERCIALISATION
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TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Innovation and its importance to organisation as compared with invention..........................3
P2 Organisational vision, leadership, culture and teamwork for shaping innovation and
commercialisation........................................................................................................................4
TASK 2............................................................................................................................................5
P3 4Ps of innovation and the use of innovation funnel...............................................................5
P4 Developments in frugal innovation with an example.............................................................8
TASK 3............................................................................................................................................9
P5 Importance of commercial funnel and the application of New Product Developed..............9
P6 Innovation business case for an organisation.......................................................................10
TASK 4..........................................................................................................................................10
P7 Different tools that organisation can use to develop, retain and protect knowledge and
intellectual property...................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
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INTRODUCTION
Innovation, is considered to be a multi-faceted process that includes a of various activities
that are diverse in nature and though complex as well. Innovation, is generally determined as an
idea which is accomplished in order to have a finished outcome. The present report is based on
innovation and commercialisation and the company which is been taken into consideration is
“Pidgin”, which was opened in the year 2015 and since then they are providing the best food in
the town. Therefore, this report will include innovation and how different elements such as
innovation funnel, frugal innovation, a business case and intellectual property rights in order to
put an effect or provides a positive assistance in being the one of the best restaurant of its kinds
by helping the same in developing a new products.
TASK 1
P1 Innovation and its importance to organisation as compared with invention
In simple words if it is to tell what innovation is than Innovation, is determined as an
action or process through which the idea is converted and provided a shape so as to present the
same in front of the customers. Innovation can be a whole new thing or it could be like inducing
a new method in the product that already exists. Invention, is mostly done for a novel cause so
that most of the benefits can be provided to people. Invention, it is an action where various ideas
and objects and undertaken for creating something which is totally new to the society (Battistella
and Nonino, 2012). For example: invention of light by Thomas Alva Edison. To understand this
in a better manner it is explained below:
Difference between Innovation and Invention
BASIS INNOVATION INVENTION
Meaning Innovation can either be a
new idea or it can be like
doing changes in exiting
products and delivering the
same to customers.
It is something that is entirely
new and never have been
introduced earlier.
Skills required Innovation includes a variety
of skills considering the work
which is being done such as
In order to do an invention
technical skill plays a crucial
role as it helps in performing
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technical, marketing and a
range of strategic.
the activity in an effective
way.
Brought about by Innovation is entirely being
done when there is a
requirement of a new product
or service.
In this the idea of a scientist
is important and mainly think
in context with betterment
human kind (Cornaggia and
et. al., 2015).
Involves Innovation can incorporate a
single product.
Whereas, invention can
include a different range of
products.
Importance of innovation is more as compared to invention because innovation is done
on a regular basis whereas, invention is done when it is essential and need to provide a better
option of a human kind. In terms of companies, in order to sustain in the market for a longer
period of time, innovation is being implement by most of the companies because with the change
in course of time preferences of customers are also changing. For example: customers of
restaurants are searching for healthy food as they are becoming health conscious. However,
restaurants and cafes are also providing them for gaining competitive advantages.
Drivers who are forcing companies to innovation: Competition- This is one of the key drivers who are enforcing companies to launch new
innovative products and services. It is so because a company makes their strategies and
policies in accordance of activities of their competitors and if competitive companies are
focusing on innovation then this becomes essential for others to do so. Such as in above
company, they launch innovative ideas in accordance of competition level. Customers- The customers also crucial whose demand leads to become more innovative
to companies. Like customers’ demand for those products which are advanced and less
costly. Due to which it becomes essential for companies to think about new innovative
ideas and operations.
Advantages of innovation:
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 Leads to continuous improvements- If a company launching continuously new innovative
products then it becomes easier for them to develop as a leading entity in a market. This
is so because they become able to attract more number of customers and beat to their
competitors. Less costly- Another advantage of innovation is that this is less costly as compared to
invention. It is so because innovation requires a unique idea while invention copies
others’ concept which leads to higher cost.
P2 Organisational vision, leadership, culture and teamwork for shaping innovation and
commercialisation
While running a business, having a vision, leadership, culture and teamwork is very
important and managing the same can provides with the maximum benefits (Datta, Mukherjee
and Jessup, 2015). Hence, it is important that companies look at all these factors and make
strategies accordingly. In context with Pidgin, considering all the factors some points are
mentioned below for better understanding”
Organisational Vision: Unlike other company, Pidgin has its own organisational vision is
to provide the best available food to customers at a very reasonable rate. However, they are
considering the choices and preferences of customers and providing them with their preferred
dishes.
Leadership: In a company like restaurant, this is an important factor for managing the
activities because there can be instances when employees can feel great pressure and here a
leader can guide them and motivate them in doing their work in a better manner. Moreover, for a
better conduction of activity leaders of the restaurant are using participative style of leadership
which means all the members working within the restaurant can have their own views and can
give their own ideas for making a proper decision. For example: Pidgin is taking provide
employees with an opportunity of making changes in the menu according to the current trends
and this is the reason why they have known as the best food in terms of tastes, varieties and
price.
Culture: Businesses like restaurants, needs to have a creative culture and their prime focus
should be on to provide something different which their rival companies has not thought off.
However, culture includes core values and a great value can probably make a big difference in
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context with providing customer experience. Therefore, in relation with Pidgin their culture can
be seen in the menu as they are unique (Koirala and et. al., 2016).
Teamwork: In order to become successful, execution of the activity is important and for
this teamwork plays a crucial role because in order to turn out an idea into innovation having a
capable team is important. While talking about the Pidgin, the have a cross functional team
which means people working within the organisation are from different functional areas such as
production, marketing, sales, customer success etc., thus, all the members of different
departments are playing their part in providing benefits. For example: company is thinking of
innovating a new dish which will be healthy but no compromise with its tastes. As a result, with
cross functional team and with team synergy i.e. working together for a common goal can shape
innovation in an easier manner.
TASK 2
P3 4Ps of innovation and the use of innovation funnel
From the innovation’s point of view 4Ps of innovation is very important because it helps in
performing the activities properly by analysing different kinds of elements. Thus, company can
have a stimulation for understanding how the action will is being done and how precisely it can
be done. Therefore, to understand more about 4Ps of innovation it has been explained below:
Product: While doing an innovation the first thing that comes into the mind of the
business owners is that how the company can expand the range of its products. Thus, a proper
study is conducted so as to maintain the quality of the products. For example: after analysing
the market trends and evaluating a shift of customers towards healthy food items “Pidgin”
thought of innovating a total new product that is health conscious and excellent in tastes as well
i.e. “healthy bowl” which will be a healthy dish including macronutrients that will be high in
proteins, fibers and potassium rich (Díaz-García, González-Moreno and Sáez-Martínez, 2015).
Process: This stage includes the entire production process which is furthermore required to
make the dish effective and innovative. In relation with Pidgin, with the help of the research
department they got to know about what customers wants and thus, considering this the
restaurant come up with a new dish “healthy bowl” in order to fulfil the needs and wants of
customers. Moreover, process innovation determines the ways through which company can
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operate its business in an organised and quick manner such as recruiting eligible candidates,
suppliers, etc.,
Position: This stage is what that determines at what stage the company is in front of its
customers like whether they are liking the products delivered by them or not. This can be
enhanced and maintained if company is able to provide what customers wants. Therefore, if it is
analysed than, at global level for a company “position” is an important factor and they do
activities accordingly. For example: “Pidgin” in the year 2017 was awarded with “observer food
monthly award” which means customers have experienced the food and liked the same.
Paradigm: This is considered as a change and sometimes it can be radical in nature that
can happen within the organisation. A proper framing is being done in this in order to analyse
what activities are required to be done. In context to a restaurant it can be in terms of ways by
which the products are being sold or delivered (Etzkowitz and Zhou, 2017).
Use of Innovation funnel
The purpose of having this method is to converting an idea into a specific product which
can be further delivered for fulfilling the needs of customers. An innovation funnel includes
three steps and this is explained below:
Figure 1: Innovation Funnel
 Wide of the mouth: In this step amongst numerous ideas company tries to select best
ideas and process through the funnel. For example: owner of the restaurant Pidgin,
might had various ideas for developing a new product such as whether to make
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innovation in delivering process, changes in menu options or go with making changes
and create a whole new product.
 Narrowing segment of funnel: The next step after, wide of the mouth, and company
started to analyse the ideas that are reliable in nature. Thus, Pidgin, try to match different
ideas and tries to find out whether it can provide benefits or not. Moreover, the idea also
starts to get filtered means amongst different ideas some kind of sorting are being done
(Ke and et. al., 2015).
 Narrow segment of funnel: This is the last stage and company has a final idea which
can be implemented in an accurate manner for gaining maximum benefits. For example:
Pidgin’s final idea which they want to implement is to develop a while new food item
named “healthy bowl” which will be full of nutrients and essential elements.
While talking about the positive side it improves the productivity level and reduce the cost of
operation and provides with an opportunity of increasing competitiveness whereas, in terms of its
negative side is the process is not being implemented or analysed properly than it can create
problem in further process.
P4 Developments in frugal innovation with an example
In an organisation while performing any kind of task it can be possible that they go through
complication thus, a frugal innovation helps a company in reducing these complexities. Thus, it
helps in eliminating the non-essential elements that are not required (Goller and Bessant, 2017).
Core values that can be known as basic principles plays a crucial role in running a business
because it helps in developing their own identity as compared to other companies who are
dealing in the same field. For example: if the core value of Pidgin is to provide an excellent
quality of food than the items that are not helping the company in order to reach to the
satisfactory standards are eliminated automatically. The “Frugal innovation” basically lies on the
concept of “jugaad” which is an Indian term and means to create a product with the help of
limited resources available. The another example of frugal innovation is launching Tata Nano car
by group of TATA. The company launched a car with price range of INR 100000-150000. This
car is completed based on frugal innovation as it was launched with cheapest price on that
everyone can afford it. The car was launched with a slogan of “Lakh takiya car”. The main
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concept behind this product was to launch a car that consists all features and specifications at
lower prices.
In relation with the “principles of frugal innovation”, it is considered to be six in numbers
and these are explained below for better understanding:
 Finding out the opportunity in adversity: this is the first principle, which tries to keep
a company positive even if they have a problem. For example: the experiment with the
new food item in the menu by Pidgin, can turn out to be a disaster but they should be
prepared and must make strategies to reframe the problem.
 Do more with less: Company should be capable of doing things even after having
limited resources by using the same optimizely. For instance: restaurant doesn’t have a
specific kind of an ingredient thus, company can think of some alternative ingredients
and produce the food item for the customer.
 Think and act flexibility: While developing a new product, company should remain
flexible and must act accordingly because there can be a possibility that the plan fails.
For example: change in the perception of food provided by the company.
 Keep it simple: More complex action can lead to a variety of problems. For instance:
making a lot of innovation in the dish can lead to ruining the same as it can mix with the
taste buds and doesn’t provide with information like how the dish is getting feedbacks
(Hausman and Johnston, 2014).
 Include the margin: Including a margin always come up as solution to the company
because it provides with an opportunity to include certain things if the innovation fails.
 Follow your heart: In order to move forward it is crucial that an individual is passionate
about the thing which he/she is doing.
TASK 3
P5 Importance of commercial funnel and the application of New Product Developed
Commercial funnel is incorporated by the company with the purpose of influencing the
behaviour of customers and increasing the profit share of the company. This helps in
implementing the strategies in an effective manner by considering all the elements. Therefore,
eight stages that are included in this are explained below:
Eight stages of New Product Development
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Idea Generation: This is the stage where ideas are generated and listed down and in
order to do this research are being conducted. For example: Pidgin, before deciding the food
items they will provide to customer they took feedbacks regarding what changes or new input in
the menu they want.
Idea Screening: This is the stage where ideas are screened which means from a large
number of ideas some of them are selected and moreover, finalised like providing a healthy food
items is listed as an idea which will be implemented (Process of New Product Development,
2018).
Concept development: After considering both the above steps things that are needed to
be considered are written on a piece of paper so that final report can be developed. Thus, this is
the stage where thoughts are being converted into reality.
Development Strategies: Before, introducing any kind of products it is important that
company develops some sort of strategies and thus, it is done in this stage. For example: Pidgin,
prior introducing a new dish might have concern to its head chefs and then may have made
strategies so that determined outcomes can be gained.
Examine business condition: Having a proper understanding of the market area is the
factor that helps the company for being in the market for a longer period of time. Thus, it helps
in improving its sales and profitability.
Product development: This is the stage where the product is being prepared with all the
resources the company has or required. As a result, proper conduction of activities in this stage
will provide the final goods that will be delivered to the customers (West and Bogers, 2014).
Marketing Test: The product which is being developed cannot be launched in the
market directly. Hence, it is tested because it will ensure that the provided product is according
to the mark of customers r not.
Commercialisation: This is the final stage where with the help of different marketing
platforms company provide the final product to its end customers.
Importance of commercial funnel:
 Increase customer relation: This is one of the key advantage of commercial funnel as
under it companies have detailed information about customer. It leads to make a positive
relation between customers and companies.
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 Increase revenues: Another advantage of commercial funnel is that it leads to higher
revenues. This is so because if customers are satisfied then they become loyal towards
company and it leads to higher sales revenue.
P6 Innovation business case for an organisation
Case: The business case is related to launch a healthy bowl which will be less costly and full of
nutrition. The company is going to offer this product in the area in which demand is higher for
food products. The essential aspects for launching this new product are as follows:
New idea: The new idea is to develop a “Healthy bowl”, which will include a dish
incorporating with food items that are rich in protein, mineral, nutritional elements etc., and
is good for the body.
Why it is an opportunity: As people are becoming more concern about their health and
wants to have a healthy food in reasonable rates. So, by doing some kind of innovation
company will gets an opportunity of establishing themselves as a Health concerning
restaurant (Autio and Thomas, 2014).
What resources are required: In order to make this dish simple resources will be required
like ingredients, raw materials etc., moreover, if required than help from nutritionist or
dietitians will be taken.
What is the project plan: The project plan will be to include make a dish that is unique and
more importantly healthy but though excellent in taste. First market research will be
conducted and perception of people will be taken in order to determine whether any changes
are needed or not after this, work will be done accordingly.
Risk and potential benefits: benefits can be more and more customers will be attracted by
listening to the uniqueness of the dish but there can be a possibility that as other companies
are also trying to provide some sort of healthy food so there can be chances that customers
prefer rival companies’ food.
Cost and funding: the cost that will be required will be minimal and if extra funds is
required than help will be taken from financial institutions (Dutta and Folta, 2016). Herein,
below detailed analysis cost and revenue is mentioned in such manner:
Cost structure for producing “Healthy bowl”
Particulars Amount (In pounds)
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Fixed cost:
Salary of Cook 60
Rent 80
Variable cost:
Labour 20
Raw material (Vegetables, oil etc.) 40
Total cost 200
Selling price: 100 Pounds
Breakeven point: Fixed cost/Contribution per unit
Contribution per unit: Selling Price-Variable cost
= 100-60
= 40
Hence,
BEP: 140/40
= 3.5 Units
Breakeven point (In revenues): Fixed cost/PV ratio
PV ratio: Contribution/sales*100
= 40/100*100
= 40%
Hence,
BEP: 140/40%
= 350 Pounds
Profit forecast for next three months:
Particulars January (150
units)
February (180
Units)
March (200
units)
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Sales revenue (100 pounds each) 15000 18000 20000
Less: cost
Fixed cost 1400 1400 1400
Variable cost 9000 10800 12000
Profit (In pounds) 4600 5800 6600
TASK 4
P7 Different tools that organisation can use to develop, retain and protect knowledge and
intellectual property
Pidgin, has come up as one of the leading restaurants in United Kingdom and they are
continuously working for providing services to its customers. Most of their food items are unique
in nature and because of which they are being able to attract a large number of customers
towards them. But along with this, in order to safeguard their products or the provided dishes it is
important that they incorporate these laws that are explained below:
Trademark: This works in providing a unique identity to the company because there can be
a possibility that many companies are working on the same field thus, to make them different
from one another trademarks are given. This can be in an of symbol, signs etc. In current time
period this is also used for services also which are provided by different companies. For services
the symbol or mark that is used known as service mark. Using trademark for products and
services can bring different advantages and disadvantages which are as follows:
Advantages:
 Creates trusts and reputation: This is one of the key merit point of using trademark
registration on a particular product or service. It is so because if a product is launched in a
market with a symbol then this becomes popular among customers and company’s
product is recognized by symbol that leads to reputation in market. Such as the above
organization Pidgin, they can use the trademark on a specific food product that become
popular in market.
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 Differentiate product- Along with, trademark is useful to differentiate a product who have
similar features. It becomes possible because by help of an original symbol on a product
help customers to recognize the product easily.
Disadvantages:
 Repeated renewals- If company register a trademark on a product or service then this has
to be Renew after 10 years. Due to this, it becomes costly and less effective.
 Marketing cost- In order to promote a trademark of a product, companies need to prepare
a marketing budget that is not suitable for small companies.
Copyright: In companies like restaurants this is an effective way of safeguarding their
products and services. Copyright is generally obtained under certain laws and by the regulatory
bodies so that the ideas can be protected (Blundel, Lockett and Wang, 2017).
Advantages:
 It helps companies in order to provide protection against various kinds of theft or misuse
of data.
 It permits to companies to claim or to take legal action in the case of violation of
copyright.
Disadvantages:
 The major drawback of copyright is that companies cannot share their work in the public
due to which overall product can become slower.
 This is not suitable for all kinds of companies specially for small businesses. It is so
because of too much restrictions under it and higher cost.
Patent: In this a variety of rights are combined and provided to the companies that helps in
keeping the idea preserved from others for a certain period of time i.e. of 20 years. Using patent
can lead to serval advantages and disadvantages such as:
Advantages:
 The key advantage of patent is that this can be easily commercialized.
 A patent on product offers an exclusive right to companies.
Disadvantages:
 One of the main issue in patent is that it is difficult to acquire.
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 Along with to this, patent needs to be Renew after 15 years which is not suitable for all
companies.
CONCLUSION
From the above report, it has been evaluated that, innovation and commercialisation is
considered to be an effective process through which company can gain benefits. It provides an
extra edge to the product as well as to the company. Therefore, it is crucially important that
innovation and commercialisation is implemented in an effective manner.
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Online
Process of New Product Development. 2018. [Online]. Available Through:
<https://www.feedough.com/new-product-development-npd/>.
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