Innovation and Commercialisation

Innovation and Commercialisation

Table of Contents
INTRODUCTION...........................................................................................................................1
P1 Describing innovation and determine the importance as well................................................1
P2 describing how organization vision, leadership and culture and teamwork shape innovation
and commercialisation.................................................................................................................2
P3 Explaining 4P's of innovation and use of innovation funnel..................................................4
P4 Explain developments in frugal innovation and provide examples of how it is used in an
organisational context..................................................................................................................6
P 5. Importance of commercial funnel and application of NPD processing................................7
P 6. Building an innovative business case for organisation.........................................................8
P 7 describing different tools that a firm may use to protect and retain knowledge .................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Innovation is the process of generating new ideas, creative thoughts and some new
imagination in order to meet the demand of the customers. Therefore, in simple terms, in
business innovation is the process of translating the idea and invention into a good services so
that it will creates value for their customers. In the same way, the report helps to understand the
meaning of innovation and commercialisation. The chosen firm for this report is Tesco, which is
the top retail firm in UK and it deals with clothes, groceries and different furnitures. As per
analysing the market demand, the company 's manger start introducing new energy drink name
as 'Fruit Punch' which helps to deal out the problem of obesity.
Therefore, the report will describe the term innovation and also show the importance for
Tesco by making comparison with invention. Further the report will explain how organization
vision, leadership, culture and teamwork shape up innovation and further, it describe 4P's of
innovation and how manager of Tesco use innovation funnel to shape innovative ideas. Further,
it describe the importance of commercial funnel and build business case that includes way to
access funding. Lastly, it describe intellectual property tool that may be use by Tesco.
P1 Describing innovation and determine the importance as well
In this modern era, every company wants to be competitive and for that they always try to
innovate new things and in the same way, after analysing the market current situation, it is
analysed that people are becoming more conscious with their health. That is why, Tesco
introduce 'energy drink name 'fruit Punch' in market.
Innovation: It is the term in which the company put new idea and thoughts in order to
meet the requirement of the company. Therefore, it is refer to something which is new or to
change made to an existing products (Stankosky and Baldanza, 2018). Innovation is the process
of creating and implementing completely new idea and also these new idea are the result of
creativity which leads a business towards success.
Importance of innovation: through innovation, Tesco change its business model and
also make changes in their existing environment by delivering the better products ans services. In
the same way, innovation leads to solve problem easily and find out different solution for the
company (Madsen, 2017). Moreover, it also leads to increase the productivity, such that, when
Tesco introduce new idea and make amendments in their existing product, it motivate their staff
which directly helps to raise their performance level too. Overall, this raise the productivity level
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of the company. In addition to this, by think innovatively, Tesco also beat their competitor and
can easily sustain it brand image in the company. Along with this, creativity also help to figure
out right marketing techniques which will help to grow the business at global level.
In addition to this, as the customers needs are continuously changes and the customer
only need what they want. That is why, it is quite necessary for the manager of regularly meet
the need and provide the same products and services as well. Therefore, it is necessary for the
manager to come up with new ideas and thoughts in order to meet the demand and also raise the
financial performance of the company too.
Comparison of innovation with invention:
Basis Innovation Invention
Concept It is the idea which is based upon the
practical implementation of an existing
information
It is a new concept in which
the manager generated new
information for the company
after analysing the market.
Concerned The manager concerned with multiple
or variety of data.
It is only focus on single
products.
Relation with
department
It is related to entire company because
it is not about to introduce new
product.
It is particularly related with
research and development
department.
Skilled needed As it deals to add new features in the
existing product, therefore, manager
needed only marketing, research,
technical and strategic skills.
In order to invent new product,
the researcher needs good
creativity skills as well as
scientific skills too.
Therefore, by analysing the difference between innovation and invention, it is realized
that innovation is better than invention because it is all about to make changes in the existing
products. While invention is to introduce completely new product. That is why, Tesco also
innovate or make changes in its existing products.
P2 describing how organization vision, leadership and culture and teamwork shape innovation
and commercialisation
In order to lead a business towards success, company should use its new innovative ideas
in their products and services. Therefore, there are many factors which also shape up the
innovation and commercialisation. These are as mention below:
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Vision of Tesco is to be most highly valued company by providing best variety of
products and services to their customers and also in the community in which they serve.
Therefore, it is the key driving force which boost innovation and commercialisation (Henttonen
and Lehtimäki, 2017). Such that company provide small proportion of time to their employees so
that they will come with their creative and new point of view. This is so because through this, the
company provide a chance which result in raising the innovative ideas and as a result, they may
lead to the company 's vision as well.
Leadership plays a crucial role to promote innovation and commercialisation in the
company. As leaders main role is to encourage the creativity among employees. In the same way,
the leader of Tesco also creates opportunities for the team members by boosting the innovation
skills. As leaders also tries to provide positive working environment to their employees and for
that they allocate the resource and manage the work in such a way that help to allow them time
to raise creativity and innovation skills as well (Hohenberg and Homburg, 2019). For that, the
leader of Tesco follow participative leadership style in which they involve all the employees to
make decision.
Culture create positive impact upon the business working such that innovation and
commercialisation flourished only when the company is willing to motivate the employees in
order to present some innovative ideas to promote innovative environment. Therefore, it only be
done when Tesco provides incentives in the form of monetary and non- monetary benefit so that
it leads to promote the positive working environment. Further, it is also analysed that amount of
resources used by the company is directly proportional to amount of using innovative ideas as
well as methods. While on the other side, limited resources may also hinder the development of
new ideas too.
Teamwork another important tool which helps to shape up innovation and
commercialisation because working in a team helps to generate different ideas and as a result, it
directly influence individual's creativity factor. Even, Onken and et.al., (2019) stated that
innovative ideas may be better generated when the person is working in a team and through
teamwork, they may get a chance to develop better so that they help to meet the company's
defined aim and objectives.
Therefore, these factors clearly reflect that it helps to shape the innovation and
commercialisation and even it also assist to lead a business towards further level of success.
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P3 Explaining 4P's of innovation and use of innovation funnel
4P's of innovation is also known as innovation mix which have four components which
are inspired by marketing mix concept. The main use of innovation mix is to have proper
communication with the customers in order to let them know about the new product introduce by
the Tesco. Therefore, these 4 components are as mention below:
Product: it is the main key aspect which makes the business process more enlarging as
well as productive. Therefore, product is the only section which includes new improvement
criteria which the organization is offering (Giones and Brem, 2019). For instance, Tesco offer
new energy drink name 'fruit punch' that helps to make the company more competitive. Thus,
this reflect that it is the component which make company more attractive and also helps to retain
the market and attention growth.
Process: It is another important element which helps to sustain the brand image at
internation level. Such that if the process of the company is well organised then, manager did not
find any difficulties. So that if Tesco follows the innovation mix, then its process is
automatically improved and even the company also themselves different (Costantini, Crespi and
Palma, 2017). That is why, to generate new and innovative ideas, it is quite necessary to make
improvement in Tesco's process such that they may recruit best person who have creative ability.
Therefore, an effective process will help to raise the brand image of company.
Position: It is the element in which the company needs to be set the target based upon
their characteristics (Söderholm and et.al. 2019). Therefore, the innovation in position does not
influence the structure but its actually re- position the perception of the new products. Therefore,
in order to introduce new energy drink or their customer, Tesco needs to be position in top by
targeting young and old age people because they are quite concern with their health.
Paradigm: It is the last element of Innovative mix which define the way, an organization
do a business. Therefore, this totally change the business model by developing new ideas so that
they may lead to development growth as well. For Tesco, by introducing the new product, the
company may also lead a business towards further level of success.
Importance of innovation funnel:
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Through an innovation funnel, the company step by step innovate the things such that as
per the image, its first part is investigation which means to analyse the demand of market and
customers and then start developing strategies for the implementing the same and then select the
best out of many and then ship the products (Bagno, Salerno and da Silva, 2017). Therefore, to
manage the innovation funnel, the managers of Tesco need to expand the knowledge base and
also access to information to raise number of new ideas and then these ideas must be screen in
order to determine the attractive opportunities. Lastly, make sure that the selected project is
deliver on the objectives when it is approved such that customers like the products or not.
Thus, it is clear that the through innovation funnel, manager may easily identify highly
expected pay-off by creating different portfolios so that it will meet the business objectives. In
the same way, company also uses the same and analysed that by introducing the energy drink
into market, will help to enhancing the firm's strategic ability in order to create best future
projects as well.
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Illustration 1: Innovation funnel
(Source: Innovation funnel, 2018)

P4 Explain developments in frugal innovation and provide examples of how it is used in an
organisational context
Frugal innovation is the process in which organization look to reduce the complexity and cost of
a good in the production of the organization. This innovation is generally depends on the
customer demand in which the company have establishes. This is generally used to make the new
and innovative product in the organization. Generally this process looks at the non essential
feature from a durable good. Frugal innovation is the concept which helps the business or the
organization to respond to the variety of the limitation of the resources. Resources can be
financial, material or institutional. After that the organization constraints into innovative ideas
and practical solutions. Frugal Innovation generally looks at offering the new product in the
market at the low price. To satisfy the need of the customer in the market (Söderholm and et.al.
2019)..
For example: Tesco plc is one of the biggest multinational grocery and general merchandise
store in the UK which used to provide the variety of the product to the customer throughout the
world. Tesco also used to provide the variety of the energy drink to the customer of different
brand such as Red bull, Monster etc. Generally it has been noticed that the price of the energy
drink of the other brand is to high that it is not affordable by all the consumer in the market as a
result many consumer are not consuming the energy drink in today's scenario. As a result by the
use of the frugal innovation now company is looking to produce the energy drink with the low
rate in the market so that the organization is able to satisfy the need of the customer very
effectively. Tesco is looking to reduce the wastage of the company so that the efficiency of the
organization can be increased.
Application of Frugal innovation in Tesco
After analysing the current market and the need of the customer in the market the
manager of Tesco has decided to introduce the energy drink which will be having the fruits as a
secondary product to develop the same. This is one of the type of the frugal innovation as
manager is trying to bring the product which is already in the market but with addition of
something new and at the lower price as compare to the past. Manager will be looking to
purchase the product at bigger quantity so that the company get the advantage of discount which
organization can use in lowering down the cost of the company (Giones and Brem, 2019).
Manager of the Tesco also will be implementing the lean production in the organization to
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reduce the wastage of the product and increases the efficiency of the production in the
organization. This may help the company in saving the cost of the production which will
eventually reduce the cost of product produce.
P 5. Importance of commercial funnel and application of NPD processing.
The commercial funnel of the organization is effectively used by the marketing team in
order to create leads from prospective targeted customers. It is a very useful model as it helps in
effectively visualizing the journey of the customer from initial awareness through conversion
(Horiguchi, 2016, July). It effectively provides a useful network to critically analyse the business
and determine the area of improvements (5 Reasons Why the Sales Funnel is Important for
Entrepreneurs, 2018). The importance of commercial funnel are listed below which includes:
 It helps in generating more sales for the company by effectively picking up the right
marketing strategy for the business.
 It helps in improving the ways to grow the operations of the business in order to attain
higher operational performance and productivity.
 It helps in creating awareness about the particular products and services to the targeted
customers.
 It is useful in generating interest in the eyes of the customers which in turn results in
higher sustainable growth and efficiency.
 It helps in generating sales for the particular goods and services which leads to higher
profitability.
 It effectively provides a useful network to critically analyse the business and determine
the area of improvements for the business.
New product development (NPD) is referred to as journey of the actual product to the
market in order to serve the targeted customers (Schleimer and Faems, 2016). This is a product
which has never been sold before and is completely new to the market. Innovation of new
product which has been brought and launched for the first time in the market (Tandrup, 2015).
The process of new product development includes:
Idea generation:The product development is associated with the generation of idea. It
leads to complete research of the particular idea through internal and external sources.
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Idea screening: The next step to NPD is to filter the number of ideas and pick the best
which will turn out to be the most profitable unit of the products and services (Schleimer and
Faems, 2016).
Concept development and testing: Market testing is useful in analysing whether the
customer likes the particular idea or not. Here, few customers from the targeted market is
selected to test the concept.
Marketing strategy development: This step helps marketers in analysing how to sell the
particular products and services in the market. It consists of product, price, place and promotion
of the set goods and services.
Business analysis:It helps in effectively monitoring the performance of the particular
products in the market. It helps in determining whether the set product is profitable or not.
Product development: This step tends to distribute the product to the actual market. It
mainly includes financing, advertising and commercialization in order to launch the product in
market (Horiguchi, 2016, July).
Test marketing: The new product is introduced to the very small scale of the market in
order to test the efficiency and productivity of the new product.
Commercialization: At the stage, company aids to make large investment for the new
product in order to reach large scale of the market (Duncan and Elkan, 2015, August).
Advertisement of new product through television, radio, newspaper, hoardings, etc. helps in
attracting attention of large number of customers.
P 6. Building an innovative business case for organisation.
Introducing innovation into the business leads to improved productivity, high competitive
advantages, attainment of economies of scale, building value for brand and improve profitability.
New perspective and idea:Tesco needs to improve an effective business case for the
organization which in turn helps in attracting the interest of the consumer towards the particular
product (Duncan, FLIPTOP Inc, 2016). Launching of innovative product known as fruit punch.
The idea behind these products is that consumer are becoming more health conscious these days.
Cost savings: Tesco must focus on combining all the departments of the organization in
order to make effective decision. Tesco needs to focus on improving the budget plan with the
help of financial department (Ratcliffe, 2017). Launch of new technology in the market results
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in high cost to the business. Company needs to make an appropriate budget plan to allocate funds
to each activity.
Competitive advantage: Tesco is well known company and maintains a competitive
advantage to reach greater customer because of high customer base and market share. The idea
of the product is very innovative and has a unique selling production, as it offers high quality
goods at the lowest price (The Business Case for Open Innovation, 2017).
Strong customer relation: Tesco tends to focus on maintaining strong customer
relationship by effectively making feedback regarding the new product. This in turn helps in
making necessary improvements in the particular area of the business.
Future proofing the business: It helps in effectively improving the business of the firm
which in turn leads to higher profitability and sustainable growth of the business after launching
of new product, i.e., fruit punch.
Ways to access funding
Personal savings: This is referred to as the personal savings. Individuals tend to save
certain sum of money in order to invest in the particular target.
Loan: The bank tends to lend sum of money to the company for the stipulated period of
time and in return charge the specific rate of interest on the loan amount (Zibaeian, Chitsaze and
SAEEDI, 2017).
Angel investors: Large number of investors tends to provide funding in exchange for the
ownership in the equity (Ratcliffe, 2017). It helps company to raise funds which helps in easy
operations for the business.
Venture capital: Venture capitalist tends to lend money to the company if they like the
idea about the particular product (Nguyen and Meng, 2016). They in turn gets the certain
percentage of profit in the business.
Marketing strategy
Marketing strategy is considered to be as a long term approach which is useful in making
competitive advantage on the particular subject matter.
 Go through the current marketing plan.
 Performing marketing research.
 Developing value proposition for the business.
 Setting marketing goals and objectives.
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 Reviewing and assessing marketing plan.
 Defining marketing mix of the products and services.
The key marketing strategy of the company is to promote their business through social
media platforms in order to attract large number of customers.
P 7 describing different tools that a firm may use to protect and retain knowledge
Intellectuals property rights can help Tesco to launch its new product 'Fruit Punch' as an energy
drink in the market by using following rights
Patent: It is a form of right which is given by the government to the inventors for their successor
in title. By giving the rights owner can exclude other to use, selling, or importing of the limited
period of time in exchange from public disclosure (Sherwood, 2019). With the help of patent
Tesco can protect its new product from other to use it in the market. When company is able to
get patent on the product no one is able to sale the product in their own name. If anyone misuses
others patents rights then government can legal action on the culprit.
Copyright: In this intellectual property right the creator of original copy has the exclusive rights
which is for limited time period. In this right the level of creation is very high, artistic forms, or
works, etc. it doe not cover information and ideas it is expressed in manner or forms. Tesco can
take copyright for the making process of energy drink which cannot be disclosed or copied by
others (Torremans, 2019).
Trademarks: The right is helps the to recognise sign, expression or design which makes the
product and services different form other trader in the market which sale the similar product and
services. Use of trade mark helps the consumer to analysis the quality of product and services
that is being provided. Tesco can use this right to differentiate its product and services from other
traders and with the help of trademark Tesco can easily show it quality of product and services
which will help the consumers to recognises the product on the basis of its quality and goodwill
in the market (Anderson and Gallini, 2019).
industrial design rights: this right helps to protect the design which protect the visual design of
the object. This right can also be termed as design right or design patent. design right include the
pattern, composition of colour, creation of shape, or three dimensional, etc. Tesco can protect
the logo of its new energy drink and make it in form so that people can easily get attracted
towards the product logo. The design patent will protect the company new product logo to be
gets misused or replaced by any other local product (Pila and Torremans, 2019).
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Trade secrets: to protects process, design, instruments, pattern, formulas, or information the
right can be created on these things. With the help of these Tesco can protect its formula for
making of new energy drink which will help the company to get competitive advantages in the
market (Hart, Sierra Industrial Group LLC, 2019). There is formal protection from governments
but business can protect on its own.
Trade dress: it is another intellectuals property right which is used as legal terms for the protects
of the art like the product packaging and design. It helps to signify the source of product for
consumers. Tesco can take this right to protects its packaging art which cannot be copied by
others.
CONCLUSION
By summing up above report it has been concluded that innovation and
commercialisation plays a crucial role for the success of a business such that by providing
innovative products, Tesco also wants to make their image positive at the global level. From the
above, it is clearly analysed that innovation and invention are two different things and
organization culture, vision, leadership and teamwork are key positive factor that shape the
innovation and commercialisation. Moreover, it is also concluded that 4P's of innovation helps to
provide the way through which the organization may easily implement new ideas into its
working place.
In addition to this, it is also concluded that by using frugal innovation by Tesco, it may
reduce the complexity and cost of goods that directly helps to attract wide range of customers.
Further, with the helps of commercial funnel, Tesco may also bring potential customers by
making them aware about the new product offering. Lastly, study also concluded that in order to
implement successful innovation business case, company access funds from personal saving and
also takes loan from bank and then in order to retain, protect the knowledge, company uses
trademark and copyright as an intellectual property.
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