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 businessinnovation 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 1
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: BasisInnovationInvention ConceptIt is the idea which is based upon the practical implementation of an existing information It is a new concept in which themanagergeneratednew informationforthecompany after analysing the market. ConcernedThe manager concerned with multiple or variety of data. Itisonlyfocusonsingle products. Relationwith department It is related to entire company because itisnotabouttointroducenew product. It is particularly related with researchanddevelopment department. Skilled neededAs it deals to add new features in the existingproduct,therefore,manager neededonlymarketing,research, technical and strategic skills. In order to invent new product, theresearcherneedsgood creativityskillsaswellas 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: 2
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Visionof 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. Leadershipplays 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. Culturecreate 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. Teamworkanotherimportanttoolwhichhelpstoshapeupinnovationand 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,thesefactorsclearlyreflectthatithelpstoshapetheinnovationand commercialisation and even it also assist to lead a business towards further level of success. 3
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 findanydifficulties.SothatifTescofollowstheinnovationmix,thenitsprocessis 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: 4
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. 5 Illustration1: Innovation funnel (Source:Innovation funnel,2018)
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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 organizationconstraints 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 themarket 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 6
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. 7
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 8
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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). Strongcustomerrelation:Tescotendstofocusonmaintainingstrongcustomer 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. 9
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 recognisesign, 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 analysisthe 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 trademarkTesco 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). 10
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 drinkwhich 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 Bysummingupabovereportithasbeenconcludedthatinnovationand 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,itisclearlyanalysedthatinnovationandinventionaretwodifferentthingsand 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. 11
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