Table of Contents INTRODUCTION...........................................................................................................................1 TASK 1............................................................................................................................................1 P1. Explanation of Innovation and determination of its importance in comparison with invention.................................................................................................................................1 P2. Explanation of how organisational vision, leadership, culture and teamwork can shape innovation and commercialisation..........................................................................................4 TASK 2............................................................................................................................................5 P3. 4Ps of innovation and use of innovation funnel...............................................................5 P4. Explanation of developments in frugal innovation and its use in Essence Drinks..........8 TASK 3............................................................................................................................................8 P5. Importance of Commercial Funnel and Application of New Product Development (NPD)8 P6. Innovation Business Case...............................................................................................10 TASK 4..........................................................................................................................................11 P7. Evaluation of different tools are used to develop, retain and protect knowledge and intellectual property..............................................................................................................11 CONCLUSION..............................................................................................................................12 REFERENCES..............................................................................................................................13
INTRODUCTION Innovation refers to the procedure which is undertaken by organisations in order to introduce a unique feature or uncover new techniques to perform activities(Ahn, Minshall and Mortara, 2015). Regardless of its size, each company needs to adopt innovation as a crucial method to survive in the current business environment. Moreover, implementing innovation within the company allows the entity in gaining an effective advantage in the market. The following report is based on Essence Drinks, which is a beverage company in United Kingdom dealing in healthy Mango Lassi.The organisation is planning to implement innovation within their firm and would be coming up with element, that is Zinc to be added to the Lassi and develop a new range using new packaging method which would completely be antimicrobial. The report covers a detailed explanation of innovation and invention and explanation of various types of innovation. It also covers a detailed discussion on the process which is required to commercialise innovation, along with a range of different methods for effective protection ideas including their advantage and disadvantages. TASK 1 P1. Explanation of Innovation and determination of its importance in comparison with invention Invention refers to a completely new and unique offering which is provided by an organisation. In addition to this, this process enables a company in providing a distinct product or services that will serve a certain type of customers and fulfil demands of a specific kind of customers who need that product or services produced by the company. Innovation is a transition of a concept into an actual feature or add-on in a product or a service which allows an organisation to enhance usefulness of their offerings, whereas the product itself would be quite useful in relation with fulfilment of another utility. Within this process, it is required that organisation take the initiative, where individuals within the same applies their imagination, along with analysing of the demand in the market which could be fulfilled by the innovation. This process could be appropriately incorporated within any service or a product which enhances its utility and makes it more prominent in eyes of customers. In addition to this, consistent and useful innovations tend to help the company in effectively a sustainable competitive advantage(Dincer, 2017). 1
However, innovation is quite important for a company like Essence Drinks and its importance is appropriately highlighted as below: ï‚·Brand Image: One prominent importance of innovation within an organisation like Essence Drinks is that with enhancing usefulness in their offerings or processes, it would lead to a better brand image within the market(Miller and et. al., 2016). It is an essential need of the business organisation which will help the firm in appropriately serving the market in a better manner, thus, ensuring a better brand image ï‚·Profit Maximisation: Another effective importance of innovation is that it leads to earning better profits. This is because innovation in a certain offering attracts more customers as their demands are now fulfilled. However, there are certain significant aspects related to innovation which enhances its importance in comparison to invention. This comparison is effectively discussed below: 2
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3 BASISINNOVATIONINVENTION CONCEPT Thisprocessmeans implementationofunique conceptsforthecompany’s existing offerings(Hemphill, 2014).Itappropriately enhancesvalueof organisation’sproductsas well as services which assists in enhancing its sales revenue andcontributesinthe efficiency of the company. It means effective creation of a completely new offering for an organisation.Iteffectively serveslikeaconceptfor innovatorsthroughunique products and services creation thathaven’tbeendeveloped before, SKILLS In context with innovation, it isimportantthateach employeeofthecompany possessseveralstrategic, technical as well as marketing skillswhichallowthemto implementinnovation effectively. Employees, in order to ensure effective invention within the firmmustappropriately possess several scientific skills whichrequiretobrainstorm ideas and amalgamate the same withmarketneedsand technologytocreatean offering. OCCURRENCE OccurrenceofInnovation depends upon need as well as scope of improvement in the existingofferingsofthe organisation. OccurrenceofInvention effectivelydependsupon strikingofauniqueideain mindsofscientistofthe company(Ismail,Norand Sidek, 2015). CONCERN Theconcernofinnovation primarily focuses on all the offerings which the firm has to offer. Incontrastwithinnovation, inventionisconcernedonly aboutdevelopmentofone single commodity or service. LIMITATIONS Innovation is facilitated within each department of the firm which reduces its likelihood to belimitedtoaparticular department Inventions,usuallyare associated with Research and Developmentofan organisation.
P2. Explanation of how organisational vision, leadership, culture and teamwork can shape innovation and commercialisation Commercialisation is an activity which is associated with introducing or communicating a new offering into commerce. This means, that this procedure is adopted by companies in order to present their newly developed products or process within the marketplace, which means providing the same to customers(Kutvonen, Savitskaya and Salmi, 2014). As for innovation as well as commercialisation, there are several elements within Essence Drinks which could appropriately shape up both of these aspects. These elements are described below:Vision:Essence Drink’s vision is to provide the healthiest and high quality beverages to its customers all over the country. This aspect could prominently shape up innovation and commercialisation because there are several advancements in terms of health and quality which would encourage the company to adopt these practices into keeping up with the consistency of providing high quality beverage which provides immense health benefits to customers.Moreover, in order to attain the vision, the firm must work towards following and implementing the health and quality advancements, which prevails in the market in terms of beverages, which would further help them in innovating their offerings to satisfy the need.Leadership:As for leadership, it is quite evident that Akshay Kumar is an autocratic leader(Sengoku, 2015). This means that he takes his own decision of making beverages within the company and how best this could be sold within the market.This could restrict the creativity and innovative spirit of subordinates and might hinder the innovations which could take place within the company. Thus, in order to sustain and appropriately supportinnovationandcommercialisation,thecompanymustadoptdemocratic leadership which would help Akshay Kumar in collaborating appropriately with the subordinates and bring out new and innovative ideas within the company through combining the mindsets and indulging in meaningful brainstorming regarding appropriate aspects..Culture:Organisational culture means accumulation of certain beliefs, norms, attitudes as well as values of employees of an organisation. In context with Essence Drinks, the culturewithinthecompanypromotesandsupportsinnovationaswellas commercialisation.It is because the leaders of the company emphasise on providing 4
platform to subordinates to showcase their innovative ideas for the company, which facilitates commercialisation and innovation. Thispositively impacts the company as well as its offerings to the individual and would effectively shape up these factors effectively. Reason for the same is that with a culture open to receive new and unique ideas and concepts, the firm could appropriately introduce new features and effective innovations within their company. ï‚·Teamwork:For any activity within an organisation, it is very important that the company emphasises on formation of different teams which appropriately helps in shaping up innovation and commercialisation. This could be done by forming teams which could brainstorm ideas and transit the same into an innovative offering.Moreover, the firm must indulge in forming departments related to innovations which collectively would contribute towards new concepts and would shape innovation and commercialisation. However, in addition to this, there are different sources of innovation which allows the companies in developing an environment as well as culture of innovation. These sources are discussed below:ï‚·Industrial Structure Change:One of the most prominent sources of innovation is structural change of an industry. This could be in terms of technology, infrastructure or regulations in relation to innovation(Razak, Murray and Roberts, 2014). This source could be prominently utilised by Essence Drinks to appropriately implement innovation within their company as well.ï‚·Demographics:Another source of innovation is demographics. There are several changes which occur in the demographic aspect of business environment such as changes in population, human capital, income level, etc. This requires the company to appropriately develop more innovative offerings which could withstand the force of such crucial changes(Plewa and et. al., 2012). ï‚·Perception:This source directly deals with what customers require from the company. In other words, this is effectively based upon the perception of customers related to offerings by the company. As an example, people within the UK are quite health conscious lately which creates a need for Essence Drinks to innovate their offering. 5
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TASK 2 P3. 4Ps of innovation and use of innovation funnel For Essence Drinks, it is very essential to use the 4Ps of innovation, which is one of the most effective frameworks led out to effectively understand innovation. There are basically four elements of this model which is quite imperative for to be understood by the organisation in order to effectively ensure innovation. These elements are discussed below:ï‚·Person:This element could be referred to the entrepreneur of the organisation, which, in the context of Essence Drinks, could be Akshay Kumar. He, as an entrepreneur and is responsible to apply their skills as well as all of their creative abilities along with motivation to develop an effective product,ï‚·Process:This element means the procedures which have been used by the entrepreneur in development of the product. However, rather than methodology, this process is more inclined towards the thought process. This could also be referred to problem solving aspects which involves development of a new solution(Pellikka and Malinen, 2014).ï‚·Product:This factor within the 4Ps of innovation is the actual offering developed by the entrepreneur which is an outcome of the creative process. In relation to Essence Drinks, this product is the healthy Mango Lassi which is served by the company. ï‚·Press:It appropriately represents the environment within which entrepreneur functions as well as operates in for the creation of Product. For Mango Lassi, the press could refer to all those conditions which were either conducive or prohibitive for any sort of innovation. It also includes organisational culture of Essence Drinks, resources available with the organisation as well as the best practices adopted by Akshay Kumar and his subordinates. This model is very necessary for Essence Drinks to opt which would help the firm in creating an organisational culture which could effectively promote creative ideologies and develop processes which help the entrepreneur in producing effective offerings(Mazzarol and et. al., 2014). Innovation Funnel: Innovation Funnel refers to a technique or a procedure which could be utilised by an organisation to create an offering within the company. The prime agenda of innovation is to assist the company in development of only those products and services which perfectly match the needs as well as preferences of customers. Essence Drinks, in order to develop such products or 6
services or improvise existing products, must involve three major steps of this funnel which would help the company in developing, embedding as well as measuring innovation. These three steps are described below: Illustration1: Innovation Funnel (Source: Innovation Funnel, 2019)ï‚·Assessment of Opportunity:The very first step of this funnel requires the company to perform extensive market research which would allow the company to gather effective knowledge of the marketplace(Mazzarol, 2013). This could be done by surveys or questionnaires and could help in assessment of opportunities available to them in the market.ï‚·Ideation Process:The next step in this process calls for ideation of several offerings which could help in capitalization of the opportunity. This could be done through brainstorming and is dependent on the insight of customers.ï‚·Conceptualisation:In this step, concepts are designs on the basis of these ideas which could involve advertising copies, packaging mock-ups or distinct configurations of the features of the product.ï‚·Benchmarking:In this stage, the company must screen their concepts and ideas. The agenda of the firm at this step must be to determine which idea would effectively provide the firm with maximum benefits in terms of sales and revenue. There could be various Performance Testing methods which could be applied to each innovation to determine and forecast their long term suitability and profitability with the company. Based on the tests, actual iteration of the concepts could be developed. 7
Go or No Go and Launching:After the idea is screened and chosen, this last step calls for evaluation of the selected idea against the objectives of the firm. Furthermore, after the idea is evaluated, it could be developed into an offering and launched into the market P4. Explanation of developments in frugal innovation and its use in Essence Drinks Frugal innovation is a procedure that is effectively utilised by a company to develop products as well as services which are high on technology and could be made available at low prices. Furthermore, several external forces of business environment of an organisation like Political Factors, Social as well as Environmental Factors act like driving forces for this innovation. The main purpose of frugal innovation is to create an offering through reduction in its cost. Its outcome could be quite favourable for the company as their offerings would be now available to customers who couldn’t afford it earlier, hence, increasing their customer base. Frugal innovation is of quite an effective use to Essence Drinks as this could lead to effective enhancement in their profitability as there would be quite a reduction in certain superfluous costs. Furthermore, this innovation could also be adopted by the firm in case there are limited resources available with the company to develop their offerings. One effective example of frugal innovation that could be considered by the firm is Antimicrobial Packaging, which would allow the healthy beverages of the firm to be better in terms of durability and providing immense benefits. TASK 3 P5. Importance of Commercial Funnel and Application of New Product Development (NPD) Commercial funnel refers to the overall customer journey towards purchasing an offering of an organisation. Having a commercial funnel could be quite beneficial for Essence Drinks which would be helping the company in attracting more customers and persuading them in acquiring their product. Furthermore, this could also help the company in effectively bringing potential customers into the fold consistently and promote all the offerings overtime. There are various steps of commercial funnel such as awareness, opinion, consideration, preference as well as purchase, all of which could be effectively used by the company to appropriately attract and influence their purchase decisions. As for the New Product Development at Essence Drinks, there has been several health related issues within the UK, which has increased awareness among customers for a new product 8
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which could protect them adequately from any sort of harm or damage. To ensure the same and to effectively enhance the scope of improvement in health as well as increase in shell life of the products, the company has come up with a new range of drinks which would be inclusive of Zinc, to address the health issue of the people of the UK as well as provide a better shell life through Antimicrobial Packaging. Apart from this, there are several steps associated with the New Product Development which are discussed below:Idea Generation:The very first step of the New Product Development begins with generation of ideas which requires Essence Drinks to come up with new ideas for their product.Internalsourcessuchascompany’sR&DorExternalsourcessuchas competitors, suppliers, etc. could be chosen for idea generation. Through these sources, the organisation stated a new range with added Zinc as well as Mix Fruit Lassi as new ideas.Screening:The next stage calls for screening of the ideas which could refer to filtration of various ideas to select the most prominent ones. Within this stage, organisation screened both the ideas and chose new range of Lassi as a better option.Development of Concept:After screening, Essence Drinks must develop all its attractive ideas into product concept. This concept is further tested amongst several small groups of target customers to determine its appeal. Responses of these customers in relation to the new drink came out to be quite positive.MarketingStrategy:ThissteprequiresEssenceDrinkstoeffectivelydevelopa marketing strategy. This must focus on elements of Marketing Mix like Product, Price, Place and Promotion which will be important for the Antimicrobial Packaging by the company. For its new range, the firm has used diversification as a product strategy, which would be provided at low price range at the company stores as well as would be using social media as a promotional strategy.Business Analysis:After determination of the product concept as well as the marketing strategies, the next step requires Essence Drinks to evaluate its new range of Lassi with Antimicrobial Packaging’s business attractiveness. This needs the firm to review the cost, sales as well as profit projections of its new product in relation with the pre set organisational objectives(Robertson, 2014). 9
ï‚·Development:This step is associated with the actual development of the new product which, in context of Essence Drink, is a new range of Lassi with added Zinc elements through Antimicrobial Packaging. This would be subjected to internal testing in which the product would be tested against several pre set performance criteria..ï‚·Test Marketing:In this step, new range of Lassi along with its marketing programmes would be tested in appropriate as well as realistic market settings, which would allow the company to view its effectiveness and perform several modifications in relation to this product. ï‚·Commercialisation:The last step of this process is the actual launching of this new product within the marketplace. P6. Innovation Business Case Innovation is an imperative part of an organisation and must effectively be included within once organisational culture(Smith and et. al., 2014). In context with Essence Drinks, innovation could help the company in increasing its competitive advantage in the market and would help in surpassing the competitors present in the country.For its new innovation of a new and unique Lassi range, with added Zinc elements for more health using Antimicrobial Packaging, it is very necessary that the organisation develops a detailed business case, inclusive of all the necessary aspects in relation to the overall implementation of the innovation. STEPSDESCRIPTION SUMMARY Essence Drinks is one of the most recognised beverage company located in United Kingdom, which deals in healthy Mango Lassi. However, due to decrease in sales, the company requires innovative range of drinks. PROBLEM The company is struggling with reduction in loyal customers and appropriatemarketshare,duetoineffectiveinnovationinits offerings. OBJECTIVES The current objective of the firm is to develop a new and innovative range of drinks without completely depriving from its original product, which is Lassi. SOLUTIONTo attain the above objectives, the new range of drinks would be packagedusingAntimicrobialPackaging,which,alongwith 10
providingmoreshelllifetotheLassis,wouldcontributein protecting the health of the customers even after multiple openings of the bottles. RESOURCES There are certain assets within the firm which could contribute in achieving the desired objectives and hence, the firm must indulge in anappropriateandoptimumutilisationoftheseresources. Moreover, there are several resources that would be required by the firmforitsnewLassi.Forinstance,skilledmanpower,new technology,advancedequipments,testingandmonitoring equipments and financial resources. INNOVATION IN SERVICES The innovation here is that Sanipolymers have been utilised in the packaging in these new range of Lassis which would help in making the plastic antimicrobial (New packaging technologies that could change the world, 2016). With usage of Zinc instead of toxic materials, this would add to the nutrients which are present in the Lassis. This would serve as a new range which might add to the profitability. RESEARCH The firm has used both internal as well as external sources to gather knowledge about how best the company could introduce a new offering in the market which services the market needs and aids to the problem. MARKET ANALYSIS Currently, in internal as well as external environment, there is a need for introducing innovations as per the market developments. Thus, in order to convert the problem into opportunity, Essence Drinks must use innovation as a tool to develop its new flavour of Lassi. This would allow the firm to overcome the rising threats of falling economyaswellasincreaseincustomerpreferencestowards innovative products. FINANCIAL PROJECTION Thecompanywouldberequiringaconsiderateamountfor developing its new Lassi as it would be indulging in acquiring new resources, technology and manpower. Thus, estimated cost that 11
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would incur to develop and distribute the offering would be £50,000. DISTRIBUTION CHANNELS The company would be providing its product at its stores within the UK. Apart from this, it would also ensure food takeaway services through online e-commerce channels to ensure a wide distribution of its products. FUNDING There are several sources of funding utilised by Essence Drinks to transit the idea of innovation into an actual product. Some of these sources are stakeholders, bank loans, investors as well as financial institutions. BENEFITS With ongoing health problems in the country, this innovation would be helping customers in maintaining a good health and consume minerals which would add to their journey of staying fit. In addition to this, there are several techniques that have been applied to test, iterate as well as improve the business case(Hang Do and et. al., 2014). For instance, Artificial Intelligence has been used effectively to determine how best the new packaging deals with its antimicrobial function. Another method of testing was sample in-house testing which allowed the company to determine several issues that could emerge after few days of its supply.Thus, these aspects are further improved using techniques such as brainstorming and performance testing. TASK 4 P7. Evaluation of different tools are used to develop, retain and protect knowledge and intellectual property IntellectualPropertyreferstointangiblepropertywhichinvolvescreationsthrough individuals. There are various tools which could be utilised by Essence Drinks to develop, retain as well as protect knowledge as well as intellectual property. These tools are evaluated below:Patent:This refers to the property right provided to the inventor in case of any invention. This right stays active and legitimate for 20 years after filing up of its application.Thus, in context of the organisation, this could help the firm in receiving high competitive edge in the market in in terms of safeguarding the flavour and ingredients used in the drink and 12
would further allow Essence Drinks in effectively protecting the original work by their talented and highly skilled employees.ï‚·Trademark:This refers to the design, sign or expressions that appropriately defines offering from a certain specific source. It could also be referred as a brand or a logo. Apart from visual elements, Essence Drinks could also use the same in form of captions and tag-lines. With this tool, the firm would appropriately separate and distinct their offerings from that of the competitors. This would enhance the effectiveness and could further contribute in creating and effective brand awareness.In terms of protection of intellectual property, it would help the company establish its image in the market in form of branding, that could help customers differentiate the beverage by the organisation from that of other companies. It provides a moderate protection to the firm and decent competitive advantage. ï‚·Copyright:There are several creative activities which are necessary to be protected from infringements. Copyright is a tool, which grants right to the owner to reproduce a certain material. In case any other party wish to introduce the same or similar material, they are required to seek permission from the owner or else face fine or lawsuit. This would allow Essence Drinks in effectively producing certain materials under its own name which would be beneficial for its success in the long term(Greenaway and Rudd, 2014).A high level of protection is guaranteed if the company uses this tool for safeguarding its intellectual property. Reason for the same is that it could file for lawsuits in terms of infringements in taste or texture and that could reduce the trust which customers have on the other company. All the methods mentioned above are necessary for the organisation to follow. However, patenting the taste and ingredients would provide Essence Drinks with maximum protection to its offerings and hence, the firm must indulge in adopting this tool. CONCLUSION Thus, it is concluded by the above report, that Innovation and Commercialisation are essentials of a business organisation. It is important to assess the importance of innovation against comparison. Moreover, it is also important to determine how vision, culture, teamwork and leadership could shape up innovation and commercialisation within a company. It is necessary for a firm to use 4Ps of innovation along with applying innovation funnel to embed 13
and implement innovation within their company. In addition to this, it is important for the firm to analyseimportance of frugal innovation and commercialfunnel and apply NewProduct Development (NPD) to develop and introduce a new innovation in the market. Lastly, it is imperative to build a detailed business case, along with analysing tools to protect intellectual property. 14
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