Innovation and Commercialisation in Chilly's: A Case Study

This report explores the process of innovation and commercialisation in Chilly's, a company that provides eco-friendly alternative to plastic bottles. It discusses the importance of invention and innovation, the 4Ps of innovation, and the use of innovation funnel and frugal innovation. It also examines how Chilly's uses leadership, culture, and teamwork to drive innovation.

Innovation and
Commercialisation
STUDENT NAME:

INTRODUCTION
Innovation is a process of introducing better or new products or services in potential
market so to create value for customers. Innovative and developed goods with improved features
helps the organisation in gaining competitor edge in the market. Commercialisation is the
process of launching of new products or services in the market to gain attention of customers. It
includes production and distribution of new goods through marketing so that sales can be
augmented through customer support. In this report Chilly's is taken which was founded in 2010
by James Butterfield and Tim Bouscarle. The company aims at providing people with alternative
to single-use plastic bottles so that they can carry cold water on-the-go. Chilly's bottles are
designed in a modern and stylish way using highly advanced technology and are eco-friendly
which helps the company to gain a dominating position over plastic bottle manufacturers. The
report will cover details about innovation and its 4Ps, use of innovation funnel and frugal funnel
along with the use of new product development.
TASK 1
P1
Invention : It is a procedure through which ideas are converted into goods and services
that has never existed before in the market. Invention is creating something completely new
which helps the organisations in bringing new ideas in the market (Invention .2019).
For example : Chilly's introduced its bottles which were designed with high performance
technology and helped to keep water cold at any time. These bottles were first of its kind as
before this people used to purchase single-use plastic bottles every time they needed cold water.
Importance of invention : Invention helps the companies in introducing new kind of products in
the market so that customers can be provided with goods and services according to their
changing needs and preference. Increasing awareness of side effects of plastic helped Chilly's in
gaining competitive advantage in the market by introducing eco-friendly alternative to plastic
bottles.
Innovation: Innovation is an activity of introducing better or new products in the market
so as to meet the dynamic demands of customers. It focuses on translating idea or excogitation
into products or services that creates worth for customers and helps in attracting and retaining
customers thereby increasing the profits of the company (Innovation .2019).
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For example, Chily's aims at brining an innovative feature in their bottles with which the water
temperature can be adjusted by charging the bottles. This will help the customers in getting cold,
warm or hot water according to their needs. This will make the bottles all-weather friendly and
help in increasing sales for the company.
Importance of Innovation: Chilly's need to introduce innovation in their products as a large
number of competitors are entering the market. Innovation can not only help the company in
increasing their sales but also various other benefits can be gained by the company which are
listed as follows :
 Gaining competitive advantage: One of the major needs for innovating a product or
service is to remain competitive in the market. As many competitors are entering the
market it is important for Chilly's to bring innovation in their products. For this Chilly's
has inserted a feature with which the temperature of water can be regulated according to
the needs of the customer depending on the weather (Bagno and et. al., 2017).
 Quick response to customers’ expectations: Through innovation the expectation of
potential customers can be effectively fulfilled. Increasing consumers expectation
majorly impacts companies to become more customer-centric through innovation
change. Through innovation Chilly's can introduce bottles that are suitable for all kinds of
weather as the temperature can be adjusted according to the preference of customers
(Biemans, 2018).
Comparison between innovation and invention
Invention is related to the development of a new idea or process for the first time so that a
new type of product or service can be generated in order to fulfil the changing demands of
customers. Technological and scientific skills are required by the research and development team
of the company to bring invention. For example invention cameras in phones by Samsung Sharp
so that the inconvenience of carrying cameras by tourists can be reduced.
Innovation on the other hand relates to making improvement in existing products, process
or services so as to add economic value in something which already exists in the market. For
this, technological, strategic and marketing skills are required by the company to successfully
innovate their products or services. For example Chilly's innovated its bottles by installing a
system by which the temperature of water in bottles can be adjusted according to the
requirements of customers depending on the weather conditions.
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P2
Commercialisation : It is a cognition by which new products or services cabn be
presented in the market and attention of customers can be gained. Commercialisation requires a
well-developed marketing strategy for achieving commercial success of the innovated products.
This will help in accelerating market share and profitability of the company
(Commercialization .2019).
Vision of Chilly's: Chilly's vision is to increase the use of reusable products so that the
use of plastic can be decreased. The company provides with bottles that always keeps water cool
which reduces the purchase of single-use plastic bottles. The vision of the company promotes it
to bring innovation in its products so that value can be created for more customers. For this the
company has introduced an innovational characteristic in the bottles which allows to adjust the
temperature of water according to the needs of customers. This reduces the purchase of plastic
bottles containing warm or cold water every time the customers need water according to their
needs.
Leadership: It is the quality of the leaders of the organisation that helps them to direct,
escort, influence and inspire a team of individuals so that the ends and objectives of organisation
can be achieved. Various types of leading styles can be followed by organisations like
democratic leadership style, autocratic leadership style etc. Democratic leadership style is most
effective as it considers the opinions and views of all the members of team to make decisions.
Autocratic leadership style is used by when leaders have to take quick decisions related to certain
issues and the team members are not involved in decision-making. Chilly's uses democratic
leadership style so that the employees can be motivated to participate in introducing innovation
and come up with their ideas and opinions so that improvements can be made in the products
(Kang and et. al., 2016).
Culture: Organisational culture basically includes shared assumptions, value and beliefs
which governs how employees within an organisation behave and perform their jobs. Some of
the features of organisational culture : purpose, possession, people, effective communication and
good leadership which help organisations in bringing innovation in their products and services. If
the purpose of the organisation is to be a leader in the industry then innovations can be brought
in the company products through effectual communication and good leadership styles followed
by the leaders. Handy's model of organisational culture can be used to determine the kind of
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culture in an organisation. Some kinds of Handy's cultures are : Power culture-In this power is
accumulated in the hands of few individuals who influence the complete organisation. Task
culture-In this teams are developed so as to accomplish a specific task or purpose and power
shifts among team members depending on the progress of project. Chilly's follow task culture
where teams are formed to achieve a particular task and through this way they can be motivated
to participate in innovative process and can freely share their ideas and opinions.
Teamwork : An effective team consists of extremely capable members who have clear
set of ideas and goals. The goals are decided by mutual consent of the team members and they
follow directions of their leader so that the set goals can be achieved. The work of team members
are effectively integrated and coordinated so as to maximize the quality of their work.
Teamwork can help in bringing innovation in Chilly's already existing products by working
together and agreeing up-on same ideas and working in a defined structure.
All these factors help the company in introducing innovations in their products. The
vision of Chilly's to reduce plastic usage has led to innovate its product. This is possible as the
task culture helps in forming teams of members of same set of skills and interests which can help
in effective teamwork. Democratic leadership style allows all the members to participate in
decision-making so that new and innovative thoughts of team members can be considered which
helps in bringing innovation and effective commercialisation.
TASK 2
P3
The innovation mix model was given by John Bessant and Joe Tidd. Under this process
clear understanding is made in order to identify the major area where the firm need to improve.
4P's of innovation includes:
 Paradigm: It depicts the mode in which business can bring innovation in their offerings.
Through this changes can be brought in the fundamental mentality structure which frames
how and what does an organisation do. Chilly's must analyse thoroughly all the business
processes so that innovation can be made in the business processes like recycling of old
bottles so that new bottles can be made and designed as per the requirements of the
customers (Kerschke and et. al., 2015).
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 Process: It relates to all factors that affects the way in which company provides its
products and services to customers. This helps the company in improving their
manufacture and transportation methods so as to reduce its costs and satisfy customers by
making their offerings accessible at lower prices. Chilly's can improve its internal
processes involved in production of its products which can help in reducing the cost for
company, increasing its efficiency and profits.
 Position: It means the market segment in which company focuses its products or
services. It helps in determining the interested customers who are ready to but the
products. Chilly's can bring improvement in its products so as to attract customers from
various segments. It will improve its position in the market and help in increasing its
market share.
 Product: It helps in determining how innovation can be brought in a product by making
it better so that customers’ demands can be satisfied in a better way. Chilly's can improve
its products by designing bottles that suits customer needs. Through this innovation
process either new products can be introduced or improvements in already existing
products can be made.
Innovation Funnel: It defines the stages in developing a new process or product which
can meet the needs and wants of customers. It is an approach used by companies to create an
innovative and pragmatic action plan. Innovation funnel is used by the R&D department so that
many product ideas can be examined and narrowed down so that best idea can be selected and a
final product can be launched in the market. Chilly's can use the stages of innovation funnel to
improve their existing products which are discussed as follows :
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 Idea generation : It relates to activity of R&D department where many thoughts related
to innovating their products are generated by scanning the threats and opportunities
present in the external and internal environment. At this stage solutions to problems are
identified.
 Concept investigation : It involves screening ideas generated in the first step so that the
idea which meets the organisational goals and objectives can be selected. The concept
and idea are tried on customers, resources are gathered so that the execution of ideas can
be most efficaciously done.
 Feasibility study : At this stage the profitableness of the idea is evaluated and its
technical and economic feasibility is tested. Risks and opportunities related to the new
products and services are also determined so that appropriate plans can be formulated to
make the idea prosperous.
 Development stage : The idea is produced into innovative product or service and the new
item that is so formed is released in the market.
 Post release phase : At this stage response from customers are assembled so that
betterment can be done in the new items.
New products development process-
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P4
Frugal innovation is a process of reduction of complexness in the manufacturing of goods
and services simultaneously reducing the cost of production. This is done by getting rid of waste
or non-value adding features from the products or services. This results in improved products
and services as the features that were not useful to the customers are eliminated. The process of
frugal innovation is as follows :
 Find opportunity in adversity : It relates to converting the problems into opportunity so
that the negative impact of the problem can be reduced. For example, Chilly's introduced
a feature in their bottles which allows to alter water temperature. This helps the people to
purchase their bottles in cold weather as the water can be kept warm and hot as per the
requirement.
Illustration 1: Frugal Innovation. 2019
Source: Frugal Innovation, 2019
 Do more with less : This means the available restricted resources are used with
efficiency so that the goods and services produced can satisfy customer needs and wants.
Chilly's can use the old bottles to introduce new features in the existing products. Also
recycling the bottles will help in reducing cost of products.
 Think and act flexibly : This means that the strategies of organisation should not be
rigid and can change according to the changing needs of customers. This will help in
improvising the products so that they satisfy customers.
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 Keep it simple : It means the operations of the company should be simpler to use so that
any modifications if required can be easily implemented. This will help Chilly's in
introducing improved products accordant to the dynamical necessity of customers.
 Include the margin : This means that the customers should be involved in the
improvement process so that their needs and requirements can be known and they can be
satisfied.
 Follow your heart : It means that the management should follow their passion to
introduce changes in the products so that the goods and services can be improved and
customers can be satisfied. Chily's need to passionately introduce any innovative feature
that it thinks will improve customer satisfaction and increase their market share.
TASK 3
P5
Commercial funnel: It is also called as sales funnel and intends at converting prospects
into customers which increases gross revenue of the company and generate leads which can be
further converted into customers. It illustrates the journey of a prospect into finally becoming a
customer (Laihonen and et. al., 2015). This funnel can help Chilly's in its pricing policy as prices
of products influence a person in making purchases of the products. It also helps it in introducing
innovative products which can help in accelerating sales as the customers will be drawn to new
and unique features of Chilly's bottles. This leads to growth of business in the marketplace.
New Product Development: It is a process that helps company to bring a new product into
market successfully. It is an important process so that customers can be provided with goods and
services according to their changing preferences so that it can remain competitive in the market.
New opportunities can be capitalised by this process and new markets can be captured.
Following is the procedure for developing a new product:
 Idea Generation: The process by which a new product can be developed starts with
conception of an idea under which systematized search for new product idea is identified.
Typically, several ideas are generated. This step will help Chilly's in generating many
ideas that can help it in developing a new product.
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 Idea Screening: Under this stage the ideas created are filtered in order to get the best
idea possible required to develop a new product. It will help Chilly's in filtering the best
idea so that the company objectives can be achieved.
 Development Concept: At this stage the chosen idea must be matured into a product
concept. It is a detailed interpretation of new product idea. This helps in developing a
concept through which product development will be achieved (Molnar, 2018).
 Marketing Strategy: Identification of target market, determining product price,
distribution and marketing budget, marketing-mix strategy etc. are developed at this
stage.
 Business Analysis: Affectivity and feasibleness of new product is analysed in detail so as
to determine the ability of the new product to meet company objectives. Chilly's can
analyse the profitability of bringing new product in marketplace.
 Product Development: The product is developed at this stage to ensure that the product
idea can be turned into a executable market offering. Chilly's after going through all the
above stages can develop the desired product (Pisoni, Michelini and Martignoni, 2018).
 Test marketing: The new commodity developed is tested in the market so that the
company can formulate its marketing strategies accordingly. This stage can help Chilly's
in determining the targeting, positioning, advertising, distributing, packaging strategies.
 Commercialisation: Marketing test gives all information and final decision regarding the
new product if it should be fully launched or not. After which the new product is brought
in the market to be available for customers.
P6
Business case: It is a elaborated well-structured business paper which describes in detail
the reasons for initiating a project or a task (Wang, 2017). It helps the organization in taking
effective decisions which will help it in achieving the objects that are intended through the
project. Chilly's need to create a business case so that the intended innovation can be successfully
brought in the existent product so that the customers’ needs and wants can be satisfied. It
includes the following:
 Executive summary- Chilly's is enhancing their business's size at a multi-national level
with the aim of providing environment friendly products. Chilly's introducing new bottles
that will be charged to keep the water hot or cold. The target market of management is
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North European countries because they are cold. Further, to enter in market price
penetration strategy will be implemented for new bottles.
 Background: Chilly's was started in 2010 by James Butterfield and Tim Bouscarle with
an intention of providing people with on-the-go cold water through their bottles which
were designed with high performing engineering and are environment-friendly. This will
help in reducing the use of single use plastic bottles.
 Vision : To cut down the use of plastic bottles with Chuilly's bottles which can give
customers the ease of carrying cold water.
 Mission : To enhance the use of reusable products and decreasing the use of single-use
plastic bottles.
 Need that the innovation will satisfy : Chilly's is introducing a battery feature in their
bottles which can adjust the water temperatures so that the the customers can adjust water
thermostat as per the weather conditions.
 Opportunity in market : Intense winters in UK provides an opportunity to the
innovation so that customers can have warm water in cold weather conditions.
 How will product meet that need : Water temperature can be changed according to the
atmospheric condition which will reduce purchase of plastic bottles for warm water.
 Competitive edge- Temperature set bottles works as a positive aspect for organisation as
it increases competitive edge for Chilly's. Such bottles will increase the sales of the
company even in cold weathers as all other company bottles can either keep water cold or
hot at a time.
 Size and growth possibilities : The innovation can increase the sales of Chilly's by 40%
as in winter conditions warm water is required by the people and Chilly's innovation can
help in adjusting water temperature according to customer needs.
 Target market : All the population of the UK are targeted by Chilly's and they will be
reached marketing through TVs, digital marketing etc.
 Marketing Strategy- With the increasing number of employee's it is identified that there
are various task need to manage for performing their work in minimum time period. It is
also identified that it is mandatory for Chilly's to perform their work in minimum time
period.
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 Advertisement and promotion campaign- It is mandatory for chilly's to promote their
new products so more number of customer's are approach by management. This results
that the sales and profits of organisation will be enhanced due to best investment in
advertisement.
 Promotional strategy : Innovation will be promoted through social media marketing,
print media, offering discounts etc.
 Funding: It is process through which funds are collected by businesses so as to help
them in effectively introducing improvement in the new products so as to attract
customers and increase their sales. Funds can be gained by Chilly's through bank loans
where banks provide funds to businesses in return to collateral security required to
sanction the loan. Another way of getting funds is through angel investors where
individuals with enormous amount of ideal funds provide them to start-ups or
entrepreneurs.
TASK 4
P7
Intellectual property: For any organisation it is essential to protect ideas, techniques or
methods used by it to produce goods and services that helps them in attracting large number of
customers and increasing their sales. It is important for Chilly's to protect their knowledge and
intellectual property from the competitors to prevent imitation so that the originality of ideas
remain with the company (Rosca, Arnold and Bendul, 2017). This help Chilly's in gaining a
competitive advantage in the market. Various tools can be used by for this purpose :
 Patents : It is a form of intellectual property which gives its owner a legal right or license
so that their new ideas and products so developed are used solely by them hence
excluding others from copying their ideas. Patents have to be renewed after the expiry of
a certain period of time. Advantage of using this tool is that it helps the company to keep
their ideas to themselves without having to share it to anyone. Disadvantage is that the
cost of gaining a patent is high and it has to be renewed after expiry of a specific period
of time which increase company's costs.
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 Trademarks : These are identifiable designs, signs or symbols that separate the
commodity or services of one company from the others. This gives the company a
characteristic recognition in the industry (Tuli and Shankar, 2015). The advantage of
using trademarks is that it helps in distinguishing its products from other rivalries and
building a separated trade name. Disadvantage of using it is that the company has to
spend a lot of money in order to restore the trademark so that it cannot be stolen by other
companies.
Chilly's can use patents so as to protect their new innovation of making bottles that are
installed with batteries that can adjust water temperatures as per customer requirements. This
will help the company in gaining a competitive benefit in the market and will protect their idea
from being imitated by its competitors. As a large number of competitors are entering the
market, patents can help the company in providing unique products to the customers.
CONCLUSION
From the above report it can be said that innovation plays a crucial role in an organisation
as it helps it in gaining competing vantage in the market. Through innovation changing customer
needs and wants can be satisfied by bringing improvement in the goods and services. Innovation
can be effectively brought by studying the 4Ps of innovation to know the areas where change of
state is required. After this a new product development plan is formed so that better goods are
produced and offered by the company to its customer-base. Business case can help in
documenting all the stages that are needed in innovation. Also various tools can be utilized by
companies to defend their innovations.
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REFERENCES
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