The Importance of Frugal Innovation

This assignment delves into the importance of frugal innovation in business growth, exploring its role in developing cost-effective products and managing resources effectively. By utilizing limited resources, businesses can reduce costs and gain a competitive advantage in the market. The report concludes that frugal innovation is crucial for firms to expand their businesses globally, supporting product development and resource management in significant ways.

INNOVATION AND
COMMERCIALISATION

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
Difference between Innovation and Invention.......................................................................1
Importance of Innovation.......................................................................................................2
Types of Innovation and their positive and negative approach..............................................2
4 P's of Innovation..................................................................................................................3
New Product Development Process.......................................................................................4
Frugal Innovation...................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Innovation refers to something new. It can be a new idea, some creative thought or
imagination in form of method. It is also viewed as the better solution that fulfil new
requirements in the existing market. Innovation can be in any product, process, technology,
service or model that is available in the market, society and government. YOYO Drinks was
founded in 2016 in UK. The firm was started with one drink (mango lassi) and in the first 3
years, the company successfully achieved a rise in sales as the drink was something unique for
the people of UK. This report includes importance of innovation, types of innovation, 4P's of
innovation, new product developments to again capture the UK market
PART 1
Difference between Innovation and Invention
INNOVATION
Innovation simply means making improvement in the existing product, service or process
of the company. Innovation means implementing the idea for the product for first time. It means
adding value to an already existing product (Bashmakovand and et.al., 2015).. When there is a
need for improvement in the product. The activities are spread within the company. The skills
required are of marketing, strategic and technical skills. It is something that is already invested.
Innovation means making a significant contribution. It is concerned with the combination of
products and processes. It refers to changing a product into something more unique and different
that is in demand and satisfy customer’s needs. Innovation brings newness into any product or
process, it can be in technology so that the operations cost of a product is reduced. Thus will
increase the sales of the product and eventually increases the profits.
INVENTION
Invention is something new that means the idea or occurrence for a product for the first
time that has never been done before. It means generation of a new product. The concept of
invention is an original idea (Eberhardt and et.al., 2017). This requires the scientific skills to
develop a product. It occurs when something new strike the scientist. Invention is concerned with
single process and product. The activities of Invention are restricted to Research and
Development Department. Invention is something that comes out of a scientist's mind to develop
a new product. For example: The company (YOYO Drinks) has brought the new invention of
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mango lassi. That worked well for the company for past 3 years as the thought was new for the
people of UK.
There is huge difference between invention and innovation, invention is the process of
creating a new product which is not available in the market or it is introducing for the first time
whereas innovation can be defined as improvement in existing product to get attention of new
buyers.
Importance of Innovation
Innovation is important for the organizations as to stand out from competitors it will let the
firm provide something new and different to the consumers. And if the companies want to
compete with the other firms they need to produce innovative product that satisfy consumer
needs. That's what innovators do they predict change and get answers before people think they
need something. Company can't remain constant; they need to keep on changing their process so
that customer's needs are fulfilled on a long term basis. The firms can attract the best talent as
innovative people are willing to work for the companies that bring innovation. People want
challenges, so they will only choose the company when they see your creation. Innovation is
needed to keep on moving in the competitive world (Henttonen and Lehtimäki, 2017). Bringing
new technology to improve the operations of business will enhance the productivity. New
products are needed to attract the customers so that they got influenced and buy those products.
Innovation brings continuous improvement in the products and that influence the customers.
Innovation improves the brand name of the organization. Customer's are attached to brands and
their offering, so if they got that satisfies their desires fully, they will be happy and committed to
the brand.
Mr. Bond can work on making the company back to being innovative and successful by
bringing some new flavours in the lassi according to the taste and preferences of the people of
UK. The company will bring the Chocolate flavour of lassi that would be preferred by the people
there or adding some nuts to the lassi, some jellies in the lassi to make it innovative and likeable
for the customers.
Types of Innovation and their positive and negative approach
Incremental Innovation: In this form of innovation the new changes are made in the
existing products with the help of the old technology , so to make it again acceptable to the
consumers by adding different features or redesigning the products. This enhances the company's
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productivity and the position of the product in the target market. The changes brought through by
the incremental innovation are just to improve the existing products efficiency and productivity.
And this is also done to maintain a products position (Hora, 2016). This type of innovation
brings in companies to only improve the personal devices with customer friendly features. In this
technology the company doesn't need to invest in new technology. They don't have to put in
these resources, they can invest and work on improving the product so that they can be again
desirable by the consumers. This type of innovation is cost and time saving.
Disruptive Innovation: This type of innovation where the company introduces new
technology to bring new innovative product for the target market. So that the consumers get
attracted with the new product and influence them to buy. Also called as Radical Innovation. In
this the existing technology is totally replaced. This innovation requires huge investment of time
and money, making it more effective. This made the products more competitive as the new
product is launched in the market. If it becomes successful for the organization, the returns are
very good and gave the company a lead against others (Kuratko and Hoskinson, 2016). This
innovation can only be brought by the large scale organizations that can afford to invest in such
technologies. Risk is equal to the amount invested but returns can be double and that will benefit
the organizations and will enhance the brand name as well. Disruptive Innovation is used to get a
new product that is yet not launched and help to get people's attention.
4 P's of Innovation
PARADIGM: It means the way in which the business runs. The change brought can be
disruptive but it is possible that the change is not positive. So the firm should have positive
aspect in the mind while applying any change. The company should frame what they want to do
and how will they do it. This includes changing in the company's business model.
PRODUCT : This is the product that the company will be offering to the target customers.
Now the question arises that how the company can improve it's products or services and how the
company will make it look more appealing and comparatively better than other firm's product.
Then the company needs to think that they want to bring incremental innovation or disruptive
innovation. As in incremental innovation cost will be saved and existing product will be
improved and in radical innovation new technology is introduced to bring new product
altogether.
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PROCESS : It means how the product is created. This not only includes the preparation
part of the product but involves the steps like supplying, hiring people, workflow and training.
Then it includes the ways so the company can enhance its profits. The company should know all
the trends to carry out the processes. Find out which method will be beneficial for the company.
POSITION: This includes the areas where product should be placed so that can be easily in
contact to the target customers. The company needs to communicate to the people about the
product they are offering and their availability. The position includes the image of the product
that is how customers take your product, employees and the public. and how the company can
work on making the product better.
YOYO Drink should engage in the product innovation, they should bring something new
like chocolate lassi, or added nuts that will suit the taste of UK people (Rasmussen and Eliason,
2017). As demand of chocolate is very high, young girls, kids like to have this flavour. By
offering chocolate lassi to consumer’s firm will be able to gain attention of kids, girls and young
male consumers. This will be beneficial in raising sales and attracting new consumers towards
the firm.
New Product Development Process
Product Strategy: The innovators have clearly identified the goals and objectives for the
new product that is developed. The new product should have some targets to be achieved by the
marketers. Goal of innovation that is chocolate lassi must be determine first, that would be
helpful in implementing correct way to introduce new product.
Idea Generation: Now the innovator needs to collect resources from internal and external
sources. The person will make a list of what the company already have and what is needed to
them. Now the innovator will choose some ideas from the available sources. YOYO Drinks has
to ensure creating correct idea that may help in raising sales of business unit. By implementing
correct idea it will be able to fulfil its goal significantly.
Screening: The chosen ideas are screened and checked like what will be the most
beneficial one for the organization. Many ideas can be get by YOYO drinks but it has to screen
all these ideas and have to select correct one that may help in gaining success in the market.
Testing: Now in this part the idea is described in a detail concept to briefly evaluate what
it is all about. The ideas are tested and analysed so to know the credibility of the product. Asif
YOYO drinks want to off Chocolate lassi hence it has to first test this in the market so that it can
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be identified whether people like to buy it or not. This will help in minimising chances of failure
to great extent.
Business Analysis: The cost and profits of the product that will be launched should be
understood and see whether they match with the company objectives. This point has to be
ensured.
Product Development: After analysing everything the product is developed and brought
to the market for the customers to enjoy its service. Before developing Chocolate lassi YOYO
drinks will have to ensure it gets developed with proper process so that no issue gets created in
the future.
Market Testing: Now the product is tested by putting the marketing mix concept and made a
trial run across the nation. The Chocolate lassi product is tested in the market and see if they
match with the standards. And if the product is successful and going in the same way as it was
expected out of it.
Commercialization: Finally, the product is introduced to the public. The product is brought to
the market for customer's use and for satisfying their demand (Stankosky and Baldanza, 2018).
Frugal Innovation
It is the process of minimising the cost and complexity of the goods and its manufacturing.
This simply means to remove the non-essential things from a good, so that the product can be
sold in the growing countries. Designing the product for developing countries will also increase
the durability of the products. By using this innovation organization can enlarge their business
across the world. It is the process to find strategies and solutions by investing less resources. This
innovation is cost effective. Frugal Innovation is the art of creating the ideas using those scares
resources. YOYO Drinks need to follow this technique as they want to launch new product or
innovation in the old product that is chocolate flavour plus nuts. The company can implement the
ideas and strategies to market the lassi that will be beneficial for their firm to step in global
market (Walsh, Lee and Nagaoka, 2016). YOYO drinks can found amazing solution by
effectively utilising their resources. Use of frugal innovation will help company in minimising
costa and enhancing chances of getting success in the market. By using this method, enterprise
can ensure low cost prodyct development and can raise efficiency of actual chocolate lassi to
great extent.By this way consumers will like this product and entity will be able to offer them
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satisfactory goods and services. It may create value for consumers and will help organisation in
gaining attention of mass audience.
Frugal Innovation is important for firms to expand their businesses in global market. This
help in reducing the price as the company work with limited resources. This gives the
organization a competitive advantage.
CONCLUSION
From the above report it is summarised that innovation plays a vital role in the development
of an organisation which can bring new opportunities in the company. It can support the
innovation of the product with the help of the organisation vision, style, teamwork and culture.
These can also support the shaping innovation as well as commercialisation. Frugal innovation
supports in developing products in significant manner and managing resources in effective
manner. By this ay firm can develop new product in cost effective manner and can serve its
consumers well.
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REFERENCES
Books and Journals
Bashmakov, A.I. and et.al., 2015. Generic Heurorithm of Innovation Management from
Generating Ideas to Commercialization. European Research Studies.18(4). p.47.
Eberhardt, A.W. and et.al., 2017. A Project Course Sequence in Innovation and
Commercialization of Medical Devices. Journal of biomechanical engineering.139(7).
p.071003.
Henttonen, K. and Lehtimäki, H., 2017. Open innovation in SMEs: Collaboration modes and
strategies for commercialization in technology-intensive companies in forestry
industry. European Journal of Innovation Management.20(2). pp.329-347.
Hora, M., 2016. From Innovation Success to Commercialization Success: Technology Ventures
and the Impact of Alliance Partnerships. In United States Association for Small Business
and Entrepreneurship. Conference Proceedings (p. CS1). United States Association for
Small Business and Entrepreneurship.
Kuratko, D.F. and Hoskinson, S., 2016. Technological innovation: Generating economic results.
Emerald Group Publishing.
Rasmussen, T.E. and Eliason, J.L., 2017. Military-civilian partnership in device innovation:
Development, commercialization and application of resuscitative endovascular balloon
occlusion of the aorta. Journal of Trauma and Acute Care Surgery.83(4). pp.732-735.
Stankosky, M. and Baldanza, C.R., 2018. 10—Successful Innovation Means
Commercialization', 21 for 21.
Walsh, J.P., Lee, Y.N. and Nagaoka, S., 2016. Openness and innovation in the US:
Collaboration form, idea generation and implementation. Research Policy.45(8).
pp.1660-1671.
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