Innovation and Commercialization Report

This report analyzes the concepts of innovation and commercialization, using Essence Drinks as a case study. It examines the importance of innovation, the role of organizational vision, leadership, culture, and teamwork in shaping innovation, and the application of the 4Ps of innovation and the innovation funnel. The report also discusses frugal innovation, the commercial funnel, New Product Development (NPD), and tools for protecting intellectual property.

INNOVATION AND
COMMERCIALIZATION
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
LO1..................................................................................................................................................3
P1. Explain innovation and its importance to organisation in relation to Invention....................3
P2. Shaping innovation and commercialization through organisational vision, leadership,
culture and team-work.................................................................................................................5
LO2..................................................................................................................................................7
P3. 4Ps of innovation and use of innovation funnel for examining and shaping innovative
ideas.............................................................................................................................................7
P4. Developments in frugal innovation and its uses in organisational context...........................9
LO3................................................................................................................................................10
P5. Importance of Commercial Funnel and application of New Product Development
processing..................................................................................................................................10
P6. Building an Innovative Business Case for Essence Drinks including ways for funding.....12
LO4................................................................................................................................................13
P7. Different tools that helps in developing, retaining and protecting knowledge and
intellectual property...................................................................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................16
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INTRODUCTION
Innovation and creation are required for every business organisation to sustain in
competitive markets. The changing needs and demands of customers need to effectively met by
the business in order to build strong customer base and develop their trust and loyalty (Adams
and et.al. 2016). Essence drinks is a company that is based in UK and sells healthy mango lassi.
The company has effectively developed and achieved rapid growth in two years because of its
innovative formula and distribution capability. But in the third year company faced decrease in
its sales and thus, founder of company, Akshay Kumar aims at introducing new and innovative
products in the target markets. In the present report, different forms of innovation are discussed
and its importance as well. Explanation for how organisational vision, leadership style, culture
and team work help in shaping innovation and commercialization. Role of frugal innovation and
uses of innovation funnel are also discussed. Importance of commercial funnel and application of
New Product Development is done further in the report. Evaluation of different tools which can
be used for developing, retaining and protecting knowledge and intellectual property is done
further.
MAIN BODY
LO1
P1. Explain innovation and its importance to organisation in relation to Invention
Innovation:
Innovation refers to the process or procedure for bringing new and creative idea
regarding a product or service into the business. This can bring great and positive impact on the
business and bring successful results. Every company focuses on to bringing new and innovative
ideas into the business activities and operations and also in its products or services so that it can
achieve great benefits and sustain in competitive markets. Essence drinks achieved great success
and results in markets because of its innovative formula and distribution capabilities. There are
different drivers that effectively push the innovation process available in the business
organisation.
Invention:
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Invention refers to the process for actualization of new thinking or idea into action. This
refers to the secondary step for inventing new products or services into the markets. There is
difference between invention and innovation as innovation focus on dealing with introducing
new idea into existing products, whereas, invention refers to bringing products into markets by
shaping and objectivity (Bain and Kleinknecht, 2016). Innovation is considered as the first step
for bringing about services or products and it aims at dealing with bringing new and distinctive
approach to the business organisation. Whereas, invention aims at dealing with procedure of how
can a product be bring it to customers actually.
Importance of Innovation and in comparison, with invention:
Essence drinks needs to focus on creating a new range of drinks so that it can gain
benefits of increased market share, sales and profitability. The company’s ability for inventing
new idea for products will lead to bring great benefits for company. Essence drinks is the UK
based company that offers Mango Lassi and aims at innovating and introducing new product
range so that it can achieve higher sales and profitability. Company can increase its competitive
advantage in the markets by introducing innovative ideas in its product range. Thus, innovation
and creation is very important for the success and development of business organisation. Essence
Drinks can innovate and create ideas and apply in its product range for getting competitive
advantages. Innovation and creation lead to bring great impact for every business organisation.
People always focus on getting distinctive products as compared to others, thus, companies
bringing new and innovative products can achieve great success and results.
Key differences between invention and innovation
1. The occurrence of an idea for a process or product that has never been created before is known
as the invention. On the other hand, application of the idea for process or product for the first
time is defined as innovation.
2. The invention is related to the development of new product and innovation refers to adding
value or introducing any kind of change in exiting product or service.
3. Invention means to come up with a fresh idea and how it works in theory, as opposed to
innovation is all about practical implementation of any new idea.
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In case of Essence Drinks, it can focus on finding out for new product idea or innovative
product range or distinctive fruit drinks in order to add value for customers and attract them. The
company can also focus on value adding services into its service arena in order to get successful
results and outcomes (Bason 2018). Essence drink can get effective benefits and results by
bringing innovation and creation in its existing food and beverage drinks range. Invention is the
final shaping of a product or service of the company. Essence drinks has achieved great success
due to its innovative formula, thus, it has great importance as compared with invention. Both the
term invention and innovation help in gaining successful results and attaining competitive
advantage.
P2. Shaping innovation and commercialization through organisational vision, leadership, culture
and team-work
Innovation is the process of creating a new idea or thinking. Invention refers to
actualizing the innovation or decoding the new thinking or idea into products or services. The
main purpose of innovation and invention is for commercializing the products or services.
Commercialization refers to the process of aggregating all the elements of innovation, invention,
communication and marketing to the end customers. In other words, commercialization refers to
the process for launching of new products or services into target markets. Different factors of the
organisation bring influences and affects the process of innovation and commercialization.
Vision statement of company:
Organisational culture encompasses of the goals and future objectives of the company.
For example, the vision statement of Essence Drinks states that it focuses on providing best and
quality food products and beverages to its customers and meeting their demands. Therefore, it
needs to bring improvements in its product range so that it can meet changing needs and
demands of customers (Bernstein, 2015). Company needs to innovate and create new ideas for its
existing product range and then it can then invent and commercialize the new products into
target markets. This can be also referred as the way for entering into markets by launching new
product range. Thus, company’s vision brings great impact on the innovation and
commercialization process.
Leadership styles:
This refers to the method for organising the business activities and operations. The
leadership style is changed and adapted according to the goals and objectives of the company.
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For example, Essence Drinks follows the leadership style that relates with Transformational
style. This style of leaders aims at effectively and positively relating to employee’s commitment
so that organisational activities can be managed in collaborative format. Essence drinks aims at
recruiting those candidates in the company who can bring innovation and creation in the business
activities and also think outside the box. As this factor also help in encouraging other employees
as well. Therefore, the leadership style can greatly impact the innovation, invention and
commercialization process. Because, the leadership bring great influences on the workforce
performance and thus; on the innovation and invention process.
Organisational culture:
This refers to the aggregate norms, values and employee’s attitude and these are
preserved organisation for many years. Organisational culture is the process and procedures of
certain things are done in the company. Essence Drinks maintains its organisational culture in a
way that aims at making the professional journey easier and smoother. It also aims at developing
collaborative working format and provides employees with required training and development
programs. Essence Drinks main motive is to have well trained staff working with happy faces so
that they can effectively bring improvements in their performance level. Innovative
organisational culture in the company helps to encourage employees for bringing new ideas
within the business and it assist as well as support in implementing any kind of change in the
organisation. The employees in an organisation with innovative culture take initiation in making
effective changes in the operations so that the business performance and productivity can be
increased.
Team-work:
Essence Drinks focus on that it develops collaborative team that can bring effective
results and outcomes. Effective and efficient team are referred as dynamic concept that helps in
solving problems consequences. The team can also work in collaboration and complete certain
task accordingly with the planning (DiMasi, Grabowski and Hansen, 2016). Essence Drinks
maintains specific team that performs entire task which is required for innovating and
commercializing the products or services. Team-work can lead to bring great impacts on the
innovation, invention and commercialization process as employees can together put their ideas,
views and suggestions for the development of new products. Thus, team-work can effectively
help in formulating the organisation’s innovation and commercialization process.
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LO2
P3. 4Ps of innovation and use of innovation funnel for examining and shaping innovative ideas
The impact of innovation is important for shaping the new and innovative ideas within
the business organisation. Innovation is the process that deals with creation of new ideas into the
products and services. 4Ps of innovation is considered as innovation mix that is used by business
organisation. The 4Ps of innovation is developed by Joe Tidd and John Bessant and it is
discussed in brief as follows
Paradigm: This is the planned procedure or specific category of innovation. This
considers bringing change in order to achieve specified target within business organisation.
Essence Drinks can focus on making plans for managing business activities and operations in
some changing conditions or situation. In order to effectively increase the sales and profitability
from its new fruit drink to its customers, it has to do paradigm innovation (Dutta and Folta,
2016).
Product: This is the main item that is offered to end consumers, thus, it is considered as
most valuable to the business organisation. Essence Drinks aims at developing its products in a
way that it can add value for the end customers and for organisation as well. For example,
Essence Drinks launches new food product or drink in markets and provides best services to the
consumers then it can effectively add value to business organisation as it can effectively achieve
competitive advantages. Product is considered as most important of the 4Ps through innovation
and commercialization process can be done.
Process: This refers to the way through which product is delivered or provided to
customers. This is also an important element because if company maintains long distribution
chain or long delivery processes then success possibilities are reduced. Therefore, Essence
Drinks needs to focus on maintaining short and quick delivery process in order to increase the
success chances and possibilities. Delivery of its new products and services needs to be quick so
that it can fit in successful criteria (Hossain and Kauranen, 2016).
Position: This is considered as the goal or objective of particular innovation and
commercialization process. The position of new product is mostly considered with the
segmentation, targeting and positioniong of the products and services in the traget markets. In
other words, position innovation aims at dealing with the promotional and advertisement
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activities. Essence Drinks can perform segementing, targetting and positioning the new product
for establishing its existence and position into the competitive world.
Innovation funnel refers to the process for developing new and innovative ideas by
effectively describing the steps. Innovation funnel also acts as aid for shaping innovative ideas
for Essence Drinks. This can be used for recitation the steps which takes place in the
improvement or development of products or services. Three stages are being marked for the
innovation funnel. For example, or in case of Essence Drinks, first step can be focused for
collecting possible ideas for the specific concept. The next step can be screening process that
ensures that ideas effectively match with the organisational goals. The final step aims at dealing
with the fact for selected ideas for delivering the objectives which are set by the Essence Drinks
as a whole. Funnel assist in shaping new and innovative ideas as it is a technique that frame a
line of ideas that can be screened for viability. The innovation funnel is also defined as funnel
management process which is a popular approach for innovation utilised by many organisations
to develop realistic and innovative action plan. It generated a large number of ideas which are
further sorted and examined to get few ideas which can provide the best outcome.
Figure 1: Innovation funnel
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(Source: Open innovation in SMEs, 2016)
P4. Developments in frugal innovation and its uses in organisational context
Frugal innovation can be described as set of techniques which can be applied for reducing
the cost of products and its production and also the complexities. With the help of frugal
innovation, non-essential features are removed for achieving the quality and also exact demand
of end customers. It can also be said that it is the process of inventing of new products in the
context of scarce resources of organisation. This also depends on the various factors including,
social, political and environmental and this acts as driving forces for the frugal innovation.
Essence Drinks can make use of frugal innovation as it helps in shaping the process of
innovation and also reduces the expenses in dramatic way. For example, Essence Drinks marks
these following features for reducing the complexities and implementing frugal innovation in the
following areas.
 Distribution
 Quality
 Adaptability
 Affordability
 Performance
 Input cost
 Servicing
 Scale-up
Frugal innovation can be polarized or also modified ideologically in which Essence
Drinks can gain ‘win-win’ situation through effectively reducing the negative impacts from
society and also from the company. Essence Drinks needs to focus on fixing the requirements in
the service quality delivered to customers (Kleinknecht, 2016). Distribution also deals with the
different methods which are applied for making services accessible to end customers. The other
factors that are marked are the output cost which relates with the factor of affordability marked
by business organisation for their potential target customers. There are many other aspects or
elements which are related with the frugal innovation. The elements are related to servicing,
scale-up, performance and input cost activities of the Essence Drinks. It can also be said that
financial reward does not act as a barrier for selling any of the products of the Essence Drinks.
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The company believes that by focusing on the different elements and aspects of the frugal
innovation, Essence Drinks can effectively strive for removing or reducing the complexities for
the selling of new products and services in the target markets.
LO3
P5. Importance of Commercial Funnel and application of New Product Development processing
Commercial funnel is responsible for visual representation of customer journey and it
depicts their sales process. It starts from the awareness and finally to actions. They also act as a
revenue funnel which depicts different ideas which are related with the beginning of a sale in
which large proportion of customers are related and then how they get smaller at the time of
purchase. The important feature which lies within the commercial funnel is that it includes
awareness of customers and also helps in identifying their issues and problems thoroughly. It
further involves finding out of respective solutions to specific problems by making use of email
campaigns and also through social media marketing (Kogan and et.al., 2017).
Further, commercial funnel also makes efforts for increasing the customer’s interest for
ensuring that sales gets increases, even if the customer prospect decreases. This leads to bring
more customer engagement within the business organisation in various different forms such as
question or information. Commercial funnel also helps in getting the close understanding for the
innovation and commercialization process; therefore, it ensures that company gets competitive
advantage in the target markets. Different techniques and tools are used in this process that
further helps in making the commercial funnel more effective. The employees of the company
are solely responsible for adopting the innovative ideas and techniques which is done by the
Essence Drinks.
Essence Drinks makes use of commercial funnel concept so that it can increase the
employee’s efficiency and effectively deliver the better-quality products and services at low
costs. This has also increased the employee retention and also inefficiency at the work
environment. Employees are then also capable for making effective and right decisions for
increasing the sales and making customer base stronger (Lusch and Nambisan, 2015). Essence
Drinks has effectively developed their concepts in a way that it can obtain new and innovative
ideas and also execute them effectively in the process of product development.
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Thousands of products enter in the markets with the help of incorporation of New
Product Development (NPD). This process also widens the scope for opportunities related to
employment. The Essence Drinks aims at introducing and developing new products in superior
quality and superior value so that it can ensure systematic and well-planned customer-driven
approach. Superior quality and new products enters into markets and enables markets to grow.
This also leads to bring massive and great impacts on the advanced technology that follows the
methods of development and improvements. Various multimedia platforms are also furthermore
widened for carrying out effective and successful promotion campaign and also distribution
process for the Essence Drinks. It also makes easy access for funding and also for resources thus
it can ensure commercialisation of entire process in effective way. Important steps of New
Product Development include idea generation, idea screening and also steps that help in
developing various concepts and marketing strategies in effective way. Furthermore, with the
product development and also effective analysis of business, the new products are also tested by
the staff and employees before launching them in the target markets. With the help and adoption
of New Product Development (NPD) and commercial funnel, Essence Drinks is capable for
driving new products into the markets (Parker and Van Alstyne, 2017).
New Product Development Processing:
Essence drinks want to lanuch the new lassi Pinapple Ginger Lassi in the market.
Therefore, company needs to follow all stages by applyinf the new product development such as:
Idea Generation: Company needs to generate ideas in terms of introduce the new product
Pinapple Ginger Lassi in the market. This can help to increase attraction of consumers towards
new products.
Idea Screening: Organization requires to screen the differeny ideas in terms of introduce the
new product Pinapple Ginger Lassi in the market. This can help to increase attraction of
consumers towards new products.
Product testing: Essence Drinks needs to making prototype product in relation to launch new
product Pinapple Ginger Lassi in the market. This can help to increase attraction of consumers
towards new products.
Market Testing: Selectd entity needs to change in products and services according to consumers
feedback and manufacturer after that they introduce the new product Pinapple Ginger Lassi in
the market. This can help to increase attraction of consumers towards new products.
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Commercialization: Firm needs to determne price of products and services as well as finalzing
the markleting plans. Thorugh this stage, company easily intorduce the new product Pineapple
Ginger Lassi in the market. This can help to increase attraction of consumers towards new
products.
Product Launch: Finally, company needs to launch the new product Pineapple Ginger Lassi in
the market. This can help to increase attraction of consumers towards new products. Also, this
can aid to increase the sales and profits of Essence Drinks.
P6. Building an Innovative Business Case for Essence Drinks including ways for funding
Essence Drinks aims at introducing new food products or drinks which is Pineapple
ginger Lassi in order to increase the sales and market share of the company. Essence Drinks can
focus on personalizing the healthy drink and also shipping the drink to the customer’s door. The
company can also make use of digital marketing campaigns for advertising and promoting the
products. This is the innovative business case that can lead to bring great benefits and advantages
for company as well as its target customers. This innovative business idea will lead to attract
great number of customers as they will be allowed to order the drinks from home and can also
receive it at home. Therefore, the innovative business case that Essence Drinks makes use of is
that allowing customers to order food and drinks from phone or online and also receiving the
order on the door steps.
Essence Drinks aims at launching new drink products in the markets that have different
flavours. This business case idea includes healthy drink having different flavours and delivery at
door steps of customer. Therefore, these features of new product will effectively attract the large
number of customers who want to diversify their taste. Essence Drinks aims at making use of
best promotion and advertising tools for the new product (Pisano, 2015). Advertisement refers to
the paid promotion and communication for the products and services of the company. There are
five important decisions of the advertisement campaign including money, mission, media,
message and measurement. Through advertisement and promotional campaigns, customers get
aware about the new products and services available in the markets. Essence Drinks can make
use of different types of advertisements such as, print media, direct marketing, broadcasting
media or internet. The new healthy drink is also applied for environment testing in order to check
the effectiveness. Internal and external sources can be used by Essence Drinks for accessing the
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funds. There are different ways or methods to access funding which are helpful for any new
business idea such as Essence drinks are as described below –
1. Friends and family: funds can be collected from savings or friends or family as well. This
are considered as the internal funding sources.
2. Bank loan: The loans can be taken ftom the banks and it is considered as the external
funding sources.
3. Investors: This is considered as the external funding sources.
4. Crowdfunding
The following is given the estimation of budget for the new healthy drink introduced by
the Essence Drinks.
Total Estimated Expenses of the organisation
Expenses types Cost
Manufacturing $500
Raw-material $400
Labour $450
Management $300
Marketing $150
Total expenses $1800
Estimated revenue of the Essence Drinks
Product Name Product Price Product Quantity Revenue generated
through single
product
Mango Lassi $2 250 $500
Orange Lassi $2 200 $400
Pineapple Lassi $3 200 $600
Litchi Lassi $35 20 $700
Plain Lassi $15 40 $600
Total $2800
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Thus, Estimated Total Profit of the Essence Drinks = Total Estimated Revenue- Total Estimated
Expenses.
$2800- $1800= $1000.
Effectiveness of innovation busines case:
Essence Drinks needs to introduce the new products Pineapple Ginger Lassi in the
marketplace. Thus, company needs to follow innovaton for growth of business. The creative
goods and services approach plays main role in business case. There are different factors
involves in innovation business case such as consumer friction, new product concept, create
unique concept, feasible, decisions etc.
 It is the essential to be clear about difference among invention and innovation.
Invemnetion is new thought for improving procedure of business to raise efficiency and
productiveness.
 It allows business to increase range or choice of existent goods and services of Essence
Drinks.
The different techniques in order to measure the effectiveness of overall effectiveness are as
follows:-
 Benchmarking:- As per this technique Essence drink can measure the efffectiveness of
the innovation by meauring its performance by comparing with another company
working in similar field..
 Performance review:- In order to measure the business success, performance can be
reviewd in order to check the business performance as it helps in identifying needs of
improvement.
LO4
P7. Different tools that helps in developing, retaining and protecting knowledge and intellectual
property
Essence Drinks can make use of different tools and techniques for effectively developing,
retaining and protecting knowledge and intellectual property. Company can also make use of
data protection policy for protecting the organisational knowledge. Following are the explanation
of three fundamental tools that can be used by Essence Drinks:
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Patent: It can be used in any case of invention. Patent is considered as the property right for the
inventor of the new product idea. Applying patent will effectively help the business organisation
to protect the individual inventions and also further improvements in the existing inventions.
Patent is an intellectual property right for any kind of invention, the patent owner has the
complete right to stop or prevent others from commercially exploiting the patented invention.
The demerits of patent is that it can be very time consuming and costly. But it brings benefits
that owner can get protection for the pre-determined period. In order to Protect their innovative
drinks, Essence Drinks can take help of intellectual property right as many big companies also
uses patent box scheme in order to get the world wide benefits from patented products.
Trademark: These are the source for recognition which is being marked among the
potential customers. Trademarks can be applied to products in form of name, word, symbol, or
any image format. Trademark helps customers for identifying their brands and also the products
within the same industry (Schmitz and et.al., 2017). There are dismerits for trademark the new
products as owner have to pay registration and renewal fees. Essence drinks have to use
trademark as it strategically protects its brands and enforcing their rights. Many companies are
getting benefits out of this intellectual property rights as its helps in planning brand strategy.
Copyright: Applying copyright is marked for protecting the ideas expression in literacy,
musical or artistic work. The copyright can be granted only to the owner for reproducing the
material or product. The benefits of copyright is that inablity to share work. Essence drinks can
be benefited with copytight as it maximize their protection and exploitation of copyright. Many
big firms are using the same in order to have maximum return on copyright.
Thus, Essence Drinks can protect the IP rights by patent, trademark and copyright.
Essence Drinks can effectively protect its Intellectual property rights by protecting its IP in UK
in which company source products and manages business activities. The company needs to first
identify that which things are eligible for copyrights or trademarks. Essence Drinks can also take
legal steps for their employees for protecting the Intellectual Property rights so that they do not
share the personal technological data with the persons outside of the organisation. Through this
way, organisation’s personal data is effectively protected.
CONCLUSION
Innovation and Commercialization of new products and services is explained in the
report. The above report also described the way in which innovative ideas or products helps to
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attract customers and gain competitive advantages in the market. The study also examined the
different innovation and invention such as Innovation refers to the process for bringing new and
creative idea regarding a product or service into the business where as Invention refers to the
process for actualization of new thinking or idea into action. In addition to this, the importance of
innovation funnel and NPV strategy is also been explained in the above report in context to
Essence drink. Furthermore, a business case for Essence drink is illustrated in the above report
along with the ways of funding such as Bootstrapping, Bank loan etc. Tools such as Patent,
Copyright etc which are used for protecting rights for any invention or innovation are also
discussed in the above report.
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