Innovation and Commercialization: A Case Study of Amazon Go

This report explores the concepts of innovation and commercialization through a case study of Amazon Go. It examines the importance of innovation for organizations, the role of organizational vision, leadership, culture, and teamwork in shaping innovation, and the different sources of innovation. The report also delves into the 4Ps of innovation, the use of the innovation funnel, and the role of frugal innovation in Amazon Go's success. By analyzing Amazon Go's strategies, the report highlights how organizations can foster an environment and culture of innovation to achieve commercial success.

INNOVATION AND
COMMERCIALIZATIO
N
2018
AMAZON GO

Contents
INTRODUCTION................................................................................................................................2
LO 1..................................................................................................................................................3
P1 INNOVATION AND ITS IMPORTANCE TO ORGANISATIONS IN COMPARISON WITH
INVENTION...................................................................................................................................3
P2 HOW ORGANISATIONAL VISION, LEADERSHIP, CULTURE AND TEAMWORK CAN SHAPE
INNOVATION AND COMMERCIALISATION..................................................................................5
M1 DIFFERENT SOURCES OF INNOVATION, AND HOW ORGANISATIONS CAN FOSTER AND
DEVELOP AN ENVIRONMENT AND CULTURE OF INNOVATION..................................................7
LO 2..................................................................................................................................................8
P3 THE 4PS OF INNOVATION AND THE USE OF THE INNOVATION FUNNEL TO EXAMINE AND
SHAPE INNOVATION IDEAS..........................................................................................................8
P4 DEVELOPMENTS IN FRUGAL INNOVATION AND HOW IT IS USED IN AMAZON GO.............11
M2 & M3 THE ROLE OF FRUGAL INNOVATION IN AMAZON GO AND INNOVATION FUNNEL IN
AMAZON GO..............................................................................................................................12
CONCLUSION.................................................................................................................................13
REFERENCES...................................................................................................................................14
1

INTRODUCTION
At present, the operations of the businesses are becoming more resilient which is creating
major problems for the businesses in every industry. For overcoming this, companies are
making new innovations and implementing new techniques for commercialization which is
helping the organizations to lead a success path and achieve great success. Here, the present
document aims to enhance the comprehensive skills and understanding of the innovation and
commercialization of the case study of Amazon Go.
The facts and figures depict that it is quite difficult for the organisations to make incessant
changes and innovate their structure, work environment, tasks etc. in the competitive markets.
Moreover, there is a need to adopt more commercial driven approaches to maximise the
Return on Investment (ROI). The unit will provide a noteworthy knowledge of the techniques
used by the organisations to become more commercial and innovative.
2

LO 1
P1 INNOVATION AND ITS IMPORTANCE TO ORGANISATIONS IN
COMPARISON WITH INVENTION
Innovation is the procedure to create or introduce something which is a better solution to the
present approaches and is useful which creates more value from the customers perspective.
Innovation is an utmost important concern of most of the organisations as it plays a vital role in
the development and commercialization of the company. It is a way to create viable advantages
in the business which helps to improve the productivity, market value and profit of the
company. In general, it can be said that the innovation is the way to stay relevant in the
competitive markets by changing the way to operate. At present, innovation is only related to
the implementation of more advanced technologies, but this is partially true as innovation can
be made in any task of the organisation (Drucker, 2014).
With the help of innovation in the businesses, one can easily create a competitive advantage by
implementing new strategies and techniques. In the ever-advancing economy, it is very
important that the organisation create some new solutions to their current problems. In
addition to this, it also helps in establishing the best and most suitable methods for the
business for attaining the true commercial advantage.
Innovative businesses develop a dynamic range of services and products and in most of the
cases, innovation is termed as a better way to build a more successful business that invention. It
is said that “invention is easy while innovation is genius (or accidental)”. At the same time, there
is a term, invention, which is a completely novel product of service from existing ones that have
a proved use and may be helpful in future in any business industry (Klaus, 2013). For example,
Apple iPhone is one of the best innovation made while the mobile phone is an example of the
invention. Hence, it can be said that invention leads the organisation to new directions while
innovation leads organisations to achieve more success.
Another of best innovation is the Amazon Go store opened at the Seattle with no checkouts,
the bills of the purchases will be directly sent to the customers on their accounts. This
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innovation by the Amazon has woken up the governments regarding the importance of the
innovation in business which helps Amazon to focus more on wealth, growth in the
marketplace (Neate, 2016).
Figure 1: Invention v/s Innovation
Source: [http://pediaa.com/difference-between-invention-and-innovation/]
4

P2 HOW ORGANISATIONAL VISION, LEADERSHIP, CULTURE AND
TEAMWORK CAN SHAPE INNOVATION AND COMMERCIALISATION
Innovation is one of the best things that can make it more attractive to the group of people in
the markets. While making a more innovative and commercial workplace, there is the hidden
hard work of the employees, management regarding the mission and vision of the company. if
the organisational vision is to develop a valuable brand name firstly, it should have a well-
defined mission and vision of the company. There is a big role of the company's vision to
introduce innovative ideas in the markets and achieve a competitive advantage. With the help
of proper mission and objectives of the company, the people related to the business will work
with motivation and effectively to create new standards in business and serve people
successfully (Taghizadeh and Rahman, 2013).
At the same time, the leadership within the company makes the things capable of the skills and
traits to make people pursue the tasks more efficiently. The reason leadership is required in
every organisation is to satisfy customers as well as the employees (Kesting, et al. 2015).
Leadership is a notion that creates a supportive work environment and lead towards the
success of the company. In most of the organisations, leadership is linked with the culture of
the organisation as it is the role of the leaders and the managers to provide a frank business
culture so that performance level of staff members can be enhanced. The role of culture in the
satisfaction of the customers and the employees is very essential. With the help of effective
leadership and culture, the team effectiveness will get increase and they eventually introduce
better innovation in the business that helps in attaining the mission and vision of the company.
In Amazon Go, the factors that made the company a very big organisation of the globe are the
vision, leadership, business culture and teamwork. The innovations introduced by the company
in most of the developing countries to buy the products online and pay later is one of the most
innovative ideas in shopping field (Artman, 2017). Recently, the company has established no
checkout store at Seattle which is termed as world most advanced shopping technology. This is
possible because of the Amazon’s leaders who made a positive work culture and developed
effective teams who developed this type of stores. According to the rumours, the company will
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be going to open around 2000 stores like this grocery stores which saves the time of people by
avoiding any queue at the stores (Neate, 2016).
Figure 2: Amazon Go (no checkouts)
Source: [https://www.youtube.com/watch?v=NrmMk1Myrxc]
6

M1 DIFFERENT SOURCES OF INNOVATION, AND HOW ORGANISATIONS
CAN FOSTER AND DEVELOP AN ENVIRONMENT AND CULTURE OF
INNOVATION
For creating the innovation in the present ideas of a business there are several options that can
be used. According to Peter Drucker (1985), there are seven sources of innovation which are:
Unexpected – it comes after a failure or an outside event, generally it happens with the
entrepreneurs and the analysists of the industries. The positives of this innovation are quite
high as it takes less time and efforts but resulted in new technology or method.
Incongruities – it is the disconnect between the present and expected or assumption. It is
unpredictable and may result in wastage of resources and time.
Process Need – the source is an imperfect task or any incompetency of the present task.
Generally, the need to introduce new solutions to the tasks lead to innovative ideas. These are
most relevant to the business as they are found by efforts while it has some drawbacks as it
required lots of skills and knowledge (West and Bogers, 2014).
Industry and Market Structures – the changes in the industry forces the companies to
innovate, the rapid growth or the reckless changes for further growth will lead to innovation.
Demographics – according to the current situation of the present technology and process in a
location may force people to create innovative ideas. This generally has low range mostly for
that particular location while it makes the tasks more effective efficiently.
Changes in Perception – the way people think about the present services will affect the working
of the companies and hence lead to innovations. Sometimes these new perceptions may harm
sentiments of others in the same industry.
New Knowledge – the gain of new knowledge generally forces people to adopt the new process
and make better changes. The results of knowledge-based innovations proceed the business to
new dimensions (Denning and Dunham, 2010).
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8

LO 2
P3 THE 4PS OF INNOVATION AND THE USE OF THE INNOVATION
FUNNEL TO EXAMINE AND SHAPE INNOVATION IDEAS
There are generally 4 types of innovation, the model given by John Bessant and Joe Tidd
regarding the commercial operations in the markets and is one of the powerful tools which is
shown below:
Figure 3: 4P’s of Innovation
Source: [http://knowledge-innovation.purot.net/dimensions-of-innovation]
Product innovation – here the changes have been made on the products and services which are
offered by the organisation
Process innovation – here the changes have been made in the way business operates by an
organisation
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Position innovation – the strategies in which the products and the services of the company is
communicated is changed
Paradigm innovation – with the help of simple examples changes have been made to the
models which define the tasks of organisation (elrha, 2018).
With the help of innovation funnel, the new innovation can be made in an organisation like
Amazon which can help them in attaining the competitive advantage and valuable worth in the
markets.
Figure 4: Innovation Funnel
Source: [http://www.innovationmanagementgame.com/dashboard/]
The stages of innovation funnel described the development and shaping of new ideas like
Amazon’s Go strategy to automatically provide the bill to the customers on their accounts after
shopping on their grocery stores.
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The broad part of funnel described the generation of a new idea by new knowledge,
experience, example, unknown source while the middle part or the narrowing part depicts that
there is a need to testify the actual customers of the company. At the last stage of the funnel or
the narrow part, shows that the idea is relevant to the business or the market or not. If the idea
is opted out from earlier parts of the funnel that means it is of no use to the company
(Vanhaverbeke, 2013).
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P4 DEVELOPMENTS IN FRUGAL INNOVATION AND HOW IT IS USED IN
AMAZON GO
With the help of frugal innovation, one can come with the new services, models and products
which are feasible for the numerous people. Generally, the frugal innovation is related to the
reduction in the costs of the goods and services with innovative ideas. The developments in the
frugal innovation in Amazon Go are:
Building new ideas – the company is very keen on developing new ideas that are beneficial for
both the organisation and the customers. Generally, these ideas are used to see their benefits
on Amazon.
Customer prerequisites – buyers are the important part of the business of Amazon and hence
the ideas and opinions of customers are given significant priorities in the company.
Innovative partnerships – a collaboration of the business with innovative partners help
business to create new dimensions in business but instead of partnerships with others, Amazon
tries to introduce innovations by their own (Bhatti, 2012).
Determining the business barriers – Amazon is very firm in determining its barriers to business
so that its teams can resolve them on a permanent basis with an innovative solution.
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M2 & M3 THE ROLE OF FRUGAL INNOVATION IN AMAZON GO AND
INNOVATION FUNNEL IN AMAZON GO
The role of frugal innovation in the organisations is very important as it helps in reducing the
costs of the company by more cheap and effective methods in the operations. Amazon always
tries to make more effective products and services by removing the complexity and costs in
production. In most of the cases, Amazon Go team removes non-essential features from the
robust, especially in the developing countries. As the grocery store has only opened in Seattle
and company may introduce stores majorly in developing countries to develop their markets
and their market value in those countries (Zeschky, et al. 2011).
Similarly, there is a big role of innovation funnel to the Amazon Go, as it describes the ways to
develop new ideas within the business like their current strategy. While the narrowing part of
the funnel helps in understanding the correct choices for their business so that finally they can
implement that in their business. At the same time, these types of innovations in the markets
may lead to tougher and competitive markets for the people when other companies try to
implement same strategies. For Amazon, there are several rivals which may cause a reduction
in their market value by their strategies and for which company has to pursue a continuously
developing process in its business.
13

CONCLUSION
After developing the current report on the topic of innovation and commercialization with
respect to the Amazon Go, it is found that the company is very strong in implementing new
strategies and innovation in the business to make their business more commercially acceptable
all around the world. The report describes the innovation and how it differs from invention then
it concludes the role of frugal innovation and innovation funnel with the types of innovation
with respect to the Amazon Go strategy. The company is performing very well with its cutting-
edge innovation to provide its customers more benefits and excellent service and in future with
this approach Amazon can enhance its market share and become a leader in the industry.
14

REFERENCES
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innovation.
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12. West, J. and Bogers, M., 2014. Leveraging external sources of innovation: a review of
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