Importance of Innovation and Commercialization

The report emphasizes the need for firms to continually innovate their products, processes, and workflows to remain competitive. It highlights various tools available for new product development and commercialization, as well as intellectual property rights that protect inventors' exclusive rights. The document draws on a range of sources, including journals and books, to provide insights into innovation studies, open innovation, and business model innovation.

INNOVATION AND
COMMERCIALIZATION

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Explain Innovation and determine its importance in comparison with invention.............1
P2 Explain how leadership, vision and culture can shape innovation and commercialisation2
TASK 2............................................................................................................................................3
P3 Explain 4P's of Innovation................................................................................................3
P4 Development in frugal innovation.....................................................................................3
TASK 3............................................................................................................................................4
P5 Importance of commercial funnel and application of new product development.............4
P6 Build an Innovation Business Case...................................................................................5
TASK 4............................................................................................................................................6
P7 Intellectual property tools used to retain and protect them...............................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Innovation can be defined as a “new idea, method or device”. It is often seen as the
application of providing better solution that meet existing market needs, new requirement or
unarticulated needs in an effective manner (Aarikka-Stenroos, and Sandberg, 2012). In terms of
business, it refers to the process of introducing new idea, product or services, processes and
workflows. The key to make business successful is being able to discover new idea to keep
product, process and operation fresh. The process of coming up with those creative ideas is
known as Innovation. The given report is based on Healthy Juice which is a two year old start-up
by Mr. Daniel Green. The main aim of this report is to increase the sales and market share of the
company through embedding innovation. It covers how innovation is different from invention,
4P's of innovation, commercial funnel, application of new product development, business case
and different tools of intellectual property rights.
TASK 1
P1 Explain Innovation and determine its importance in comparison with invention
The process of converting an idea into final goods or services that creates value for
customer or for which potential buyer is ready to pay is known as Innovation. In terms of
business, it can be described as implementing new ideas, creating dynamic goods or improving
existence services in order to gain high competitive edge in the market. Innovation act as a
catalyst that creates value for the business entity. That value eventually comes driving more
revenue through present channels or by generating new revenue opportunities that ultimately
leads to save money and time or both. In short, the process of Innovation leads to generate higher
profit for firms. Moreover, it also helps the organisation to adapt and grow themselves within the
market in an effectual manner. It generally refers to the process of changing and creating more
effective product, ideas and process. According to the statistics reports, it has been figured out
that companies that innovate creates more effective work process and have better performance
and productivity (Bogers and West, 2014).. Healthy Juice is a two year old start-up launched by
Mr. Green. The organization mainly deals in selling only one drink i.e. one healthy milkshake.
However in its third year, company faces major decline in its sales an profitability ratio. In order
to deal with such situation, the firm has decided to embed innovation by introducing new range
of drinks, smoothies and juice. As a result, it launches many variants of juices that is made up of
two or more than two fruits. For example: Gracherry juice (composed of grapes and cheery).
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Apart from this, it implant innovation by launching other products like smoothies, healthy drinks
with different variants. Following are some of its advantages:
11 Creates value for company as well as for customers11 Higher lead generation and profit11 Customer satisfaction level increases11 Improves overall performance and productivity11 It is considered as the best way to develop USP for specific product or process.
Comparison between Innovation and Invention
Innovation Invention
It deals with adding value to something that
already exists.
It is related with creation of entire new
product or services.
It requires scientific skills. It requires set of technical, marginal and
marketing skills.
It is mainly related with single product or
process.
It refers to the combination and
amalgamation of various goods and
process.
P2 Explain how leadership, vision and culture can shape innovation and commercialisation
Vision: The vision of company is “To become leading seller of healthy drinks, smoothies and
juices”. It is crystal clear from its vision statement that company aims at providing healthy and
organic juices, drinks, smoothies to vast number of people. In the modern era, where needs and
expectation of customers are frequently changing, referred firm has formulated effective
strategies that give them high competitive edge in the market over its rivals. Recently, Mr. Green
has decided to expand its product line by launching new products like smoothies, juice, healthy
shakes etc. To beat competition prevailing in market, firm launch Gracherry juice (mixture of
grapes and cheery) as Grape is consider as best selling fruit in United Kingdom.
Leadership: The leadership style followed by referred organisation is democratic in which equal
rights are given to all employees and company include them in their decision-making process as
well which makes them feel valued (Bogers and West, 2012).
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Culture and Team work: The culture of any business entity includes behaviour and value of all
people associated with firm that contributes in such a way to create unique psychological and
social environment. Workplace culture controls the way in which workers behave amongst
themselves and with other outsiders. Healthy Drinks create creative and unique work
environment that motivates, attracts and retain the best employees in the field. It's culture also
encourage innovation & reflects in their decision making process. Thus, when the company
decided to undergo innovation, it get full support from its workers and moreover the idea of
Gracherry was originated by its employees only. In addition to that, the firm believe in carrying
out business activities with collective efforts of a team.
TASK 2
P3 Explain 4P's of Innovation
This framework was given by John Bessant and Joe Tidd. Like marketing mix, the tool is
made up of four P's including product, process, paradigm and position. Following are the
detailed explanation of all 4P's:
Product: It refers to the change in product and services offered by business entity to its
competitors. Earlier Mr. Green only sells one healthy milkshake but with over the time due to
entry of other competitor there was a tremendous decline in its overall sales. In order to
overcome such situation, the company along with its members have decided to spread out its
product line by launching smoothies, juices and health drink with many variants. For instance:
Gracherry Juice, peanut butter coco banana smoothie and many more.
Process: It deals with change in delivering goods and services to end-customers. With advance
and innovative technology, an urge for changing the delivery process emerges. For instance:
Mr.Green has decided to launch its mobile online application which directly connects the
customer with company.
Position: It defines the way in which products and services are communicated to potential
buyers. This is the way in which goods or services are actually perceived by potential buyers.
Earlier, referred firm was selling its product through its outlet only but now, they have started
selling through online mobile application as well which proves out to be much convenient for
customers.
Paradigm: It is the combination of all discussed P's. It refers to the change in perspective of
customer regarding any particular product or services.
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Innovation Funnel: It refers to the range of steps that needs to be taken into account while
satisfying customer needs and wants. The main use of Innovation Funnel is that it adds value to
customer as well as organisation. With the help of this, company can easily examine available
market opportunities for its future product.
P4 Development in frugal innovation
Frugal Innovation refers to the process which enables business concern to minimise
complexities of overall production and cost of goods sold (Gambardella and McGahan, 2013).
However, it is not concerned with simple selling of product but instead, it also provides better
quality solution to customer problem that delivers high value at economical cost. There are
various companies who not only radically change its business model but also change its mental
model as well. Following are the various stages involved in frugal development:
Find Opportunity in Adversity: At this stage, manager of the firm reframes the existing
problem. They serve threat as an opportunity or try to convert threat into the best possible
opportunity.
Do more with less: At this stage, company tries to discover the best possible solution with given
available resources. They are advised not to ask more and create better solution with the things
they already have (Godin, 2012).
Think and act flexibly: It is better to be improvisational rather than being rigid.
Keep it simple: Complexities can create problem or issues in the company. It is always better to
have fewer choices instead of having multiple choices.
Include the margin: It is important for every company to be well aware about its target
customer choices and requirement, involve them and ask suggestion and feedback from them.
Moreover, company executives should directly ask buyers what are their expectations regarding
the particular product and what changes or modification they actually want.
Follow your heart: Be passionate with your ideas and courageously move forward with it.
TASK 3
P5 Importance of commercial funnel and application of new product development
Commercial funnel illustrates the idea that initially every sale begin with numerous
customers but ends up with very few of them actually buying or purchasing it. This funnel aids in
generating higher leads for company and then sorting and ranking it on the basis of final
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purchase made by the customer. As per the 20/80 rule, company needs to lay more stress on
retaining that 20% of the customers who generates 80% of company's total sales. This funnel
helps in identifying those loyal buyers and tries to retain them for longer by keep satisfying their
needs and expectations.
The given company has decided to expand its product line by implanting innovation in
their products for which they have to go through new product development process before
launching its innovative product or service. It consists of several stages which are discussed
below:
Idea Generation: At this stage, idea is formulated or generated.
Idea Screening: There must be numerous ideas developed by the company but very few of them
are practical or good (Huizingh, 2011). At this stage, managers try to eliminate all those bad
ideas and focus on those practical ideas and then select the best from them.
Concept testing and development: At this stage, selected idea undergo testing and
development. Some members from target group have been selected by the company on whom
firm will try or test its innovation. With the help of information provided to them, they are able
to visualise the product.
Market development and its strategy: At this stage, marketing strategies have been developed
by company which assist in promoting its innovative product in the market (Kim and et.al.,
2011).
Analysis of business and financial: At this level, actual sales of the product after innovation are
compared with pre-determined one.
Commercialisation: At this phase, company finally launches its product in the market.
P6 Build an Innovation Business Case
Business Case is developed by companies so as to figure out the risk associated with
investing or spending in innovation. In the given report Owner of Healthy Juice, Mr. Green has
decided to expand its product line by introducing smoothies, drinks and juices with different
variants with an aim of maximise its sales and generate higher profits. It mainly covers series of
steps which are discussed below:
The Need: At this stage, company discover the need for innovation. For example: Due to entry
of many competitors, sales of “Healthy Juice” is going down. In order to deal with such situation
Mr. Green has decided to bring innovation in its product line. They introduce Gracherry Juice
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which is a mixture of real Grape and Cherry Fruit. Along with this, company also introduce other
products like smoothies, drinks.
Your Solution: At this stage, best possible solution for the given problem is developed. Here the
solution formulated is in the form of expanding its product line by introducing other products
with different variants.
Why it is Innovative: The solution discovered by organisation must be simpler and
understandable. It creates value for both company as well as for customers.
Customer Research: At this stage, Mr. Green conduct mini research so as to know about the
various needs and wants of customers which help them in selling such products that has mostly
been liked by potential buyers. For example: Grape is consider as the best selling fruit of UK.
Taking the advantage of this, Mr. Green has launched Gracherry Juice made up of fresh and
organic grape and cheery fruit.
Investment Requirement: There are two main sources through which company can manage or
arrange funding i.e. Internal and External
 Internal Sources: These are sources that are available within the organisation only
(Lindič and et.al., 2011). For example: Profits can used or re-invested for business
expansion, retained earnings can also be used for acquiring new assets. Moreover, long
term assets that are not in use can be sell by manager for diversification of business.
 External Sources: These sources are available outside the business premises such as
international organisation, business investors, creditors, banks etc.
Expected Benefit: Satisfies customer requirement in more appropriate manner and company
gain high competitive advantage over its rivals (Rafinejad, 2015).
The Ask: At this stage, managers of company will take feedback from customer regarding their
innovation.
TASK 4
P7 Intellectual property tools used to retain and protect them
Intellectual Property Rights defines the right or possession of a person given to them in
order to protect their discoveries or invention. It means giving exclusive rights to the person for
his creative plan or idea. Intellectual Property Rights Tools enable inventor to achieve sense of
recognition and gain monetary benefits from their invention. Following are the detailed
explanation of these intellectual tools:
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1. Patent: These are the property rights given to the inventor for their creative invention. It
gives certain rights to patent holder to eliminate others from making, using or selling
their invention without the knowledge of discoverer.
2. Copy-rights: These are the rights given to the person who invent or create something new
for its artistic, literary, musical and dramatic works. With the help of this intellectual
property right, inventor gets the possession for allowing others to use their work but
possess control over it. This gives exclusive rights to inventor in terms of displaying,
performing, modifying or distribute their work
3. Trademark: It is a symbol, phrase, design or word that assists in distinguishing the
product from one another (Schoonmaker and Carayannis, 2010). This is often used by
business enterprise so as to create its distinctive image in consumer's mind which makes
easier for them to found or identify their product.
CONCLUSION
As per the above mentioned report, it can be concluded that in order to survive in the
market for longer period and gain high competitive advantage, it is important for every firm to
keep innovating their product, process and workflows. Different tools exist in the market that aid
in application of new product development. In addition to that, with the help of intellectual
property rights tools, inventor can protect his/her invention from others as they get exclusive
rights for their discoveries.
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REFERENCES
Books and Journals
Aarikka-Stenroos, L. and Sandberg, B., 2012. From new-product development to
commercialization through networks. Journal of Business Research. 65(2). pp.198-206.
Bagchi-Sen, S., 2017. Strategic considerations for innovation and commercialization in the US
biotechnology sector. European Planning Studies. 15(6). pp.753-766.
Bogers, M. and West, J., 2014. Contrasting innovation creation and commercialization within
open, user and cumulative innovation.
Bogers, M. and West, J., 2012. Managing distributed innovation: Strategic utilization of open
and user innovation. Creativity and innovation management. 21(1). pp.61-75.
Ettlie, J.E. and Rosenthal, S.R., 2012. Service innovation in manufacturing. Journal of Service
Management. 23(3). pp.440-454.
Gambardella, A. and McGahan, A.M., 2013. Business-model innovation: General purpose
technologies and their implications for industry structure. Long range planning. 43(2).
pp.262-271.
Godin, B., 2012. “Innovation Studies”: The Invention of a Specialty. Minerva, 50(4). pp.397-
421.
Huizingh, E.K., 2011. Open innovation: State of the art and future perspectives. Technovation.
31(1). pp.2-9.
Kim, S.K. And et.al., 2011. The effect of R&D, technology commercialization capabilities and
innovation performance. Technological and Economic Development of Economy. (4).
pp.563-578.
Lindič, J., and et.al., 2011. Deploying information technologies for organizational innovation:
Lessons from case studies. International Journal of Information Management. 31(2).
pp.183-188.
Rafinejad, D., 2015. Innovation, product development and commercialization: Case studies and
key practices for market leadership. J. Ross Publishing.
Schoonmaker, M.G. and Carayannis, E.G., 2010. Assessing the value of regional innovation
networks. Journal of the Knowledge Economy. 1(1). pp.48-66.
Snow, C.C. And et.al., 2011. Organizing continuous product development and
commercialization: the collaborative community of firms model. Journal of Product
Innovation Management. 28(1). pp.3-16.
Teece, D.J., 2012. Business models, business strategy and innovation. Long range planning.
43(2). pp.172-194.
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