Frugal Innovation and Product Development

This assignment delves into the concept of frugal innovation, examining its definition, principles, and significance in the contemporary business landscape. It analyzes how frugal innovation methodologies can be applied to new product development processes, emphasizing cost-effectiveness, resourcefulness, and customer-centricity. The assignment draws upon academic research, industry case studies, and practical examples to illustrate the benefits and challenges of adopting a frugal innovation approach.

INNOVATION AND COMMERCIALISATION

Executive summary
This report focuses on the innovation and commercialisation process of the chosen
organisation in UK, namely, Softwire. It presents two case studies of Apple and Virgin,
which include incorporates innovation and commercialisation process and its importance to
the organisation. The current report also evaluates the tools used in developing, retaining and
protecting knowledge of the property in the organisation with reference to the case study. The
current report also provides an innovation business case of the chosen organisation, namely
Softwire consultancy.

Table of Contents
Introduction:.........................................................................................................................................4
Task 1:...................................................................................................................................................4
Explanation of innovation and its importance to the chosen organisations (P1):.................................4
Impact of organisational vision, leadership, culture and teamwork in shaping innovation and
commercialisation (P2):.........................................................................................................................6
Task 2:...................................................................................................................................................8
Explanation of 4Ps of innovation and the use of innovation funnel to examine and shape innovative
ideas to employees (P3):.......................................................................................................................8
Development of Frugal innovation in the organisation (P4):...............................................................10
Task 3:.................................................................................................................................................11
Importance of commercial funnel and the application of New Product Development (NPD)
processing for commercialisation to employees of the organisation (P5):..........................................11
Innovation Business Case of the chosen organisation (P6): ................................................................12
Task 4:.................................................................................................................................................14
Evaluation of different tools used to develop, retain and protect knowledge and intellectual property
(P7):.....................................................................................................................................................14
Reference List:.....................................................................................................................................16

Introduction:
Innovation is a multi-faceted and complex process that includes a broad spectrum of
diverse activities and outcomes. On the other hand, commercialisation is the process of
transforming ideas, knowledge and inventions into greater wealth for individuals and
business process in an organisation. The importance of both the concept is to provide better
organisational productivity by adaptation of new techniques and unique ideas to enhance the
business process. This report focuses on the innovation and commercialisation process of the
chosen organisation in UK, namely, Softwire. It presents two case studies of Apple and
Virgin, which include incorporates innovation and commercialisation process and its
importance to the organisation. The current report also evaluates the tools used in developing,
retaining and protecting knowledge of the property in the organisation with reference to the
case study.
Task 1:
Explanation of innovation and its importance to the chosen organisations (P1):
Organisational innovation means the implementation of new organisational method in
undertaking the business process, workplace organisation and external relations. In order to
make innovation, an organisation changes its management strategy, mergers and acquisitions.
According to Costello (2015), the innovation process in an organisation also includes
accessing of capital replacement or extension, customisation, regular seasonal and other
cynical changes. Organisational innovation is also providing chance to the employees for
showing their creativity in order to make a flow of their business activities. In this regard,
Innovation process is improved in Software by rethinking about high-level business
strategies, recognising and protecting entrepreneurs and building an innovation culture
among employees in work environment .
The Software tries to institutionalise the process of innovation by creating innovation
teams from diverse segments of the company. It also relies on individual employees to
flourish in an enlivenment where innovation is encouraged. This Software consultancy and
developer has a special product idea from where its employees can suggest innovations while
keeping intellectual property. Therefore, it can be said that for competition, there is an
innovation process in Software, which helps in taxing the employees of the organisation who

are already working hard to complete their targeted tasks and keep up with the flow of
business. It has been found that in its 5th year of development, London and Bristol based
Softwire is distinguished by its openness and flexibility among the employee due to
innovation process. Due to their product and service innovation process, Softwire has grown
from a staff of 73 in 2013 and has unparalleled sense of job security (92%). The innovation
of software products helps in raising the revenue by 50% last year. However, the employees
are not the only driving force for this success. The organisation is providing top quality to its
customers and fantastic work environment to the employees. From the viewpoint of Karlsson
(2013), the innovation process helps the employees by providing them health environment.
For instances, the offices of Softwire are equipped with televisions and all kinds of games to
encourage breaks and stop people feeling exhausted.
Similarly, apple has shown its innovation process by manufacturing small and sleek-
looking device, namely iPod. In spite of having innovative and interesting small MP3 players
at market, Apple Inc. made an innovative device that includes larger number of songs within
a small physical space. By making an effective innovation, they become superior in MP3
player market in terms of both unit share (31%) and revenue share (56%). This innovation of
product helps in marketing of 1.4 million iPods and helps the employees to present their
creativity and uniqueness within a wide range. Therefore, it is evident that Apple’s
organisational culture is the key factor for the company’s success.
Invention is termed as obtaining an idea that has never been thought before.
Whereas in innovation the idea which has came into existence by invention is implement for
product or processes. Invention creates new product while innovation gives an add on to
something which is already existing.
On the other hand, Virgin group has continued to grow from simple innovation of
investment ventures, which include Virgin Atlantic, Virgin Express, Virgin Rail, Virgin
Blue, and Virgin Mobile. During the process of innovation this company, there are
entrepreneurial efforts that are encouraging the growth of employees. In this process, each
member or employee of the group is able to create innovative ideas for offering best products
and services to their core customers. In this situation, the employees are able to present their
ideas on business ventures due to introduction of innovation in the organisational business .
Innovation and its importance in Virgin group is as follows:

 Innovation helps in creating competitive advantage in the company .Now a days it is
important to get best ideas and competence from all over the world which helps in
getting true commercial interest.
 In establishing suitable method for the Virgin group innovation will help a lot.
Applying new method tor urn the businesses of the entity can help in achieving
success .
Impact of organisational vision, leadership, culture and teamwork in shaping
innovation and commercialisation (P2):
The organisational vision is a pronouncing explanation of what an organisation would
like to achieve or accomplish in their future. Organisational vision helps in providing clear
guide for choosing and future courses of action. In this regard, Software has three significant
vision and these are to be an extremely successful and profitable organisation, to provide top
quality service and to provide fantastic work environment to the employees. These visions
have great impact on the development of innovation and commercialisation of product and
services of the company and in enhancing the business activities. The visions help in setting
business target, which the employees have taken into consideration for organisational
competency and improvement of their self-esteem (Popa et al. 2010).
Effective leadership in the organisation helps in the development of innovative ideas
and creativity in the business procedures. From the viewpoint of Bound and Thornton (2012),
the effectiveness of leadership also helps the organisation in decision-making process in their
business practices. The guidance of managers and business developer in Softwire results in
development and commercialisation of products and services. Softwire through their
effective leadership skills strongly encourage their staff to be multi-tasked and learn a new
range of technologies and programming languages. It also aims at the development of new
ideas, knowledge and invention into greater wealth for organisational benefit and economic
growth in the world market.

Press and people aspect of innovation
Press
Press aspect of innovation incudes two conditions which are conducive and
prohibitive. Softwire company focuses on making creative environment by making
everyday activities creative. To achieve creativity following factors are included :
Organisation culture : It involves risk taking . Motivating employees, encouraging workers
to learn from failures. Communication and feedbacks form employees and providing rewards
for recognition (Popa et al. 2010)
Organisational resources : Providing enough skills and competences to make innovation in
works. Role models who can give guidance in implementing creativity.
People
Individual working in organisation should have capabilities like self control,
intelligence, creative thinking . These capabilities help in making innovation in product of
company.
Work culture deals with the study of beliefs, thought processes and attitudes of
employees, which helps in the development of innovating new techniques and process for
offering quality and service to the customers. According to Bhuiyan (2011), thought process
of employees enhances the process of transformation of ideas and knowledge of employees
regarding the business activities. In this regard, in Apple’s case, employees are effectively
developed and integrated into an organisational culture that facilitates rapid innovation and
commercialisation. Such innovation is observable in terms of products like iphone, iPad and
Apple Watch. The company’s organisational culture contributes in order to strengthen the
business and imposes limits and challenges to the firm. Therefore, Apple Inc. is developing
its organisational culture to cope up with dynamics of business environment.
Teamwork is important in an organisation as it provides employees with an
opportunity to collaborate with each other, which improves relations among employees
within the work environment (Vanhaverbeke, 2013). With an effective implementation of
effective teamwork, the employees in Virgin Group feel valued upon the successful
completion of their business activities. In this regard, this is evident from the teamwork
within the Virgin group where ambitious and talented people are motivated in order to enable
them to achieve their best s well striving for performance at high level. Therefore, despite of
being informal, Virgin Group is expected for high achievement due to employees’
commitment.

Task 2:
Explanation of 4Ps of innovation and the use of innovation funnel to examine and shape
innovative ideas to employees (P3):
There are 4Ps of innovation. They are product, process, position and paradigm and
they are helpful in stimulating the entire business process of the organisation.
Figure 1: 4 Ps of innovation
(Source: Lam, 2011)
Product:
Softwire consultancy and developer has special product ideas from where its
employees are suggesting innovations. Product innovation includes the development and
transformation of smart and creative product, which can easily attract the customer and
results in organisational competency (Do et al. 2012).
Process:
The process of innovation includes the delivery and manufacturing of the product. Softwire is
making its profit by charging commission during the process of product innovation. The
product innovation process is comprised of the production and sale of then product in the
world market.
Press
The press of innovation works on two measures which are conducive and prohibitive.
I this aspect company concentrate on making environment which is creative and innovative.
Creativity is accomplished by making culture of organisation innovative. Employees are
motivates and encouraged for providing their ideas to implement innovation. Resources are
given by organisation to implement innovation.
People

In people aspect of innovation employee should have skill like innovative thinking,
creativity in work and intelligence (Bound and Thornton, 2012)These skills are required in
worker to implement innovation.
According to Vanhaverbeke (2013), most business in every organisation, including Softwire
has some form of innovation funnel. The funnel of the organisation is wide at the front to
capture potential ideas and opportunities or proposed projects. The company’s entire
innovation funnel or portfolio aligns to its strategy and strategic planning to channel the
projects into the portfolio or the innovation funnel.
Figure 2: Innovation funnel
(Source: Vanhaverbeke, 2013)
However, managing the development funnel involves different tasks or challenges.
The first is to widen the mouth of the funnel where the organisation must expand its
knowledge base ad access to innovative information in order to increase the number of new
products and new process ideas. The second challenge that the company is facing is to
narrow the funnel neck where the ideas generated must be displayed and resources needs to
be focused on the most attractive opportunities. The third challenge of the company is to
ensure the selected projects delivered on the objectives anticipated when the project or
business process is approved (insead.edu. 2016).
Development of Frugal innovation in the organisation (P4):
According to Granqvist (2016), frugal innovation is the ability to generate more
business and social value while significantly reducing the use if scarce resources. Frugal

innovation is the game changing strategy in which firms including Softwire is compelled by
cost conscious and eco awareness consumers, employees and governments to provide
offerings that are easily affordable, sustainable and have high quality.
In Softwire consultancy, frugal innovation is the entire innovative mindset and a
flexible approach that developed constraints not as a weakening challenge but as growth
opportunity. From the viewpoint of Granqvist (2016), the company uses frugal innovation as
a secret weapon of emerging market. Emerging market in UK, acts as a production ground
for frugal innovation. Softwire in emerging markets is able to innovate in resource-
constrained settings and create frugal solutions that deliver more values to the customers at
reasonable cost (insead.edu. 2016).
In this regard, Apple shares have struggled of late, falling over 20% over the past
year. Apple has been the biggest wealth destroyer of the investors as in recent time; iphone
revenue has just tumbled 18%. Therefore, Apple is growing slower if compared to other
competitors in the market and apple never really managed to make money selling the
computers. On the other hand, Virgin group is also making considerable price rate in their
products and services for the customers. They are establishing their business strategies as per
frugal innovation.
Six steps of frugal innovation are as follows:
1. The first step in frugal innovation is to identify the opportunity in which that is
threatening to organisation.
2. Second step describes finding new way to create better solutions.
3. Flexible thinking is required in this phase.
4. Every idea should be simple and must have more choices as backup.
5. While making ideas one should include KYC terms to include the margin.
6. In the last step of frugal innovation one should follow his/her heart means moving
ideas forward.

Task 3:
Importance of commercial funnel and the application of New Product Development
(NPD) processing for commercialisation to employees of the organisation (P5):
The commercial funnel is actually a consumer focused marketing paradigm, which
explains the theoretical customer journey towards the purchase of product and services. Aplle
has paved the way to have commercial funnel for their core customers. they have done an
innovation in making iPod that can hold large number of music within smallest physical
space. The company make an effort of commercial funnel and attract customers for
marketing their products and in this way, they sold 1.4 million iPods and become No. 1 in the
MP3 player market both in terms of unit share of 31% and revenue share of 56%. Apple does
not only begin with technological breakthrough but also by attracting the customers towards
their product and services.
Figure 2: Commercial funnel
(Source: Bhuiyan, 2011)
As per the above diagram, the commercial funnel has many layers, which signify the
customer journey towards the process of purchasing products and services. The first layer is
campaigning of the product and services for customer attraction. The second level leads to
the proposed product or services. The third step signifies the opportunity for the organisation
while having the product marketing process. The fourth step includes sales of the product and
services to the potential customers. The fifth step involves the sale of product and services to

the company clients and the final step is to ensure customer retention by marketing of
products and services (systems-thinking.org. 2016).
This process is also evident in case of Virgin group, where they have continued to
grow from simple publishing venture in the year of 1970 to big investment ventures, which
include Virgin Atlantic, Virgin Express, Virgin Rail, Virgin Blue, Virgin Entertainment
group, Virgin Money, Virgin Net and Virgin Mobile. The consistent and constant growth of
Virgin Group emphasises the commercial funnel in which the main aim is enhance customer
retention and paved the way for customers to buy their respective products and services.
The Softwire consultancy and developer also has a special product idea due to the
suggestion of respective employees, which enhances the customer attraction towards their
products and services. The innovation and commercialisation techniques that have been used
by the company, which involves the advertisement of the product, sales promotion, other
marketing efforts that encourage commercial adoption of the product and development. The
company by using the commercial funnel specifically aims at target customer needs and
requirements. From the viewpoint of Bhuiyan (2011), the commercial funnel also helps the
company to interact with their core customers through the medium of their respective
products and services. Softwire with the help of commercial funnel is able to make
innovative ideas and knowledge while marketing their products and services.
Innovation Business Case of the chosen organisation (P6):
The software consultancy and developer has a special product idea from where its
employees suggest innovations while keeping the intellectual property. Its 102 employees
vote on the issues from the bonus structure to the staff welfare budget. The company also
uses an innovative tool called discourse in order to collect and discuss suggestion regarding
new ideas and knowledge and invention of the products and services. Revenues rose by 50 %
after the marketing of its products and services. Softwire has grown from a staff of 73 in
2013 and has an unparalleled sense of job security.
Softwire company is planning to design a new mobile app so that more number of
customers can use the services provided by organisation. Company has discussed this idea
with its employees. Workers suggestions and ideas should be included for better innovation. .

New application of organisation will help company for providing better services to its clients.
. Newly designed application will support organisation in gaining more revenue and profits.
Innovative idea can be carried out by open discussion with all the workers and giving them
proper training to deploy it. Resources that would be required human resources, capital
resources, trainers, technical expertise etc. Funding can be done for innovation taking loan
from bank (Granqvist , 2016)
Time period of 3 month would be require for this innovation. All the people involved
in innovation should be given directions to maintain the confidentiality so that idea of
innovation could be protected. Company can patent the rights for new mobile app. It can also
use copyright method for maintaining the security. Measuring success can be done by cross
checking revenue and satisfaction of client and customers. If company is able to generate
profit from new application then the innovation will prove successful for it.
Similarly, Virgin group also supports entrepreneurial efforts that are expected to contribute
the employee growth. In this company, each employee is able to present the concept of
business venture in its applicability if it is realistic in nature. They also promotes situation in
which all the employees are able to present their innovative ideas on business ventures
including variety of resources.
On the other hand, Apple Inc. follows some of the significant principles for their business
growth like top notch excellence, creative ideas, innovation, secrecy and moderate
willingness. The combination of these principles helps the company to make organisational
culture that supports the firm industry leadership.
Task 4:
Evaluation of different tools used to develop, retain and protect knowledge and
intellectual property (P7):
Developmental tool:
Training is an essential tool for the development of employees regarding the
innovation of new product within their business activities. By this tool, the company is able
to provide some new techniques for making innovation and commercialisation in their

business process. The Softwire is able to make the employees learn about new techniques to
improve their performance level. The company is also making innovation through the process
of training developmental activities in their business management programme.
Retention tool:
From the viewpoint of Karlsson (2013), retaining employees and their knowledge is a
crucial an ongoing effort in Softwire. The manager of Softwire is able to understand their
responsibility and their knowledge in their business activities. The company has done staff
requirements, reinforcements and recognition of their innovative ideas and intellectual
property in order to make an effective effort for business growth. The company also
motivates the employees and their innovative invention regarding product development,
which as a result leads to organisational competency. Softwire also involves the employees in
the process of realizing goals with the help of heir innovative techniques and unique ideas
that have been emerged during the process business development.
Protection tool:
In order to protect the knowledge and intellectual property, the company includes the
publishers’ legal notices and disclaimers within information of the product and services.
Trademark helps in protecting distinctive words, phrases, logos, symbols, slogans and other
devices in order to identify and distinguish the products and services of the company in the
marketplace. The company uses trademark law, which helps in the protection of service name
and product brand along with innovative ideas and knowledge of the employees in the
business project. Product insurance also helps in protecting the product information and
innovation process (nnl.co.uk. 2016).
Utility Model for innovation and invention:
This model is used by Virgin group to recognize minor improvement in the exiting
services and products which is not able to fulfil the patent requirement. This requirement
may have significant role in the system of innovation. Utility model provide security to these
innovation by giving exclusive rights of the organisation.

Conclusion:
In the concluding lines, it can be said that the innovation and commercialisation
process helps in the development of the product and enables the product marketing. This
process also helps in customer retention with the help of using commercial funnel in the
business process. In this regard, two companies, namely, Apple Inc and Virgin Group also
make an effort of using different innovative techniques for development of the product and
make the customer attracted towards their targeted products and services. Different
developmental tools and retention tools have been used for protection of employee
knowledge and intellectual property. The current report also provides an innovation business
case of the chosen organisation, namely Softwire consultancy.

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