Innovation and Commercialisation: Concepts, Benefits, and Frugal Innovation

This study explores the concepts and benefits of innovation and commercialisation in the context of Essence Drinks. It discusses the difference between innovation and invention, the 4 P's of innovation, and the use of innovation funnel. It also covers frugal innovation with examples and the significance of commercial funnel. The study further discusses the ways of funding for innovation and ways to protect knowledge and intellectual property.

Innovation and
commercialisation

Table of Contents
Introduction.................................................................................................................................................3
TASK 1.......................................................................................................................................................3
P1) Discuss innovation concept and its benefit to company in comparison of invention.........................3
P2) Discuss the way in which vision, leadership, teamwork and culture can shape innovation and
commercialization...................................................................................................................................5
TASK 2.......................................................................................................................................................6
P3) Discuss 4 P’s of innovation along with the use of innovation funnel to shape innovative ideas........6
P4) Development of frugal innovation with suitable examples................................................................9
TASK 3.......................................................................................................................................................9
P5) Discuss significance of commercial funnel along with the application of new product development
for commercialization of innovation........................................................................................................9
P6) Discuss innovation business case for organization along with the ways of funding........................12
TASK 4.....................................................................................................................................................13
P7) Different tools which can use by organization to develop, retain and protect the knowledge of
intellectual property...............................................................................................................................13
Conclusion.................................................................................................................................................15
References.................................................................................................................................................16

Introduction
Innovation signifies development of new product or service in order to gain attention of
individuals in an efficient manner. Main aim of present study is to examine the effectiveness of
innovation and commercialization in current environment. Innovation is about developing a new
idea so that existing issue can be addressed in proper way (Urabe, 2018). The present study is
based on Essence Drinks which is a leading drink provider of London. It was founded by
Akshay Kuman and offers elegant drinks to customers. Here, difference between innovation and
invention, 4 P’s of innovation, types of innovation are going to discuss in the following study. It
will also cover infrugal innovation with examples along with the significance of commercial
funnel. Ways of funding for innovation and ways to protect knowledge and intellectual property
will also include in the given study.
TASK 1
P1) Discuss innovation concept and its benefit to company in comparison of invention
Innovation: It is related with implementing the new ideas to introduce new products and
services in market. Here, modifications are made in existing goods or services in order to
improve overall experience of customers. It will help in facilitating uniqueness and creativity in
products. Innovation helps in improving the brand image of company by developing new
products or modifying existing ones (Evangelista, 2019). In context of Essence drinks, they can
add new flavors in their existing portfolio of drinks. With this, organization can easily gain the
attention of buyers in an efficient manner.
Invention: It is a process of developing something new which has not been developed till
now. Here, the idea is completely unique & creative. It help in developing attractive, creative as
well as unique products which will improve overall experience of customers. In context of
Essence drinks, they also need to invent new drinks in order to grab the attention of more number
of people in an efficient manner.
Innovation and invention:
Innovation Invention

 It is based on practical implementation.
Innovation is about making changes in
existing products or process of
identifying new ways.
 Innovation is the combination of
several products & processes (Dodgson
and Gann, 2018) .
 On the contrast, invention is related
with creating such products that are
entirely new.
 Invention is related with single product
or process.
Benefits of innovation:
Improve productivity: It is identified that innovation helps in increasing the overall
efficiency of organization. In this, company implements effective ways to enhance productivity
which further improve the quality of production in an efficient manner. In reference of essence
drinks, they can enhance the productivity by implementing innovative ways of production.
Reduce Costs: Innovative techniques are helpful in reduce down the production
expenses. On other side, invention is related with development of new products or services.
There is requirement to invest huge amount in order to develop a new product. By implementing
innovation, company can easily minimize the cost (Weisburd and Braga, 2019).
Increase competitiveness: In current time, it is important to maintain competitiveness so
that company can stay in market for longer period of time. Innovative tools and techniques are
helpful in developing unique and creative features which further lead company towards
competitive edge. In context of Essence drinks, they can improve competitiveness by
implementing innovative techniques in business.
With above discussion, it is identified that invention and innovation are two different
aspects. Innovation is concern with enhancing existing practices while invention is related with
designing new products. Innovation helps in facilitating enhancement within limited expenses
and resources while there is requirement of huge resources as well as time in process of
invention.

P2) Discuss the way in which vision, leadership, teamwork and culture can shape innovation and
commercialization
Innovation is process of facilitating creativity ideas in organization. On other side,
commercialization signifies the process to implement the idea in marker in order to get better
results. Innovation and commercialization plays a crucial role in growth and success of company.
However, it is imperative to assess the idea on different fundamentals before implementing it in
real context. The process of innovation and commercialization is affected with ample of factors
which are outlined below:
Organization Vision: It depicts the purpose of business entity. Vision clearly shows
what company wants to attain in future. Clear Vision helps in preparing suitable strategies so that
company can accomplish its goals. It provides direction with an aim to make efficient use of
available resources (Jamieson, 2018). In context of essence drinks, Vision of company is to
become a global leader within the industry by providing quality drinks to customers. Here, vision
provides guidance to managers as well as other employees so that they can perform their duties
in an appropriate way. Additionally, Vision will assist them towards attainment of pre-define
level of success by implementing innovative strategies.
Leadership style: The way adopted by leaders for guiding staff members plays a crucial
role in success of organization. Here, different leaders have their own way to lead team towards
attainment of a particular goal. In the given case study, leaders of Essence drinks follow
democratic leadership style where they motivate employees to give creative suggestions. Here,
suggestions of employees are helpful in development of innovative products which will help
company in accomplishing their goals and objectives in an efficient manner.
Organizational Culture: It is made with the beliefs, values of individuals who are
working with organization. Culture prevailing within organization has a profound impact over
productivity of work force. Positive Culture motivates employees to work effectively for success
of company. In current scenario, they follow adhocracy culture. Here, company respects those
employees who are flexible in their process and respond the change circumstances in an effective
manner. This type of culture motivates staff members to come up with their valuable suggestions
for facilitating innovation and commercialization within organization.

Team work: Team work is important to achieve those objectives that cannot be attained
with individual efforts. It develops the synergy by combining the skills, abilities of different
individuals. In team work all the individuals work collaboratively so that they can attain pre-
defined goals in an efficient manner (Rammert and et. al., 2018). In addition to this, team work is
really important for strengthening the personal bond of employees with each-other. In context of
Essence drinks, they focus on team work where they divide work in order to make best
utilization of skills and capabilities of each and every team member. The team of company is full
with highly skilled and trained employees who are efficient enough in developing creative and
innovative ideas. Apart from this, they are also competent in commercializing the idea in real
context.
TASK 2
P3) Discuss 4 P’s of innovation along with the use of innovation funnel to shape innovative ideas
In present business world, innovation is a crucial way to add value in existing products or
services. It is often used by organization in order to improve the overall experience of customers.
Different forms of innovation are mentioned below:
Architectural innovation: It is associated with innovation in architecture of a product
that improves the way in which several elements of system are link with each-other. It required
extensive knowledge of tools and techniques in order to develop innovative goods to attract more
number of customers (Lechevalier and Laugier, 2019).
Radical innovation: Under this, entirely new model is developed. Here, the components
are modified and consolidated with an aim to develop entirely new solution. In this, entirely new
product is being offered to customers within industry. iPhone is the best suitable example of this
innovation.
Incremental innovation: It is considered as low cost innovation as small improvements
are made in existing products. These small improvements help in differentiating the product or
service from competitors. It helps in repositioning of brand within limited expenditure. Coca cola
is the best example of this as they keep adding new products in their existing product portfolio.

Disruptive innovation: It is used in order to produce sophisticated as well as expensive
products in affordable price range. Main rational behind this is to make these products affordable
for all. For instance, Netflix is one of best examples of disruptive innovation as they are using
new and effective business model in order to facilitate change in existing market (Kovalenko and
et. al., 2019).
It is identified that incremental innovation will be best suitable form of innovation for
Essence drinks. Here, they can add some new flavors in their existing drinks with an intend to
facilitate small improvement. This improvement will help in differentiating their product from
competitive firms. By applying thus method of innovation, it is possible to cater customers with
better quality and taste in minimum possible price.
4P’s of innovation
Paradigm: It is the first type of innovation which is concern with identification of right
technology in order to resolve the specific issues of project. Under this, focus is on actual
development of technology rather using the trial and error method in order to find the best
suitable way. Here, ideas are developed which can be aligned with the business goals of
organization (Astiti, Sakapurnama and Huseini, 2020).
Product: It is one of the widely used forms of innovation wherein development is based
on products or services. In this, new features are add-on in existing product or one can also
introduce an entirely new product in market. Product innovation is crucial in order to stay in
market for longer period of time. It helps in creating differentiation in order to get an edge over
rival firms. In addition to this, product based innovation is also integral in order to gain higher
level of customer satisfaction.
Process: This innovation is related with enhancement in internal mechanism of company
so that overall productivity & efficiency can be enhanced. It includes the way in which
organization manage its daily activities. Additionally, it is about introducing something new
which will help organization to meet with requirements of customers and maintain competitive
edge as well (Stojčić, 2021).

Position: This innovation is about changing the positioning of product by improving the
perception of customers regarding existing product or service. It is moreover related to reposition
a brand in market. It helps in creating a new brand image in order to attract more number of
people.
The above mentioned innovation will help Essence drink in improving their position in
market place. By product innovation, they can introduce new product in market whereas process
innovation will help in carrying out daily operations in smooth manner. In addition to this,
pragmatic innovation will allow company to select a best suitable way to serve customers
whereas position based innovation will formulate positive image of entity in competitive market.
Innovation Funnel: It is a model that is used in order to develop a new product or process. In
order to bring improvement, a lot of ideas are considered by company. At end, they finalize some
important ideas which are also feasible from the company’s prospective. Innovation funnel helps
in narrow down the ideas so that organization can select best possible idea for further
enhancement (Link and Scott, 2018). In context of Essence drinks, managers of company will
screen the available ideas and compare those ideas on different aspects in order to select the best
possible ides for future betterment. Here, ideas are evaluated on specific criterias so that
company can receive optimum benefits. In addition to this, it also helps in improving overall
production process so that quality products can be offered to customers. In this context, steps of
innovation funnel are mentioned below:
 Idea: In Essence drinks, they gather the necessary market ideas so that they can select a
suitable idea for further growth and development of business.
 Concept: It is the second step of innovation funnel in which company does extensive
analysis & research with an aim to understand the entire concept in an appropriate way.
 Solution: After gathering different ideas, managers of Essence drinks narrow down the
ideas on the basis of different factors. Here, they also evaluate various ideas in order to
find out an effective solution.
 Market: It is the final step of innovation funnel wherein company actually
commercializes the idea in order to fulfill requirements of customers in an efficient
manner.

P4) Development of frugal innovation with suitable examples
Frugal innovation is a process that is adopted with an aim to minimize the level of
complexities of project along with the cost of production. It is a way to generate high business
and social value while reducing the use of scarce resources. In this, non essential features from
goods are removed with an aim to minimize overall cost of producing goods (Zahedi and et. al.,
2018). By applying frugal innovation, company can easily produce quality goods at lower price
without hampering the quality. In current time, it has become an essential requirement of
business. Frugal innovation is helpful in producing unique, different as well as creative products
so that organization can accomplish its goals of customer satisfaction. In context of Essence
drinks, frugal innovation will help company in adding value of their products in less price. With
this, they can easily attract customers by adding some innovative and new features in products.
Here, company will able to eliminate additional cost which will enhance overall profit margin of
entity. In this situation, organization can add-some new taste and flavors in their drink. While
doing this, they need to take care of requirements of customers. Adding new features will
improve the demand of products in market that will further minimize the overall cost of
production.
TASK 3
P5) Discuss significance of commercial funnel along with the application of new product
development for commercialization of innovation
Commercial funnel is marketing tool that assists a company to understand the journey of
customers. Under this, each and every aspect from product awareness to end purchase of
customer journey are analyzed in an appropriate way. Here, company attracts buyers and
convenience customers as well to purchase end product or service. In reference of Essence
drinks, they were working with a single product that was Mango Lassi. Due to increasing
competition, founder of company realized that it is not possible to stay in competitive market on
the basis of a single brand. Sales of organization also started to decline. In this situation,
company is required to add new flavors in drink in order to ensure growth and success in future.
In this context significance of commercial funnel is outlined below:

Generating more sales: By applying the sales funnel, essence drinks can easily relate with
buyers. It will allow them to take appropriate actions in order to fulfill requirements of customers
in an efficient manner. If company gets good command over commercial funnel, it can easily get
high sales in longer duration (Hsieh and Wu, 2019).
Edge over new entrants: Proper understanding of sales funnel helps in evaluate the
behavior of customers. Here, essence drinks can formulate suitable strategies for meeting with
requirements of customers. It will also allow them to provide a better and valuable experience to
buyers so that they visit to outlet frequently. By this way, organization can easily get an edge
over rival firm which is crucial to survive in current situation.
Growth of business: In Essence drinks, they can add new flavors in existing drinks
which will help in enlarging the current customer base. It will enable entity to attract more
number of people which is directly associated with growth and success. In addition to this, sales
funnel will also help in adding value to customer experience in order to make the whole
customer journey more successful.
New product development process:
Essence drink was successful during its initial days. They were only working with a
single drink such as “Mango Lassi”. With increasing competition level, it has become
challenging for company to manage the previous profit margin. Hence, it is required to develop
an innovative and new product. In this context, process of development is mentioned below:
Idea generation: In this, respective company will required to generate a new, unique and
advance business idea. For this purpose, they will carry out a detailed market research in order to
know the needs and requirements of buyers in an efficient manner (Oduro, 2019).
Idea Screening: Here, company needs to screen the idea so that they can choose one best
suitable idea for further enhancement. In Essence drink, they will offer flavored lassie to
customers.
Concept development and testing: In context of new idea, administration of essence
drink is required to analyze their available resources and equipments for effective
implementation of idea.

Market strategy development: Essence drink is going to use digital marketing and
online techniques such as social media, websites, blogs and more in order to gain attention of
more number of customers.
Business Analysis: In reference of essence drink the idea is really innovative which will
drive profits in future period of time.
Produce development: It is the stage where essence drink will actually commence the
production of new products based on new and innovative idea.
Market testing: In this, Essence drink will launch product among few customers in order
to know the view point of customers and take their feedback for further improvement.
Commercialization: This is the final stage wherein product will launch in market (Mat and et.
al., 2019). Here, company will offer the product to end customers. In this Essence drink will
produce goods and sale them to final users effectively.

P6) Discuss innovation business case for organization along with the ways of funding
Executive Summary: The present scenario is based on a healthy drink which is mango
lassi that is being offered by a company names as Essence drinks. It is a startup that has gained
overwhelmed response from customers during initial days. With increasing competition, the
sales of company is reducing so they are looking forward for innovation in terms of adding new
feature, flavors as well as taste in drink.
Company Overview: Essence drinks is a company that is working in food and beverage
industry. It is based on UK and mainly offer health drink that is mango lassi. It was founded by
Akshay Kumar who will make effective strategies for further enhancement of business.
Mission: “To enhance the market share by acquiring more loyal customers within UK.”
Vision: Vision of company is “to become the first choice of customers in healthy and
tasty drinks”.
Objectives: To earn substantial amount of profit is the main goal of essence drinks. They
also aim to enlarge the current customer base of business entity.
Strategy: The organization was started with merely a single brand that wad Mango lassi.
Due to unique and different taste & effective distribution strategy they recorded substantial profit
during the first year. In order to continue the growth, they need to become more innovative by
introducing new products in market. It will strengthen the market position of organization.
Product innovation: Here, Essence drink will launch innovative product in terms of
flavored lassi. This product will not only healthy but also good in taste. It will help them in
sustaining competitive market for longer duration.
Source of funding: There are ample of sources from where Essence drink can acquire
funds. However, each and every source has its own benefits and drawbacks that need to evaluate
by company before selecting on suitable source (Min and et. al., 2019).
Bank loan: Here a fixed amount of interest is charged by banking institution in exchange
of loan they are giving. It is easy to get the higher amount of loan from banks. It is required to
put an asset as collateral while taking money from bank.

Angle investors: These are the investors who invest in new venture with an aim of
growth and success. They invest when venture is in its initial phase and has the potential of
growth in future period of time.
Crowd funding: It is source wherein funds are acquired through public via social media and
other such platforms. With this source, it is possible to collect small amount of fund for a new
venture ( Sheth, Acharya and Sareen, 2019).
In context of Essence drink they need to use bank loan as they are looking forward to
expand the current product portfolio. By using this source, they can easily acquire huge amount
of funds within nominal interest charges.
STP analysis:
 Segmentation: Essence drink is using demographic segment where they have been
divided customers on the basis of factors such as income, age and more.
 Targeting: They are targeting to such people who are looking for healthy and tasty drink.
Major target segment is youth generation.
 Positioning: They are using social media, internet and other such ways in order to
formulate unique identity of brand among target audience.
TASK 4
P7) Different tools which can use by organization to develop, retain and protect the knowledge
of intellectual property
In current time, protecting the privacy of business is really important in order to avoid the
cyber crime. In this context, several tools are used by companies so that they can develop and
protect the privacy of business as well as their products. In context of Essence drink, they are
also going to embark on journey of innovation thus they need to adopt tools to protect knowledge
and intellectual property.
Patents: Patents are used to protect the invention and improvement which has been made by
company in existing products (Cao and et. al., 2018). In this regard, Essence drink can also
protect its innovative and unique products by getting the patent done.

 Advantages: This help in minimizing the misuse of invention so that competitors cannot
copy the product.
 Disadvantages: While getting the patent right, company needs to complete a lot of
formalities which are time consuming.
Trademark: This tool is helpful in protecting the right over symbols, names and images which
are used by company to maintain their unique identity in market (Liu and Lyu, 2020). In case of
Essence drink, they can use trademark in order to protect name and unique symbol of their brand.
 Advantages: It helps entity in protecting the name, logo, symbol with legal rights. In
other words, company can run business without any harm of outsider parties.
 Disadvantages: For getting trademark, organization needs to spend significant amount of
money.

Conclusion
It is analyzed out of above mentioned information that innovation and commercialization
has become crucial need of current time. It is important to adopt innovative ways in order to
produce quality products. There is discussion regarding importance of innovation along with the
impact of team, culture, leadership over innovative practices. It is concluded that essence drink
follow incremental innovation with 4P’s of innovation. Further, company is using commercial
funnel and also looking forward to introduce new product in terms of flavor lassi. It is
summarized that bank loan is the best suitable source of fund for organization and they also
adopt appropriate tools such as patent and trade mark in order to safeguard the intellectual
property right of organization.

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