Innovation and Commercialisation in Hyundai: Sources of Innovation, Frugal Innovation, and New Product Development

This report discusses the importance of innovation and commercialisation in Hyundai, sources of innovation, frugal innovation, and new product development. It also evaluates the role of organizational vision, leadership, culture, and teamwork in shaping innovation and commercialization in Hyundai.

INNOVATION AND
COMMERCIALISATION

Table of Contents
INTRODUCTION...........................................................................................................................3
ACTIVITY 1....................................................................................................................................3
1-How Invention and Innovation are different from each other..................................................3
2-Organizational vision, leadership, culture and teamwork shaping innovation and
commercialization in Hyundai.....................................................................................................4
3-Sources of Innovation, Recommendation for new product and 4Ps of Innovation — Hyundai
......................................................................................................................................................5
4- Evaluating role of frugal innovation in company and how much can be applied in the
context of it..................................................................................................................................6
ACTIVITY 2....................................................................................................................................7
1- Building a detailed innovation business case that covers how to measure its effectiveness by
using techniques to test, & iterate................................................................................................7
2- Critically evaluation of nature of innovation and context it may developed...........................8
3- Explaining application of innovation funnel and utilize of new product development process
as well as commercialization of idea...........................................................................................8
4- Building innovation business case with aims that are matched to capability and resources
including ways to access funding..............................................................................................12
5- Evaluation of different tools in the context of wider business environment.........................13
6- Evaluating different tolls that companies can utilize to develop, retain and protect IP and
knowledge..................................................................................................................................14
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Innovation and commercialization are included in list of beneficial elements that
contribute to make a company productive and profitable. It can be said that innovation is a kind
of creativeness that has been created by individual that have creative mind and utilized in term of
producing new product or offering services in innovative style. While commercialization refers
to process of managing and effectively running a venture for financial purpose. The current
report will be based on Hyundai, which falls under the top 10 automotive manufacturing
companies in the world. The study will explain innovation and its importance in comparison with
invention. It will also define how organizational culture, vision, leadership and team work can
shape innovation & commercialization, 4ps, and utilization of innovation funnel as well frugal
models. Furthermore, the assignment will justify the importance of commercial funnel and
application of new product development, innovation business case with ways to access funding
and different tools that firm can utilize in the context of protecting knowledge and IP.
ACTIVITY 1
1-How Invention and Innovation are different from each other
“Invention” is creation of something completely new, that never existed before, with own
ideas and development. Inventions are unique to anything that ever existed, it is developed to
find solutions of pre-existing problems or it could be something that was never thought of before.
These can be patent by the creator also known as Inventor.“Innovation” comes from a Latin
word “innovare” which means to renew. It is a process of renewing a product, service, or a
domain to improve its productivity in a business enterprise by introduction of new techniques or
establishment of successful ideas. In the new world of digitalization, innovation leads the way of
an organization, especially new start-ups.
Invention and innovation are two words closely connected but cannot be replaced with
each other. In simple words, innovation completes the bridge between inventions. These are two
different concepts with some similarities, carrying much importance. Invention drives an
economy by solving problems and changing the world like great inventions of electricity,
telephone, internet and many more inventions that are driving the world (Haeussler, and Assmus,
2021). Companies that wants to be market leaders and strive for unique strategy needs
innovation to develop such features, it helps in adapting to changes and discovering new
opportunities. Business growth and profit making can be ensured through innovation.

Inventions Innovation
Invention is turning a completely new idea into
an actual product/machinery or service.
Innovation is implementation of renewed idea
to product and services.
It is creation of new product Value is added to already existing idea
It is a scientific skill Includes marketing, strategic and technical
skills.
Invention includes single product or a process. It is a combination of many processes and
products.
It is limited to research and development
department.
It includes the organization as whole.
2-Organizational vision, leadership, culture and teamwork shaping innovation and
commercialization in Hyundai
Hyundai multinational auto-mobile manufacturer having reach to 193 countries. Further,
it will be discussed how organizational vision, leadership, culture and teamwork has shaped
innovation and commercialization in Hyundai:
Organisational vision:
Organisational vision sets the goal clear for everyone in the company and drives them
towards it. Hyundai Motor Company has its vision clear of being “Lifetime partner in auto-
mobiles and beyond”. This vision makes them innovate new idea and commercialize those
products that retain the customers.
Leadership:
Leadership is the foundation of origination of ideas coming from its employees and
subordinates (Branson, and Marra, 2019). They not only motivate their subordinates to generate
ideas for innovation and commercialization but make it real. Good leadership in Hyundai is a
result of success and should be encouraged.
Culture:
A culture where innovation is welcomed creates a healthy environment for taking
challenges and creating better ideas. The employee engagement increases and people feel safe to
contribute in the project which should be opted by the Hyundai for overall health of the business.

Teamwork:
Teamwork increases productivity as every person in the team works best for reaching the
goal. It leads a company to growth and contributes in commercialization of innovated
products/services in the market efficiently (Potnuru, Sahoo, and Sharma, 2018). For a large
company like Hyundai teamwork is a base to reach the organisational goals.
3-Sources of Innovation, Recommendation for new product and 4Ps of Innovation — Hyundai
Hyundai has been in the auto-mobile industry for years as one of the market leaders and
commercialized many of its product. The new product “Electric Car” is been commercialized by
them and further are the discussion and recommendation to the Innovation and
commercialization of the product:
Sources of Innovation:
There are four main sources of innovation:-
1. The Unexpected — There are many instances when innovation could be found
unexpectedly, even in failure and success (Gupta, 2018). The company should know
when to seize such opportunity.
2. Incongruities — Incongruities develop a need of solution and that need create a space
for new innovations. Inconvenience often calls for opportunities to seek solution in the
name of innovation.
3. Process Needs — When there is a weak link in a product or a missing link then the
creation of its substitute is defined as process needs.
4. Market Structure — The market changes can create immense opportunities for
organizations to innovate and grow.
4Ps of Innovation:
1. Product — The new product that has been innovated by Hyundai is “Electric car” with
high efficiency and environment friendly.
2. Process — With innovation and efficiency the orders are reaching in the stores weeks
before decided and services like online orders are reaching directly to the gate of
customers.

3. Position — The organization is aiming to reach new audience by cost friendly and eco-
friendly innovation of electric car.
4. Paradigm — Hyundai is considering shifting mostly to this eco-friendly innovation as
the market leader, changing there old business practices.
Hyundai can use this innovation opportunity of “Electric car” into their main market as
the normal cars run by petroleum is taking a toll on environment and damaging it. This
opportunity will not help the environment but also complete their corporate social responsibility
as well as gain trust from the customers. This opportunity in future will allow company to seize
even more opportunities in this sector of business. The market structure can change because of
this concern and adapting to it in the beginning is a benefit for the organisation (Joueid, and
Coenders, 2018). The initial process needs will also be easier to detected and corrected with
other innovations.
4- Evaluating role of frugal innovation in company and how much can be applied in the context
of it.
Innovation is one of those components that play important role in the context of business
growth and success in this competitive corporate world (Dressler and Bucher, 2018). There are
different types of models and theories accessible that utilized in regard to innovation and
implementation of tactics related to that. Frugal innovation is one of those frameworks that
provide varied benefits to user. It is a kind of those models that help to reduce the complexities
related to products and services and cost as well, which may put positive impact on a company
such as Hyundai, in term of increasing its profitability and productivity. It plays significant role
in form of enabling organization to add more value in existing product portfolio at lower costs
just to make assure that its target market is satisfied and retain with brand products purchase
forever, which is not that easy for organizations to grab so as it is quite challenging and hard-
working practice.

It can be said that frugal innovation can be applied in the context of Hyundai, as it is one of those
automotive companies that may have faith of innovation and quality of products, which is
possible when management takes this model into their consideration (Hossain, 2020). It may
drive their attention towards producing beneficial and providing satisfactory goods to customers.
Frugal innovation covers 6 key principles that can be applied in the context of Hyundai and
these are;
Principle 1- Engage and Iterate
According to this norm, management engage customers to collect information about their
needs.
Principle 2- Flex assets
After engaging individual consumer, they may take approach to flex resources according
to those practices that delivery buyers value.
Principle 3- Create sustainable solutions
This principle drive company attention toward developing plan to reduce its carbon
footprint, in term of conducting CSR practices.
Principle 4- Shape customer’s behaviour
Illustration 1: Frugal innovation
(Source: The Emergence of Frugal Innovations, 2021)

Management in Hyundai may take approach to shape behaviour of target market by
making change in the context of existing and new products according to their demand as well as
expectations, which contribute to retain and acquire new customers.
Principle 5- Co-create with other prosumers
By following this principle, marketer and management may provide personalized
solutions to each buyer and engage them with MEcosystem that are customers centric.
Principle 6- Make innovative frineds
Hyundai and its teams may take approach to follow this principle, which drive their
concentration toward working with creative and innovative partners who are able to offer unique
item to target market in term of successful implementation of frugal innovation.
ACTIVITY 2
1- Building a detailed innovation business case that covers how to measure its effectiveness by
using techniques to test, & iterate.
The current innovation business case is based on new electronic car that company may
introduce further to be sustainable and prevent environment from harmful factors. It defines the
key techniques such as KIP, system testing, etc. which enable marketers and management to
determine potential change and perform accordingly.

2- Critically evaluation of nature of innovation and context it may developed
The innovation is defined as the action taken for generating a new technology, method or
and idea. Hyundai innovates by providing their vehicles with 'parallel hybrids' for improving fuel
consumption and economy with providing more hybrid smooth driving to customers. Hyundai
overcome challenges as
Competitive advantages: With the new innovation of hybrid generator aids company in
gaining a competitive advantage over others. New feature introduction gives an upper hand in
attracting more customers with new improved fuel efficiency solutions. As customers opt for
more fuel efficient cars then more fuel consuming cars.
Environmental sustainability: Another challenge overcome by firm with the
introduction of new technology vehicles tends to consume less fuel and provide with more
efficiency. Hence aids in firm to acquire and maintain environmental sustainability.
Cost Effective: One of the important challenge resolved by company with launch of EV
charging. With this new feature enterprise may able to achieve more efficiency with and cost
reduction aiding in both for firm to earn more sales revenue and for customers with providing
new technology.
With the introduction of innovation firm may able to overcome challenges and achieve
efficiency.
3- Explaining application of innovation funnel and utilize of new product development process
as well as commercialization of idea.
The Innovation Funnel is a model used by companies about innovation idea may work
realistic or not (Borsi and Dőry, 2020).

Ideation: Under this process new idea generation is there with the company's R&D
strategies.
Define: In this stage the conceptualisation of idea is done as converting ideas into
prototypes for testing (Kralisch and et.al., 2018).
Measure: Evaluation of generated idea is done under this stage. The testing process is
done and feedbacks may taken for further enhancements.
Analyse: Observation, evaluation and analysation of the innovated idea is done. After
feedbacks analysing about the areas needing improvement.
Implement: One of the important step to launch or implementation of that generated idea
is done.
Control: The last stage of process, under this after the launch checking, assesing and
controlling of idea being generated.
New Product Development process: NPD is defined as the process through which
every new product or service went for being introduced in the market (Tai, 2017).
Illustration 2: Innovation Funnel
(Source: What Is An Innovation Funnel, 2021)

Idea Generation: The very first step includes about creation of new idea like what new
product or service firm may come up with.
Idea screening: Under this evaluation of idea is done as taking out ideas not worth.
Concept Development and Testing: During this stage specification is provided such as
technical feasibility and after that testing is done.
Marketing strategies development: Before launch of product or service its marketing is
done by deciding best timing and process for testing new product.
Business Analysis: In this step business analysis is done as to know about how product
will perform in the market.
Product development: Making or creation of prototypes for the product is done and
after that checking and observation is done what more to include.
Illustration 3: New Product Development
(Source: What are the Seven Stages in the New Product
Development Process, 2021)

Test Marketing: Samples may provide to customers, manufacturers and support
organization also reverting their feedbacks. Also includes best timing and processes for product
or service (Oliveira, Tan and Guedes, 2018).
Commercialisation: The last step as it determines about the pricing, and finalising
marketing plans for product. Also the launching of product or service in market is done.
Commercial funnel is one of the best marketing methods or tool through which
organizations may find, qualify & trade merchandise to customers (Kim, 2019).
Awareness:
Company may generate the awareness among consumer about its new product via digital
marketing tools, social media channels and other methods.
Interest:
The above practice may enhance their interest level and generate the same to purchase
new item that firm tends to offer and design according to target market needs.
Decision-making:
It may drive their attention toward taking right decision and action to purchase innovative
item.
Action:
Consumer acts effectively and positively after passing above stages in form of buying
item and obtain satisfaction from it.
Illustration 4: Commercial Funnel
(Source: What is a Sales Funnel, 2021)

4- Building innovation business case with aims that are matched to capability and resources
including ways to access funding.
Executive summary:
The current business case is based on innovation that will be introduced by the Hyundai
in the market. It has enhanced its productivity and performance as well as profitability level.
Aim:
The aim is this innovation business case is to generate revenue and gain competitive
advantages.
Objectives:
 To increase profits margin by 50% within 2 years.
 To gain competitive edge in 2 years.
 To enhance consumer base and their satisfaction in 3 years up to 50%
Strategies:
It is quite important for management to take external and internal business environmental
analysis into their consideration, which play important role in growth and success of their
business case based on innovation. They may consider external and internal factors into
recognition and identify extent to which they may put positive or negative impact on overall
plan.
Tactics:
In form of strategic strategies, organization and its management may take initiative to
follow the key stages of NPD and also consider frugal innovation model that drive its attention
toward innovating a new car with emission free concept.
Budget-
Resources Cost
Human resource 12000
Market research 25000
Training and development 22000
Marketing methods 30000
Raw materials 154000

Electronic tools and devices 45000
Total 265500
Measuring effectiveness of business case-
KIP is the best technique that company and production department may use to test and
iterate their innovative product such as electronic car. It enables them to measure the
effectiveness of whole plan. By analysing the gap between last and current year profitability,
management may identify that their new business case is successful. It may enable them to
identify further improvement needs.
Monitoring and controlling-
With the help of training and development methods, manager and leader may take
approach to monitor and control staff as well as venture performance in effective manner that is
quite essential for them to do so.
5- Evaluation of different tools in the context of wider business environment
In regard to wide business environment, there are varied forms of methods has been
utilized and are accessible in the corporate world. For example, assessment of risk is the best
tool that Hyundai and its stakeholders may utilize, in order to identify risk and develop plan to
overcome that in effective manner, which is quite beneficial and essential for them to do so
(Murayama and et.al., 2019). Risk assessment is beneficial in term of enabling organization to
determine the factors or forces that may put negative impact on its business, On the other hand, it
may affect negatively in term of lacking consistency. It may do not provide appropriate
information about further risks in accurate manner.
Value analysis is another tool that help to reduce cost in term of driving organizational
attention toward conducting those practices that may contribute to increase profitability and
offering quality products to target market according to their needs and expectations. This
approach is valuable in term of making management capable to review material composition of
goods and then develop plan to purchase raw materials and other items accordingly as it help to
save money as well as effort. While it is also known as inwardly concentrate procedure, which
provides key value only as described by relative project elements.
Stakeholder needs is also included in list of key tools that has been provided benefit to a
company in term of identifying the perspectives of each stakeholder and interest in the context of

organizational growth and success in the market. It may benefit firm in term of systematically
collection and examining information to identify whose interests companies may take into their
account. While it may affect oppositely as well in form of lacking info about the interest and
effort to stakeholders in appropriate form.
6- Evaluating different tolls that companies can utilize to develop, retain and protect IP and
knowledge.
Patent:
In order to retain and protect innovation as well as IP, organizations can utilize this tool
which enable them to obtain rights to stop others from manufacturing, following and copying
their invention without any approval, which is quite important for other companies to take so.
Trade mark:
It is another IP tool that allow companies to protect and retain their innovative concept, in
term of putting online registration with name of innovation that they innovate and effort to
launch in the market.
Copy right:
This tool enables organizations to prevent money loss and obtain legal protection that
help to prevent and secure their innovation being stolen by the others.
Basis Advantages Disadvantages
Patent It may give user right to stop
others from using and copying
their resources.
The overall process of patent
application is quite lengthy.
Trade mark It is cost effective and that is
one of this element benefit.
It is a time-consuming process
Copy right Utilization of this IP tool may
give firm chance to protect its
venture from any legal issue.
It is expensive in term of
registration charges.
Funding sources:
Funding sources like bank and others can help in giving funds that can protect the
intellectual property as well as they opens under the law that would ensure the safety.

CONCLUSION
From above study it has been summarized that organization has gained competitive
advantages, increased profits margin and generated revenue more than other brands that are
running and operating their businesses in similar industry such as automotive. It has obtained the
benefits of considering frugal innovation and funnel innovation models in term of retaining
consumers and enhancing their satisfactory level that is not easy to do so. Company has also
generated revenue and sales more than its rivals by selling the best vehicles and producing
according to target market needs that is quite important for firm to do so. Furthermore, by
summing up above discussion, it has been concluded that by using the best and appropriate IP
tool, it has protected and retained its innovation concept from those might be taken that without
any permission and unethically. NPD and commercial funnel are those models that has provided
varied advantages of company in term of achieving strategic aims and objectives.

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