Innovation and Commercialisation in TESCO and Sainsbury: Analysis, Evaluation and Recommendations

This report analyses and evaluates the innovation and commercialisation strategies of TESCO and Sainsbury, two leading retailers in the UK. It also recommends innovative processes for a new online grocery retailer, supported by risk and benefit analysis, funding channels, and an action plan for innovation.

Unit 8 Innovation and
Commercialization

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
Analysing and discussing how innovation is sourced & fostered by each of the chosen
retailers.........................................................................................................................................3
Detailed analysis on types and processes of innovation in TESCO and Sainsbury.....................5
Critically evaluating success of innovation in each chosen retailers...........................................7
PART – 2.........................................................................................................................................8
Recommending innovative process for a new online grocery retailer.........................................8
Tools to protect the intellectual property rights.........................................................................10
Funding channels for innovation supported with business value..............................................10
Action plan for innovation with methods to secure them..........................................................12
CONCLUSION..............................................................................................................................13
REFERENCES................................................................................................................................1

INTRODUCTION
Innovation and commercialisation are the key sources of organizational success and
progress in the business world (Wang, Phillips and Yang, 2021). Innovation is defined as useful
element of making ventures successful and profitable, while commercialisation refers to the
procedure of bringing new items or services to the market, which provide an organization varied
benefits. Both terms or concepts, help companies to reach desire outcomes such as in form of
aim achievement. The current assessment will be based on TESCO and Sainsbury, which falls
under the list of leading retailers in the UK. The study will explain how innovation is sourced
and fostered by each chosen retailer in the market. It will also specify the types and procedures
of innovation in the both selected retailers. The report will also clarify the success of innovation,
recommended innovative process or product for a new online grocery retailer, supported by
innovation risk & benefit analysis. It will define the funding channels for suggested innovation
by analysing business value for potential investment. Lastly, the report will explain the tools to
retain/protect knowledge and intellectual property, generates via innovative process.
Furthermore, it will also specify the explicit action plan for innovation by using methods to
protect them in a wider environment context.
PART 1
Analysing and discussing how innovation is sourced & fostered by each of the chosen retailers.
Innovation in the corporate world is considered as practical implementation of useful and
valuable ideas that outcome in form of introducing a new service or product that people prefer to
purchase or use (Kahn, 2018). It is also defined as process of making improvements in the
existing goods, so that it can benefit all, including customers, ventures and others.
There are different forms of ways or methods accessible in the world of business in
which TESCO and Sainsbury can source and foster innovation appropriately and successfully,
and these are;
Necessity-
The best source of innovation is necessity, which means TESCO and Sainsbury innovate
something new in the market, after determining the necessity in form of need identification
(Sources of innovation, 2022). This process or action may drive the attention of management
towards determining the actual requirement and demand of consumers, whom they target for
purpose of selling their products and services. It is important for the both retailers and their

management to recognize these things, because of making ventures successful in the competitive
market, where the competition level between existing leading grocery retailers is high. In can be
said that innovation is based on bright ideas, which is possible for the management to create by
considering necessity as key source of innovation.
Changing perception-
Another source of innovation is current one, which Sainsbury and TESCO consider, for
purpose of innovating something different or unique, that they can utilize of retain consumers
and enhance their satisfaction level. In the corporate world, perception change, in the context of
goods and services can also give birth or become source of innovation. Therefore, both retailers,
focus on changing perception of consumers, related to products they purchase from both of
companies. It enables them to consider buyers perception, so that the services and products
offering to the individual buyer accordingly, which is important for the retailers to do that.
Demographic change-
It is fact that people change their lifestyle, which become a key source of innovation,
because it can also change the buying behaviour of individual customer, which is important for
the retailers to consider. It gives them a clear direction of retaining existing consumers, and
gaining attention of new, by considering the lifestyle they prefer to follow and adopt, which
relate to a particular need of them. It creates the best opportunity for the Sainsbury and TESCO,
to build wide customer base, for which they can focus on and prioritize demographic changes,
that add more value in existing offers successfully.
New knowledge-
Innovation can be sourced in the TESCO and Sainsbury, through new knowledge that
employees or management, can gathered about varied things such as advanced technologies (Di
Vaio and et.al., 2021). They can utilize new technologies such as AI, for purpose of offering
innovative services or existing in unique manner, so that customers can retain with both retailers,
forever, which benefits ventures in term of increasing sales, profits, revenue, etc. With better
technology, management can take pleasure of enhancing the satisfaction of consumers, which is
essential and beneficial too for them in varied terms. It can help to innovate new service, than the
other retailers.
Ways in the context of fostering innovation-
Every day sharing of creative ideas-

The best way to foster the innovation in the both retailers is to share creative ideas in the
workplace and provide the same chance to everyone fairly. It can aid to innovate something
different in the workplace, that fulfil target market need and requirement successfully, which
enable company to take pleasure of increasing customer loyalty (Seven Ways To Foster
Innovation In Your Company, 2017). By sharing creative ideas, management can boost the
morale of employees, so that they can be more creative than last few months or weeks. It can
give them opportunity to attract more people towards purchasing new products that increase flow
of supply and demand.
Create a culture of innovation-
Innovation in Sainsbury and TESCO can be fostered appropriately, in term of creating
environment or organizational culture innovative, regarding which leaders and managers can
support. They can encourage staff to be creative in form of generating new ideas and gathering
information about varied things, in order to innovate a product or service people like to utilize
more than once. It helps to generate revenue and gain competitive advantages in the bulk, in term
of enhancing performance of ventures, increasing profits and flow of products demand from the
market side. It is important for the management to focus on creating amazing environment,
which helps to reach desire outcomes.
Detailed analysis on types and processes of innovation in TESCO and Sainsbury.
In the corporate world, each organization, either small or large, utilize a specific type and
process of innovation, among many, accessible in the bulk. The main reason behind using types
and procedures of innovation, is to gain competitive benefits. There are some examples of
different innovation forms;
Incremental innovation-
The current concept is considered as the most common type of innovation that can be
observed appropriate by expert (Gui, Lei and Le, 2021). In the TESCO or Sainsbury, it can be
utilized with current technologies within the workplace, which aim is to improve current offering
in term of adding more value, such as features, quality, etc. The best thing about current
innovation type is that it encompasses certain advantages such as less risk, consumer retention
power, longevity and potential for radical innovation.
Architectural innovation-

According to the current term, management in the both retailers can take initiative to
make some essential changes in the context of existing products and services that can enable
TESCO and Sainsbury to gain unexpected benefits in the bulk (Albert and Siggelkow, 2022). It
can make management capable to determine the value added missing key features within the
current product or service portfolio, so that they can change things accordingly, which is
important for them to do that in term of innovation.
Disruptive innovation-
The current form of innovation is defined as those procedures that proceed within the
both companies in term of driving their concentration toward offering items more accessible,
valuable and affordable manner to the large population (Kivimaa and et.al., 2021). It enables
them to transform sophisticated or expensive items, into valuable one, so that it can enhance
consumer satisfaction level, more than last few years or months. By adopting disruptive
innovation, TESCO can obtain benefit in form of making its services better and products
valuable.
Radical innovation-
In the recent time, radical innovation refers to process of innovating new technologies,
services and ventures model that can be opened up entirely in the new markets, where growth
and success factors are varied (Rampa and Agogué, 2021). With radical innovation, Sainsbury
can get opportunity to gain competitive advantages in term of increasing profits, generating
revenue and building wide customer base, which is not possible for all the supermarkets or
retailers to do that strategically.
Innovation processed within TESCO and Sainsbury-
Stage 1- Idea generation and mobilization
In the supermarkets, management can proceed with innovation after passing the varied
stages, such as current one (Innovation explained – Definition, Types and Meaning of Innovation,
2022). According to the first phase, it is important for the management within the TESCO and
Sainsbury, to focus on idea generation, which enable them to innovate something new and
different from the existing things such as products, that they tend to offer consumers. During this
stage, individual person came with innovative ideas, so that management can select specific one
from many.
Stage 2- Advocacy and screening

The next stage moves management, including leaders in the supermarkets toward idea
screening, in term of considering their benefits and cons, which helps to take right decision. They
can take approach to select an idea of innovation, either related to existing products or
introducing new, in the market, which is essential and beneficial too for continuous venture
success. It is one of those stages, where innovation is proceeded in appropriate manner, in form
of proper evaluation.
Stage 3- Experimentation
The selection of innovative idea, proceed further in term of driving management attention
toward idea testing, for purpose of determining its reliability, validity and effectiveness in each
and every term (What is the Innovation Process, 2020). It helps to collect useful information
about the idea, as it works well in the market, or not. With this form of clarity, individuals can
work further in form of implementing idea into practical manner, by introducing new service or
making chances in the existing one.
Stage 4- Commercialization
The current stage includes varied activities and actions such as change of concentrate
development to persuasion. It can be said that after idea is selected and clarified, management
can move toward practical implementation, so that it become quite easier to introduce finally in
the market, where target consumers are accessible. By conducting practice related to
commercialization, management can obtain unexpected benefits such as increase sales, and flow
of supply & demand.
Stage 5- Diffusion and implementation
The last stage of processed innovation within the companies, can enable supermarkets to
identify the next set of demands and requirements for target audience, so that the innovation can
be done accordingly. In the context of diffusion and implementation, managers and leaders can
play important role in form of obtaining feedback from the consumers. They can also set
benchmarks so that firms can stimulate the innovative or innovation procedures appropriately
and systematically.
Critically evaluating success of innovation in each chosen retailers.
In the TESCO, innovation is successfully developed and implemented in term of
appropriate directions and suggestions as well as engagement, that leaders can provide to
employees. It is fact that the support of leaders and management, can allow candidates to

innovative something unique, or better than the other brands. They can play important role in
form of providing resources and other facilities in the workplace, so that the overall process
proceed further. It can be critically evaluated that success of innovation is also relied on
organizational culture, and type of leadership as well as management style, that a manager and
leader used in the companies.
On the other hand, it can be critically examined that success of innovation is depended on
employees engagement and their commitment as well, along with other variables. For example,
when candidates engage themselves in innovative idea generation, process they can come up
with new concepts, that management can select more than one, at that time. It can benefit all,
including employees, management and ventures in varied manners. It can impact positively in
term of generating revenue, more than last few years or months, and increasing profitability,
which is important for the management to increase rapidly, appropriately and systematically.
PART – 2
Recommending innovative process for a new online grocery retailer
Cargills online is one of the freshest online grocery store in the market of Sri Lanka. It is
engaged in providing its customers with the best quality foods and fulfil their needs. The
business tends to move to the country of united kingdom which is the best place for any grocery
business to run successfully (Do Vale and et.al., 2021). The market of UK offers the firms a
higher competitive edge ensures growth of the business. In order to move the business in the
markets of the united states, there are many things that the firm needs to take care like the rivals
and state of economy in the country.
The focus of Cargills would be on providing an online platform to the customers in UK
so that they do not have to go for shopping and can buy anything they need under one head. They
provide their customers with high quality fresh food and healthy grocery food items that allows
them to achieve customer satisfaction. As more and more people of UK are becoming health
conscious which makes it easy for the firm like Cargills to enter and survive in the market. This
could help the company to earn more profits by increasing their sales and resulting in overall
increase in the profitability (Grisold and et.al., 2021).

Innovative process for Cargills to start a new business in UK
Cargills have to innovate their process of working to maintain a good position in the markets of
UK. Following are the four innovations that the company can adopt: Dark stores – Nowadays supermarkets offer online facility where the deliveries are taken
from the chains operating in the market. Dark stored are stores that operate only for the
purpose of taking orders and do not get indulge in the retail business. They act as the
traditional facility stores where operators come in place of customers. Here the products
are kept in blue boxes and robots are assigned with the tasks to deliver the product to the
operators where it picks up the product and bring it to the required party. This reduces the
burden on the operator, and this can facilitate early fulfilment rather than walking around
the warehouses (Indradewi, 2020). Voice ordering – The business can develop their apps for online shopping and innovate
the idea of enabling voice ordering which can allow the customers to order with their
voice. The app can detect the voice of the customers and their needs and offer them the
products they need. It will help the customers by providing them easy shopping
experience and a new method of shopping. This facility can attract more and more
customers and specially the ones which do not know how to type and search for the
products.
 Offline and online – Sometimes the business can offer offline and online mode of
services to its particular segment of customers and should develop the facility in order to
attract more and more customers (Jain, 2020).
Innovation brings about change in the organization and this change can be sometimes
beneficial for the company and sometimes the business have to bear risk associated with the
process of innovation. Innovation allows the business to offer their customers with better quality
of products. Better quality offering can attract the customers and allows the firm to conduct fair
practices. This can ultimately result in increased sales and profits for the company. Also, the
business can focus on particular segment and offer them with the products according to the needs
of the customers. Moreover, there are risks that comes along with innovation in the business as
investment in the Research and Development sometimes engages in higher risks. These risks can
include competition and risk of uncertainty. Competition with the rivals have been a major
challenge in the path of innovation and it can lead to increased competition. Uncertainty of

revenues and future profits is another risk that the business have to bear in order to survive in the
new markets (Liyanage and et.al., 2021).
Tools to protect the intellectual property rights
Intellectual property consist of original ideas, discoveries, creativity that is produced by a group
of persons or individuals. Earlier when it was not easy to asses to the information, it was not
necessary for the protection of rights but now with more access to the information and privacy its
is important to protect the IP rights. It not only protects the innovation to be copied by others but
also protects any individual from violating the rights. Every business should take it as necessity
to protect their intellectual property rights. Following are the ways in which the online grocery
business can protect their intellectual property rights: Trade secret – This is considered as unique and valuable for the business as it helps the
company to maintain competitive edge in the market. The company of Cargills can be
termed as harmful for the business itself. This does not allow any other competitive
forces to copy the innovative strategy of the business. The operations are conducted in a
way which is active and which give company the legal security along with the trade
secrets (Piumali, 2020). Patents – It is related to the exclusive rights which includes invention and it is a method
of process that allows the business with technological solutions to perform a certain task.
The time period of providing patent to any business is usually of 20 years. Without the
permission of the owner of the patent, no one is allowed to use the patent, sold or
distribute.
 Copyrights – Copyright is the right of authorship that can be given to someone in terms
of the ownership. No person is allowed to copy anything which has a copyright on it
because it is the right of only one person who can be liable to copy print or anything.
Funding channels for innovation supported with business value
There are certain sources which provides funds to businesses like equity finance, governmental
funding and public offerings. It is important for business to plan growth objectives and achieve
them effectively. Every business aims at achieving financial goals which can be done by proper
planning, support from the investors, bankers and various other capital ventures. Following are
the sources through which funds for the business can be raised in order to make the process of
innovation lucrative:

 Crowdfunding – In this source the funds are raised with the help of bunch of individuals.
It is a very suitable source of funds for the business which are offering online facilities to
their customers. It helps the business entrepreneurs to maintain a position in the market
and do not use their own funds to take the products to a better market. This can be
achieved by using the websites of crowdfunding (Mazhar Gul and et.al., 2022). Angel investors – The angle investors is a source of fund which includes people who
directly invests in the business and have a high amount of net worth which makes it a
suitable option for raising finance. The source of angel investors should not be confused
with the term of charity. This helps the business to earn higher profits and maintain the
success of the business. Other investors like capital investors are in hurry for the return
which they get for lending their money but the angles wait for their returns. Friends and Family – It is easier for the firms engaged in online business to acquire
funds or raise funds through their friends or family ans they can arrange flexible
arrangements for loan. The family members may have to bear the risk when the
agreement is put into writing and this ruins the relations with the family members.
Therefore, it makes the arrangements more like a business matter (Mendis, 2020). Debt – Debt is the source of fund which is raised in order to use it to finance the business.
Here, the finance is raised by borrowing money from individuals and paying them back
within a specific time period. This source does not include nay kind of interest payment
and also there is a perfect time in which the loam has to be repaid which makes it
important for the borrower to earn money as soon as possible. There are special
organizations like credit unions and financial institutions which offer funds from these
sources. Business like Cargills can retain payment options that are flexible in nature and
retain their equity.
 Government Grants – Government of various level grants certain kind of finance options
to the business in order to help the business or industries to grow. Sometimes the business
may have different perspectives for which they require funds. It depends upon the
eligibility criterion that in which category the business falls to make them eligible to
acquire the funds as the grants differ from business to business. This can help the
business to promote their operational activities which would further help in maintaining
competitive edge in the market (Pakhnenko, 2019).

Investors need to be careful while lending money to the businesses which are new and
just planning to move to another country like United Kingdom. Cargills have to opt for the best
and the most suitable options to raise funds in order to reduce their costs of operation and make
profits which would further enhance the performance of the business. The best option for the
firms is to raise funds through the source of crowdfunding which is better as there are different
people offering different amount of funds. The time period for repayment may be different which
make it helpful for the firms to meanwhile earn the money.
Action plan for innovation with methods to secure them
Following action plan will be suitable to introduce online grocery market in the United
Kingdom:
Step 1 Set up smart objectives
In the first step proper objectives should be set up and clearly defined to make the business
successful.
Objective – It is to increase sales by 20% and customer satisfaction by 25%.
Measurable – It can be measured by number of loyal customers in online business and through
various analysis.
Achievement – To maintain good position the company will focus on creating innovative
products and differentiated products.
Time - A period of three months is required to increase customer satisfaction and a period of one
year to increase the sales.
Step 2 Forming list of Action
Funding – Proper sources should be adopted to raise the funds for the business with appropriate
interest rates.
Timely delivery – The raw material required and the orders should be timely delivered in order to
be successful.
Relations with suppliers – Cordial relations should be maintained in order for fast delivery of the
products and the business do not have to wait for the raw materials if the suppliers listen to the
demand of the owner.
Waste management – Proper techniques should be adopted to reduce the operational cost and
will attract more customers.

IP rights – Methods should be adopted to protect the intellectual property rights like patents ,
copyrights etc.
step 3 Timelines
A timeline should be created in the step three where it should be properly mentioned the time
period in which prescribed goals of the business will be achieved.
Step 4 Delegating Authorities
Every resource in the business should be delegated according to each department like the human
resource, financial resources and the physical resources.
Step 5 Evaluation of the process
The final step is the involvement of the evaluation process where the performance of the
business will be evaluated so that if any deviations are found they can be improved or removed
(Schiavone and et.al., 2019).
CONCLUSION
From the above report it has been concluded that how innovation and commercialization
can bring changes in the business in numerous ways like new technologies and products can be
introduced. Also, the ways in which the innovation process can be done has also been discussed.
There was a broad discussion on the types of innovations and how it is helpful for the new
business that is entering into the markets of United Kingdom. In context of the two companies
Tesco and Sainsbury, the benefits and failure of the process of innovation in context wit their
retail businesses has also been highlighted. Moreover, the report was based on the proper funding
channels that the business uses to raise finance for success of the business. It is important for any
business like Cargills that intends to move its business in the country of UK to protect their
intellectual property rights for avoiding duplication of innovation process. The report was
summarized with an action plan for more recommendations for the business and proper methods
to secure them.

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