Innovation and Commercialization in Online Grocery Retailers: A Case Study of TESCO and Waitrose

This report analyzes the interrelation between innovation and commercialization in the online grocery retail industry, with a focus on TESCO and Waitrose. It discusses the ways in which different organizations source and foster innovation, the types and processes of innovation, and the 4P's of innovation. Additionally, it recommends innovative products and processes for a new online grocery retailer, supported by innovation risk and benefit analysis.

Innovation and
commercialization

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
Discuss the ways in which different organizations source and foster innovation by utilizing
specific examples........................................................................................................................3
Detailed analyses and discussions on type(s) and process(es) of innovation in each of the
selected retailers. .......................................................................................................................5
PART 2............................................................................................................................................7
Recommended innovative products/processes for a new online grocery retailer, supported by
innovation risk and benefit analysis............................................................................................7
Suggestion of funding channels for the recommended innovation, supported by analysis of
business value for potential investment....................................................................................10
Recommendation of tools to retain/ protect the knowledge and intellectual property (IP),
generated through the innovation process above, complimented with a critical evaluation of
the tools.....................................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Commercialization is defined as the procedure which is helping the companies and
businesses to generate extra revenue and helps in enhancing the efficiency in the business
operations. Commercialization helps the business in rendering new and innovative products and
services in the market. Innovation and commercialization are inter related to each other, as with
the use of new ideas the businesses enhance their profits. Innovation is simply defined as the
changes made in the existing products or services. Whereas commercialisation helps the
businesses in introducing these new and innovative products in the market for fulfilling the needs
ad wants of the customers (Altaf, e Hassan and Batool, 2019). Innovation is often confused with
the term invention, whereas invention is introducing new products and services in the market.
Invention is said to be something new which has not been in existence. This report is the analysis
of two online grocery retailers who have considerable share in UK markets. The businesses
evaluated are TESCO and Waitrose, leading grocery retailers in the British markets. TESCO is a
multinational grocery store headquartered in Welwyn Garden City, England. Waitrose and
Partners was founded in 1904, and has headquarters in Bracknell and Victoria, England. This
report is the critical analysis on how the innovation is sourced and fostered by both the
companies. Further in this report types and processes of the innovation are discussed along with
the evaluation of the 4P's of innovation. This report also describes the business case of both the
companies, which will further help the managers to analyse the business situation. Businesses
also require investment sources so that they can expand their business in new markets and can
acquire new customers.
PART 1
Discuss the ways in which different organizations source and foster innovation by utilizing
specific examples
Foster innovation- Fostering innovation simply means being adaptable to new ideas and the
technologies which are not explored by the businesses in their business operations. Fostering
innovation is important in the business, as it helps in attracting new and talented workforce and

retain old employees. Individuals are attracted towards the companies which are engaged in
producing new and innovative products in the market.
In an organization it is important to identify the factors which are helping the organization in
shaping the innovation and commercialization (Asgari, Zakery and Pishvaee, 2021). For a
business it is important that they train their personnel to be more creative and encourage them to
introduce new ideas and thoughts in the organization. Business are engaged in the activities of
producing and selling the goods and services, for fulfilling the needs and wants of the customers.
Businesses perform these activities to achieve their goals and objectives and earn higher profits.
Several factors which helps in shaping the innovation and commercialization are-
 Vision- Vision of the organization helps it in making strategic plans to achieve success
and fulfil the needs and wants of the customers. Vision statement also helps the
employees to have a clear understanding of the goals and work hard towards them.
Vision of TESCO is to create quality products for the customers and create brand loyalty
towards the customers and the stakeholders. Vision of Waitrose is to be a successful
business and produce unique products and services for the customers.
 Leadership- Leadership qualities are pertained by the individuals which helps them to
influence other employees of the company. A good leader helps in enhancing the skills
and interests of other employees and motivate them to do their work efficiently. Both
TESCO and Waitrose are using democratic leadership style, the decisions are taken after
hearing all the aspects from the employees. In this type of leadership style, employees
uses two- way communication and management tends to listen to the subordinates before
taking the decisions.
 Teamwork- Teamwork plays a vital role in achieving goals and objectives of the
organization. It is important for leaders to motivate their member to coordinate with the
team and get to know each other. Teamwork helps in promoting the trust and loyalty
between the members, and prevents misunderstandings between the members. The
leaders at TESCO respect the ideas and thoughts of the employees and help them to build
strong relationships. At Waitrose the managers aims at autonomy within the decision-
making process and encourage their employees to express their thoughts.

 Network- Network helps the business to build the relationships with other businesses and
helps in grabbing opportunities. With the help of these relationships, the business can
make progress and have better understanding of their business paths (Bansi, 2019).
TESCO also focuses on enhancing networks with other businesses and clients so that
they can use it as a opportunity. Waitrose is also using network opportunities to enhance
productivity in their business activities.
Detailed analyses and discussions on type(s) and process(es) of innovation in each of the selected
retailers.
4P's of innovation
For businesses it is important that they focus on managing the innovation, so that they
can explore new opportunities. The 4P's of innovation is a tool used by the managers of TESCO
and Waitrose to remain innovative in all of these areas. The 4P's of innovation are described
below-
 Paradigm- Paradigm is the collection of ideas and thoughts, which will later help the
company in making money. This type of innovation helps in creating new wealth for the
company when a new product or service in introduced in the market. TESCO has
launched Fresh and easy neighbourhood markets in the United States had changed the
retailing paradigm (Boni, 2018). Tesco had used advanced customer segmentation
strategies, which helps the customers to have new shopping experience. Waitrose has also
introduced new Salmon and trout dishes which are a result of a successful new product.
This product has been loved by the customers and has set a benchmark in front of other
competitor companies.
 Position- It basically means repositioning the product in the market. It changes the
context in which the products are introduced in the market or are positioned in the minds
of the customers. Both TESCO and Waitrose are aiming in introducing their products and
services in the new markets. Both the companies are targeting developing countries in
order to earn more profits, as the cost incurred is slightly lower.
 Process- The businesses are involved in the activities of buying, selling, recruiting and
financing their business operations. For TESCO and Waitrose it is important that both the
companies make their business operations quicker and effective.

 Product- Every company is engaged in producing goods and services, through product
innovation the business can provide their customers with differentiated products and
services. The unique needs and wants of the customers have to be fulfilled by TESCO
and Waitrose, so that they can gain more competitive advantage in the retail industry.
Types of innovation
There are three types of innovation and they are being discussed below:
 Radical innovation- This type of innovation usually ruin the existing business model of
the organization. In this concept the relationship between the customers and the suppliers
changes due to the current products and the services. Large amount of capitals are
required to implement this type of innovation, so for TESCO and Waitrose radical
innovation is costly.
 Incremental innovation- In this type of innovation the organizations tend to make minor
improvements in their existing products or the services (Brenner and Adamovic, 2018).
The changes made are aiming at increasing productivity and performance of the
organization. The investment made is generally low and small progressive changes are
seen in the business operations of the company.
 Disruptive innovation- In this type of innovation the organizations generally produce
affordable products and services and ignore the needs and desires of unexploited
segments. This lack of attention has given the smaller companies the opportunities to aim
at ignored population. For TESCO and Waitrose it is important to focus on the ignored
sections of the society so that they can earn more profits.
Innovation process-
Innovation process are the steps which are involved in the implementation of new strategies.
There are various steps which are involved in the implementation process which will help in
achieving the structural objectives. The process used by TESCO and Waitrose are described
below-
 Generating and collecting ideas- For a single person it is not possible that they can
think of all new ideas and strategies and try to implement them. The business operations

require several team members which will bring different thoughts and ideas to achieve
the goals and the objectives.
 Reviewing and evaluating ideas- Further the ideas given by the members have to be
analysed so that the managers can choose the best possible idea (Kelly and Kim, 2018).
The thoughts and strategies should be analysed regularly so that the members will get
proper feedback and can improve their ideas.
 Pilot or proof-of-concept- The ideas which are selected for implementation are then
developed by the managers so that they can not negatively affect the organization. All
the changes and strategies to implement the ideas have to be taken into consideration so
that there are no hindrances created in between the implementation. For managers it is
important that they make sure the ideas which are selected are having the potential to
bring innovation within the organization.
 Implementation- After analysing the idea and moulding it according to the goals of the
organization, it is necessary to move to the implementation stage. The ideas and
strategies have to be implemented after analysing all the details related to the budget and
proper documentation have to be done before implementation (King and et. al., 2018).
The managers have to make sure that the ideas implemented are performing well in the
organization.
 Adoption and benefit realization- The affects of the new ideas which are implemented
have to be adapted by the employees. It is important for the managers to see whether the
employees are happy or not with the change. After the implementation it is important
that proper feedback is taken from the employees, this will ensure the if the employees
are working efficiently and effectively.
PART 2
Recommended innovative products/processes for a new online grocery retailer, supported by
innovation risk and benefit analysis.
Innovation is the process of implementing new strategies and business plans within the
organization. It is the process of introducing new products and services in the market, which will

help in getting better results from the business operations. The innovation that can be introduced
by different businesses in order to increase the return on the investments are-
TESCO
The business case for TESCO helps it in making effective plans and also enhance the decision
making power of the company-
Executive summary The brand can give their customers with contactless shopping in their
physical stores. In this way the brand can attract new customers as new
vending machines will help the buyers to scan their cards directly in the
machines and choose the product (Korotchenya, 2022). In this way the
customers do not have to indulge in touching the products. Through
automatic vending machines the customers can also pay for their
products, the payment made is directly transferred to the accounts of the
business.
Problem statement With the rise of COVID- 19 pandemic the customers are more concerned
about their health and do not want to touch any product. So the customers
are attracted towards the contactless activities offered by the business.
Possible
Innovations
The brand can make more effective vending machines with more features
which will help the customers to get the products and can pay with their
cards.
Why idea is
innovative
This idea is trending and innovative as the customers will like the
concept of the vending machines and if TESCO will acquire this then the
company can attract more customers.
Market analysis Market analysis is important for the company to analyse the growth and
the profits involved in the business.
Funding The company can use bank loans or debt equity in order to get the

investments. The company is having a brand name and have good
reputation among the customers, thus the company can get bank loans
easily.
Benefits The business can increase their profitability by giving effective results
and can earn the trust of the customers.
WAITROSE
Business case used by the Waitrose in suggesting new innovative ideas is described below-
Executive
summary
Waitrose can use the robotics technology in place of their employees. This
technology will attract the customers as they will come to the offline
stores to use and analyse this technology (Lages, 2022). Through this
technology the businesses do not need to give salaries and business
operations can be done effectively. Use of robotics will reduce the costs
and will solve the major problems within the company.
Problem
statement
The customers are not satisfied by the after sales customer services
provided by the company. Thus the company can use the robotics
technology in their business operations. The business is not able to
connect better with the suppliers and the managers.
Possible
Innovations
The business have to evaluate all the technical advancements in the market
and have to choose the best possible technology. Using effective
technology will help the business in performing their business operations
effectively.
Why idea is
innovative
The idea used by the company is innovative as the other companies are
lacking in this technology. This technology can help in increasing business
efficiency and effectiveness (Lin, Xiao and Wang, 2021). The
infrastructure of the company will become more organized as it will solve

all the rising problems.
Market analysis The technology can be used in researching the market, the business can
aim the targeted customers to increase the success rate of the business.
Funding The business can use their retained earnings as they do not need huge
amount of capital. Also the business does not require to pay interest as
they are the savings out of the profits earned by the business.
Benefits The business will get benefited by the use of the robotic technology. This
innovation will help in increasing the firms efficiency and and can help the
business in solving the problems which are faced by the customers.
Suggestion of funding channels for the recommended innovation, supported by analysis of
business value for potential investment
For businesses it is important to avail funds through different sources so that they can expand
and grow in different countries. Some sources of funding available for the businesses are-
Retained earning- Retained earnings are the funding source where the company reinvest their
own profits. The companies are involved in holding some amount of retained earnings and
use it later to expand their business, innovate new products and grow in more countries.
 Advantages- In this type of funding the businesses are not required to give interests as
they are investing their own funding in the organization.
 Disadvantages- If the amount required by the company is large than the retained earnings
are not enough to fulfil the needs of the investment.
Debt capital- Debt capital is a source of earning where the companies borrow funds and repay
them later (Mirghafoori, Morovati Sharifabadi and Zahedi, 2018). This can be done in the
form of growth capital where the company takes loans. These loans can be short term or
long term.
 Advantages- The companies which are in need of huge amount of capital can raise the
funds through debt capital.

 Disadvantages- Businesses have to give high interest rates on the borrowed amount
which is a greater disadvantage for the company.
Equity capital- In equity capital the business source their capital by giving their ownership to
the general public to get money from them.
 Advantages- In equity capital the businesses are not charged with interest rates, rather
they have to provide dividend from their profits to the shareholders.
 Disadvantages- The company is giving dividend from the profits, thus the company is
getting lower profits.
Recommendations for TESCO-
TESCO is recommended to use debt capital as a source of funding, because the company
is operating in a large scale thus it need huge amount of capital (Mohammadi, Rezaei Asiabar,
and Babaei, 2021). With the help of debt capital the company can fulfil their requirements of
investment and can grow in various sectors.
Recommendations for Waitrose-
The company can use retained earnings as their source of fund, this will help them in
saving cost as they do not have to pay high interests on the investment. It is important for the
company to get profits so that they can expand their business and can innovate new products and
services.
Recommendation of tools to retain/ protect the knowledge and intellectual property (IP),
generated through the innovation process above, complimented with a critical evaluation of
the tools.
Intellectual property is required to kept harmless and assured. Without the security of
content the companies will be incapable to get the proper thoughts and creative ideas that the
people are having. Intellectual property is that holding that is a broad categorical description for
the set of unidentifiable assets legally owned by businesses. Tesco and Waitrose are companies
that have been working to develop and retain and protect intellectual property and knowledge.
An intellectual property infringement happens when another person or group engages in the
unauthorised utilisation of the assets (Stankosky and Baldanza, 2018). The companies know that

even though there are legal protection available for these properties, they could expire after or
get perished. The intellectual property could be of many types like Trademarks, Patents and
copyrights. These are explained in detail below:
 Copyright- Copyright is defined as the legally recognised right of the owner of
intellectual property. It can also be said as the way by which things can be used again. It
also means that only the manufacturer or owner of the product and those they authorise
have the right to reproduce the same work (Tianyi, 2021). There are some laws known as
the copyright laws that allows the creators of the original material the right to use it. But
still there is a time after which the copyrighted object could be made available to the
people.
 Trademark- Trademark could be stated as a thing that can be identified for a product as
a holding to a particular company which gives the company the ownership of that
product. It could be a symbol, phrase or a word that gives the product its status. Though
the trademark is almost non perishable, the holder of the trademark should use that to
receive the security that comes with it.
 Patent- It provides the rights to the individual for the property that is given to them by
the government agency. The patent permits the individual to be able to use the sole rights
to the advanced services or products through that patent. Technologies and the software
could be the patented products as they are valuable.
Recommendation for TESCO and Waitrose-
It is recommended that TESCO and Waitrose that they can get the copyright of their innovations,
new products and services, this will help them in safeguarding their innovations. Copyright will
help the company in protecting their products and services from getting copied by different
companies.

CONCLUSION
From the above report it is concluded that, innovation is important for a business.
Innovation helps the businesses in getting competitive advantage over other companies as it
helps in earning more profits. The customers nowadays have unique tastes and preferences, thus
the businesses are needed to make some changes in their existing products and services.
Innovating something in their business will the businesses in acquiring new customer base and
will enhance the profits. Commercialization also helps the customers to choose from a variety of
products, this helps the businesses in generating more profits and also helps in increasing
revenue. The above report discusses about how the businesses foster their innovation process
which will help them in decreasing the costs. The report involves several types of innovation
which helps the business in in increasing their efficiency. It is important for the business to
evaluate the different type of process and types of innovation. This report have also described the
business case of the companies which help the managers to analyse the operations of the
business. Businesses should evaluate the funding channels and select the best source through
which they can get investments. The above discussion also shows the several tools which will
help in protecting the intellectual property from being copied by other companies.

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