Innovation and Commercialization in Online Grocery Retailers: A Case Study of Fresh Direct and Schwan's

This report discusses the ways in which different organizations source and foster innovation by utilizing specific examples. It provides a critical analysis of whether or not each online grocery retailer's innovation was successful, as well as a comprehensive discussion of the various types and procedures employed by each organization. The report also includes a detailed business case for innovation for an organization including risk, benefit and other ways to access the funding.

Innovation and
Commercialization

Table of Contents
INTRODUCTION ...............................................................................................................................3
TASK 1.................................................................................................................................................3
Discuss the ways in which different organizations source and foster innovation by utilizing
specific examples.............................................................................................................................3
Detailed discussion on different types and processes of innovation in each of the selected
organization......................................................................................................................................5
Critically analyse the success or failure of the innovation in each online grocery retailers............8
TASK 2.................................................................................................................................................8
Produce a detailed business case for innovation for an organization including risk, benefit and
other ways to access the funding.....................................................................................................8
Suggestion of funding channels for the recommended innovation, supported by analysis of
business value for potential investment...........................................................................................9
Recommend tools to protect or retain the knowledge and intellectual property...........................11
Conclusion: ........................................................................................................................................12
REFERENCES ..................................................................................................................................13

INTRODUCTION
The process of adding new features or specifications to already-existing goods and services after
figuring out what customers want is known as Innovation. However, when we talk about invention,
we're referring to the complete creation of new goods and services that boost a brand's market
popularity. The process of using a number of steps to make a company's goods more widely
available on the market is known as commercialization. (Wang,.Q.J.,2021) The main reason a
business uses the innovation process is to build a strong network with all of its customers. For the
purpose of comprehending the impact of innovation, Fresh Direct and Schwan's are the
organizations of choice here. Both of these businesses are retail-based, and the management of both
of them offer their services and products to customers online. The report will provide a critical
analysis of whether or not each online grocery retailer's innovation was successful, as well as a
comprehensive discussion of the various types and procedures employed by each organization.
TASK 1
Discuss the ways in which different organizations source and foster innovation by utilizing
specific examples
The management of Fresh Direct employed a variety of strategies for fostering and sourcing the
organization in their business functions, including the following:
 Developing innovative culture – During the process of innovation, individuals must exert
themselves fully despite receiving encouragement from others. Employees' self-assurance
and ability to think for themselves are easily raised in a broad way with effective
encouragement. In relation to Fresh Direct, management must maintain a positive and
adaptable work environment among employees, resulting in long-term increases in
performance.
 Leading from front – Innovation begins when the CEO employs a variety of leadership
qualities. In this regard, people's enthusiasm and interest are crucial to innovation. Products
can easily be produced in the highest possible quality to meet the requirements and
preferences of customers because innovators are highly motivated. (.Joly, P.B., 2019) In
comparison, Fresh Direct was able to easily maintain their vision, mission, and goals in the
market for a considerable amount of time thanks to their strong focus on the innovation
process and concept.
However, Schwan's company is also a type of online retail business that offers quality services and
products to a wide range of customers. The authority of this company is concentrating here on

sourcing and encouraging business innovation.
 Reward and recognition – It is a crucial and highly effective way to improve workers'
overall thinking and creativity. Because each employee's needs and wants are different here,
the company needs to be able to identify them. It also thanks employees for their ideas and
opinions. In relation to Schwan, management must offer attractive benefits and rewards to
employees to keep their employees' confidence in their jobs for a long time.
 Taking ownership of consumer problems – This company's authority places a strong
emphasis on providing customers with long-term access to high-quality goods and services.
The management of this company must constantly motivate their employees regarding their
work and performance in order to provide customers with products of the highest possible
quality. Lower-level employees can easily complete challenging tasks because they are
motivated.(Gobble, M.M., 2018)
Various sources of innovation
 Change in perception: During the development of any product, dynamic opinions centre on
a variety of topics. This indicates that when people purchase various services and goods,
their perceptions frequently shift. Because of this, the company must effectively assess the
tastes and preferences of customers to boost sales.
 Demographics: A large company's focus is on demographics, which include changes in the
population, pay scale, human resources, and age ranges on a regular basis. Dividing
disparate demographic data is a potent strategy for precisely meeting the requirements of a
potential market.
Foster innovation -
A method that an organization employs to generate novel concepts and make use of cutting-
edge technology within the organization is known as foster innovation. When new ideas are used,
the company's resources can be used more efficiently, and the success rate of the company can be
easily increased at a higher rate.
Developing innovation vision and leadership, entrepreneurial teams’ innovation networks –
Innovation plays a crucial role in increasing the popularity of a company's services and
products in the market. In innovation, a company takes a variety of steps, including technological,
product, process, and others, to increase sales. Through food that serves as the foundation for
celebration, bonding, and a connection to one another's heritage and communities, the mission of
fresh direct is to make a healthy difference in people's lives. (Bunduchi, R., and et. al.,
2022).However, Schwan's goal is to make their business more innovative by incorporating
technology and other elements. The company is able to maintain its long-term supply of high-

quality products in this manner.
The ability of a group of people or a single person to direct and influence others is essentially what
we mean when we talk about leadership. The employees of both companies are able to carry out
their duties with ease and maximum efficiency thanks to strong leadership. Lower-level employees
are able to perform their duties in the workplace area with full efficiency with the assistance of an
effective leader.
In the context of entrepreneurial teams and innovation networks, on the other hand, the term
"network" refers to a group of people who use a variety of innovative and advantageous business
strategies to increase a company's success rate. In entrepreneurial teams, work is distributed equally
among employees, resulting in a greater reduction in mental stress.
Detailed discussion on different types and processes of innovation in each of the selected
organization
In the workplace, innovation plays a crucial role, providing a variety of opportunities for faster
development and improved connection. It contributes to an organization's development, regular
improvement, brand recognition, response to competition and trends, and creation of a distinctive
selling point for products and services, among other benefits. (Lea, B.R2018) The company needs
to implement a comprehensive market strategy in order to identify the customer's needs in order to
innovate. An effective innovation process includes idea generation and mobilization, advocacy and
screening, which aids in determining the feasibility of a business idea, the experimentation stage,
which tests the sustainability of ideas, commercialization, which increases the idea's market value,
and implementation of the innovative idea. There are four kinds of innovation that lead to long-term
success results in a greater rate of mental stress reduction.
 Sustaining Innovation: This includes making significant improvements to products and
services in order to remain competitive in the current market.
 Disruptive Innovation: The introduction of a novel business model that brings about a
market disruption for an existing product is an example of disruptive innovation.
 Incremental Innovation:The continuous and gradual improvement of the products and
services that are already on the market is included in incremental innovation.
 Radical Innovation: The term "radical innovation" refers to technological advancements
that improve industries and frequently open up new markets.
The analysis of innovation procedure of the both retailers are given below:
Fresh direct
Its corporate innovation program enlists the assistance of a few companies from outside the
company and its twelve teams, which then demonstrate the innovations' viability to top executives.
Addressing a real customer's need, involving senior-level sponsors, setting a time limit for each

project, and then maintaining complete openness among the teams are the four guidelines they use
to develop their innovation process. More than 350 employees participate in hackathons where they
intensively collaborate in teams to develop solutions to business problems. They innovate their
online business by identifying ways to assist customers in saving money while grocery shopping on
weekends and conducting in-depth research into the factors that influence their shopping
experience. Their goal is to provide products and services that add value and meet buyer needs, as
well as to speed up the customer's shopping experience.(Wang, Y.C.2021) The primary innovation
strategy of fresh direct is to produce high-quality goods and services at affordable prices for
customers. In order to remain competitive and satisfy customer demands, they continuously
innovated, ensuring that they are able to anticipate customer needs and creating opportunities for
innovation in the business. The organization's sustaining and incremental innovations are included
in fresh direct.
Schwan's
In order to provide the best possible customer experiences, they place a strong emphasis on
introducing new innovations to each and every aspect of Schwan's, including improved shopping
options and new apps. Their digital innovation teams are crucial to the expansion of their business.
Schwan has reported 50 percent growth online and offers click-and-collect and home delivery on
their own websites.(Gasparin, M., and et. al. 2021). Their innovation strategy includes determining
the requirements of their customers and what they anticipate from the business in the near future.
Based on this information, they develop plans and evaluate each innovation strategy based on its
market value before implementing the most effective innovation strategy. Their most recent
innovation at Schwan's is a new automated ordering system that reduces costs and stock levels
while saving employees time to provide better customer service. The product and service
incremental innovation is included in Schwan's.
4P’s of Innovation
It is basically a four-stage process that allows Fresh Direct and Schwan's to consistently provide
customers with high-quality goods and services for a long time.
 Product innovation: The alterations that businesses make to their goods and services are
referred to as product innovation. The product has been completely altered and developed in
a novel way as a result of various modifications to attract a large number of customers.
 Process innovation: is a type of innovation in which a company can align its procedures in
a manner that is focused on the customer, thereby enhancing the success of the business.
Process flow, technology, and other elements are included in this innovation.
 Paradigm innovation: The term "paradigm innovation" refers to a change in a company's
status that alters the fundamental mental model. It also has to do with alterations to

managerial methods, procedures, and concepts in order to generate novel sections.
Position innovation: is essentially defined as the repositioning of a brand or organization in the
market through the provision of high-quality goods and services to potential customers. In order to
successfully reposition their brand, the company must effectively highlight the uniqueness of their
products and services online.
After analysing above data, it is understood that Fresh Direct must utilize the method of Position
innovation.(Tianyi, H., 2021) In aspect of this method here management is mostly focusing on the
quality services and goods by using modern equipment's. But in aspect of Schwan's company, they
must focus on the method of process innovation. Because with help of this method company easily
safeguard their position in market by solving the problems of their potential customers in time
regarding their services.
An innovation process is a method that a company uses to introduce novel products, services, and
supply chains, among other things.
 Idea generation: is one of the stages in this process. Various employees use a brainstorming
activity to come up with a variety of ideas here. Fresh was able to consistently deliver high-
quality products to customers with ease thanks to the application of novel concepts.
 Screening and advocacy: In this instance, authority examined the implemented ideas to
effectively comprehend their viability. This makes it simple for businesses to determine
whether or not the implemented ideas are beneficial to their operations.
 Experimentation: It aids the organization in comprehending the online and offline viability
of ideas. Using information that is arranged in accordance with the results of the original
ideas, various concepts are generated here.
 Commercialization: Here, the management of Fresh Direct is putting the emphasis on
generating market value by providing customers with the highest quality services and
products. The functions of the organization are effectively worked into the market through
the use of ideas.
 Implementation: At this point, top-level management finally puts ideas into action.
Customers' wants and needs are easily met on time as a result.
Critically analyse the success or failure of the innovation in each online grocery retailers
The analysis of the aforementioned data leads us to the conclusion that the organization's functions
are heavily influenced by the idea of innovation, which is crucial for keeping their good name in the
market for a long time. Customers are quickly drawn to the business in large numbers as a result of
innovation in various products and services.(Krishnamoorth.,2018) In regards to Fresh Direct,
management made the decision to modify their products and services, which is responsible for
maintaining their performance at a higher rate for an extended period of time. However, in relation

to how Schwan's management applied innovation, the use of Blockchain in business operations.
Users' queries and issues are resolved promptly with the assistance of innovation.(Mayer, C., 2018)
TASK 2
Produce a detailed business case for innovation for an organization including risk, benefit
and other ways to access the funding
In order to make it simpler for management to make a decision, an efficient course of action is
provided below. The following are the suggestions for fresh direct:
Business case
Executive summary The business case identifies the obstacles and offers suggestions for
reducing their impact. In order to lower the cost of acquiring a
customer, Fresh Direct aims to target the end user using technology.
Additionally, it aims to outperform the competition by providing
superior services.
Problem explanation
and investigation
Due to their lack of innovation, Fresh Direct is unable to acquire new
customers without incurring significant marketing costs.
Resolution The commodity requires new ideas. Additionally, the obstacle could be
overcome by utilizing the sales funnel concept.
Project statement It is necessary to inject capital into research and development. This
money will also be used to hire experts.
Cost benefit analysis It would be simpler to determine the project's viability if charts and
graphs showed the potential benefits and current requirements.
Financial analysis Peer-to-peer funding is recommended because it helps the business
acquire expertise without sacrificing equity and at a low interest rate
For Schwan's, the following is recommended.
Business case
Executive summary Because complaints are not resolved, Schwan faces customer
dissatisfaction because it sells frozen goods to end users.
Problem explanation
and investigation
Schwan's competitive advantage is being lost as a result of their
inability to satisfy their target market and inefficient customer service.
Resolution The brand should use a sales funnel to figure out who their target

market is and come up with new ways to answer customers' questions
and save money, like using chatbots.
Project statement n order to cut down on input costs, Schwan needs to improve business
operations. In order to gain a competitive advantage, new hardware
capabilities could be adopted.
Cost benefit analysis In order to determine how much they stand to gain from the
undertaking, they ought to display the potential benefits and costs in
graphs and charts.
Financial analysis Schwan could use the Angel Investor option because they won't have to
pay back the money and can get connections and capital.
Suggestion of funding channels for the recommended innovation, supported by analysis of
business value for potential investment
Venture capital and loans were traditionally used to expand businesses. However, in recent times, it
has been discovered that these methods lack the solutions that could be provided to the entities. In
the modern era, funding has taken on entirely new forms. The following is a list of some of these
forms:
 FUNDING BY CROWDS: When approaching investors, newer businesses or start-ups
typically employ this strategy. This strategy could be used to gather people around the
product or service being offered. Websites that connect investors with various businesses
seeking capital serve as the platform for attracting investors. Investors make a promise to
invest in the company, and these websites collect the funds. In exchange for providing their
services, these websites take a cut of the funding. The investors make their own investments.
In order to entice investors, the organization employing this method must gather the
necessary data. (Brock,F., 2019.) The websites also have a model in which investors' funds
are transferred to the business only if a certain amount of money is invested; otherwise,
investors will receive a refund on their investments.
Advantages Disadvantages
 Using this strategy, the entity's required
capital could be gathered quickly and
for low fees.
 In order to provide that product or
service in a more effective manner,
crucial data can be obtained through a
 The entirety of the investments made by
various investors could be returned to
them in the event that the funds are
insufficient. Additionally, this may
result in a loss of trust and repute in the
prospective product or service.

variety of means, including peer-to-
peer funding.
 When compared to more conventional
means of financing, it is not always a
more convenient or superior option.
 Investment by peers, social group and family: Because the people who are running the
entity that is seeking investment are well-known and familiar with them, getting investment
into that entity is much simpler than with other methods. However, this could also lead to
them contributing information that isn't needed to run the business, which could hurt the
company's interests.(Nam, D.2019) This method of sourcing capital investments has
proven to be one of the most profitable due to the low interest rate at which these funds can
be obtained without securing the loan against a physical asset.
Advantage Disadvantage
 The people running the company that
wants to get money from investors are
nice to them.
 There is no need to secure the
investment with shares or other assets.
 If the investment doesn't work out, it
could hurt the relationship between the
people involved.
 The inputs might be bad for the
business because they don't know
enough.
 Peer to peer Investments: Because they have developed a better method or product, the
existing entities might be interested in investing in a new player. In this scenario, important
information from previous players could be used to acquire a new player. This could be done
in person or through online arrangements. This typically entails imposing an interest rate or
acquiring shares in the company from previous players, which could be exploited by new
players. (Sanders,2019).This could be done in person or through the websites. This typically
entails imposing an interest rate, acquiring shares of the company from previous players, or
investing in physical assets.
Advantage Disadvantage
 The entity seeking the investment could
select the best option by utilizing the
essential and varied expertise of their
 Some nations, including Canada, the
United Kingdom, and Australia, have
strict regulations regarding this kind of

peers.
 Peers are more likely to see the
business's full potential and assist in
realizing it by offering lower interest
rates.
investment.
 Since peers are well aware of the risks
associated with making the investment,
such as the investment not being
covered by insurance, it is difficult to
find this kind of investment.
 Angel Capitalism: When it comes to brand-new businesses, this is a very common choice.
Angel investors are wealthy private capitalists who give small businesses their findings in
exchange for equity shares. The entity is funded by these angels using their own funds.
These angel skills are not afraid of taking risks, they know how to help the business, and
they make important connections for the business. They are personally invested in the
success of the business because they own equity in it.(Mulhearn,.2020)
Advantages Disadvantages
 The angel investor provides expertise
and connections.
 they do not charge interest or require
repayment of their investment.
 Finding the ideal angel investor who
can appropriately offer expertise and
crucial connections is difficult.
 Since the businesses will have to give
up their equity, they will get less of the
profits.
Recommend tools to protect or retain the knowledge and intellectual property
The concepts of the mind, such as an invention, the work of an artist or author, software codes,
symbolism, and nomenclature used by a business to differentiate itself from other brands are all
examples of intellectual property. Patents, copyrights, and trademarks are forms of intellectual
property rights granted by law exclusively to the companies that developed them.
By granting IP law secures an environment conducive to creation and innovation practices:
 Patents:The only person who has the right to manufacture and sell their invention is the one
who invented it, and no one else has the right to do so. Even though this is time-limited, it
typically lasts for 20 years. Authorities must be informed of the invention's specifics. These
fall under the utility patent and design patent categories.(De Angelis,.2018)
 Copyrights:This right safeguards the newest works of writers, artists, photographers,
musicians, software developers, and others, so that no copy of their work is made without

their explicit permission. In most cases, those who copy these works are required to pay a
royalty to the original creator. The copyrights remain in effect until the creator passes away.
 Trademarks:The company has been granted these rights for life. Any symbology, phases, or
designs that set one company apart from another are covered by these rights. These rights
are granted to prevent one business from exploiting another's goodwill.
 Secrets of trade:Companies have a lot of information that, if shared, competitors could use
to their advantage. In order for a trade secret to be legally protected, it must have monetary
value.
Conclusion:
This report in particular emphasizes the necessity of business innovation to gain a competitive
advantage by reducing input costs and increasing revenues. In addition, the report recommends a
novel sales funnel method for increasing revenue and fostering customer faithfulness. The report
also goes into great detail about the many different ways the company could get funding through
different channels, like peer-to-peer funding or crowdfunding, to encourage revolutionary
innovation. In addition, in order for fresh direct and Schwan to foster innovation, a strategy is
suggested.

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