Innovation and Commercialization in Online Grocery Retailers

This report discusses the impact of innovation and commercialization in online grocery retailers, with a focus on Fresh Direct and Schwan's. It covers different types and processes of innovation, ways to foster innovation, and critically analyzes the success or failure of innovation in each organization. Additionally, it provides a detailed business case for innovation, including risk, benefit, and funding channels.

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.......6
TASK 2.................................................................................................................................................6
Produce a detailed business case for innovation for an orgaanization including risk, benefit and
other ways to access the funding.................................................................................................6
Suggestion of funding channels for the recommended innovation, supported by analysis of
business value for potential investment......................................................................................8
Recommend tools to protect or retain the knowledge and intellectual property.......................10
Conclusion: ........................................................................................................................................12
...........................................................................................................................................................12
REFERENCES:..................................................................................................................................13

INTRODUCTION
The innovation is basically defined as the procedure of adding new features or
specifications in the existing products and services by organization after identifying the needs of
customers. But in respect of invention, it refers to the fully development of new product and
services which leads to enhance the popularity of brand in market at higher rate. The
commercialization is defined as the process of various steps which is used for enhancing the
availability of goods of company in market. The main purpose for utilizing innovation process by
company is to create strong network with all customer segments. Here the chosen organizations are
Fresh Direct and Schwan's for understanding the impact of innovation. In aspect of selected
organizations both are a retail-based firm and management of both firms are providing their services
and products to users in online way. The report will be covered critically analyse the success or
failure of the innovation in each online grocery retailers, detailed discussion on different types and
processes in each of the selected organization.
TASK 1
Discuss the ways in which different organizations source and foster innovation by utilizing specific
examples
In relation to Fresh Direct, the management of this company used different types of methods for
fostering and sourcing the organization in their business functions are -
 Developing innovative culture – In the process of innovation people required to put their
full effort during the time of receiving encouragement from others (Zhang, Song and He,
2020). Due to effective encouragement the confidence and thinking level of employees are
easily increased in broad manner. In context to Fresh Direct management must sustain
positive and flexible work culture in their workplace between employee's which leads to
increase their performance at maximum level for long time.
 Leading from front – Innovation is beginning during the time of utilizing different
leadership traits by CEO. In aspect of this kind of people’s passion and interest are highly
important in innovation. Due to having high passion in innovation products are easily
produced in best quality according to the needs and desires of customers. In context to Fresh
Direct, due to highly focusing on innovation process and concept, they easily sustained their
vision, mission and objectives in market for long time.
But in aspect of Schwan's company, it is also a one type of online retail business and they also
facilitate their quality services and goods to customers at wide range. Here the authority of this firm
is focusing on sourcing and fostering innovation in the business functions.

 Reward and recognition – It is the highly effective and important source for increasing the
thinking and creativity of workers broadly. Because here the desires and wants of each
employee are different which is required to identify by firm and also provides recognition to
workers for their opinions and suggestions. In context to Schwan's management must
provide attractive rewards and other benefits to their employees which leads to sustain their
confidence level in their job for long time.
 Taking ownership of consumer problems – The authority of this firm is highly focused on
serving high quality goods and services to users for long time (Muchtar and Qamariah,
2021). For providing best quality goods to users, it necessary for the management of this
company that they always motivate their workers regarding their work and performance.
Due to receiving motivation lower-level employee's easily able to solve challenging task
easily.
Various sources of innovation
 Change in perception – Dynamic type of opinions is focusing on various things during the
time of innovating any products. That means the perception of people are regularly changing
at the time of buying various types of services and products. Due to this firm required to
evaluate taste and preferences of customers effectively for enhancing their sales.
 Demographics – In relation to population, pay level, human resource and age ranges
changing on regular basis of large company is focused on this. Unifying various
demographic data with division is a very strong technique for precisely for fulfil the needs
of potential market.
Foster innovation -
The foster innovation is a procedure which is used by organization for generating new ideas
and utilizing advanced technology within firm. By utilizing new ideas resources of the firm are
easily utilized in optmized manner and the success rate of firm are easily enhanced at higher rate.
Developing innovation vision and leadership, entrepreneurial teams’ innovation networks –
The development of innovation plays the crucial role for enhancing the popularity of
organization services and goods of company in market at higher rate. In innovation various kinds of
steps are taken place by firm for enhancing the sale of their company such as product, process,
technological and others.
The vision of fresh direct is to be a healthy difference in people’s lives through food that is
the basis for celebration and bonding, and a connection to each other’s heritage and communities.
But the vision of Schwan's is to enhance innovation in their business by using technology and other
elements. In this way firm is able to deliver high quality goods to users for long time.

The leadership is basically defined as the ability of group of individuals or individual to
guide and influence the followers. With help of effective leadership employees of both firm easily
do their work with full efficiency. With help of having effective leader lower level employees are
able to do their job with full work efficiency in workplace area.
But in aspect of entrepreneurial teams and innovation network is refer to those group of
individuals who used various kinds of beneficial and unique ideas in business activities which leads
to enhance the success rate of company at higher rate. In entrepreneurial team’s work are equally
distributed between employees which leads to decrease their mental stress at higher rate.
Detailed discussion on different types and processes of innovation in each of the selected
organization
4P’s of Innovation
It is basically a process which consist of four stages and due to the effective use of this
process Fresh Direct and Schwan's is able to deliver high quality goods and services to users for
long time.
 Product innovation – The product innovation is defined as the modification which are
made by organizations in their product and services. Due to made various changes the
product is fully modified and developed in new way to attract the customer in large number.
 Process innovation – In this kind of innovation organization is able to aligning their
procedure in a consumer-oriented manner which leads to enhance company success. The
elements which are comes under this innovation are process flow, technology and others.
 Paradigm innovation – Paradigm Innovation refers to the shift in the underlying mental
model via a change in the business status. It is also related with the changes in the
managerial techniques, procedure and concept in order to generate new and innovative
sections.
 Position innovation – The position innovation is basically defined as repositioning of brand
or organization in market by facilitating high quality goods and services to their potential
customers. For repositioning the brand organization needs to highlight uniqueness in their
goods and services through online mode effectively.
After analysing above data, it is understood that Fresh Direct must utilize the method of
Position innovation. 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.
Innovation process is referred to a procedure which is used by firm for introducing unique

type of goods, services, sources of supply etc. The stages which is involved in this process are -
 Idea generation – Here different types of ideas are developed by various employees with
help of brain storming activity. Due to using new and unique ideas Fresh easily delivered
best quality products to users for long time.
 Screening and advocacy – Here authority analysed the applied ideas for understanding
their feasibility effectively (Kaschuck and Klimova, 2019). In this way firm easily
understand that the applied ideas is beneficial or not for their business.
 Experimentation – It support the organization for understanding the sustainability of ideas
in both online and offline mode. Here various ideas are generated with information which is
arranged according to the output of original ideas.
 Commercialization – Here the management of Fresh Direct is focusing on generating
market value by serving best quality services and products to customers. Due to effective
use of ideas the functions of organization is effectively worked in market.
 Implementation – In this stage ideas are finally executed by the management of top-level
management. Due to this the needs and desires of customers are easily fulfilled in time.
Critically analyse the success or failure of the innovation in each online grocery retailers
From the analysis of above information, it concludes that the concept of innovation plays the
major role in the functions of organization which is highly essential for maintaining their goodwill
in market for long time. Due to conducting innovation in various products and services customers
are easily attracted in large number towards company in low time (Ehls, Polier and Herstatt, 2020). .
In respect of Fresh Direct, management decided to modify their services and goods which is
responsible for sustaining their performance at higher rate for long time. But in context to Schwan's
management applied innovation by utilizing Blockchain in their business functions. With help of
innovation queries and problems of users are solved in time.
TASK 2
Produce a detailed business case for innovation for an orgaanization including risk, benefit
and other ways to access the funding
An effective plan of action to the management is provided below to make it easier for them to make
a choice. For Fresh Direct the recommendations are:
Business case
Executive summary Business case identifies the hurdles and provides input to mitigate the
impact of those hurdles. Fresh Direct seeks to make use of tech to target
the end user in order to reduce the cost of acquiring a customer. Also it

aims to provide superior services in order to gain edge over the
competition.
Problem explanation
and investigation
The hurdle faced by Fresh Direct is that they can't acquire a new
customer without incurring significant costs related to marketing due to
lack of innovation.
Resolution Innovation in the commodity is needed. Also, the concept of sales
funnel could be used to resolve the hurdle.
Project statement Capital is required to be infused into R&D Which among other things
will be used to hire experts.
Cost benefit analysis Charts and graphs depicting the prospective gains and the current
requirements would make it easier to gather the viability of the
undertaking.
Financial analysis Peer to peer funding is recommended as this helps the company in
gaining the know how without giving up equity and acquiring the funds
at nominal intrest rate.
For Schwan's, the following is recommended.
Business case
Executive summary Schwan offers frozen commodities to end users and are facing a hurdle
of customer dissatisfaction due to non-resolution of complaints.
Problem explanation
and investigation
Completive edge is getting lost for Schwan due to inefficiency in
dealing with customers and not being able to satisfy their target market.
Resolution Sales funnel is recommended for the brand in order to assess their target
market, and innovate solutions such as chatbots to address the queries
of costumers while saving costs.
Project statement Schwan needs to optimize business operations in order to reduce costs
of inputs. New hardware capability could be adopted to gain
competitive advantage.
Cost benefit analysis They should put the prospective benefit and costs in graphs and charts

to gather how much they could gain from the undertaking.
Financial analysis Schwan could utilize the option of Angel Investor, as they will get
access to connections and capital without having the need to repay the
amount.
Suggestion of funding channels for the recommended innovation, supported by analysis of business
value for potential investment
The expansion of enterprises was conventionally based through venture capitalism, loans. Or
capitalist. However in modern times these ways have been found to be lacking in the solutions
which could be provided to the entities. The funding in contemporary period have assumed new
forms and shapes. Some of these forms are provided below.
Funding by crowds: This type of method is generally used by newer companies or start-ups to
approach investors. This method could be utilised to cultivate a assembly of people around the
commodity or service on offer. The platform for gaining investors are websites which engage the
investors with the different companies looking to gain capital. The investors make promise to invest
in the business and the amount is collected by these websites, in return for their services the
websites charge a amount from the funding. The investors invest according to their own means. It is
crucial for the entity using this methodology to gather requisite information in order to lure the
investors. The websites also have a model where if a certain specified investment is reached then
and only then the investors’ money would be forwarded to the enterprise otherwise the investors
will get a refund on their investments.(Coakley, and Lazos, 2021)
Advantages Disadvantages
 The capital needed by the entity could
be quickly gathered by using this
method with nominal fees.
 There are various methods in such as
peer to peer funding from which crucial
data could be obtained in order to
provide that commodity or service in a
better way.
 If the funds are not adequate the entire
investments made by various investors
could get refunded back to them. This
also may result in loss of repute and
confidence in the prospective
commodity or service.
 It isn't necessarily a better or easier way
to finance when compared to
conventional means

 Investment by peers, social group and family:
Getting investment into an entity is much easier than other methods since the people are very well
known and comfortable with the people running the entity which is seeking investment. However,
this may also result in unnecessary input provided by them in order to run the business which may
prove to be detrimental to the interests of the business. Keeping that in mind the interests’ rate at
which these funds could be obtained without securing the loan against a physical asset has made
this a lucrative method to source capital investments.
Advantage Disadvantage
 The investors are comfortable with the
people running the entity seeking
investment.
 The investment doesn't need to be
secured against asset or shares.
 The inputs provided could be
detrimental to the interest of the
business as they lack the expertise
 If the investment does not pan out it
may sour the relationship between
individuals involved.
 Peer to peer Investments: The existing entities could be interested in making investment
into a new player, since they have come up with a better way or product. In this case crucial
knowledge of old players could be exploited by new player. This could be arranged through
the websites or in physical form. Typically, this involves levying an interest rate or getting
shares of the business by old players or the investment could be tied to physical asset.
Advantage Disadvantage
 Entity seeking the investment could
utilize the crucial and diverse
knowledge of their peers and choose
the best available option.
 Peers are most likely to realize the full
potential of the business and help in
 This type of investment is highly
regulated in some jurisdictions namely
Canada, United Kingdom, and
Australia.
 Its not easy to source this type of
investment since the peers are well
aware of the risks associated with

reaching it with lower interest rates. making the investment such as the
investment not being covered by
insurance.
 Angel Capitalism: This is a very popular choice amongst the new companies. Angel
investors are affluent private capitalists who provide findings to small entities in return for
equity shares. These angels use their own money in funding the entity. These Angel
capitalists are not risk averse and provide the business with know-how and secure crucial
connections for the business. Since they own equity in the entity they are personally
invested into making the business a success (Arya, Mittendorf and Pfeiffer, 2021).
Advantages Disadvantages
 They do not charge interest or require
their investment to be paid back
 Expertise and connections are provided
by the Angel capitalist.
 It is not easy to find the right Angel
investor who can appropriately provide
expertise and crucial connections.
 The companies have to give up their
equity which means they will have less
share in the profits.
Recommend tools to protect or retain the knowledge and intellectual property
Intellectual property pertains to the conceptions of the mind for instance invention, work of
an artist or author including software codes, Symbology and nomenclature used by a business to
distinguish itself from other brands (Ma, 2020). Intellectual property rights are provided by law in
form of patents, copyrights, and trademarks to the companies which came up with it in exclusion to
everyone else (Schneider, 2019).
By granting IP law secures an environment conducive to creation and innovative practices.
Patents: This is Right given exclusively to the inventor of a product or process to manufacture and
sell the invention barring all other from doing so. Although this is time bound usually lasts till 20
years. The Details of the invention must be disclosed to authorities. These are classified under
utility patent and design patent (Mody, 2019).
Copyrights: This right protects the fresh work of authors, painters, photographers, musical artists,
software code writers etc. so that their work is not duplicated without their express permission.

Typically, someone copying these works have to pay a royalty to the person from whose mind these
works originated. The copyrights last till the person who created them dies (Mansfield, 2019).
Trademarks: These are perpetual rights given to company. These rights pertain to any symbology
or phrases or designs which differentiates one company from another. These rights are granted to
ensure that the goodwill of one company is not exploited by another company (Frischtak, 2019).
Trade Secrets: Entities have a lot of information which if disclosed could be exploited by the
competitors. The trade secret must connote some type of monetary value in order to be protected by
the law (Correa, 2020).

Conclusion:
The report above emphasises upon the need to innovate in business in order to gain an
competitive advantage in terms of saving costs of inputs and realizing higher revenues. The report
further recommends a innovative process of sales funnel to increase the revenue and inculcate
loyalty amongst the customers. The report further examines in detail various types of methods the
business could use to source funding by various channels such as peer to peer funding or
crowdfunding in order foster innovation. Many types of innovations could be utilized by the
business such as disruptive form of innovation, revolutionary form of innovation. Furthermore, a
plan of action is recommended for Fresh Direct and Schwan in order for them to foster innovation.

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