Importance of Innovation and Frugal Innovation in Essence Drink Company

This report discusses the importance of innovation and frugal innovation in Essence Drink Company. It covers the difference between innovation and invention, sources of innovation, 4 P's of innovation, and the role of frugal innovation in reducing operational costs. The report also analyzes the process of measuring innovation and the use of innovation funnel. The subject of the report is business innovation, and it covers course code and name if mentioned, and college/university if mentioned.

U8 PART A

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
PART - A.....................................................................................................................................3
P1 Presenting the importance of innovation and difference between invention..............3
P 2 Describing organizational vision, culture and teamwork shape innovation....................4
M1 Analysing the different sources of innovation..............................................................4
D1 Critically analysing the process of measuring the innovation......................................5
P3 Explaining the 4 P’s of innovation funnel and the use of innovation funnel..............6
M2 Analysing the role of innovation funnel.......................................................................7
P4 Presenting development in frugal innovation.....................................................................7
M3 Describing the role of frugal innovation.......................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................1

INTRODUCTION
Innovation refers to making changes in the existing products in order to increase the
demands. Moreover, it is a process of implementing an idea that result in introducing
the new goods and services in the market (Chen and et.al., 2018). Along with this, the
present report is based on Essence Drink that serve Varity of drinks to their customer.
Moreover, the headquarter of the company is located at UK and cover the local
market.
Furthermore, the study will discuss on difference between innovation and invention
and its importance in the organization. Along with this, it will depict about the 4 P’s of
innovation and how commercial funnel will help organization to increase its
productivity
MAIN BODY
PART - A
P1 Presenting the importance of innovation and difference between invention
Business innovation is very important for running the business in the competitive
market. Moreover, it is a method of introducing new goods and services in the
market in order to attract more and more customer. It is not only related to manufacturing
the new items rather it also include new market strategy in order to increase the
overall growth of the firm (Russell and Smorodinskaya, 2018). Furthermore, innovation is
vital for the organization as it allows the firm to add value into the business as well as
increase the sales that contribute in success of company. Along with this, it helps the
firm in staying ahead of the competition as it allows the firm to predict the
market situation. That allows the firm in developing the market strategy. In addition to this,
it allows the organization to take the advantage of the new technology such as data
analytical tool that contributes in identifying the demands and needs of the
customer.
On the other hand, invention is the process of developing new products that will
allow the organization to be unique in the market. Moreover, it is the process of
creating new products in the market while innovation is the process of adding value

to existing products (Oeij and et.al., 2019). Along with this, for invention scientific skill
is required whereas for innovation set of marketing and strategic abilities are necessary
as firm has to promote the product in the market. However, invention is done on the
single product while innovation is combination of various products and process.
P 2 Describing organizational vision, culture and teamwork shape innovation
Every organization aims to accomplish the success in the external market for that
firm has to implement plan and strategy in order to achieve the objective
effectively. Along with this, the firm has to develop innovative product so that it
can increase its performance (Iga, 2018). In addition to this, the organization has to conduct
training and developing programmes so that it can enhance the skills of its employees.
However, Essence company can adopt the functional organizational structure so
that it can increase the specialization in the firm that will contributes in
manufacturing the new products efficiently. In addition, to this, leadership also play
important role in the organization as it guides the employees to accomplish the goal in
the limited frame of time. However, Essence company can adopt the autocratic style of
leadership as it will allow the subordinates to share their ideas that will lead in
manufacturing the new product (Hameed, Nisar and Wu, 2021). In addition to this, teamwork
is very crucial for the organization as it build the health environment as well as allows
the employees to interact with each other and share their ideas with each other.
Moreover, Team works in order to achieve the organizational goal and in the efficient
manner. Thus, it helps in formulating the plan for the innovation and
commercialization.
M1 Analysing the different sources of innovation
There are various sources of innovation according to the Peter F Ducker that
allows the organization with various opportunity in order to increase the overall
productivity of the firm. There are 7 sources of innovation that allows the company
to make new product in the market. The first source helps in meeting the unexpected
efforts as well as can be implemented easily. While the last sources are not so clear as it may
poses higher rate of risk as well as promise the greater rewards. Moreover, the seven
sources are mentioned in details below:

 The Unexpected: In this method essence company is required to conduct a market
research in order to identify the insights of the market. The organization has to
analyse the unexpected opportunity in order to excel in the market (Bouncken, Kraus
and Roig-Tierno, 2021). Along with this, the form need to know that there can be
unexpected risk and for dealing with this it has to make an appropriate plan.
 The Incongruity: This source allows the organization to make the innovation
product it allows the company to increase the demand and supply by fulfilling
the trends of the market. It should be highly considered with the business in
order to make the innovative product.
 Process change: The Essence company has to changes the process of
manufacturing if it is not able to meet the goal of the organization.
Moreover, it is task force sources instead of situation focused as the innovation idea
needs company after looking at the process. The organization need to identify in
the weakness in the process in order to enhance the channel. As it will
contributes in increasing the company capabilities as team will be able to make
more innovative product.
 Industry market: The leader of the organization has to keep an eye on the market
condition in order to identify the insights of the market (Russell and Smorodinskaya,
2018). As well as firm can develop the new technology as it gives ample of
opportunity to innovate.
 Demographic: This sources allows the company in making the product
according to the needs and taste of the employees.
 Change in the perception: The change in the demands of the customer vary
from time to time thus for existing in the market firm has to make innovative
products.
 New Knowledge: The organization has to make use of advance technology such as
artificial intelligence to learn more about the customer.
D1 Critically analysing the process of measuring the innovation
Innovation is one of the most crucial part of marketing as well as it need to be
measured in the long term rather in completing of the task. However, the
organization can measure the innovation by spreading the process such as identification of

the goal, near term development and short term deliverables (Das, 2021). In the first step
the firm need to make the appropriate goal that will increase the demands of the
company in the market. However, in the second stage the organization will collect the
resources in order to achieve the short term objectives. Whereas, in the third stage it will
make the appropriate development to measure the outcomes of the innovation.
P3 Explaining the 4 P’s of innovation funnel and the use of innovation funnel
The four P’s of innovation is known as innovation mix that helps the organization to
develop new products. That are mentioned in detail below:
 Paradigm: It is generally a pre-planned process that organization has to take in
order to meet the changes by developing the innovative product in the market.
Along with this, Essence company has to make the changes in the business plan,
model in order to improve the performance.
 Product: This is offered to the customer by the organization in order to fulfil their
needs as well as to increase their sales (Huettl and Rathmayer, 2017). Moreover,
the essence company sell various drinks such as Mango lassie that has helped
the organization in increasing the brand image in the market.
 Process: This step is consist of manufacturing and developing of products
such as preparation of goods and services. It also include hiring of people and
turning so that it can make innovative product for the firm. Moreover, essence
company can use advance technology to make the process of manufacturing
efficient.
 Position: It is generally the psychological category and promotion plays very
important role in increasing the market position of the firm in the market.
Innovation funnel: It is a management tool that allows organization with constant
stream of ideas in order to develop quality goods and services. Along with this, it is
used to make the action plan for the companies in order to deal with the innovative
ideas (Gavira and et.al., 2020). It helps the organization in meeting their needs by
allowing organization top make strategic plan. Moreover, in the first step it allows firm to
generate the ideas whereas, in the second stage it makes the criteria for making the
products. In the third step the testing of the product is done and in the last stage it is
promoted in the external environment for sales.

M2 Analysing the role of innovation funnel
Innovation funnel play important role in the organization as it allows the firm
to generate innovative ideas that contributes in manufacturing the new products.
Along with this, it has 6 stage that are needed to be followed by Essence company in
order to produce new product (Mamasioulas, Mourtzis and Chryssolouris, 2020). The first
stage is known as opportunity assessment in this essence company need to analyse the
market situation as well as examine the customer data. That will contributes the firm
in making the products according to their taste and preference. In addition to this, in the
second step the firm develop the idea on the insight of the market. The essence company
has introduce the new product fruit lassie in the market that will help the organization in
attracting more and more customer. However, this product will be successful in the
market as there is less competition as well as well it will be unique product. Thus,
innovation funnel increases the growth of the firm in the competitive market.
P4 Presenting development in frugal innovation
Frugal innovation is an engineering process used by the organization in order to
reduce the cost of the production by removing the non-essential feature form the
products. Moreover, it helps the organization to reduce the organizational voids. It is
important for the organization as it allows the firm to reduce the operational cost as
well as creating the huge opportunity for firm to expand their business in the
market (Albert, 2019). In addition to this, it allows the company to change their business
model so that it achieve success in the external environment. Furthermore, the Essence
company can develop an innovative drink such as mix fruit flavour lassie as it will
attract more and more customer of young age. Moreover, the company has decided to
open in the market of UK as most of the customer are not familiar with such drinks.
Because of that firm will be able to achieve the success in the market as compare to
Asian market. Along with this, there is low competition in case of healthy drink thus Essence
drink is able to sell their products at good price that will lead in increasing the sales
of the firm and cover the local market.
M3 Describing the role of frugal innovation
Frugal innovation helps the organization in delivering the moral values at lower cost
to large number of customer. Moreover, it helps the organization in gaining the

competitive advantage in the market that contributes in increasing the overall growth of
the firm as well as raise the sales of the company (Hossain, 2020). Along with this, it allows
the firm to save the operational cost by removing the non-essential part from the
products. That contributes in manufacturing the quality products at cheaper price that
result in meeting the needs of the customer.
CONCLUSION
From the above report it has been concluded the innovation is a framework of developing
the new product in the market in order to attract more and more customer Along with this
it plays important role in increasing the growth of the organization in the competitive
market. In addition to this, the study has discussed on invention that can be define as process
of making the changes in the existing product in order to improve the company
production. Furthermore, the report has depicted about the innovative product made by
the Essence Drink such as mix fruit flavoured lassie.

REFERENCES
Books and journals
Albert, M., 2019. Sustainable frugal innovation-The connection between frugal innovation and
sustainability. Journal of Cleaner Production. 237. p.117747.
Bouncken, R. B., Kraus, S. and Roig-Tierno, N., 2021. Knowledge-and innovation-based business
models for future growth: Digitalized business models and portfolio
considerations. Review of Managerial Science. 15(1). pp.1-14.
Chen, J. and et.al., 2018. Holistic innovation: an emerging innovation paradigm. International
Journal of Innovation Studies. 2(1). pp.1-13.
Das, S., 2021. Managing innovation: The three ‘Ps’ of creativity and commercialisation.
In Innovations in Magazine Publishing (pp. 80-102). Routledge.
Gavira, M. D. O. and et.al., 2020. Technological innovation management: Analyzing the
application of the innovation funnel in a consumer goods organization. RAM. Revista
de Administração Mackenzie. 8. pp.77-107.
Hameed, W. U., Nisar, Q. A. and Wu, H. C., 2021. Relationships between external knowledge,
internal innovation, firms’ open innovation performance, service innovation and
business performance in the Pakistani hotel industry. International Journal of
Hospitality Management. 92. p.102745.
Hossain, M., 2020. Frugal innovation: Conception, development, diffusion, and outcome. Journal
of Cleaner Production. 262. p.121456.
Huettl, T. and Rathmayer, S., 2017. The 4P’s of Creativity and Innovation in Engineering.
In Handbook Of The Management Of Creativity And Innovation: Theory And
Practice (pp. 219-235).
Iga, K., 2018. Forty years of vertical-cavity surface-emitting laser: Invention and
innovation. Japanese Journal of Applied Physics. 57(8S2). p.08PA01.
Mamasioulas, A., Mourtzis, D. and Chryssolouris, G., 2020. A manufacturing innovation
overview: concepts, models and metrics. International Journal of Computer Integrated
Manufacturing. 33(8). pp.769-791.
Russell, M. G. and Smorodinskaya, N. V., 2018. Leveraging complexity for ecosystemic
innovation. Technological Forecasting and Social Change.136. pp.114-131.
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