Innovation & Commercialisation

This assignment focuses on differentiating between innovation and invention in business, with a specific focus on Essence Drinks. It explores the importance of innovation for organizations, and how organizational vision, leadership, culture, and teamwork shape innovation and commercialization. The assignment also discusses different types of innovation, the 4Ps of innovation, the use of the innovation funnel, and the developments of frugal innovation. It further explores the process required to commercialize innovation, the importance of the commercial funnel, and the application of new product development (NPD) processing. Additionally, it evaluates methods for protecting ideas and understanding their advantages and disadvantages.

INNOVATION & COMMERCIALISATION

Executive Summary
The project is about a company named Essence Drinks, which has introduced Mango
lassis to the UK market. Lassi being a traditional Indian beverage has been a preferred
soft drink in the UK and the company has earned a good amount of revenue in its first
year. The project will discuss and further enlighten about the different business models
and strategies used by the companies to sustain in the market.
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Table of contents
Introduction........................................................................................................................3
1.0 Explanation of innovation and determination of the difference between invention and
innovation...........................................................................................................................3
Explanation of innovation and determination of the importance to organizations like
Essence Drinks as compared to invention.....................................................................3
Explanation of how organisational vision, leadership, culture and teamwork can help
in shaping innovation and commercialisation for an organisation.................................4
2.0 Explanation of the different types of innovation..........................................................5
Explanation of the 4Ps of innovation and explanation of the use of the innovation
funnel to study and shape innovative ideas in Essence Drinks.....................................5
Explanation of the developments of frugal innovation with examples to show how it is
used in Essence Drinks..................................................................................................7
3.0 Discussion on the process required to commercialise innovation..............................9
Explanation of the importance of the commercial funnel and application of new
product development (NPD) processing for commercialisation of innovation...............9
Building an innovative business case for Essence Drinks, including ways to access
funding..........................................................................................................................10
4.0 Evaluation of the range of methods for protecting ideas and understanding their
advantages and disadvantages.......................................................................................11
Evaluation of the different tools that Essence Drinks can use to develop, retain and
protect knowledge and intellectual property.................................................................11
Conclusion.......................................................................................................................12
Reference........................................................................................................................13
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Introduction
The topic of this assignment is focusing on differentiating between innovation and
invention in business. The emphasis is on Essence Drinks, a company which started
conducting business by offering Mango Lassis to the customers. The product that has
been developed and the idea behind the development have been very effective. In its
first year of business, the company gained reputation and earned revenue more than
what was expected. But three years into the business world in the UK market, the
company is experiencing challenges from competitors. The competitors have also
developed similar products with a range of varieties and at the moment Essence Drinks
are finding ways to take effective measures and attract the customers.
1.0 Explanation of innovation and determination of the difference
between invention and innovation
Explanation of innovation and determination of the importance to organizations
like Essence Drinks as compared to invention
The process of developing and improving the existing ideas in order to design new
versions of products and services is known as innovation. Focusing on innovation
allows the companies to understand the demands and preferences of the customers
and act accordingly to manufacture products for fulfilling the needs of the customers.
Here, the company Essence Drinks had focused on a soft drink which is a traditional
drink of India. Therefore, being a new kind of drink to the citizens of UK, the drink
became very popular and the company actually experienced huge sales in its first year
(Camisón and Villar-López 2014). The idea behind the product is innovative and the need
for an organisation to be more innovative has many benefits, which are as follows:
Ability to adapt to the changes according to customer’s demands
When an organisation focuses on innovation, it understands the market trends better,
hence allowing them to understand the customer’s demands thoroughly. Therefore,
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being an innovative company, the company becomes more customer centric and
customer satisfaction becomes their primary objective. Hence, the products that they
produce are beneficial for the customers and the company also earns huge revenue in
the process.
Broadening globalisation
Understanding the demands of the customers better and serving them relevant
products, makes the brand famous across the borders. Therefore, allowing international
trade which results in boost in sales and the company earning more revenue from the
sales generated from the foreign customers.
Gaining competitive advantage
A company which focuses more on innovation, has a better vision for the future and in
understanding the preferences of the customers. Furthermore, their futuristic approach
allows them to take risks in their business approach and also sets them apart from the
other business organisations. Therefore, companies like Essence Drinks, who took the
risk and introduced a traditional beverage of India had gained the competitive
advantage over other beverages in the UK.
Establishing the best methods for the business
Organisations which do not recognise the resources that they have required for
innovation, understanding the global trends and lacks in taking risks often face
challenges in the future in operating efficiently. Here, Essence Drinks analysed the risk
factors and introduced their product which was liked by the customer base in the UK
and flourished in the UK market.
Explanation of how organisational vision, leadership, culture and teamwork can
help in shaping innovation and commercialisation for an organisation
Organisational vision, leadership, teamwork and culture are important characteristics
that a leader should possess in order to be successful. These key characteristics of a
leader help in guiding the workforce towards the common organisational goal and
achieving the objectives. Furthermore, a leader should have all the qualities and the
qualities should be related to one another in order to guide the company and be
successful (Hogan and Coote 2014). The important relationships are as follows:
Relation between leadership and culture in an organisation
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Maintaining a friendly and cooperative culture within an organisation is the basic
requirement within an organisation. Maintaining professionalism and promoting learning
within the organisation are also few characteristics that should be maintained in the
organisational culture. Leadership behaviour should be maintained by the senior
employees of the organisation, in order to promote teamwork, taking decisions
effectively and also help in guiding the employees to achieve the organisational goals.
In addition to this, a leader should check if the subordinates are technically sound, so
that the employees can be educated and trained in new technological developments to
ease the process of their job profile (Choi and Majumdar 2014).
Relation between teamwork and organisational vision
The leaders and the hierarchy of the management of the company should be aware
about the organisational goals. Therefore, the employees working in the organisation
should have a clear idea about the objectives of the company in the long run. Teamwork
should be promoted within the employees of the company, so that a mutual
understanding and a good inter personal relationship is maintained amongst the
employees. Furthermore, working as a team, allows the employees can share ideas and
discuss the relevant details required to reach the common goals.
2.0 Explanation of the different types of innovation
Explanation of the 4Ps of innovation and explanation of the use of the innovation
funnel to study and shape innovative ideas in Essence Drinks
The 4Ps of innovation comprises to form the innovation mix. These four aspects are
used to investigate the specific areas of business organisation. The 4Ps of innovation
mix are as follows:
Product
This identifies the components that are essential for designing and manufacturing the
products that the company needs in order to manufacture the products. For instance, in
case of Essence Drinks, the management of the company had to determine the
components needed for producing mango lassis.
Process
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The process phase not only identifies the developing or the manufacturing phase, but
also highlights the phases which is related to supplying, selling, distributing and
accounting. Therefore, process can be said to be the phase where the organisation
focuses on manufacturing the products quickly and efficiently by reducing the cost of
production (Ganter and Hecker 2014).
Position
This is a psychological aspect and it is related to the perception of the company from
the point of view of the management of the company itself as well as from the viewpoint
of the customers.
Paradigm
This is related to the category of innovation and it is concerned with the radical changes
that can be brought about in the organisation.
Figure 1: The 4Ps of innovation mix
(Source: Ganter and Hecker 2014)
The innovation funnel is used to examine and describe the steps which are involved in
developing products. The aim of the innovation funnel is to refine the ideas related to
the manufacturing process of a product in order to fulfill the needs of the customers
economically. The various steps involved in innovation funnel are as follows:
The wide section of the innovation funnel
This part of the funnel is the widest compared to all the other part of the innovation
funnel. Here, the company Essence Drinks gathers all the necessary information
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required from the market in order to develop their products. Therefore, this stage signify
the phase where the organisation gains knowledge and details.
The narrow section of the innovation funnel
This part of the innovation funnel signifies the investigation of all the information that
has been gathered by Essence Drinks from the market. The information and knowledge
that has been collected are then screened through to check if they are matching with
the organisational goals. After the screening process, the rate of risk and the rate of
returns is assessed to implement the ideas (Camagni 2017).
The narrow end section of the innovation funnel
In this phase, the company assesses if the ideas are delivering the expected results
which are required for the smooth performance of Essence Drinks in the market. As per
the results of the assessment of the third stage of the innovation funnel, Essence Drinks
then plans to launch their products in the market.
Figure : Functioning of the innovation funnel
(Source: Camagni 2017)
Explanation of the developments of frugal innovation with examples to show how
it is used in Essence Drinks
The process of reduction of complexity and expenses for production of the products
required for manufacturing by removing the non essential features from a product, to
sell the products in the markets of the developing countries, is known as frugal
innovation. There are some aspects of frugal innovation which are as follows:
Matrix for frugal innovation
This identifies the similarities between two frugal innovations that Essence Drinks is
manufacturing. The basic idea behind this is to manufacture products that are related to
the core products which is being produced by the company. Here, Essence Drinks is
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manufacturing mango lassis, so in order to develop other products and also maintain an
economic manufacturing cost, the company should produce products which are not
much different to their base product. Essence Drinks can incorporate strategies wherein
they can manufacture lassis of different flavours. Previously, they manufactured mango
lassis, now they can focus on offering lassis which are based on other fruits like
pineapple, watermelon and so on.
Drawbacks of the matrix
This type of frugal matrix is a directional matrix in contrast to the frugal matrix. It
identifies the areas where the company can face problems in the long term and can
falter in achieving the long term goals. In addition to this, regarding Essence Drinks, the
company can face challenges in the market to boost its sales, if the drink is considered
to be unhealthy and the drink is not preferred by the customer base. In these situations,
the customer base can opt for other soft drinks which are available in the market
(Cajaiba-Santana 2014).
Solution to the matrix
The solution to the potential problems that Essence Drinks can face, lies in the
company’s ability to manufacture and offer customers with a range of products. If
Essence Drinks can develop a product which is more diverse and offers a variety rather
than focusing only on mango lassi, then the customers would get to exercise their
personal options and buy the products as per their taste. Furthermore, the Essence
Drinks company can request customers to provide feedback regarding their products
and can also request the customers to help them with their personal preferred taste.
Therefore, the company would be able to get an idea about the preferences and can
manufacture customer centric products to retain the customers and attract more
customers in the future (Borrás and Edquist 2013).
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3.0 Discussion on the process required to commercialise innovation
Explanation of the importance of the commercial funnel and application of new
product development (NPD) processing for commercialisation of innovation
New product development or NPD is a process which is used to analyse the market
situation and introduce a new product in the market. It can also be said that new product
development process basically transforms the market opportunity in order to boost the
chances of selling a product.
The commercial funnel is a business model wherein the companies can analyse the
information from the market situation and gain knowledge from the market to strategize
and take necessary measures to develop the products according to the needs and
demands of the customers. Implementing the commercial funnel model also helps the
organisation to analyse the market situation effectively and also allows the company to
understand the pricing policies that need to be set for the products that have been
produced by them. The steps involved in new product development are as follows:
Gaining knowledge
The marketing management team analyses the market and their company’s situation by
using SWOT analysis and other business models to gain knowledge about themselves
as well as about the competitors in the market.
Analysing the idea
The knowledge that has been gained from the market is then analysed by the board
members and a concrete idea is formulated which would fulfill the organisational goals
of the company. The members of the board will assess the strengths and the
weaknesses of the company to finally come to a plan which would be implemented to
achieve the goals (Ellis et al. 2014).
Framing business strategy
After careful analysis and discussion among the board members, the hierarchy of the
company reaches to a final concrete idea which is then implemented in the market to
achieve the objectives of the organisation.
Developing the relevant products
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The idea and knowledge that has been obtained from the market situation, makes the
company understand about the demands and preferences of the customers. Therefore,
based on the knowledge gained from the market the company then plans to serve and
offer products to the customers with an aim to earn revenue.
Marketing test
After the market knowledge is obtained by the company, the company decides on
production of a few number of quantities of the product as prototype. Now, the prototype
products are offered to the customers in the market and the reviews and feedback of
the customers are retrieved. These reviews and feedback are used for further
development of the products.
Building an innovative business case for Essence Drinks, including ways to
access funding
Building an innovative idea requires a lot of market knowledge and a thorough survey of
the market. In order to develop products based on the tastes and preferences of the
customers, the need to understand their needs and demands is very important. Here,
the company in focus is Essence Drinks and the need to identify the demands of the
products that the company produces is very essential for the company. In addition to
this, the company needs to assess the pricing policies of the products that they produce
in order to sustain in the market and tackle the challenges from the rival companies.
Furthermore, allocating budget and convincing the investors to invest in their company
and products requires a lot of effort from the management of the company.
Essence Drinks being a soft drinks company has only one product to offer to the
customers. Here, the company has chances for improvement by producing a wide
range of products for the customers which will appeal to them and would also boost the
sales for the company. Essence Drinks can use the commercial funnel model to study
the market thoroughly and the studies that would be conducted by the team from the
company would help them in developing the appropriate products for the customers.
Therefore, the company would be able to get an idea about the preferences and can
manufacture customer centric products to retain the customers and attract more
customers in the future. This is related to the category of innovation and it is concerned
with the radical changes that can be brought about in the organisation.
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4.0 Evaluation of the range of methods for protecting ideas and
understanding their advantages and disadvantages
Evaluation of the different tools that Essence Drinks can use to develop, retain
and protect knowledge and intellectual property
There are a variety of methods that Essence Drinks company can use to retain and
protect their knowledge base and intellectual property. The effective methods which the
company can incorporate for protection of their knowledge and intellectual properties
are as follows:
Seeking professional help
Seeking professional help is one of the easiest way to protect knowledge and
intellectual property for Essence Drinks. The company can hire lawyers and can file
cases against companies or individuals if they try to copy their brand name and designs.
Knowledge about intellectual rights
Trade marking and branding the products produced by the company is essential for
protecting its products from duplicity. Furthermore, issuing copyrights for the logos and
the other symbols that are used by the company is also a good strategy to protect the
rights of the company. The management of the company can also register the brand
name to protect the products produced by the company from getting duplicated or
pirated.
Protecting it for innovation
Most of the innovated products require huge amount of investments. Protecting the
rights of the products is essential, since disclosure of the confidential details can lead to
further development of the similar products by other brands.
Being realistic about the things that can be protected
Essence Drinks should understand the fact that not everything can be protected.
Therefore, there are chances that details would be leaked out in the market. But what
the company can do is to assess what are the details that need to be kept secret and
prevent them from getting known to all. The suppliers of the company should also be
careful about the loyalty of the suppliers of the products to them, since the direct
suppliers have information about the company’s products (Alegre and Chiva 2013).
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Confidential business information
Maintaining confidentiality in business process is also important to sustain in the market
with the core products that Essence Drinks produce. The ingredients and the
composition of the core products that the company produces should be confidential.
The company should also monitor the employees working within the organisation to
check if the details of the products are not leaked in the market. Since, the product
recipe is the main thing that has helped the company to achieve the business objectives
and capture the market.
Conclusion
On completion of the studies and the researches on Essence Drinks, it has been
identified that the strategies and the risk that the company took previously has been
very fruitful. Further studies have identified the various types of models that companies
can incorporate to gain knowledge and compete with other companies in the market. In
addition to this, the studies have also revealed the need to protect the knowledge base
and the intellectual property of Essence Drinks.
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Reference
Camisón, C. and Villar-López, A., 2014. Organizational innovation as an enabler of
technological innovation capabilities and firm performance. Journal of business research, 67(1),
pp.2891-2902.
Hogan, S.J. and Coote, L.V., 2014. Organizational culture, innovation, and performance: A test
of Schein's model. Journal of Business Research, 67(8), pp.1609-1621.
Choi, N. and Majumdar, S., 2014. Social entrepreneurship as an essentially contested concept:
Opening a new avenue for systematic future research. Journal of Business Venturing, 29(3),
pp.363-376.
Ganter, A. and Hecker, A., 2014. Configurational paths to organizational innovation: qualitative
comparative analyses of antecedents and contingencies. Journal of Business Research, 67(6),
pp.1285-1292.
Camagni, R., 2017. Technological change, uncertainty and innovation networks: towards a
dynamic theory of economic space. In Seminal Studies in Regional and Urban Economics(pp.
65-92). Springer, Cham.
Cajaiba-Santana, G., 2014. Social innovation: Moving the field forward. A conceptual
framework. Technological Forecasting and Social Change, 82, pp.42-51.
Borrás, S. and Edquist, C., 2013. The choice of innovation policy instruments. Technological
forecasting and social change, 80(8), pp.1513-1522.
Ellis, S.C., Gianiodis, P.T. and Secchi, E., 2014. Advancing a typology of open innovation.
In Open Innovation Research, Management and Practice (pp. 39-85).
Alegre, J. and Chiva, R., 2013. Linking entrepreneurial orientation and firm performance: the
role of organizational learning capability and innovation performance. Journal of Small Business
Management, 51(4), pp.491-507.
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