Managing Innovation Assessment

This project report aims to discuss varied innovation theories along with their application as well as future development in organisational context. It majorly talks about two theories, namely, Blue Ocean strategy and Disruptive innovation theory in this project report. Chosen organisation for application of the innovation theory is Hello Fresh which provides meal-kit to their customers on order. They offer meal-kit on the basis of four differential categories, namely, Meat & Veggies, Low calorie food, only Veggie and family friendly. Organisational managers of Hello Fresh has adopted subscription business model whereby, they charge a certain sum of money and allow customers to make a choice among their plans that what kind of dish or ingredient they want.

Managing Innovation
Assessment

Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Theoretical explanation of innovation theories............................................................................3
Application of theories in relation to chosen organisation .........................................................6
Application of theories in context to future development practices ...........................................9
CONCLUSION..............................................................................................................................10
REFERENCES .............................................................................................................................11

INTRODUCTION
Innovation can be described as a concept whereby an establishment undertake to
conceptualise their brand by introducing new products, services, processes and ideas in order to
boost the bottom line (Bansal, 2021). Successful innovations help businesses houses to add up
the value to their processes and methods for making the brand viable and aids in increasing the
profit margins. It is imperative for businesses to bring innovative practices in a constant manner
in order to become competitive in dynamic and rapidly changing environment. For better
understanding of innovative practices, Hello Fresh is taken into consideration. Hello Fresh is a
German based company which is consider as a largest meal kit provider and operate its operation
on a global basis. Company was established in 2011 and has its headquarters at Berlin, Germany.
This project report aims to discuss varied innovation theories along with their application as well
as future development in organisational context. It majorly talks about two theories, namely,
Blue Ocean strategy and Disruptive innovation theory in this project report.
MAIN BODY
Theoretical explanation of innovation theories
Blue Ocean Strategy
Blue Ocean Strategy can be understood as a simultaneous pursuit of introducing
differentiated products or services at low cost which aids company to cater the new market
segment as well as create new demands (Batac and Maymo, 2019). This concept majorly
encompasses a discussion regarding creating as well as capturing uncontested marketplace which
led to make the competition irrelevant. This theory is based on the principle whereby market
boundaries and structure of industry can be reconstructed through the actions and beliefs of
market players.
Blue Ocean Strategy majorly demonstrates how this perspective can challenge an
establishment to look beyond competition and bring some innovative and differentiated products
or services (Bennink, 2020). It is basically based on several principles including creation of new
factors which helps in reducing competition. It also illustrates to tap an uncatered market space
for making the competition irrelevant. It basically depicts on the stance of maximizing
opportunities as well as mitigating risks which aids in increasing the probable chances for
success. Effective application of this strategy assists organisational managers in develop their

market by catering uncontested needs of people which help them to boost their growth and
profitability ratios.
Blue Ocean Strategy is essentially works on a framework which aids in identifying
significant actions which are imperative for value innovation. This framework basically includes:
 Generation of value as well as create industry factors which are not offered by any
establishment before.
 It is imperative for organisational managers to reduce market forces which are are no
significance for organisations.
 Elimination of those factors which are considered as basis of competition in market for a
very long time.
 Introduction of those factors which are relevant to new and uncatered marketplace.
There are varied organisations which have used blue ocean strategy by bringing
innovative practices in their operations which help them to gain competitive advantage (Biazzo
and Filippini, 2021). For instance, business model of Uber whereby they have transformed
transport industry by bringing easy to book cabs. This practice led them to earn more profits
even without owing a single cab.
Another example is of Canon who have adopted Blue Ocean Strategy by producing
customised products for catering their individual segment of customers unlike their competitors
who have focused on large industries and standardised processes. One of the most rated example
of Blue Ocean Strategy is business model of Netflix. In 2000, when organisation operating in
entertainment sector are dealing in video rental stores, Netflix has developed their digital
streaming platform which is uncatered marketplace at that time.
Major limitation of Blue Ocean Strategy is that there are probable chances that customers
might not appreciate the launched product or service as it is new for them. There is a possibility
that customer preferences as well as technology has not been evolved that much that business
house will earn a profit due to introduced product or service.
Disruptive innovation theory
Disruptive innovation theory can be understood as a practice whereby small enterprises
usually which have fewer resources are capable to present a competition for large and well-
established companies (Biemans, 2018). These small enterprises usually enter from the bottom

line of industry and strategies their practices to move up in the market through introduction of
innovative products or services. This happened through a series of steps which includes:
 Large establishments produce or sell those products which have bigger market and
capability of catering diverse customer needs. Meanwhile, they lose their focus on needs
of down market customer segment.
 At this time, small enterprises enter into market and meet uncatered needs of those
downsized market by offering them commodities at lower prices as compared to large
corporates.
 Large establishments do not focus or respond to new entrant in market on a eventual
basis as they continue to concentrate on their profitable segments.
 This situation has made small establishments big and they choose to cater large segments
by introducing innovative products.
 Once, customers of large organisation has moved to small enterprises, disruption has
occurred.
Disruptive innovation is based on the principle of making use of developed technologies
to target the uncatered needs of customers while presenting competition to well-established
establishments (Jiang Ye and Lin, 2021). It has been assessed that contention or desire is the
point which makes the technology or innovation disruptive. For example, people are using
smartphones rather than laptops and desktops for fulfilling their computing needs in an effective
manner. It also comprises of easy web browsing and digital streaming through smartphones.
Technological advancements has make the smartphones to be equipped with updated software
applications, chips and latest processors that essentially supports these functions.
Under disruptive innovation theory, it is required for organisations to require the access
of ignored customer segments as well as technology which assists them to transform their
products or services into an affordable one (Visvizi, 2021). Core requirements in relevance with
disruptive innovation theory are mentioned below:
Enabling technology- In organisational context, it can be understood as technologies and
innovative practices that are changed in a substantial manner regarding improved processes
(Kerzner, 2019). In relevance with disruptive innovation theory, this perspective of enabling
technology has made possible the affordability of differential products to a larger market.
Through this, organisation can use technology for making their business practices viable.

Innovative business model- Organisations use this innovative business model to
concentrate on the varied needs of niche market. As per disruption innovation theory, small
enterprises can search for uncatered diverse needs of customers in order to make their business
profitable and compete with large organisations.
Coherent value network- This network encompasses upstream as well as downstream
partners which are benefited by adopting disruption (Likar, 2021). In order to implement new
business model, an organisations needs to make a shift from their distributors, suppliers and
vendors.
Example of disruptive innovation theory is online platform of Amazon for book selling
without having a physical store. They have adopted new business model of selling books through
online platforms which is a disruption for those who have selling it through a physical store.
Through adoption of disruptive innovation strategy, Amazon has make huge profits as well as
gain large market share. Another example of disruptive innovation theory, International Business
Machine Company (IBM) is an American based company which provides technological-driven
services to varied establishments company is known globally through its disruptive approach of
bringing computer hardware as well as incredible technology. They were first to bring machine
learning as well as artificial intelligence and present it to the world as their innovation.
General Electrics also come with their innovative practices and present competition to
large companies through their international radio stations. It was the GE who has demonstrated
first television broadcast. Disruptive model of Google has continues to bring innovations on a
constant basis which makes it ahead of their competitors. Their main technologies and innovative
practices are their virtual assistant, smartphones and many more.
This theory of disruptive innovation is advantageous for small organisations as they can
search effectively regarding uncontested market needs and bring innovative practices to attract
them (Thornblad, 2018). It also helps in bringing differential modifications in market through
introduction of new technology and innovation.
Adoption of disruption innovative strategy is disadvantages for organisations as it
requires managers of small enterprises to strategise their processes. Small firms which have
adopted disruptive innovative theory have slow growth in its initial period as they offer their
products at lower rates.

Application of theories in relation to chosen organisation
Chosen organisation for application of the innovation theory is Hello Fresh which
provides meal-kit to their customers on order. They offer meal-kit on the basis of four
differential categories, namely, Meat & Veggies, Low calorie food, only Veggie and family
friendly. Organisational managers of Hello Fresh has adopted subscription business model
whereby, they charge a certain sum of money and allow customers to make a choice among their
plans that what kind of dish or ingredient they want. Hello Fresh has developed hundred of
recipes through utilizing varied skills of their professional chefs on a world wide basis. They
provide easy to cook meal which allows customers to buy and follow the instructions depicted on
packets to cook their food in a easy manner. This practice is helpful for those households who do
not want to engage in complicated process of cooking but want excellent taste (Thøgersen,
2021). Meal-kit provided by Hello Fresh is basically a six-step process which takes maximum
3O minutes in cooking food in an easy manner. Another most significant element that is
provided by Hello Fresh is introduction of many new recipes every week in order to make their
plans customizable. Business canvas model of Hello Fresh is as follows:
Illustration 1: Business canvas model
Source: The business model of Hello Fresh. 2022
Explanation of business canvas model in relevance with Hello Fresh are mentioned
below:

Key partners of Hello Fresh are its professional chefs which help them to develop
numerous recipes which ultimately helps to gain massive number of customers. Logistics
companies also considered as their key partners which help them to reach their procured raw
materials to their workshops as well as delivery of finished products to customers.
Key activities of Hello Fresh is to create recipes and perform marketing activities in order
to reach to a large customer base. For developing their recipes they have collaborated with
professional chefs from all over the globe. So that they can provide a variety of recipes to their
customers to make a apt choice.
Key resources of Hello Fresh are their online platforms and customer data which they
record as well as keep in a proctored mode in order to frame varied marketing strategies. They
communicate directly with their customers which provides them insights to make modifications
regarding their value proposition.
Unique value proposition of Hello Fresh are its healthy recipes and ingredients which
they deliver on orders of their customers as per their selected timings through their online
platform.
Managers of Hello Fresh believes in making stronger customer relationship through their
flexible plans. They also offer discounts on customer's starting package as well as for students.
Hello Fresh targeted those customer segment who want to eat healthy and hygienic food with
little or no cooking hassle.
Channels used by Hello Fresh are online platform and home delivery services through
which they can make a reach to their customers in differential countries. They have maintained a
logistics team for effective delivery services.
Cost Structure of Hello Fresh comprises to pay off salaries to their staff, logistics team,
marketing professionals and fees to chefs for creating differential recipes.
Only revenue stream which is presented to Hello Fresh is their monthly subscription
model through which they take orders of their customers.
It has been assessed that Hello Fresh sources their raw inputs directly from the suppliers
which curb the role of middlemen. This practice has made their business operations more
profitable as compared to traditional grocery stores.
At the time, when people wants ready to cook and instant food, Hello Fresh has bring
innovation of their product of meal-kit. As per the blue ocean theory whereby organisation has to

find their blue ocean or innovative stance, managers of Hello Fresh has bring their product. Their
innovative product has helped them to reach to a larger segment of customers as well as makes
the competition irrelevant. As with their innovative product, their subscription model is also
innovative which is not applied by any of its competing company. They have chosen a
differentiated product for entering into market which helps them to perform their activities
without competing. They have chosen uncatered market space that is people who have desire to
cook healthy food but are not doing it because of their busy schedule or incapability to cook
food.
As per the disruptive innovation theory, managers of Hello Fresh enter into market with
their innovative product and subscription model. They have chosen subscription model to
operate their operations which is not used by any of their competing companies (Mao, 2021).
With the help of this process, they can cater the needs of massive number of customers. They
have chosen differentiated technology and customer base in order to present perfect competition
to their competitors. There are numerous online delivery organisations such as Deliveroo, Uber
eats, Food Hub and many more which delivers food to their customers. However, Hello Fresh
has try to create an additional value through their prepared recipes and customizable plans. Due
to their practice, customers are willing to pay premium to them through their subscription model.
As it is considered as a best practice of getting the ready to cook food packets and make
customers empower to determine their dietary practices.
Application of theories in context to future development practices
Organisational managers are all set with their future plans next year. They have estimated
to grow their revenue from 20% to 25% (Hello Fresh Sets its 2022 Growth Plans. 2022). Their
main growth areas encompasses to focus on becoming more sustainable, geographical expansion,
and capturing a bigger share of customer budget for food. Managers of Hello Fresh have
announced to produce more value to their customers by adding more options in their plans which
will help them to making their reach to larger segment of customers. They are planning to add
lunch and dinner menus in their plans in order to make it more attractive.
At present times, Hello Fresh have adopted sustainable practices such as reduction of
food waste as well as carbon emission. Hello Fresh is planning to attain certification of ISO-
500001 for their energy efficiency management. They are also focusing on implementing panel
installation programmes. They are also planning to make huge investment in automation

capabilities which helps them to increase their production level as well as make more profits
(Puhan, 2019). Their plans are flexible in nature as they can cater customer needs through their
differential packages such as family, classic and rapid options.
As per the blue ocean strategy which states that organisations should determine their blue
ocean or uncatered marketplace which helps them to cater the diverse needs of customers
(Petkova, 2018). In future, Hello Fresh is planning to increase their manufacturing processes and
expanding in differential countries which helps them to cater a uncontested customer base.
As per the disruption innovation theory, Hello Fresh is a small enterprise which came with
innovative practices to provide meal-kit which comprises of ready to cook items, spices and
procedure in market for competing with other well-established companies. Now, they have made
their differentiated position in market through their innovative practices as well as subscription
model. Managers of Hello Fresh are now planning to increase their manufacturing process in
order to carer the needs of whole segmented audience. Through implementing sustainable
practices, they are trying to increase their profit margins as well as customer base.
Managers of Hello Fresh can make modifications in their subscription model by
providing free sample to their first customers. They should also make investments in increasing
their marketing activities for reaching large number of people. They should increase shell life of
their products by increase fermentation activities. Through this, their ready-to-cook food can be
preserved for a long period of time and expand their operations in differential countries (Saiz-
Alvarez, 2019). They should made modifications in their packaging practices in order to be more
sustainable.
CONCLUSION
From the above presented information, it has been assessed that it is significant for
organisations to adopt innovative practices in a constant manner which helps them to gain market
share as well as profitability. In order to understand about innovative practices, two innovation
theory have been taken into place. Blue ocean theory depicts that organisations should bring an
innovative and differentiated product or service for catering the needs of uncatered market
place. Disruptive innovation theory states that an small organisation enter into marketplace
through introduction of innovative products or technology present competition in front of bigger
corporates. At their initial phase, they cater the needs of a niche segment in order to moving

further and develop as a large organisation. Companies use blue ocean strategy for searching a
uncatered market in order to make competition irrelevant. Through using disruptive innovation
theory, organisation can disrupt practices of large establishments by bringing some innovative
practices regarding products, services, methods and processes.

REFERENCES
Books & Journals:
Bansal, S., 2021. Managing Innovation in CIM Environments. In Designing Innovations in
Industrial Logistics Modelling (pp. 243-266).
Batac, J. and Maymo, V., 2019. Managing innovation: controls and people. Recherches en
Sciences de Gestion. 130(1). pp.267-289.
Bennink, H., 2020. Understanding and managing responsible innovation. Philosophy of
Management. 19(3). pp.317-348.
Biazzo, S. and Filippini, R., 2021. Managing Product Innovation: A Framework. In Product
Innovation Management (pp. 21-39).
Biemans, W.G., 2018. Managing innovation within networks. Routledge.
Jiang, S., Ye, F. and Lin, Q., 2021. Managing green innovation investment in a Co-opetitive
supply chain under capital constraint. Journal of Cleaner Production. 291. p.125254.
Kerzner, H., 2019. Innovation project management: Methods, case studies, and tools for
managing innovation projects. John Wiley & Sons.
Likar, B., 2021. Managing Innovation in Smart Industries. In Engines of Economic
Prosperity (pp. 21-36).
Mao, Y., 2021. Managing innovation: The role of collateral. Journal of Accounting and
Economics. 72(1). p.101419.
Petkova, I., 2018. Fashion Companies: Organizational Responses to Managing Innovation in E-
Commerce Practice. In Engineering Legitimacy (pp. 49-84).
Puhan, T.X., 2019. Managing Change and Innovation. Available at SSRN 3371800.
Saiz-Alvarez, J.M., 2019. Managing social innovation through CSR 2.0 and the quadruple helix:
A Socially inclusive business strategy for the Industry 4.0. In Organizational
transformation and managing innovation in the Fourth Industrial Revolution (pp. 228-
244). IGI Global.
Thøgersen, D., 2021. Managing innovation on the public frontline: three approaches to
innovation leadership. International Journal of Public Sector Management.
Thornblad, D., 2018. Managing Innovation without Managers: Valve Corp. Journal of Case
Studies. 36(2).
Visvizi, A. ed., 2021. Research and Innovation Forum 2021: Managing Continuity, Innovation,
and Change in the Post-Covid World: Technology, Politics and Society. Springer Nature.
Online:
The business model of Hello Fresh. 2022 [Online] Available through
<https://www.businessmodelsinc.com/business-model-hellofresh/>
Hello Fresh Sets its 2022 Growth Plans. 2022 [Online] Available through
<https://progressivegrocer.com/hellofresh-sets-its-2021-growth-plans-0>