Managing Innovation in Business - Desklib

This report covers managing innovation in business, organization & industry overview, existing innovation performance & capabilities, industry in 2021 & beyond. It also includes PESTLE analysis, Porter's five force model, SWOT analysis, strategic capabilities, value chain analysis, and Pentathlon Frameworks model. The report focuses on Rimmel, a British cosmetic brand, and its new product, Organic Lipstick.

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Managing
Innovation in
Business

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Executive Summary
The act of bringing things new or even doing something in a creative manner is referred
to as innovation. In business, innovation varies from creativity in that the former is commonly
linked with the development of new ideas. In contrast, innovation is the process of taking
fresh ideas and putting them into action in the industry. The goal of innovation is to reduce
unit costs. It may be accomplished by increasing the company's manufacturing capacity
and flexibility, allowing it to capitalise on economies of scale. The aim of the report is to
highlight the overview of organisation and industry in which the company is operating. Also,
it showcases the performance and capabilities of firm by using different analysis and the
industry in 2021 and beyond.

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Table of Contents
Executive Summary..............................................................................................................................2
Introduction..........................................................................................................................................4
The Organisation & Industry Overview............................................................................................4
The Organisations Existing Innovation Performance and Capabilities............................................5
Strategic capabilities.........................................................................................................................8
The Industry in 2021 and Beyond.....................................................................................................9
Conclusion...........................................................................................................................................10
References..........................................................................................................................................12

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Introduction
Innovation refers to the procedure which a person or firm undertakes to conceptualize
brand new products, idea and processes to existing commodities or ideas in an innovative
manner. Rimmel is a British cosmetic brand which was established by Eugene Rimmel as
perfumery in 1834, London, UK. This organisation serves their customers into many
countries such as USA, Canada, France and so on. In this report, it covers the organisation
& industry overview. Along with this, organisations existing innovation performance and
capabilities and industry in 2021 and beyond is mentioned.
Purpose of report and Structure
The main aim of this report is mainly to conduct the company as well as industry
analysis so that it can drive innovation at workplace. It also examines the existing innovation
capabilities and performance of the firm so that a new innovation can brought. Moreover, this
report also covers the industry overview of the year 2016.
The Organisation & Industry Overview
The Organisation and its Innovation History
UK is among the three leading cosmetic consume in Western Europe behind France
and Germany. In 2017, there was boom when the cosmetic industry's market value reached
to 9.8 million British pounds and it was worth 27 billion British pounds in 2020 and ranks as
the seventh largest cosmetic market across the globe (Herath, Herath and D'Arcy, 2017).
Rimme is a cosmetic brand which was started in 1820 by Rimmel. Rimmel is presently the
bestselling brand of UK and sold products in 40 nations across the globe.
4Ps of Innovation Space
Product innovation: The organisation is offering a new product which is Organic
Lipstick. This lipstick would be made up of organic products such as mangnifera indica
(mango butter), almond oil, shea butter and so on.
Process innovation: Rimmel could make attractive advertisements and promote
their new product by different marketing strategies such as print media, broadcasting media
and social media.
Position innovation: The firm would make themselves position to all those
consumers who are inclined more towards using organic products. It would be beneficial to
target these customers (Oeij and et. al., 2019).

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Paradigm innovation: Rimmel uses indirect distribution and they sold in
supermarket or pharmacies and chemists. The organisation would continue to sell using
indirect distribution method as people are aware of this fact that Rimmel is not having any
particular store.
The firm's innovation strategy would follows a radical strategy as they are coming up
with a new product which is Organic Lipstick. Along with this, the process would be new and
innovative for promoting of new product.
The mapping of Rimmel
Rimmel was started in 1820 and after 10 year, Rimmel started their own perfumery
which is known as The House of Rimmel. In 1844, Rimmel son's Eugene has gained skilled
of perfumer, cosmetic genius and marketing pioneer. Rimmel was one of the first to create
mouth rises, scented pomades and perfumes. Eugene was become most known for creating
first non-toxic mascara. In 1887, both the sons of Rimmel created cutting edge mascara.
After World War II, Rimmel launches their colour ranges and had become the first cosmetic
brand to use modern packaging and self selection dispenser (Building the Brand: The
History of Rimmel, 2021).
Earlier the organisation was selling make up products which does not include any
organic vegan product. Rimmel is introducing a new Organic Lipstick which is made up of
organic ingredients. This product would be able captivate the attention of customers easily
as Rimmel is already having their established customer base and it would be easy for them
to launch the new product. As the organisation do indirect marketing, it would be more
beneficial to distribute into different stores as people already aware regarding the availability
of the product (Watkins and Anderson, 2019).
The Organisations Existing Innovation Performance and
Capabilities
PESTLE analysis
Political factors: EU is having the policy of mentioning ingredient and over
500 nations have been banned for not obeying the rule.
Economic factors: The cosmetic industry is highly resistant to economic
recession as the economic condition of UK has created huge impact on the sales
which contains economic unproductivity.

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Social factors: The social factor that Rimmel could face is related with recent
trend no make selfie which encouraged customers to upload their bare face pictures
into social media. This would create a negative impact on the sales of organisation
(Matthews and Wrigley, 2017).
Technological factors: Rimmel has its own application where the user could
try out other individual's make up styles by using personalised augmented reality
mirror. Legal factors: Rimmel obeys to all the legalities and rules which are required
for the production of cosmetic. Their website states that they comply with the strict
worldwide regulations such as China.
Environmental factors: In terms of business innovation, Rimmel is enabling
their aims of establishing sustainable and ecologically responsible enterprise.
Porter's five force model
Threat of new entrant: The threat of new entrant is low for Rimmel as there
is a huge cost of entry. Creating unique cosmetic product needs lot of resources in
terms of research and development and manufacturing process.
Bargaining power of customers: The bargaining power of customers would
be high for Rimmel as there is increased competition and availability of cosmetic
products from various manufacturers (Giannetti and et. al., 2017).
Bargaining power of supplier: The bargaining power of supplier would be
low for Rimmel as there is high number of players and large supply of diverse
commodities to market.
Threat of substitutes: Threat of substitute would be high as there are many
competitors. If the manufacturers sell products at higher prices then customers are
able to buy substitutes from many rival firms which are present in the market
environment.
Intensity of rivalry: The intensity of competition is high for Rimmel as there
are various firms which are also working under cosmetic industry and it would
difficult market for new firm (Konsti-Laakso and Rantala, 2018).

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SWOT ANALYSIS
Strengths
 They are able to have a strong
brand among target audience.
 They concentrate on the London
based brands which acts as an
incentive for foreign market
(Nußholz, 2018).
Weaknesses
 They have narrow target market
which is primarily for 16 to 24
years old.
 They do not deal with organic
products.
Opportunities
 They could introduce organic
products
 They could do horizontal
integration into skin care hair care
and fragrance market.
Threats
 There are price wars in
cosmetics brands are
continuously running price
promotion.
 There is high level of
competition in the cosmetics
industry.
Resources -
● Physical resources: Resources such as the machinery and the production ability of
the firm. Physical resources of Rimmel include the production of make-up products.
The natures of such resources such as the make-up products are for age 16 to 24
and they are available at all locations where they are catering in different countries.
● Financial resources: Resources such as capital, cash, debtors and creditors and
suppliers of funds are utilised for developing their products (Fiore and et. al., 2017).
● Human resources: Resources such as skills and knowledge of workers which are
used for organisation function and achieve the goals and objectives of firm.
● Intellectual capital: The intangible resource such as patents, brands, business
systems and customer databases are considered as major assets of firm. The

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organisation would make sure that they are able to secure their intellectual capital in
order to run their organisation and manufacture products.
Strategic capabilities
Value of Strategic Capabilities: The organisation is developing make-up
product which are popular in UK. The firm make sure that they do not involve animal
cruelty which makes the customer buy the product.
Rare/Unique Strategic Capabilities: The organisation has very limited
products which is a rare capability for them as they do not deal with many varieties of
products such as their lipstick are of limited collection (Thomas and Autio, 2020).
Inimitable strategic capabilities: The organisation is launching new product
which is organic lipstick. This product is very new for the firm to launch and they
would had already existing customer base which would be easy for them to sell their
product.
The Value Network or Value Chain Analysis
Value chain analysis is a method of assessing each activity in a firm's value
chain in order to determine where possibilities for improvement exist. The primary
activities are those that are directly associated with the creation and delivery of a
product. They are classified into five major categories such as inbound logistics,
operations, outbound logistics, marketing and sales and service. Inbound logistics
refers to products acquired from the organization's suppliers and utilised in the
production of the final product.
Operations are the process through which raw resources and commodities
are transformed into a finished product (Nurmala, de Leeuw and Dullaert, 2017). As the
product progresses through the production process, value is added to it. When the
items are finished, they are ready for transportation to distribution centres,
wholesalers, retailers, or consumers. Outbound logistics refers to the distribution of
finished commodities. Marketers should ensure that the product is marketed to the
effective customer group.
Support activities assist main activities in achieving the organization's
effectiveness. Procurement, technological development, human resource
management and infrastructure are the four primary areas of support activities.

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Pentathlon Frameworks model
This framework consists of five elements that are used for the optimum performance.
It includes-
 The method of the idea generation in response to the challenges and problems.
 The process for the prioritisation and selection of the ideas with the incomplete
information.
 The strong skills of project management
 The innovation strategy to identify where the innovation is required to influence and
guide the selection of idea.
 The enterprise culture which can manage tension in taking the risk.
The Industry in 2021 and Beyond
From the above, it can be encapsulated that Rimmel is one the famous
cosmetic firm which is running from many years. The organisation was started in
1884 and it is best known for mascara. Rimmel was first one to create product such
as mouth rinses and pomades and now they are the world’s most popular make up
producers. They are able to cater various countries such as USA, China, Canada

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and so on. Rimmel was founded in 1820 and after ten years, Rimmel established
their own fragrance, known as The House of Rimmel. Eugene Rimmel, Rimmel's
son, became a perfumer, cosmetic genius and marketing leader in 1844.
Rimmel was a pioneer in the development of mouth rises, scented pomades
and fragrances. Eugene is most recognised for developing the first non-toxic
mascara (Perera and Abeysekera, 2020). Both of Rimmel's sons invented cutting-edge
mascara in 1887. After WWII, Rimmel introduces new colour lines and becomes the
first cosmetic company to employ contemporary wrapping and a self-selection
distributor. Previously, the company sold make-up items that did not provide any
organic or vegan products. Rimmel is launching a new Organic Lipstick made with
organic materials. As the company is very new to produce product made up of
organic resources, the item would readily get the attention of consumers because
Rimmel already has a large client base so it would be simple for them to introduce
the new product. Also because organisation uses indirect marketing, it would be
much more effective to offer the goods in other places where consumers are already
aware of its existence.
During the forecast period, the market for cosmetics in the United Kingdom is
expected to grow at a CAGR of 3.89 percent (2020 - 2025). Considering economic
uncertainty and Brexit, the UK cosmetics goods industry is anticipated to increase at
a steady rate throughout the projection period. The expansion of the cosmetics
goods market in the United Kingdom matches the expansion of the wider European
market, which is characterised by a rising emphasis on quality, premiumization and
the growing position of local firms. As COVID 19 has created impacted on
everyone’s life, the industry has reacted favourably to the issue, with companies
shifting production to manufacture hand sanitizers and cleaning agents and giving
free beauty treatments to frontline emergency staff (Naulleau and Swetchine, 2020). At
the very same time, industry professionals have a duty to do everything in their
power to guarantee that their firms survive. The worldwide beauty business
generates $500 billion in sales each year and employs millions of people, both
directly and indirectly.
In order to smoothly run in the market, the organisation could came up with
different variety of cosmetic products such as by using vegan resources and

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organisation. People are more inclined towards using sustainable as well as skin
friendly products and this would be a great opportunity for Rimmel to increase their
sales.
Conclusion
From the above discussion, it can be concluded that innovation is critical in the
business as it provides firms a competitive advantage in entering new markets
quickly and creates a stronger link to growing markets that might lead to larger
prospects. This could also contribute in the development of creative thoughts while
providing the inventor with a proactive mindset that allows them to take. In this
report, it includes overview of organisation and industry in which it operates. Along
with this, PESTLE analysis, SWOT analysis, Porter’s five forces and value chain
analysis are mentioned for analysing the performance and capabilities. Moreover,
the industry in 2021 and beyond is also mentioned.

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References
Book and journals
Fiore, M and et. al., 2017. Understanding the relationship between green approach and
marketing innovations tools in the wine sector. Journal of cleaner production, 142,
pp.4085-4091.
Giannetti, R and et. al., 2017. Managing Costs Through Business Model Servitization: A
Strategic Management Accounting Perspective on the RESOLVE Project. In Global
Conference on Services Management (GLOSERV 2017) (pp. 66-67).
Herath, T., Herath, H.S. and D'Arcy, J., 2017, June. Managing security in organizations:
Adoption of information security solutions. In Proceedings of the 2017 ACM
SIGMIS Conference on Computers and People Research (pp. 87-88).
Konsti-Laakso, S. and Rantala, T., 2018. Managing community engagement: A process
model for urban planning. European Journal of Operational Research, 268(3),
pp.1040-1049.
Matthews, J. and Wrigley, C., 2017. Design and design thinking in business and management
higher education. Journal of Learning Design, 10(1), pp.41-54.
Naulleau, G. and Swetchine, N., 2020. Managing “Large Projects” through the Covid-19
crisis. Managing a Post-Covid19 Era, p.160.
Nurmala, N., de Leeuw, S. and Dullaert, W., 2017. Humanitarian–business partnerships in
managing humanitarian logistics. Supply Chain Management: An International
Journal.
Nußholz, J. L., 2018. A circular business model mapping tool for creating value from
prolonged product lifetime and closed material loops. Journal of Cleaner
Production, 197, pp.185-194.
Oeij, P. R.and et. al.,2019. Understanding social innovation as an innovation process:
Applying the innovation journey model. Journal of Business Research, 101, pp.243-
254.
Perera, J. and Abeysekera, R., 2020. Exploring the role of social innovation in developing
sustainopreneurship: a new approach to managing the triple bottom line in
SriLanka. International Journal of Social Entrepreneurship and Innovation, 5(4),
pp.317-334.
Thomas, L. D. and Autio, E., 2020. Innovation ecosystems in management: An organizing
typology. In Oxford Research Encyclopedia of Business and Management.
Watkins, E. A. and Anderson, C., 2019. Managing Journalistic Innovation and Source
Security in the Age of the Weaponized Internet.
Online
(Building the Brand: The History of Rimmel, 2021) [Online] Available through;
<https://cavesocial.com/rimmel/>