Impact of Innovation on Commercialization

The assignment discusses the importance of innovation in commercialization, highlighting key factors such as firm size, industry type, and R&D efficiency. It also examines the role of open innovation, intellectual property, and commercialization strategies in enhancing business outcomes.

INNOVATION AND
COMMERCIALISATION

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1: Innovation and its importance to organisation in comparison with invention.................1
P2. How organisational vision, leadership, culture and teamwork can shape innovation and
commercialisation...................................................................................................................2
TASK 2............................................................................................................................................3
P3:The 4Ps of innovation and use of the innovation funnel...................................................3
P4: Frugal innovation and its use in organisation..................................................................4
TASK 3............................................................................................................................................5
P5: Commercial funnel with application of New Product Developments.............................5
P6: Develop innovation Business Case..................................................................................7
TASK 4............................................................................................................................................9
P7.The different tools that organisations can use to develop, retain and protect knowledge and
intellectual property................................................................................................................9
CONCLUSION................................................................................................................................9
REFRENCES.................................................................................................................................10

INTRODUCTION
Innovation refer to transforming the creative idea into production of goods and services
which further leads to satisfaction of needs and wants of customer (Chun, Chung and Bang,
2015). For the better understanding, discussion is made on Essence Drink that basically sell
mango lassi in the markets of UK. In the initial years, the sales of company was high. After that
when it reached to third year, company experienced decline due to the competitive pressure. This
report cover following topics such as explanation on innovation and its importance for
organisation. How the vision, culture, leadership as well as teamwork helps to shape innovation
and commercialisation. Along with that emphasise is made on 4Ps of innovation. Moreover,
development in frugal innovation in respect to organisation context as well as importance of new
product development. Further, build innovation business case, tools used by organisation to retail
as well as protect knowledge (Sonne, 2012).
TASK 1
P1: Innovation and its importance to organisation in comparison with invention
Innovation refers to the creative thought or new imagination of people to do things
differently. It leads to positive change in the society as the innovator find new methods to cater
the demand of people. It either leads to development of new product or bringing additional
change in the existing product. In context to Essence drink which sell mango flavour lassi. as
people have different taste and preferences due to which they can cater each need successfully.
Therefore, significance of for organisation are defined below (Aarikka-Stenroos and Lehtimäki,
2013):
 Innovation helps to gain competitive advantage over competitors by increase the demand
or sales of product.
 Innovator either identify the problem or opportunity and accordingly take measure to
satisfy the need of customer. (Mazzarol and Reboud, 2017).
 It catches the attention of customer due to which it comparatively become easier for them
to build a brand loyal customers.
Comparison between Innovation as well as Invention
This is clearly stated that invention is the process of creation of the new product which is
never made before and on the other hand, Innovation is the process of making changes in the
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existing product so that the firm can increase their sale and maximise more profits. Here is the
comparison chart which will define better about both terms -
Basis of Comparison Invention Innovation
Definition Invention refers to establishing
that product which has not
produced before. It emphasises
on out of box thinking ability
due to which company become
successful in launching unique
invention.
Innovation basically refer to
bringing change in the existing
product. This addition of
attributes further benefits the
company (Maritz and
Donovan, 2015).
Required Skill It requires strong
determination, in depth
knowledge as well as financial
support.
Require research and
development work to identify
the existing need, good
marketing as well as technical
skill (Hemphill, 2014).
Concentrate Emphasise on invention of
single product.
Innovation emphasize on
various product like launching
various flavour of lassi.
P2. How organisational vision, leadership, culture and teamwork can shape innovation and
commercialisation
Organisation can only function if it has clear vision, culture, effective leadership as well
as promotion of team work. In relation to Essence drink have clear objective that they have
increase the sales of their innovative product that is mango lassi. This will help the organisation
to shape its innovation and commercialisation.
Vision: Vision basically refer to the objective of organisation that it wants to achieve in
long term. Herein, Essence drink’s vision is to cater the large audience of UK by providing them
quality services. Due to which they bring innovation in their existing product which helps them
to shape innovation and commercialisation.
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Culture: Culture refer to norms or guidelines of company that each member has to
follow within its internal environment. In context to respective company, it keeps their culture
positive which helps to create synergy with the working area and lead to creative thinking ability.
Along with that company adopt task culture so that work gets delegation based on the
specialisation of personnel which further helps to shape innovation as well as commercialisation
(Abdul Razak, Murray and Roberts, 2014).
Teamwork: Teamwork helps in bringing coordination and better accomplishment of
task. In related to, Essence Drink promote coordination and cooperation within the team work by
welcoming the opinions or viewpoints of group member. This further helps to shape the
innovation as well as commercialisation.
Leadership: An effective leader is one that encourages as well motivate its member to
achieve the organisation objective successfully. Essence Drink can adopt participative leadership
style to shape the innovation and commercialisation. Further, such style creates the transparency
by considering the valuable opinion of team member. This landed up in making good bond
between employer and employee.
TASK 2
P3:The 4Ps of innovation and use of the innovation funnel
The four P's of innovation includes product, process, position as well as paradigm. Its
purpose is to give an organisation direction to carry forward their innovative product.
Product: Product refer to the item that company offers to the ultimate consumer. Like in
Essence Drink brought innovation by adding up various more flavous in their drinks. Therefore,
various varieties of lassi are the product of company on exchange of which they generate
revenue from audience.
Process: Process refer to supply of product to the customers, it even includes the role of
workforce in making the product available to the customer. Further, selected company adopt well
structured process that does not create gap between demand and supply. Along with that it grab
the attention of potential audience by minimising the waiting time.
Position: It depict the existing position of company in comparison to competitor. This
helps the Essence drink to identify the changes they can make to increase the sales and
accordingly standards are set to achieve the expected position.
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Paradigm: The purpose of innovation is to improve the business and increase the
profitability. Essence drink here simply identify the preference of customer and how they are
changing with time. Simultaneously they can work upon their innovative ability to sustain in
dynamic environment.
Innovation Funnel: It starts with the idea and ends till final production it is basically
used to manage the functioning of new product development process. The significant parts of
innovation funnel are defined below:
Opportunity Assessment: With this, data is collected regarding the expectation as well
as customer requirement. Further, such data can be used by selected company to bring positive
result due to innovation.
Insight based Ideation: It include activity like brainstorming, market research as so on
to identify the opportunity. Accordingly, the strategy is established by selected company.
Evaluation and Benchmarking: Within this stage, sample of the product that is
flavoured mango lassi are sold to the customer. Then based on the review as well as feedback of
customer changes are adopted by company.
Go/No Go: Based on review, decision is made that whether the new innovate product
should be launched in the market or not. It brings clarity which further saves the time as well as
cost of company.
Launch: At this stage Essence drink will launch the innovative product in the market in
order to generate revenue for company. Thus, people of UK enjoyed its taste.
P4: Frugal innovation and its use in organisation
Frugal Innovation: Frugal Innovation refers to the innovation by reducing the
unnecessary cost while production and development of goods and services. Moreover, it focuses
to eliminate those features that are non-essential for innovative product. In context to Essence
Drink has come up with flavoured mango lassi to enhance their product sales.
New Market opportunities: Market opportunity is identified once the company analyse
the strategy adopted by its competitor. Then based on it, innovation is adopted like launching
various flavoured lassi in market. This helps the markets to gain monopoly right over its product
in the marketplace.
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Resources: Here attention is paid on the resources required by organisation for the
development of innovative product. Thus, respective organisation must consider it at advance so
that they don't feel difficult in preparation of product.
Innovation funnel: It include stages of development of product thus, each stage needs to
be treated carefully so that flavoured lassi can increase the footfall for its company.
Therefore, all these three things that is innovation, opportunity as well as resources are
most essential component of frugal innovation which needs attention of company so that they
can accomplish their standards. Further, there are two significant section which are defined
below (Cunningham, 2013):
Problem: At the time of launching new product company can face various problems. So
it is vital for company to identifying the problem like lack of resource and find its solution before
launching flavoured mango lassi.
Gain attention of customer: The purpose of respective company is to increase the sales
of its product. For this purpose, it needs to select best channel of promotion like social media
that can enhance the sales of company within their geographical market successfully.
TASK 3
P5: Commercial funnel with application of New Product Developments
Commercial funnel is also known as sales funnel as it depict the customer's journey
while purchasing product or services (Tsai, 2015).
Importance of commercial funnel
 Sales funnel helps in the adoption of appropriate marketing strategy that helps in the
success of business by increasing the sales of product for long run.
 Helps in easy identification of target market that further helps to build large customer
base.
Commercial funnel is further classified into various phases which is described below:
Pricing Policy: Commercial funnel is responsible to set the price of innovative product.
In relation to Essence drink, commercial or sales funnel has kept its price moderate. This is
because every customer can afford it and find the price worth paying.
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Helps in growth of business: It helps in increasing the sales of company's product so
that company can cater the expectation of ultimate consumer. Therefore, it finally helps in
growth as well development of business to achieve long term sustainable success.
Adoption of advance technology: In order to gain competitive advantage and improve
the process function company adopt the advance technology to provide the innovative product
that is flavoured lassi. Along with that, various promotional tools are used to make the customer
aware about the existence of product.
Implement investigation programmes: After analysing and preparation of innovative
product is launched in the competitive market with the assistance of commercial funnel
(Robertson, S.L., 2014).
New Product Development process for Essence drink
Idea generation: It is the first stage of new product development. idea can come from
anywhere like from personal experience or from various sources. Like, internal source , market
research, SWOT analyses, competition as well as from the feedback of customer. Thus, the idea
of brining mango lassi emerged from analysing the taste of customers.
Idea screening: Numerous idea can come across in a day so it is significant to filter the
idea. This helps in finding the most relevant as well as feasible idea. Like, Essence lassi find that
their ideas of adding up mango flavour worked in favour of company. This helped the company
to categorise it under relevant idea (Wynarczyk, 2013).
Concept development and testing: Once the innovative idea passes from screening
stage then it is presented in form of concept. In context to Essence drink they selected the
customer and presented their concept of preparing mango lassi forward. This finally helped
company finalisation or test the product.
Business strategy analysis and development: If the concept passes from the testing
stage, then it leads to finalisation of concept. Moreover, here Essence drink prepares the business
strategy such as marketing mix, branding, positioning and so on for the innovative product.
Product Development: Here intangible concept is transformed into actual product.
Moreover, at this stage selected company started preparing mango flavour lassi for the local
resident of UK.
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Commercialisation: As per the marketing strategy, innovative product that is mano
flavoured lassi launch in the market. Thus, due to which company used various promotional tools
to enhance its sales.
P6: Develop innovation Business Case
Business case is a well-structured process used to initiate the project for the development
of innovative product. Thus, business estimate the overall budget for the development of
innovative business case. Therefore, business case following things are required:
Executive Summary: It contains internal factor such as SWOT analysis as well as
external analysis like pestle. Such marketing strategy helps while preparing the summary of
innovative product. Thus, on the basis of this mango lassi is prepared for the growth of business.
Mission statement: The mission of Essence company is to provide quality product that
is mango lassi to the consumer by satisfying their requirements. Perhaps it will help the
company to increase the sales which company used to receive in their initial years (Mc Manus,
2012).
Resources: Required resources needs to be utilised effectively as well as efficiently for
the preparation of innovative product.
Market analysis: It is basically conducted so that the market can explore the emerging
needs of customer based on which adoption and innovation decision are taken.
Cost and benefit analysis: As per the basis of market analyses the estimated cost as well
as profit margin are identified by the company. This will help them in future to achieve long term
advantage.
Total expenses of firm on the basis of estimation
Type of expenses Cost
Marketing expenses $200
Management expenses $250
Raw material expenses $450
Labour expenses $500
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Manufacturing expenses $250
Total $1650
Total Revenue of Essence drink on the basis of estimation
Product name Product price Product quantity Revenue generated from product
Mango Lassi $ 3.50 100 $350
Pineapple Lassi $ 1.50 400 $600
Plain Lassi $ 2 200 $400
Litchi Lassi $2 100 $200
Orange Lassi $ 3 200 $600
Total revenue $2150
On the basis of estimated total expense and revenue the estimated total profit is derived
from deduction of total expenses from revenue.
Estimated total profit = Total revenue – Total expenditure
= $2150 - $1650
= $ 500
Sources of fund
Whenever firm adopt innovation or invention in both the cases it require fund to carry out
business process. Thus, there are various sources from where the company can raise the fund,
these are defined below:
Close members: Firm can generate the fund from their loved ones such as family or
friends. They get privileged in taking fund from them as they do not have to pay any interest in
return.
Financial institution: Financial institution such as bank provide the facility of extension
of credit that helps the company to bring innovation in their existing product. In relation to
Essence drink company has raised the fund from bank.
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TASK 4
P7:The different tools that organisations can use to develop, retain and protect knowledge and
intellectual property There are various types of innovations like: designs, symbol,
literacy, artistic work, images, name etc. There are various laws that have been made
which protect the intellectual property rights. As the Essence Drink has make innovation in
its product which is Lassi and it add flavours in it such as mango flavour. This innovation
will help the organisation to maximise its sales because it attract the consumers to purchase
the innovative product so that their needs can be satisfy. So in order to protect the business
from its rivals company adopt various right which are defined below: (Fuertes-Callen and
Cuéllar-Fernández, 2014):
Copy right: This law is the part of intellectual property and it involves artistic work
comprising of painting, chart, photograph, literature work etc. If an organisation has resister
under this law than its rivalries can not adopt the procedure to manufacture same products. This
IP right is not only used to handle civil remedies but also to protect the injections , damages etc.
The person who registered itself as the original owner of invention and can register its work so
that no one can produce same work.
Patent: It provide rights to the owner to exclude others from making, using, selling &
importing an invention for a specific period of time and it depends country to country. Under this
process original owner of product who make invention can register itself so that other party does
not access the product without the prior approval of Essence Drink.
Trade mark: Within Trade mark company take the patent over its design or symbol due
to which other company are not authorised to use similar type of logo or design. Thus, to protect
the brand name of company it can be use so that other organisation does not use it.
Therefore, amongst the various tools Essence drink can use Trade mark to gain the
authority over its brand. This will help the company to gain whole right over its property and
help to enhance recall value of brand. Moreover, this initiate the company to launch innovation
product.
CONCLUSION
From the above report it has been determined that innovation means adding up suitable
changes in the existing product. The main purpose of it is to increase the sales or enhance the
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customer base for the innovative product. Moreover, company should have clear vision as well
as mission along with that it must follow the 4P's of innovation effectively. Further, commercial
funnel is used by company to provide various advantage while adoption of effective market
strategy for the profitability of company.
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REFRENCES
Books and Journal
Chun, D., Chung, Y. and Bang, S., 2015. Impact of firm size and industry type on R&D
efficiency throughout innovation and commercialisation stages: evidence from Korean
manufacturing firms. Technology Analysis & Strategic Management. 27(8). pp.895-909.
Sonne, L., 2012. Innovative initiatives supporting inclusive innovation in India: Social business
incubation and micro venture capital. Technological Forecasting and Social Change.
79(4). pp.638-647.
Maritz, A. and Donovan, J., 2015. Entrepreneurship and innovation: Setting an agenda for
greater discipline contextualisation. Education+ Training. 57(1). pp.74-87.
Hemphill, T. A., 2014. Patent assertion entities: do they impede innovation and technology
commercialisation?. Technology Analysis & Strategic Management. 26(7). pp.717-731.
Aarikka-Stenroos, L. and Lehtimäki, T., 2013. Building up a firm’s commercialisation
competence: from product concept to the first reference. International Journal of
Technology Marketing 24. 8(2). pp.177-196.
Abdul Razak, A., Murray, P. A. and Roberts, D., 2014. Open innovation in universities: The
relationship between innovation and commercialisation. Knowledge and Process
Management. 21(4). pp.260-269.
Tsai, S. P., 2015. Dynamic marketing capabilities and radical innovation commercialisation.
International journal of technology management. 67(2-4). pp.174-195.
Fuertes-Callen, Y. and Cuéllar-Fernández, B., 2014. What is the role of commercialisation and
reputation in product innovation success?. Innovation. 16(1). pp.96-105.
Mc Manus, J. P., 2012. Intellectual property: From creation to commercialisation: A practical
guide for innovators & researchers. Cork: Oak Tree Press.
Robertson, S.L., 2014. Corporatisation, competitiveness, commercialisation: new logics in the
globalising of UK higher education. In The Internationalisation of Higher Education
(pp. 31-44). Routledge.
Wynarczyk, P., 2013. Open innovation in SMEs: A dynamic approach to modern
entrepreneurship in the twenty-first century. Journal of Small Business and Enterprise
Development. 20(2). pp.258-278.
Mazzarol, T. and Reboud, S., 2017. Entrepreneurship and innovation. Tilde Publishing.
Cunningham, S., 2013. Hidden innovation: Policy, industry and the creative sector. University
of Queensland Press (Australia).
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