Unit 8 – Innovation and Commercialisation

Innovation and
Commercialization

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
TASK 1............................................................................................................................................1
P1. Explain innovation and invention and difference between both to determine importance of
innovation above invention ...................................................................................................1
P2. Explain how organisational teamwork, vision, leadership and culture can shape innovation
and commercialisation............................................................................................................3
TASK 3............................................................................................................................................5
P3. discuss the model of innovation of 4P's and application of innovation funnel to shape
innovative ideas......................................................................................................................5
P4. Explain developments in frugal innovation and provide examples of how it is used in an
organisational context.............................................................................................................8
TASK 3............................................................................................................................................8
P5. Explain importance of commercial funnel and application of new product development
(NPD) processing for commercialisation of innovation.........................................................8
P6. Build an innovation business case for an organisation, including ways to access funding 10
TASK 4..........................................................................................................................................13
P7. Evaluate different tools that organisations can use to develop, retain and protect
knowledge and intellectual property....................................................................................13
CONCLUSION..............................................................................................................................13
References:.....................................................................................................................................15
Books and Journals...............................................................................................................15

INTRODUCTION
The current market environment is surplus of rivalry and neck to neck competition in every
industry due to which organisation invests in the market research to identify the opportunities to
gain the competitive advantage by defeating the competitors thereby increasing the sales.
Innovation is considered as the one of the best strategy to gain competitive advantage.
Innovation is the evolution of something new thereby implementing new methods and techniques
to meet the needs and wants of customers (Russell and Vinsel, 2018). Innovation in organisation
also refers to the improvement or enhancement of the existing products and service by adding
some attributes and features to it. With innovation there is the another term attached to it that is
commercialization a term which helps an organisation to gain profit in return of the innovation
by launching the innovation of product and service in market among consumers and investors for
financial gain. The present report is the study on the “innovation and commercialization” in
context of “Essence drinks”- an organisation that offers flavour drinks and is headquartered in
UK. The present report will discuss the difference between the key concept of innovation and
invention and the importance of innovation in organisation. Further the report will discuss the
role of leadership, culture and teamwork in driving and shaping innovation. The report will
discuss types of innovation and its importance such as frugal innovation, funnel innovation etc.
the report has also developed the NDP for the innovation of new product. At last report has
discuss the intellectual property rights and its benefits and drawbacks to organisation.
MAIN BODY
TASK 1
P1. Explain innovation and invention and difference between both to determine importance of
innovation above invention
Innovation
The innovation has become vital component for the growth and development of a business
organization in the current market scenario. For businesses it is very important to consistently
modify their existing products and services in order to increase the sales there by increasing the
profitability and productivity of an organization (Horn and Staker, 2017). Innovation helps an
organization to attract more consumers as customers are always looking for something new in
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market. Innovation requires a creative and critical thinking skills because only a creative mindset
can think out of the box too develop innovative ideas that can be implemented as an innovation
for an organization. The associative development team of an organization is responsible and
accountable for driving innovation in organisation which can meet consumer’s needs and wants.
In Essence drinks to meet the current consumer trend of health consciousness as customers are
more looking forward to the healthy and immunity rich food in the UK and the food that
increases immunity. Therefore, the company came up with the new innovation of "Lemon,
orange and ginger immunity booster drink".
Invention
Invention refers to the origination of something raw and fresh which is never been heard about.
The invention is a complex concept and is associated with high amount of risk as it requires huge
amount of financial investment to assess resources, tools, laboratories etc. if invention become
famous and successful it is highly beneficial to inventor as it can provide the person with patent
and other intellectual rights (Sorescu, 2017).
Significance of innovation for Essence Drinks
When the Essence drinks come up with the innovation of lassi with flavour of mango in UK
market it helped the company to gain large number of loyal customer base and also increased it
sales overnight thereby increasing the revenue of the organisation. This innovation of the
Essence drinks was completely with new innovative formula and also has strong distribution
capability. But from last few years the company has not entered with the new innovation in
market which is constantly decreasing the company’s sales and revenue therefore it very
important and essential for company to drive innovation and utilize the product development
strategy to gain the advantage of innovation (Zhou, 2021). The significance of innovation to
essence drinks are:
 The innovation of flavoured immunity booster drink will provide the company
competitive advantage as the product will differentiable from the rival companies and
also help in meeting the customer trend thereby increasing the sales. The innovation is important for Essence drinks as this will also encourage the employees
to always think beyond limits and also bring new techniques and increase the product
portfolio of the company.
Basis Innovation Invention
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Competitive
advantage
Innovation of the new product in
Essence drinks will add an item to
the product portfolio which will
provide competitive advantage as
the company will have varied
product range with larger
customer base.
Invention is unique and fresh idea
but implementing an invention is
risking as it is not necessary that
invention will gain popularity or
increases the sale which means
there is no assurance of
competitive advantage.
Waste management Innovation is also considered as
the modification in the existing
methods, processes which are not
efficient or requires more features
therefore the innovation in
Essence drinks will do same with
the same brand.
Invention is time and cost
consuming process as requires
more money, resources and time
therefore for Essence drinks
innovation is more suitable thing to
incorporate (Varadarajan, 2018).
Meet customer trends Innovation always gain the
consumer attention as they are
inspired from the customer’s
needs and wants therefore the
Essence drinks innovation of
flavoured immunity booster drink
will meet customer trend.
Invention is just raw idea can be or
cannot be inspired with consumers
trends therefore for Essence drinks
to increase the customer base
Innovation is better option to adapt.
P2. Explain how organisational teamwork, vision, leadership and culture can shape innovation
and commercialisation.
The generation of unique thought which can be utilized to evolve brand-new products and
services within an organization is categorised under innovation but to make that innovation fiscal
for an organization commercialization is important. Commercialization is the concept to make
the innovation visible in the market setting and among the consumers increasing the financial
gain for an organization. Commercializing the new product developed by the organisation in the
market is considered as the difficult task. The following factors related to the Essence drinks are
discussed below:
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Organisational vision
Essence drinks has a vision to serve their customers with refreshing, healthy and tasty
drinks of their choice by adding different flavours that are loved by consumers as per their
preferences, tastes and moods. The vision of the company is the factor that motivates the
employees of to think beyond their limits which assist in driving innovation in the company. This
organisational vision of Essence drinks is the reason that made the company innovate the concept
of mango flavoured lassi in UK market with was loved by consumers and also the latest
innovation of company of lemon, orange and ginger immunity booster drink is to increase the
immunity in consumers with the flavour that refresh them. The vision of devising their
consumers to appraise and love the drinks and their flavours aids the company in formation the
employees mindset for driving innovation and commercialisation.
Organisational leadership
Leadership is essential for shaping and directing the employees to work towards the
organisation goals (Hernandez-Vivanco, Cruz-Cázares and Bernardo, 2018). To foster the
innovation and make the employees adaptable towards the change in the business environment
the leaders of the Essence drinks has adopted the transformational leadership as this leadership is
useful for the change management and to make the people think something new thereby shaping
innovation with the help of changing customer behaviour and emerging technology. Leadership
is also useful for the Essence drinks during commercialization as commercialization includes the
systematic steps that are directed by leader to successfully launch the innovation of Essence
drinks to the market.
Organisational Culture
In Essence drinks the organisational culture if flexible where the employees are supported
and free to put forward their innovative ideas. The organisational culture of the company
represents their principles, norms and attitude towards the employees. The company’s
organisational culture motivates and encourages the employees towards the creative and
innovative thinking. The culture of the Essence drinks pushes employees to work hard and
develop their skills and competencies which are reflected through innovative ideas. The
organisational culture of the Essence drinks also helps in generating the strategies for the
successful commercialization of products that help them in earning higher profits (Lee, Lee and
Garrett, 2019).
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Teamwork
Team work always drives innovation as when more people work together there are
multiple ideas and thoughts and when they are integrated together with filtration the successful
innovation is originated. In Essence drinks the teamwork is highly supported as they believe that
team work always shape the raw ideas into wonderful innovation. The innovation of flavoured
immunity booster drink is the result of the team work of the employees of the Essence drinks.
TASK 3
P3. discuss the model of innovation of 4P's and application of innovation funnel to shape
innovative ideas
The concept of 4P's of innovation was originated by Tidd and Bessant in 2005. The model
consist of four terms product, process, position and paradigm.
The model is discussed below in context of Essence drinks:
Product innovation: In this there is the improvement in the existing product for which additional
features and attributes are improvised. In Essence drinks there is the radical innovation of
new product i.e.“Lemon, orange and ginger flavoured immunity booster drink” as company
has never produced or sell the immunity drinks in its product portfolio which implies that
incremental innovation is low in Essence drinks.
Process innovation: In this there is changes in the existing process of the organisation due to any
deficit or lacking in the functioning of the process or to develop something new (Sakun and
Gryshova, 2019). In essence drink the process was changed to produce the new immunity
booster drink as a new innovation for which new process was adopted with new techniques
and technologies. The company also changed it recipe but flavours remained same which
means the company has incremental innovation.
Position innovation: Position innovation is term in which the organisation is shifted from their
original target market and consumers and reach new consumers for their new innovation.
The innovation of Essence drinks does not requires to change the position as company has
innovated in same UK market among same consumer base thereby the position of Essence is
unchanged.
Paradigm innovation: this is the last P of the innovation in which the earlier traditional long
term processes or product portfolio are changed creating a big impact on the organisation. In
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essence drinks there is change in product portfolio its ingredients, concepts and vision as
company has completely adopted new product that is opposite of lassi that immunity booster
drink. The innovation of Essence drinks is radical in nature due to its uniqueness and
differentiable quality.
(Source: Model 4P's of innovation, 2021)
Innovation funnel
The innovation funnel is the process which has a intention of converting or transforming the
multiple ideas into the realistic product to gain the financial benefit with the filtration of the
ideas through the narrow faced funnel (Gruszka and Tang, 2017). The overall process
consist of the three stages that are used by the Essence drinks to decision the best idea that
can be raised as a innovation which will successful for the company's growth and brand
image.
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Illustration 1: Model 4P's of innovation, 2021

(Source: Innovation Funnel, 2016)
The three stages of innovation funnel are :
Investigation: The first stage where the ideas given by the employees and management of the
Essence drinks are entered through the wide mouth of the funnel for the filtration and screening.
The company at this stage provide the employees a open culture to speak up their ideas that can
be useful for the company. The R&D team of Essence drinks play a important role at this stage.
Development: The second stage in which the some useful, realistic and SMART ideas are
moved to the further stage of funnel which as narrow opening compared to the first stage.
Basically the potential ideas that has the competency are screened out for the next stage of
development for which the management of resources is done. In this stage the Essence drinks
select the best ideas from the stack full of ideas, also compare the substitutes and identify and
recognise the market opportunities and yield the resources required for the development of the
innovation of immunity booster drink.
Shipping products: The stage in which the best ideas is developed into the product that can be
commercialized for the market with the perspective of attaining profits and gaining the
customers acceptance towards the product. The essence drinks has taken various initiatives and
actions to make the product popular (Siekierski and et. al 2018).
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Illustration 2: Innovation Funnel, 2016

P4. Explain developments in frugal innovation and provide examples of how it is used in an
organisational context.
The frugal innovation is also termed as the jugad innovation in which the new product is
commercialized with the utilization of the limited resource still maintaining the quality of the
product thereby decreasing the production cost. The frugal innovation helps the Essence drinks
in increasing sales and profits by reducing their product and additional cost without
compromising with the quality that maintains and retains the customers and provide the
organisation with the loyal customer base. The frugal innovation is useful when the company has
the limited resources like low budget, raw materials and other resources to produce or
commercialize the product. The frugal innovation help the essence drinks in finding the
opportunities and methods that can promote the sustainability of the organisation and also create
the greater customer engagement (Lasrado, 2019).
With the help of the frugal innovation Essence drinks can serve the customers with the low cost
immunity boosters drinks in different flavours compared to competitors which will help the
company in gaining the competitive advantage and also the customers will be more attracted
towards the product. This innovation will also provide the Essence drinks a sustainable growth
and also increase the brand reputation. Therefore the incorporation of the frugal innovation is
considered as the beneficial method to reduce production cost and optimally utilize the scarce
resources thereby creating the waste management.
TASK 3
P5. Explain importance of commercial funnel and application of new product development
(NPD) processing for commercialisation of innovation.
The commercial funnel is also refereed as the sales funnel because the funnel helps in
identifying the complete customer journey of buying. The funnel has aim assuring that the
potential consumers that are involved with the buying process to buy the supplies of Essence
drinks must be converted into the end customers (Adebola, 2021). Essence drinks can gain the
advantage through the commercial to analyse the customer buying behaviour so that the
innovation can become profitable and gain popularity among the consumers. In order to discuss
the importance of commercial funnel AIDA model is utilized. To describe the importance of the
commercial funnel we are using AIDA model. The model has 4 stages that are described below:
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Awareness: The stage has aim of creating the awareness of the product of the Essence drinks
among the consumers and stakeholders of the organisation which is essential for the
organisation at the stage of commercialization (Park, Swanstrom and Price, 2018).
Interest: The stage has the objective that Essence drinks must maintain the interest of the
immunity booster drink among the consumers to boost there sales regularly to increase their
overall revenue.
Desire: The desire of the product among the consumers must be ignited and continued as this
will increase the productivity of the innovation and also the innovation will gain popularity.
Action: The last stage where the actions are taken for the commercialization of the product. This
will provide the company consistent sales.
Figure 1: AIDA Model, 2021
(Source: AIDA Model, 2021)
Applications of New Product Development
The new product development (NDP) is the multi- staged process that has a aim of
changing the innovative ideas or market opportunities into the new product that can be
commercialized in market to meet customer demands. The stages of NDP are discussed below:
Generation of idea: the first and general stage where the the investigation is done foe generation
of new idea. The ideas can be generated through the drivers like internal and external sources
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such as competitors, consumers, internal research etc. Essence drinks has generated the idea
through external source by looking at the consumer behaviour and environment factors (Lemay
and Moreau, 2020).
Screening of idea: The stage where the evaluation and identification of multiple ideas to pick
the realistic and smart innovative ideas for further process. The process is fast and accurate as
further processing depend on it.
Development and testing: the innovative idea is developed into the realistic product and then
there physical appearance and working is tested to create the customer value. The testing is
important as this stage as this will help the company to known whether it is good or bad for
entering market.
Development of marketing strategy: the market promotional and advertising strategies will be
developed.
Analysis of business: The stage in which Essence drinks will analyse the cost involved to
develop the product, market condition, sales and profit analysis for prediction.
Product of development: The physical representation and existence of the product will be
originated by manufacturing the product along with packing and other essential things.
Test marketing: At this stage the product is ready to be tested in the market before it can be
commercialized as this will help the company to know the correct worth and value of product.
Commercialisation: the launching of the product developed into the market among distributors,
consumers and suppliers. The involves the large amount of investment as for this marketing and
sales promotion is necessary (Jose and Sharma, 2021).
In terms of Essence drinks the company has first time launched the immunity booster
drinks with different flavours. The drink will not only refresh the consumers but also provide
them immunity which is essential after the Covid-19.
P6. Build an innovation business case for an organisation, including ways to access funding
Company Overview
The Essence drinks is the UK based organisation owned by Akshay Kumar. The company
product type includes the different variety of flavoured drinks like mango flavoured lassi,
detox drinks etc. The company was established two years ago with the mango flavoured
lassi and gained the large amount of sales and profits. The innovation of company in the
lassi in UK market helped the company to gain popularity and capture good customer base
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at early stage only (Correa, 2020). The company also has efficient innovation capabilities
with good distribution strategy.
Vision of Company
The vision of the company is “to serve their citizens of the UK a varied menu of fresh,
healthy and refreshing drinks with different fruit flavours”.
Mission of Company
The mission of the Essence drinks is “to deliver the consumers with refreshing drinks and
drink that boost the immunity of consumers to fight from Covid-19 thereby capturing larger
market share”.
Problem statement
The Essence drinks has a major decline in the sales as due to covid-19 customers were
avoiding the to buy the street or outside food and drinks for their health and company has
not come up with new innovation after the innovation of Mango lassi.
Innovative Idea
implementation of the innovative idea into the form of new product development is
necessary for an organisation. The Essence drinks has research and analysed the market and
identified the need of immunity drink among the consumer that originated the idea of
immunity booster drink that has different flavours. The company developed the product to
gain competitive advantage which will also help the company to gain profitability. The
innovative ideas where filtered by the Essence drinks during the process of NDP so that best
idea can be put forward to convert them into product that give rise to the new product of
Essence drinks that is flavoured immunity booster drink.
Risk and Challenges
The challenge and risk associated with the innovation of lemon, orange and ginger immunity
booster drink is that customer may show resistance towards the shifting of Essence drinks
from lassi to immunity booster as customers are not easily adaptable towards the new foood
or drinks. The another challenge with this the risk of competitors as there are many
organisations that provide the immunity booster drinks. Also the UK consumers has bit
delightful and light taste therefore there are changes they may not like the strong taste of
ginger and lemon together (Trott, 2017).
Cash Flow Statement:
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Source of funding
In order to bring innovative idea into reality and to commercialize the source of funding is
important and most essential thing. For an innovation every organisation has fix amount
budget for which business look for the suitable source of finance that has low interest and
and is easy to access. The streamline flow of financial resources are essential for
organisation like essence drinks to drive innovation and to execute the innovative ideas into
product that can gain profits when commercialized in market. The various source of funding
used by Essence drinks are:
Self- funding: The most basic variety of funding in which the owner of the Essence drinks that
is Akshay Kumar will invest its own savings for the execution of the innovation. This type
of funding contains low risk and also there is no stress of returing the amount back to
someone.
Venture capitalists: This source of funding has role and objective to invest in the startups and
for the business that are expanding or developing themselves through innovation. This the
suitable source for funding for the Essence drinks as company is small organisation and
requires a fund for the execution and commercialization of the innovation of new lemon
orange and ginger flavoured immunity booster drinks (Morgan, Obal and Anokhin, 2018).
Bank loans: The most common and easily accessible way of source of funding as everyone is
aware about the bank and are familiar with the concept of bank loans. The bank loans are
granted to every type of organisation in exchange of collateral. Essence drinks can also
utilize this method of funding by applying the bank also this is beneficial for the company as
bank loans are repaid in the intervals and also has low interest rates.
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TASK 4
P7. Evaluate different tools that organisations can use to develop, retain and protect knowledge
and intellectual property.
Every organisation has their own unique products, process, techniques and tools that are
differentiable and provide them with competitive advantage (Wonglimpiyarat, J., 2018).
Therefore, it is very essential for an organisation like Essence drinks that has unique product
portfolio to protect their product from competitor to be copied or breached. To develop, retain
and protect the knowledge of the organisation Essence drinks utilize the intellectual property
rights that are discussed below:
Copyrights: The copyrights protection right is the legal intellectual property right that prevents
the organisation data from being copied or duplicated by another organisation or person without
permission thereby hindering the success of organisation. The innovation of flavoured immunity
booster drink of Essence drinks must be protected as this is beneficial for the organisation to
generate revenue. Copyright will provide advantage to Essence drinks from protecting its
innovation from being theft or misused. The disadvantage of copyright is that it is not ownership
which means it is essential to have copyright to access the rights.
Trademark: Trademark intellectual property right is applied to the symbolic representation of
the organisation such as logos, word, phrase or combination of these as they source of value.
These property provide the Essence drinks a unique presence in the market of UK therefore
company can advantage of Trademark to protect their logo and also it economical and simple
process of registration which is statutory for life. The disadvantage of Trademark is it is required
to be renewed timely else it expires and doesn't provide with any rights (Halt and et. al., 2017).
It is suggested to the Essence drinks to utilize the copyrights intellectual property right as
this will provide the organisation a safeguarding from the breaching or copying of its latest
innovation of immunity booster drinks. The copyright is also useful to company as by this
company can permit someone else to produce or reproduce their product for more sales and
profit.
CONCLUSION
It is concluded from the above report that for an organisation it is very important to adapt the
innovation in consistent period of time because this helps the company to regularly reach the
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consumers thereby retaining the loyal customers and gaining new customers which increases the
value of the organisation. There are different types of innovation for both product and service
and in order to develop new product an organisation must go through new product development
(NPD) process for the successful commercialization of product. Hence the organisation must
identify the suitable way of funding for the converting the innovative idea into realistic
innovation. Hence protecting an innovation is essential as this helps an organisation to earn full
profit without any breaching.
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References:
Books and Journals
Adebola, T., 2021. Intellectual Property Rights. In Encyclopedia of Law and Development.
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Wiley & Sons.
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p.153.
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performance: Towards the understanding of the mechanisms and key
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Park, A., Swanstrom, L. and Price, R., 2018. Frugal innovation: key to surgical innovation.
Russell, A.L. and Vinsel, L., 2018. After innovation, turn to maintenance. Technology and
Culture. 59(1). pp.1-25.
Sakun, A. and Gryshova, I., 2019. Influence of the Commercialization of Innovations on
Leadership Positions of the Agro-Industrial Sector.
Siekierski, P., Lima, M.C., Borini, F.M. and Pereira, R.M., 2018. International academic
mobility and innovation: a literature review. Journal of Global Mobility: The Home of
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Sorescu, A., 2017. Data‐driven business model innovation. Journal of Product Innovation
Management. 34(5). pp.691-696.
Trott, P., 2017. Innovation management and new product development. Pearson education.
Varadarajan, R., 2018. Innovation, innovation strategy, and strategic innovation. In Innovation
and Strategy. Emerald Publishing Limited.
Wonglimpiyarat, J., 2018. Challenges and dynamics of FinTech crowd funding: An innovation
system approach. The Journal of High Technology Management Research. 29(1). pp.98-
108.
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Zhou, P., 2021, July. Competitive Intelligence in Technological Innovation: An Exploratory
Study. In International Conference on Human-Computer Interaction (pp. 167-181).
Springer, Cham.
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