Innovation and Commercialisation: Importance, Difference, and Development

This document discusses the importance of innovation and commercialisation in business, the difference between innovation and invention, and the development of frugal innovation. It also explores the 4Ps of innovation and the use of innovation funnel to shape innovative ideas.

Innovation and
Commercialisation

Table of Contents
INTRODUCTION...........................................................................................................................1
Task 1 ..............................................................................................................................................1
P1 Difference between innovation and invention and the importance of innovation..................1
P2 The vision, leadership, culture and teamwork of organisation can shape innovation and
commercialisation........................................................................................................................3
M1 Different sources of innovation that can help to foster and develop an environment and
culture..........................................................................................................................................4
Task 2...............................................................................................................................................4
P3 4Ps of innovation and uses of innovation funnel to examine and shaping innovative ideas..4
M2 Innovation Funnel in organisational context.........................................................................6
P4 Development in frugal innovation with examples..................................................................6
M3 Role of frugal innovation in organisational context..............................................................7
Task 3...............................................................................................................................................7
P5 Importance of commercial funnel and its application for new product development............7
P6 Innovation business case for organisation..............................................................................9
M4 Detail of innovation business case that involves measurement of overall effectiveness....11
Task 4.............................................................................................................................................11
P7 Different tools that can be use by organisation to develop and retain knowledge...............11
M5 Different tools in organisation in context to wider business environment..........................12
CONCLUSION..............................................................................................................................12
REFERENCE.................................................................................................................................13

INTRODUCTION
Innovation is said to a multi faceted and complex process that are used to run a business
successfully. To continue a business, innovation is important which helps to introduce from new
products and services in market and increase the organisational productivity and profitability. A
business concern who is running a business uses commercialisation process which helps to deal
with others and increase the profits (O’Gorman and Donnelly, 2016). In other words
commercialisation is said to a launching a new product in new and existing market in order to
provide new products and services to customers. For understanding the effectiveness of new
products and commercialisation McLaren Automotive has been chosen for this assignment. This
report covers difference between innovation and invention, importance of innovation to business
organisation that can be embedded within organisational leadership and culture, different forms
of innovation and directions for change which helps in continuous growth. A part from this
report covers difference approaches that are used by innovation manager to take innovative
process, ideas by including innovation funnel.
Task 1
P1 Difference between innovation and invention and the importance of innovation
Innovation is the important thing for business organisation as it helps to introduce from new
products and services in order to run their business continuously. The main aim of business
industry is to develop their products and increase the profitability. The business environment are
changing as per customers demand and wants.
According to the view point of (Akinwale and Surujlal, 2017), it has been seen that the
needs and wants of people do not remain constant, as they are demanding new products and
services which make feel them good. Every business organisation who are interested to run their
business at international level there is need to have innovation which helps to introduce from
new products and attracts customers. Such as McLaren Automotive manufacture sports cars of
different models which influence people. Now people are demanding new model of sports car
with new technology such as fast speed and auto control which will help to maintain the
continuous development. This organisation is planning to introduce new product that is McLaren
GT which is hybrid and electric designed sports cars. This products is highly demanded product
1

that will help to retain existing customers as well as attract new customers. The importance of
innovation are as defined:
Competitive advantages – This means necessary advancements in capabilities which
provides an edge as compare to competitors. It helps to get the competitive advantages in
business market (Importance of innovation, 2019). Successful and innovative businesses keeps
their operations, products and services relevant to customers which get change according to
market conditions and needs. To sustain in competitive environment it is important to develop
new products which can attracts customers and increase sale. Such as McLaren Automotive
understand the importance of innovation and introduce new sports cars time to time which helps
to face the competition efficiently.
Improve productivity – Improvement in production is next importance for business
organisation that helps to make work more meaning full and less time. To innovate the new
products are helpful for business organisation as it helps to maintain the relationship with
customers and reduced cost that processed to higher productivity. Such as McLaren Automotive
is introducing new products that is McLaren Automotive GT which will help to increase the
turnover of business organisation. Therefore innovation is important for business organisation.
Creative development – This is important for business organisation as it helps in
development of organisation as well as country. If any organisation introduce something new
which helps to influence customers towards it self which helps to create development. According
to the opinion of (Duarte, 2017), with the help of innovation a business organisation can
introduce something new and creative which gets attention of customers towards itself. For
instance, McLaren Automotive GT is creative product for business organisation which will help
to develop the business organisation as well as country. Therefore, innovation is used to bring
creative development within organisation and maintain the productivity.
Moreover, innovation is playing an important role which helps to provide the job
opportunity, increase income level, improve ROI etc. that states the continuous growth of
business industry. By introducing McLaren Automotive GT respective company can gain
competitive advantages and development of products.
Difference between innovation and commercialisation
Basis Innovation Invention
Meaning This means to improve the existing This means to create or introduce a
2

product and services. new product first time.
Focus The manufacturer focuses on
collection of different products and
procedure which helps to face the
competition.
It mainly focuses on new product
development process by inventing
new product and services.
Activities In innovation, the products are
distributed in whole business.
It involves only research and
development department that only
consider new product process.
Source: Difference between innovation and invention, 2016
P2 The vision, leadership, culture and teamwork of organisation can shape innovation and
commercialisation
All businesses are having different vision, leadership style, culture and teamwork who
focuses only goal of business organisation in order to maintain the productivity and profitability.
For business industry, it is important that to set a vision, culture, leadership and teamwork which
are used to attain the business goals effectively (Pachura, 2017). For instance, vision, culture,
leadership and teamwork is decided by management of McLaren Automotive company that are
shaping the innovation and commercialisation. Vision of business industry states what a
organisation need to do for the purpose of earning high profits and increase brand image. The
vision, leadership, culture and team of McLaren Automotive are stated as:
Vision – This defines future activities which are used to increase the production level and
brand image of organisation. Such as management of McLaren Automotive understand what
customers wants and how they can be satisfied. To know about the management has set a vision
that is to attract the customers towards McLaren Automotive that will helps to create a brand
image. By concentrating on visions they are launching McLaren Automotive GT that will help to
shape the innovation and commercialisation with this new product.
Leadership – Leaders are important who helps employees to accept the new technology
and work accordingly. Without support of leaders employees cannot work properly and reduces
the production (Bhardwaj, 2017). Such as McLaren Automotive GT is going to introduced by
McLaren Automotive company in which leaders direct the employees to adopt new technology
such as hybrid and electric energy with auto control. Moreover, they suggest employees how
3

they can work in dynamic environment that are used in processing to shape innovation and
commercialisation.
Culture – This refers as values, beliefs, rules and regulation which are set by
management in order to improve the production. Such as McLaren Automotive is maintaining
good environment and easy culture which helps employees to work in dynamic environment and
feel comfortable in order to work effectively which can shape the innovation and
commercialisation with the help of good business environment.
Team work – It means group of people who are implementing new ideas in order to
attain the common objects (Gao and Haworth, 2016). In context to McLaren Automotive, team
members understand the target of organisation and make efforts to complete the task collectively
which is shaping innovation and commercialisation.
M1 Different sources of innovation that can help to foster and develop an environment and
culture
Innovation is important for business organisation as it helps to develop the product and
services accordingly. By with help of innovation a person can modify the product and services in
available market which helps to maintain higher productivity (de Zubielqui, Jones and Statsenko,
2016). To innovate the new products there is require different sources such as financial,
technology, capital, skilled employees etc. who helps to introduce from new product. Such as
McLaren Automotive is auto mobile company is planning to introduce new car model that is
McLaren Automotive GT in business environment. It understand the changing culture of
organisation develop this product appropriately which foster and develop an good culture and
business environment by facing the competition.
Task 2
P3 4Ps of innovation and uses of innovation funnel to examine and shaping innovative ideas
New ideas and thoughts are developed by a person who helps to run a business continue
and states the continuous growth and development. A products is innovated by organisation by
using innovation mix model that helps to develop the product continue basis and increase the
productivity of business industry. 4 Ps of innovation is used by all organisation who are going to
introduce some thing new and wants to enhance their business activities which helps to maintain
the high profits. Innovation mix model is using by McLaren Automotive that are as defined:
4

Illustr
ation 1: Innovation Mix model, 2019
Source: Innovation Mix model, 2019
Product innovation – This refers as changing in product and services which are mainly
used to attract customers. It has been seen that demand and needs of customers are not constant
which is require to innovate new product (Mohalajeng and Kroon, 2016). Therefore, by
understanding the changing demand of customers McLaren Automotive is innovating new sports
car that is McLaren Automotive GT that will attract customer more. This states the first thing
that comes in to Mc Laren manager's mind about innovation and convey the changes in existing
product.
Process innovation – This element of innovation mix model are used by organisation to
change the production and supplying process. For instance, McLaren Automotive can change its
manufacturing and supplying process at other place which can help to reach near by all
customers.
Position – This refers as position of a company in different market area by providing
different types of products and services. Such as McLaren Automotive can use this element to
introduce its new product at more location by understanding need and demand. It can help to
maintain the good position in business market. This refers as process where changes are created
and delivered which helps to maintain the productivity on continuous basis.
Paradigm- This contains theories, model and principles that helps to define that where,
why and how product should be used by company (Song, 2016). McLaren Automotive can use
5

this by identifying the needs and importance of new product which can help to increase the
productivity and profitability.
Innovation Funnel:
This is a mechanism which is used to describe the steps in order to develop a product and
process. The main purpose of this is to create a product and process which helps to meet with
market needs by manufacturing the products. This is used by McLaren Automotive to upgrade its
product such as:
The mouth of the Funnel - This stage is used to increase the knowledge and information
within organisation. Main object is to collect many ideas as possible and implement within
organisation in order to develop the new product (Innovation Funnel, 2019). In this step,
McLaren Automotive gather information from competitors, existing partners and others that
helps to introduce new product effectively.
Narrowing the Funnel – As per opinion of (McKenzie, Woodcroft and Cassidy, 2016) ,
idea which is generating in first step need to go through screening. It is used to match the ideas
with organisational goals in order to see whether they are related or not. In context to McLaren
Automotive, managers go through screening their ideas and then allocate the promising and
attractive opportunities which helps to meet with organisational goals by launching McLaren
Automotive GT product.
Narrowed part of Funnel - Here, the business organisation ensures that selected ideas is
turned to organisational objectives which was started by company. If everything went right, the
idea of generating new product can be launched by organisation. Such as McLaren Automotive
analysed all ideas and decide to introduce new product such as McLaren Automotive GT that
will help to increase the productivity and profitability.
M2 Innovation Funnel in organisational context
Innovation funnel is used by business organisation in order to know the effectiveness of
products and services. It mainly used to develop the product by using three step. In first step
McLaren Automotive identify the needs of people and gather information about products. In
second step it analysis the information that helps know about interested people and how they can
be satisfied. And in third step they develop the new product by collecting and gathering
information accurately. It helps to maintain higher productivity with organisation.
6

P4 Development in frugal innovation with examples
Frugal innovation reflects the new business models, value chain and redesigning
products which are used to respond towards limitation of resources. Organisation needed
different resources such as financial, institutional, material etc. in order to develop new products
and services. It helps to reduce the cost of products whether in manufacturing and distributing
the products. Some example of frugal innovation China's Haier washing machine, Toyola
Charcoal stove etc. For instance, Mc Laren is using frugal innovation to produce the auto mobile
cars by reducing the cost and increase capacity which helps to maintain the high profits.
Organisation can make higher profits by using frugal innovation which helps to reduce the
costing of products. McLaren Automotive is using Frugal innovation in order to reduce the cost
of non effective features such as:
Product development efficiency: This refers as capable to develop the new product with
reasonable cost. Such as McLaren Automotive can launch new sports car by reducing the cost of
manufacturing and shipping the products which helps to maintain higher profitability.
Manufacturing simplicity: This is used to to simplify the manufacturing process which
helps top produce many units. With the help of frugal innovation McLaren Automotive can make
the simple manufacturing process which will help to develop new product in high number of
units in less time.
Eliminating the non features: This is used by McLaren Automotive to eliminate the
cost non valuable feature which were using by organisation for manufacturing the sports cars.
Therefore, according to (Adelowo, Olaopa and Akinwale, 2016) ,it has been analysed that
frugal innovation is used by McLaren Automotive to reduce the cost and increase profitability.
By using this management can reduce the unnecessary cost while introducing new product
effectively.
M3 Role of frugal innovation in organisational context
Frugal innovation is playing a significant role which helps to increase the organisational
productivity and profitability. Such as McLaren Automotive is using the frugal innovation which
helps to reduces the non valuable cost and maintain the profitability. The main aim behind frugal
innovation is to increase profits by reducing the cost (Intarakumnerd, 2017). Moreover, it helps
to improve the business performance with the help of this process. Moreover, it maintain the
higher profits w2ithin organisation.
7

Task 3
P5 Importance of commercial funnel and its application for new product development
Commercial funnel are stated as commercial activities which is used by business
organisation for the purpose of making buying decision through customers. It finds, qualify,
implement and sale the products to customers under this process. Mainly this process is used to
increase the selling activities. This is using by McLaren Automotive in order to increase selling
activities such as:
Attract: This involve proper resources which can attract the customers and investors for
the purpose of developing products. Such as McLaren Automotive attract more customers by
sharing their success story with the help of online website. Moreover it provides attractive
products with unique features which attracts more.
Convert: Here, visitors are converted in to customers by attracting them effectively. As
management of McLaren Automotive identify the interested customers or visitors and make
efforts to convert in customers. The main object is to increase the turnover by selling the
products and services to targeted audience.
Close: This activity is used to meet with needs of customers and identify the way to meet
with them effectively. Such as management of McLaren Automotive get information about
people who wants new sports cars with different features that helps to keep close customers and
organisation often.
Delight: This is used to keep happy customers by satisfying them broadly. Here, different
type of services are provided by McLaren Automotive by identifying their needs which helps to
satisfy the customers and increase productivity.
New product development process:
A process which is used to identifying people's needs and make products accordingly in
order to satisfying them is consider as new product development. It mainly used by business
organisation in order to develop its new product (Krishnen, Noor, Jack and Haron, 2016). New
concepts such as designing, safety, features, speed, capacity and cost are consider by McLaren
Automotive in order to develop its new sports car. There should a strong idea to develop the new
product which is using by McLaren Automotive company -
Idea generation: To develop the new product, idea generation is important that helps to
define what an organisation need to do for the purpose of developing products. For instance,
8

management of McLaren Automotive generate idea by understanding the needs and wants of
people then develop a plan to introduce McLaren Automotive GT in existing market which
helps in new development process.
Idea screening: This step is used screening the ideas which is generate by managers. In
context to Mc Laren Automotive managers screen idea by using their skills and knowledge
which states appropriateness of idea.
Concept definition: This step is used to specify the product which mainly attracts
customers and emphasis to purchase products. Whenever organisation is going to launch new
product in market then it need to specify the uses and risks while using that helps in new product
development. Such as McLaren Automotive launches new products in existing market they
specify uses and risk that helps to protect them and leads new product development process.
Marketing strategy: Strategies are formulated by managers in order to evaluate ideas
and provide information which helps to maintain the profits. In context to Mc Laren, manager
evaluate ideas which by formulating different marketing strategies which helps to perform good.
Market analysing: Whenever organisation is going to launch something new then firstly
it need to analyse the market which helps to take correct actions (Guimon, 2017). In context to
McLaren Automotive, market is analysed by managers that helps to know about interested
customers about new sports cars which processed to organisational productivity.
Product development: This step is used to develop the product is launched by business
organisation. This should be done after all activities which helps to introduce new product
effectively. Such as McLaren Automotive is launching new sports car that is McLaren
Automotive GT which helps to retain customers for long term.
Test marketing: In this step manager of Mc Laren test their marketing strategies which
are formulated by organisation which helps to develop the product. In this strategy all strategies
and plans are analysed by management in order to develop their new product.
Commercialisation: After testing the strategies managers of Mc Laren starts to sale
their new products such as new cars which is produced by organisation by following different
steps and strategies.
P6 Innovation business case for organisation
A business organisation should have proper information which is used to introduce new
products accordingly and increase profitability (Wnuk, Mazurkiewicz and Poteralska, 2016). To
9

innovate any new product it is important that business analysis the needs and wants of people
and develop the plans which helps to run a business continuously. Such as McLaren Automotive
management is preparing business case that are as explained:
Executive summary: McLaren Automotive is British automotive manufacturing
organisation which was founded in 1985 by Ron Dennis. The head quarter of this organisation
are in UK that manufactures sports cars. The management of such organisation are introducing
new product that is McLaren Automotive GT which is new car model with special features and
technology. Market is analysed by management which helped to know their expectations. A
business case is also prepared by managers by involving SWOT, mission, objectives, fund
analysis and monitoring activities are as defined:
Vision and mission statement: “To deliver best quality of product and services
globally”
Objectives:
 To provide high range of sports cars and deliver best services.
 To use available resources properly and maintain the eco feriendly environment.
 To expand the business sale by developing new products.
 To earn higher profits by selling the number of products.
 To be up to date from new technology within business market.
Market analysis:
McLaren Automotive's management analysed the market in order to know the demand of
new product that is McLaren Automotive GT. It will help to increase the productivity and
profitability of business industry by attracting customers more.
Cost and benefit analysis:
The cost of new McLaren Automotive GT £163,000 which will attract the customers
more and increase the number of customers.
Financial projection:
To introduce new product McLaren Automotive GT organisation is require £ 500000 to
run all business activities effectively (Spencer, 2017).
SWOT analysis:
Strength Weakness
 Attractive design and logo of cars.  Other competitors who also sale sports
10

 Uses of hybrid and electric energy.
 New technology within business
organisation.
 High command on business operation.
 Qualitative products and services.
cars such as Aston Martin, Tesla etc.
 High cost to use new technology.
Opportunity Threats
 Growing demand of products and
increasing population.
 Reasonable cost and high facility.
 Helps to maintain high level of status.
 Changes in customers interest.
Fluctuation in exchange rate.
Changes in customer preference.
Low focus on customer needs.
Way to access funding:
Business organisation need to arrange the funds which is important to introduce new
products effectively. The way of funding are as determined:
Bank and financial institution: Business organisation can arrange funds from basks
and other financial institution who provides finance by charging interest rates.
Venture capital: This is suitable options for business organisation which helps to
provide funds to start ups and enhancing business activities. They invest in companies and
businesses which helps to make future profits.
Angel investors: This means individuals like friends and family who can provide funds
to small size businesses (Macnaghten, 2016). It helps to arrange the funds and increase business
activities.
Funding from personal savings: This means funds can be arrange by using personal
saving such as own property etc. that helps to enhance the business activities effectively and
efficiently.
McLaren Automotive is a auto mobile company that has adopted venture capital to
arrange the funds in order to introduce new product which will help to increase organisational
productivity and profitability.
11

M4 Detail of innovation business case that involves measurement of overall effectiveness
Innovation business case are detailed structure which is prepare by management in
context to McLaren Automotive industry. It helps to measure all planning which are developed
by managers and increase productivity. By using this, management get information about needs
of products then prepare a business case which helps to introduce a new product effectively.
Business case helps to define the cost, mission, objectives and fund accession which helps to
increase the organisational productivity and profitability.
Task 4
P7 Different tools that can be use by organisation to develop and retain knowledge
Every business organisation have different business activities which are developed by
management in order to earn profitability. In competitive business, it is important that to protect
the business activities from copied others. Protect the knowledge helps to develop the product
and services at high range which helps to make high profits. There are different options to
protect the knowledge and ideas such as:
Copyright: This refers exclusive right which are given to creator who creates work and
new ideas. It may be in literary, musical form and artistic which helps to increase the
productivity of business organisation. This gives an right to save their ideas sufficient and no
other one have right to use without any permission.
Patent: This refers as intellectual property right that gives legal right to producers who
produce the products and services. It helps to stop the other person by making or using invention.
This also helps to increase the demand of product which are manufactured by a person in order
to increase brand image. This right is given to manufacturer for some period after this there is
need to get renewal the right of their products. A business organisation can take patent their
manufacturing and supplying process.
Trademark: This is another tool which is used to the legal right in order to protect
knowledge and ideas. It helps to deal with competitors who wants to produce same products and
services. Business organisation also can use this to save the knowledge for specified period (.
Heger and Hussinger, 2017).
12

From the above mentioned tools McLaren Automotive is using Trade mark which helps
to save the knowledge ideas which are using to manufacture new product. It will help to capture
new market by analysing the needs of people and will helps to maintain the profitability.
M5 Different tools in organisation in context to wider business environment
Trade mark, copyright and patent are those tool which can used by McLaren Automotive
in business environment. It helps to protect the knowledge and ideas which is manufactured by a
person with special skills and knowledge. There are many auto mobile industry in business
market which need to protect their knowledge by using such tools. It helps business organisation
to increase the productivity and profitability by comparing to other organisation.
CONCLUSION
From the above report it can be concluded that innovation and commercialisation are
important for business environment which helps to continuous growth and development. By
using innovation a business organisation can change the existing product which helps to maintain
the profitability. Innovation mix is used to introduce new product by identifying needs of people
and run it continuously. Frugal innovation helps business organisation reduce organisational
cost and increase profitability.
13

REFERENCE
Books and Journal
O’Gorman, B. and Donnelly, W., 2016. Ecosystems of open innovation: Their applicability to
the growth and development of economies within small countries and
regions. Handbook on Politics and Technology. routledge, UK.
Akinwale, Y. O. and Surujlal, J., 2017. A techno-economic policy framework to enhance the
contribution of marginal oil and gas field to Nigeria’s economic growth: A petroleum
innovation system approach. International Journal of Economics and Finance Studies.
9(1). pp.132-147.
Duarte, A., 2017. Innovation and entrepreneurial orientation: The case of a global family wine
firm.
Pachura, A., 2017. Innovation and change in networked reality. Polish Journal of Management
Studies. 15.
Bhardwaj, D.K., 2017. Unit-16 Commercialisation of R & D.
Gao, J. H. H. and Haworth, N., 2016. Servicing academics and building relationships: the case of
two university commercialisation offices in A ustralia. R&D Management. 46(S2).
pp.653-663.
de Zubielqui, G. C., Jones, J. and Statsenko, L., 2016. Managing innovation networks for
knowledge mobility and appropriability: A complexity perspective. Entrepreneurship
Research Journal. 6(1). pp.75-109.
Mohalajeng, L. E. and Kroon, J., 2016. Innovation through accelerators: A case for open
innovation. The Southern African Journal of Entrepreneurship and Small Business
Management. 8(1). pp.1-9.
Song, J., 2016. Innovation ecosystem: impact of interactive patterns, member location and
member heterogeneity on cooperative innovation performance. Innovation.18(1). pp.13-
29.
McKenzie, S., Woodcroft, M. T. and Cassidy, M. M., 2016. AND INNOVATION: THE STATE
OF PLAY AT UQ.
Adelowo, C. M., Olaopa, O. R. and Akinwale, O. Y., 2016. Policy Direction for Effective
Interaction and Linkages among the Elements of Nigeria’s National Innovation
System. Journal of Entrepreneurship and Innovation Management. 5(1). pp.1-12.
Intarakumnerd, P., 2017. Mismanaging innovation systems: Thailand and the middle-income
trap. Routledge.
Krishnen, G., Noor, M. R. M., Jack, A. and Haron, S., 2016. Research, Development and
Commercialisation of Agriculturally Important Microorganisms in Malaysia.
In Agriculturally Important Microorganisms (pp. 149-166). Springer, Singapore.
Guimon, J., 2017. Policies to promote science-industry links and technology commercialisation
in emerging countries: the case of Kazakhstan's Technology Commercialization
Project. International Journal of Technological Learning, Innovation and Development.
9(1). pp.1-16.
Wnuk, U., Mazurkiewicz, A. and Poteralska, B., 2016, September. Commercialisation Strategies:
Choosing the Right Route to Commercialise Your Research Results. In European
Conference on Innovation and Entrepreneurship (p. 869). Academic Conferences
International Limited.
14

Spencer, D., 2017. Exploring the impact of life science intermediaries on knowledge exchange
and commercialisation: using a constructivist grounded theory methodology (Doctoral
dissertation, Abertay University).
Macnaghten, P., 2016. Responsible innovation and the reshaping of existing technological
trajectories: the hard case of genetically modified crops. Journal of Responsible
Innovation. 3(3). pp.282-289.
Heger, D. and Hussinger, K., 2017. Implications of uncertain patent rights for German start-ups’
commercialisation activities and access to external capital. Industry and Innovation.
24(7). pp.753-773.
Online
Importance of innovation. 2019. [Online]. Available through:
<https://lisacaprelli.com/7-reasons-innovation-is-important/>
Innovation Funnel. 2019. [Online]. Available through:
<https://www.toolshero.com/innovation/innovation-funnel/>
Difference between innovation and invention. 2016. [Online]. Available through:
<http://mediashift.org/2012/03/the-difference-between-invention-and-innovation086/>
15